An infusion of Chinese students would probably be good for any American town. But the reason is unusual. Some American communities have been devastated by free trade. These story is a tale of a community that has no resources.
James Pilant
Category: Government Failure
News Of Death Net Neutrality Working Through The Media
Okay, watching this thing is just painful. Not only are sites like mine going to suffer, if you want a decent internet speed so you can watch movies, you’re going to have to pay more for it.
It highlights once again, the President’s ability to take a solemn pledge on an issue, break it, and then declare victory.
Today, the White House hales a victory on Net Neutrality. Maybe they can sell that to the rubes but I can read law.
James Pilant
Internet Dead.
From Steven Axelrod on Salon –
The internet as we know it is officially doomed, as of today, and I’m already feeling nostalgic. Funny that a technology could move so fast across the landscape of my life – from a geeks-only fluke to a curiosity, to a useful tool, to a powerful engine of procrastination and finally a central venue for all my communications, research, entertainment and shopping, only to be reduced to the closed down, controlled, censored corporate cash cow it’s about to become, with the Obama administration’s blessing.
Internet, we barely knew ye.
But of course the Proprietors of our Nation couldn’t allow this internet business to go on the way it was heading. What a frightening thought – free, unobstructed communications, with no control and no profit … people just saying whatever they want, whenever they want, leaking documents, downloading YouTube videos that make Proprietor-controlled media outlets look like liars. You knew there’d be repercussions after the “Colbert bombed at the Press Association Dinner” narrative was reduced to one more punchline, a million downloads later.
He’s right. It will take a while but these things you’re reading like my blog, the sites you surf will probably go the way of the dodo bird and the passenger pigeon.
You might be curious as to why I’m not outraged myself.
In fact, my most fire breathing, screaming fits of anger were over this issue some months ago.
I simply realized that the Obama administration will sell out the internet in a total reversal of the President’s stated position. As far as the President is concerned, words have no meaning. He says whatever is necessary to get whatever he wants at the time.
You want to argue with me.
If so much as one person objects, I will happily put up the You Tube videos where the President declares that he absolutely supports net neutrality and will not compromise. I put them up on a previous post. It took me about a minute to find four separate events where he said these things.
So, it was inevitable.
The best guide to this President’s actions are to go on You Tube, run the issue and see what the President said during the campaign. Expect him to do the opposite and you will only rarely be wrong.
The independence of the internet was critical to the kind of support and networking, the Obama campaign used to win election in 2008. You see, the President isn’t even smart.
It was unwise politically, damaging his own campaign infrastructure and limiting the influence of the blogosphere which did so much for him during the campaign. It also alienates the aforementioned bloggers, who if they are anything like me, will never forget this latest outrage.
I’m not going to forget it.
What happens to me and this blog. Well, I’m going to keep going and I have a monitor that tells me the loading speed for the web site, when it gets longer than say five seconds, I’ll start considering shutting down.
I am stubborn though, maybe I’ll hang on until it’s just me and some close friends who tell me that they log on when don’t or can’t.
And it gets better. Our President is planning on fixing the tax code next year.
Of course, he’s going to cut up Social Security like a butchered steer, George W. Bush’s dream come true.
I’d like someone to tell me what the hell happened?
I want to know.
I can get being betrayed.
I can get changes of allegiance.
I definitely understant political expediency.
But this President makes decisions that don’t even make sense from an election point of view.
Earlier, I said that you could take the opposite of what the President said as a guide, but there is another one. If there are two options and one is the more politically foolish, the White House chooses that one.
Net neutrality is dead. Happy Christmas.
James Pilant
We Invite You To Predict When China Will Overtake America – The Economist
The Economist magazine asks this intriguing question.
It posts a comparison of economic growth between the two countries and points out that at the current rate of economic growth, China will overtake the United States in 2019. They then suggest you plug-in your estimates of growth for the Chinese and Americans and arrive at your own figure.
Okay, here’s my prediction of when the Chinese are going to overtake the United States.
Never.
It’s all nonsense. Chinese corruption is endemic. Their real estate market crashed two years ago. They had to do an economic stimulus of 400 billion dollars two and a half years ago. They have foreign policy disputes with almost every bordering country and a large number of those that are not. They are building a fleet to challenge the American Seventh fleet in the South China Sea. The difference in economic development between the coastal and interior provinces borders on the incredible. There are rumors (probably true) of gathering Muslim unrest in the far West. I could go on.
It seems likely to me that the estimates of economic growth put out by the Chinese government bear a strange similarity to East Germany’s constant high economic growth before the country disintegrated in 1989.
And watching the Chinese lurch from one foreign police misstep after another hardly gives one any confidence in the nation’s future. If you’re willing to force the Philippines to take your lead painted toy imports by threatening economic retaliation, you have only the vaguest concept of a) right and wrong and b) how you appear to the rest of the world. If one of your ship captains decides to deliberately ram a Japanese naval vessel and you get him out of it by threats, that might not have long term positive results. If a dissident gets a Nobel Peace Prize and you demonize the award rather than keeping a discrete silence and resort to every measure short of blackmail to discourage other countries from attending, you’re not demonstrating balanced judgment. If when faced with a dissident receiving a Nobel Peace Prize, you create, fairly instantly,a bogus “Confucius” prize which you then present to the former President of Taiwan who admits he doesn’t know what it is and fails to appear for the ceremony, you don’t impress anybody.
Never.
This is all just part of the policy narrative from the media beltway. As always, they only ask hard questions of ideas they oppose. This isn’t one of them. The terror of Chinese competition, of their eventual success, is a reproach to criticism of free trade and authortarianism. It calls the very importance of democracy for economic success into question. It makes the idea of open society with rights of privacy seem unnecesary to a nation’s future.
When China has failed to become number one, it will have outlived its usefulness, their will be a new narrative of America losing out. Will it be India, Islamic nations, South Asia or even a resurgent Japan? Who knows? But its’ necessary. It’s a club against policies you don’t like and it works.
James Pilant
Chinese Ghost Cities
The hottest market in the hottest economy in the world is Chinese real estate. The big question is how vulnerable is this market to a crash.
One red flag is the vast number of vacant homes spread through China, by some estimates up to 64 million vacant homes.
We’ve tracked down satellite photos of these unnerving places, based on a report from Forensic Asia Limited. They call it a clear sign of a bubble: “There’s city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids. With 20 new cities being built every year, we hope to be able to expand our list going forward.”
I am indebted to Luke H. Lee for bringing this story to my attention.
I am often told how China will be the next superpower. I point out the numerous dangerous border situations, the rampant corruption, and the inherent inefficiency of a communist government. Yet, I fail to make a dent. The conventional wisdom is too strong.
This evidence is hard to dismiss. The United States was considered to be foolish when there were unoccupied developments, housing and commercial, but cities? That’s a disaster. And it’s ongoing.
James Pilant
Andrew Comments On “Will Tax Cuts Spur the Economy? (via The Ethics Sage)”
I think the problem is that the government doesn’t know HOW to PROPERLY regulate the economy to help spur growth. Sometimes the government just needs to learn when to back off. Cutting taxes isn’t going to do anything anymore. You cant really lower interest rates because they are practically zero as is.
What about letting loose of the arbitrary reins of control the government has hold of. For instance, legalize marijuana. The drug, in of itself, is no worse than tobacco and alcohol. Legalization would do many things. It would open up an entirely new market to legitimate tax paying citizens. It would create thousands of jobs. Portugal has had great success with it. They also saw a substantial decrease in the consumption of hard drugs after they legalized marijuana.
Thats just one example of how we can get the economy going again. We just need to reevaluate why we make certain things illegal or off limits. If there is no good reason for it, then legalize it, tax it, and regulate it. We cant try and create a fake demand like FDR did in the New Deal. We just need to satisfy actual demands.
Extreme Inequality Helped Cause Both The Great Depression And The Current Economic Crisis (via Washington’s Blog)
From Washington’s Blog –
Most mainstream economists dismiss the idea that wealth inequality causes economic crises.
Of course, some ideologues will argue that even discussing inequality is waging class warfare, and smacks of an attack on capitalism.
However, the father of modern economics – Adam Smith – disagreed.
And as Warren Buffet, one of America’s most successful capitalists and defenders of capitalism, points out:
There’s class warfare, all right, but it’s my class, the rich class, that’s making war ….
(And as I have previously noted, radical concentration of wealth actually destroys capitalism.)
More to the point, most mainstream economists do not believe there is a causal connection between inequality and severe downturns.
But recent studies by Emmanuel Saez and Thomas Piketty are waking up more and more economists to the possibility that there may be a connection.
Washington’s Blog is an interesting web site full of writing you will not see else where. Here’s the link.
I lean toward the argument that inequality is a factor in economic downturns.
Read their post. I can’t do it justice in a few paragraphs. It’s full of graphs, multiple references and good writing. I’ve got this on my favorites.
James Pilant
Will Tax Cuts Spur the Economy? (via The Ethics Sage)
Steven Mintz takes out a sharpened pen and ridicules the notion of a cut in social security taxes as a stimulant for the economy. (I ridicule it, too and I’m less polite.) He suggests a better alternative but you are going to have to click on the link to see it. Visit the web site and while you’re there, look around and enjoy the writing.
By now you’ve heard about the plan to cut the payroll tax on employees that funds Social Security and Medicare by 2%. Once again the fiscal irresponsibility of those in Congress and President Obama shines through any effort to get control of federal spending and reduce the national debt. The plan is put forward at a time when many have warned about the potential bankruptcy of social security in the not too distant future. How can our “leaders” possibly defend the proposal?
The explanation seems to be that the 2% extra in workers’ paycheck each pay period will stimulate the economy. We’ve been down this road before with little positive effect on spending. In past economic stimulus plans the workers largely saved the money or paid off bills. What makes the government think the result will be any different this time around?
The Ethics Sage, the whole web site, is found here.
James Pilant
Workplace bullying 2010: “Bullycides,” Breakthroughs, and Backlash (via Minding the Workplace)
James Pilant
Irish And Greek Bailouts Won’t Work!
James Pilant
So let’s recap, because this is truly bizarre: Lenders to Ireland or the other troubled states won’t take a hit now but if they stick around until 2013 then they will take losses along with the taxpayers. Oh yeah, and the current round of bailouts are aimed at seeing Ireland and Greece through the next couple of years, at which point it will become extremely dangerous to lend to them, as their economies will have shrunk, their debt burdens bloomed and private lenders will be on the hook.
To add to this, the European Stability Mechanism, the name of the new fund, will be senior to all creditors except the International Monetary Fund, meaning that in the event of a bankruptcy it would be paid first. Ratings agency Fitch looked at this provision and quite rightly said that it might lead to lower ratings on shaky euro zone sovereigns.
The only way you could make this policy mix work was if you could find a very rich lender with no ability to conceptualize the future. Hmm, let’s see a rich entity with limited ability to fully imagine a future state – it must be the European Union!
Few private lenders will stick around, they will sell their bonds and the only buyers will be the EU or ECB, which itself as it understands this predicament is hugely unwilling to play along.
Germany and France are both so unwilling to both have principles and pay for them that they are refusing to act on proposals for common European bonds and are expected to resist moves to increase the size of the European Financial Stability Fund, the vehicle now being used for bailouts.
Okay, do you get it? These aren’t solutions. They are designed to tide things over until someone new is in office to take responsibility. And especially, they are designed to appear as decisive action when they are nothing of the kind.
It is important that both Greece and Ireland elect new governments charged with challenging these horrendous plans that smack only of disaster. Those countries deserve better, and their citizens should demand better terms. These are sovereign nations not American homeowners subject to the whims of banks.
Let democracies exert the power of the people, the one and only thing that banks fear.
James Pilant
Pilant's Business Ethics Blog 
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