Streams

What America Can Learn from China’s Economic Growth

Monday, January 30, 2012

Frank Newman looks at why China’s economy is booming while America’s lags. He looks at why this is the case, and addresses some fundamental misunderstandings about our economy in Six Myths that Hold Back America: And What America Can Learn from the Growth of China’s Economy.

Guests:

Frank Newman

Comments [21]

David

And you can read this book for an analysis of how government policies have hurt laborers in the last century. (I know, you thought it was those "greedy, capitalist pigs.")

http://www.amazon.com/Out-Work-Unemployment-Twentieth-Century-Independent/dp/0814787924/ref=sr_1_2_title_0_main?s=books&ie=UTF8&qid=1327979553&sr=1-2

Jan. 30 2012 10:16 PM
David

Or you can try this site for an analysis of government economic statistics:

http://www.shadowstats.com/

Jan. 30 2012 10:09 PM

I too am disappointed in many of these comments, which show ignorance and inattention to what the guest was saying. One commenter (who called him a "traitor"!) even got his name wrong. It is Newman, not Hoffman. Bankers do have a bad reputation now, but lumping them all together as villains is foolish. This particular banker wrote his book in an effort to help this country, and he has some good ideas. I've read the book and recommend it. It's not long, and it is available at B & N.

Concerning inflation, if you don't believe our government's numbers, or what Mr. Newman says, try the site Trading Economics at

http://www.tradingeconomics.com/united-states/inflation-cpi

Jan. 30 2012 06:20 PM
Hicoachrich from Murray Hill

I had no idea that Leonard drew such an angry, uninformed audience. I assumed the opposite was more the case. These disappointing Comments reflect an ignorance of the history of labor here in the US, and pretty much in any post-industrial nation. Do some reading people. Read about the enormously brave battles our forefathers fought to get decent wages and safer working conditions. And we still have men dying in mines, or drilling decks, because of corporate management concerned with PROFITS and not the well being of their employees. Read about the history of unions here in the US and the brutal and sanctioned violence inflicted by the 'captains of industry' aka the 'robber barons' who have their names on grand institutions and cultural buildings such as music halls. Read about the abuse one ethnic group (all former European neighbors) after another inflicted on the newest group that arrived on our shores. Read about the labor groups who led anti-war riots.
You may then be able to see that China is just a modern version of labor force evolution. The power the 1% had back in our early years of labor struggle was likely no less than the central government has in China now.
Read people.

Jan. 30 2012 04:33 PM
Amy

RL: Very well put. I'd add the corollary that you can then sell that junk to countries where the people don't have to breathe & drink *your* air & water.

Jan. 30 2012 12:43 PM
jgarbuz from Queens

Most of this conversation is nonsense! Economics is like water; investments flow to where it finds the lowest cost and the highest returns! When China and those were communists, there were barriers to investments. WHen the barriers came down, the money flowed to where the costs were lowest, and the returns are highest.It's just nature.

Jan. 30 2012 12:34 PM
chiefsilverbear from Newark

Ironic, Mr. Hoffman works for a china bank now. Also Americans value trust in their government China has ideological trust. china has robbed the US of all the technology they copy and ripped off at lower labor cost.Mr. Hoffman your china logic is all for your profit and is misleading.There are 2 china"s .They don't buy from us they ripe us off. You are a traitor. They invent nothing and you invent spin.Set the interest rate for us at 1% for 10 yeears without a raise and you will see people spend. Your banks are traps of credit slavery.

Jan. 30 2012 12:33 PM
tom from astoria

To Anonymous:

30k? Glad to hear it! I hope we start hiring all the American engineers possible. Why give the future to China, and blame, blame blame our federal government?)

Jan. 30 2012 12:29 PM
jgarbuz from Queens

China today is where the US was in 1920! Do we want to go back to 1920? Maybe in ten years they'll be where we were in 1940. And in 20 years, where we were in 1960. They are optimisitic because it is still all so new to them,whereas we are satiated, tired, and have naturally lost self-confidence. But so will they in 40 years.

Jan. 30 2012 12:28 PM
Barlow from astoria

Two Hundred MIllion Chinese have reached middle-class status from poverty. Isn't the issue really trading our expensive workforce for available cheap workforces elsewhere? The first ten minutes of President Obama's State of the Union Address talked about manufacturing . How important is it to bring those facilities back?

Jan. 30 2012 12:25 PM
Anonymous

tom from astoria, I have seen good US engineers go for $30K but you do have to shop.

Jan. 30 2012 12:25 PM
David

This guest is a classic example of:

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

First of all, of course China is going to have an economic boom when it went from a command (Communist) market of incredible inefficiency to a mixed economy (a marketplace with private enterprise but with government regulations). Is this guest aware of how much the Chinese government has wasted on real estate developments that are ghost towns?

And the only reason why the RepubliCONs didn't care about the deficit is because both political parties are controlled by the same Banksters who make money on government spending paid for with loans from the Federal Reserve.

Perhaps this guest's maid does his grocery shopping for him, so he is not aware that prices have gone up appreciably in the last few years. The government has been lying about the real unemployment and inflation rates.

There are only two ways a government ultimately can get money: taxation and printing it. If we aren't being taxed to pay back the debt, then the government's printing more money to pay back its debt will automatically cause inflation (i.e., higher prices for us sheeple).

Jan. 30 2012 12:24 PM
The Truth from Becky

What is good for the goose "ain't" always what is good for the gander...we need to improve the education system and produce more well educated young engineers. We should not rush to put china on a pedestal for our young people.

Jan. 30 2012 12:23 PM
jgarbuz from Queens

Bankers should have "learned" what I learned back in grade school back in the 1950s, that a bank should never lend out more than $10 for every $1 it has on deposit! That was a hard learned lesson that was conveniently forgotten. We thought we had learned our lessons about "lending on the margin" and not overextending from the Depression, but apparently greed eventually makes people forget these hard lessons again and again. Times may change, but people don't. They will always hope to get something for nothing.

Jan. 30 2012 12:21 PM
John A.

Obvious to me that once you run out of cheapest countries to go to, because one by one their standards of living are indeed raised, you come back around to your own country to do the manufacturing. There was an article this weekend about how So.Korea was at $30K per capita income. They got there by doing the work for us and countries like us. Trouble is China is too big for the US to wait out a charge-up like that. Prez said last week for us to change now, seems right.

Jan. 30 2012 12:21 PM
tom from astoria

I spoke yesterday to an owner of a web based advertising company --he pays $9,000. to top engineers in Pakistan. Here , he said, the wage would be $125,000. Thanks to decades of our corporations sending facilities to countries like China and Pakistan, we are falling behind. Weren't "free-trade" agreements during the Clinton years plus granting WTO membership to China key?

Jan. 30 2012 12:17 PM
CL from NYC

He wants to "stay away" from social issues and concentrate on the economic???? That single statement invalidates nearly everything this guy-- a banker, for crying out loud-- has to say. For an intelligent, more comprehensive view, vide Fukuyama:

"I think the China alternative is a big red herring. I just don’t think that in the long run the Chinese are going to look nearly as good as they do today. Buried in all that authoritarian decision-making are a lot of time bombs with regard to environmental degradation, with regard to repressed social anger at the way those decisions are made and so on. No matter how smart they are, they’re not that smart. No one can spend that much money in a stimulus and have it all go into productive investment. We’re going to discover in a few years that they’ve overplayed their hand and made lots of mistakes, just like in this much touted high-speed rail system that they have put in place. There’s obviously a tremendous amount of corruption and shoddy workmanship and we’ve only seen the tip of that particular iceberg."

Jan. 30 2012 12:17 PM
Jim

No inflation? How do explain the cost of education, healthcare, and housing? Sure, gadgets are cheap, but the truly valuable things are not. CPI is misleading.

Jan. 30 2012 12:15 PM
RL

What can we learn from China? That if you're willing to pollute your water and air, then you can produce more junk than any countries that would like to breathe and drink clean air and water.

Jan. 30 2012 12:11 PM
tom from long island city

Of course many of the huge factory complexes in China are building for American companies. Our business leaders shave given away design and production ideas for permission to set up there for short term profit increased thus WE HAVE GIVEN THEM THE FUTURE.

Jan. 30 2012 12:07 PM
jgarbuz from Queens

I doubt there is anything to learn from China's resurrection, but a lot to learn from why China declined in the first place two or three centuries ago. It declined because in the 15th century, due to various catastrophes and other events, the Chinese bureaucracy and its imperial regime decided that there was nothing worthwhile to learn from outside of China, and that keeping China open only would invited trouble. A few decades later, Columbus discovered a new world, and both Europe and the New World rapidly rose with the coming of the "industrial revolution," and China basically chose to miss out. Japan, by contrast, were forced to open its doors and decided that it would learn everything of use to it from the newly arisen West. So Japan became a superpower and China became a backwards, sick old and, and treated like dirt by the West.

As for the resurrection of China back to its traditional position as the number one power, that is only to be expected from this most populous and highly capable people.

Jan. 30 2012 12:07 PM

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