The Problem with Beijing and/or Washington

Has China peaked? Without far-reaching political and economic reforms, yes:

The most serious long-term obstacle to Chinese growth is its state capitalist system. In the last decade, Beijing has largely reversed pro-market reforms and embarked on a decidedly statist developmental path. Consequently, state-owned enterprises have gained enormous clout in the economy and enjoy monopolistic privileges. The financial system favors such firms at the expense of private entrepreneurs. Household income, at 43 percent of GDP, is too low to support a higher level of consumption, a critical factor in rebalancing the Chinese economy and providing a source of future growth. Without systemic reforms, according to an influential World Bank study, growth in the coming two decades will fall well below 7 percent per annum. But reforming state capitalism is almost impossible politically because that will undermine the very foundations of the Communist Party’s rule.


That’s Minxin Pei, writing for The Diplomat. China has reached the end of the road for “state capitalism,” and the communist-in-name leadership hasn’t figured out what to do about it, other than to dial reforms back.

Well, and why not? We’ve been trying that very thing in this country for years now, and just look at how far we’ve come!

That last line hurt, just typing it.

If there’s any good news out of China, it’s that the current leadership might end up regretting investing in all those street lamps.

Anyway, if the seeds of Chinese communism’s doom were sown long ago, so were the seeds of American renewal. Here’s Paul Rahe in Ricochet:

In my opinion, none of the psephologists mentioned above has reflected on the degree to which the administrative entitlements state – envisaged by Woodrow Wilson and the Progressives, instituted by Franklin Delano Roosevelt, and expanded by their successors – has entered a crisis, and none of them is sensitive to the manner in which Barack Obama, in his audacity, has unmasked that state’s tyrannical propensities and its bankruptcy. In consequence, none of these psephologists has reflected adequately on the significance of the emergence of the Tea-Party Movement, on the meaning of Scott Brown’s election and the particular context within which he was elected, on the election of Chris Christie as Governor of New Jersey and of Bob McDonnell as Governor of Virginia, and on the political earthquake that took place in November, 2010. That earthquake, which gave the Republicans a strength at the state and local level that they have not enjoyed since 1928, is a harbinger of what we will see this November.


No, I haven’t been drinking the Mitt Romney Kool-Aid. I rather doubt such a thing even exists. But the broader trends show a fundamental shift — or shifting; it ain’t finished yet — in the American electorate. But our system is geared to respond to that shift, even if with frustrating sluggishness.

Remember, one man winning one election isn’t enough to fix everything overnight, doubly so if that one man is Romney.

The trend line in American politics looks good. We had an eight-year experiment of increasing spending and regulation at high speed under a Republican president, and that didn’t work out very well. We’re now in the fourth year of increasing spending and regulation at Ludicrous Speed under a Democrat president — and that hasn’t led to a whole lot of happiness, either. So we are arrived at a point where both parties are pretty well discredited, at a time when we need real leadership to undo the mistakes of the last dozen years.

So I suspect Rahe might have nailed it. The important thing to remember is that this shift will create losers — from both parties. And they will howl even at just the idea of the sting. They’re howling already. It will get worse — much worse; Wisconsin was barely a warmup act.

Take three neighbors with you to your polling place. If you have a car that seats more than that, bring more. The Democrats will be waving around money like there’s no tomorrow — and in a sense, for them there isn’t. The new GOP leadership won’t want to live up to even its lame promises — so be prepared to vote those bastards out, too, in 2014.


Washington is a massive cargo ship top-heavy with other people’s money, covered in barnacles, and with a demented and dangerous captain at the wheel. It won’t be easy to set it right. But it can be righted. Just watch out for icebergs along the way.


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