America, supposedly the best run capitalist economy on the planet has been upstaged by the Chinese.  America’s expected growth rate next year is 0%. China’s expected growth rate is 8%. America’s answer to our economic woes:  let’s give money to bankers who lack basic business competence- i.e. the banker’s who lent money to people for mortgages without checking their income, people who had no visible means of repayment and let’s lend money to car manufacturers who lose money every month.  What do the Chinese do to prop up the Chinese economy?  They have announced $500 billion of public works projects to build airports, roads and other public infrastructure and thereby create jobs and build the country’s public assets.

In five years, after giving tens of millions to the banking and auto industries, we will still have an inefficient auto industry and incompetent bankers. The auto companies are so poorly constructed  that they can only make money if they run at 90+% of capacity (i.e. they are designed to sell 17 million cars and if sales drop below 16 million, they start losing money). These companies cannot weather economic downturns and through our bailouts we will have saved one million jobs of people that generate negative output—i.e. the auto companies lose money keeping these people employed thereby subsidizing jobs that should not exist.  We will still have the same morons running banks—people who lent money to foreign countries in the 80s , countries that had no visible means of repayment (and got bailed out by the US government) only to do the same with homeowners 25 years later.

Where will China be in five years?  They will have new airports to support travel of their own residents and tourists that bring hard currency, they will have roads and other infrastructure to support economic growth of industry.

China will have something to show for their investment, we will have nothing so show for our investment. China embarrasses America because they are far better capitalists than us.

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