"This can't go on. . . "

If you think the March report on US inflation (0.5% monthly rate) was bad, read what’s going on in China:

“Some people think that China’s economy is already overheated; others think it’s in the process of becoming overheated,” explained Zhao Qizheng, the minister who runs the State Council Information Office. He told me that China needs “sustainable” growth, and he’s right.

The sharpest analysis I heard was from Li Ruogu, the deputy governor of China’s central bank. He even used the “B” word: “If credit is growing as fast as it has been, we will be concerned about a bubble,” he said, adding that the central bank had raised reserve requirements for Chinese banks this month partly “to send out the message that we are concerned about overheating of the economy.”

Li warned that the central bank could also raise interest rates soon, a move many analysts think is overdue. Li said inflation during the first quarter was running at an annualized rate of over 12 percent. “If that trend continues, we will be in the position to raise interest rates,” he warned.

Last time we had inflation that bad, we voted out Carter, we got interest rates a mile high, suffered a severe recession (’81-’82), and we’ve been booming, with only two brief interruptions, ever since.

And what let us endure such pain, in order to experience such a miracle? Because we were able to vote out the bastards who got us into the mess, and had the ability to throw out any bastard who got us into a new one.

The people of China aren’t rich enough to afford little luxuries like fast cars, big homes, an occasionally-sane central bank, or general elections.

If the bubble bursts, how can they throw their bastards out? And if they can’t throw them out, how will they ever renew their faith in their government?

Those two questions keep the bastards in Beijing awake nights.