Javelin Marketing: China Embarrasses America and Americans Say Nothing
by admin ~ November 13th, 2008. Filed under: bailouts.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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June 24th, 2009 at 6:41 am
it’s intersting that their expected growth rate is so high, and yet I feel like all my investments in overseas markets have not been doing good ever since the economy when down the tubes. Is there something to invest in the foreign economies that would somehow shield someone from that?
September 28th, 2009 at 3:39 am
8% compared to 0%? Not even close really is it? I think the most important question you raised is where will China be in the next 5 years? I think ‘way ahead’!
March 18th, 2010 at 4:02 am
About ten years ago, financial analysts said that China would be the next big thing. Now it seems that China IS the big thing. Its entry to the World Trade Organization has proved its worth. When was the last time you bought a pair of shoes? Can you look where they’s made from? Guess what, that pair comes from China.
April 30th, 2010 at 7:56 pm
America has to change the way they spend money. But the comparison is not fair because the things China invests in already exist in the US.
June 3rd, 2010 at 5:13 pm
China it seems will be ahead, so good to invest in China.
June 4th, 2010 at 4:39 am
China is scary and the fact that the US owes SOOO much money (and growing) to them makes it only worse. Are we going to be able to ask them to stop invading Taiwan?
August 4th, 2010 at 3:38 am
Chain owns our currency and their labor cost is increasing which is even more scary for our currency. Oh man..
August 7th, 2010 at 6:27 pm
Very intreging post, I have always known that China would make a big come back oneday, I just hope that it’s not going to be anytime soon. The U.S. government has got some serious problems, especially because the Obama administration just started to waste more money than ever before. This will for sure effect how long the resession will last, I am praying for the best, but preparing for the worst. I advise everyone else to do the same!
March 26th, 2011 at 5:50 am
Very true, China is looking more Capitalist than the USA these days – bailing out banks is not how capitalism works. China invested in itself by funding infrastructure projects etc and that boosted their economy the proper way, and will reap further rewards from the projects themselves for years to come.
November 14th, 2011 at 1:20 am
The growing influence of China in the world is inevitable. The Eurozone is now going cap in hand to them for a bail out!