Western people might learn a trick or two from China. That is, when all the propaganda is put aside.
THE SECRET OF CHINA'S MIRACLE ECONOMY: THE GOVERNMENT OWNS THE BANKS RATHER THAN THE REVERSE
by Ellen Brown
Source To the extent that China's stimulus plan is working better than in the U.S. and the U.K., this seems to be because the government is using the banks for public ends, rather than allowing the banks to use the government for private ends.
"The banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. They frankly own the place."
-- U.S. Senator Dick Durbin, Democratic Party Whip, April 30, 2009
While the U.S. spends trillions of dollars to bail out its banking system, leaving its economy to languish, China is being called a "miracle economy" that has decoupled from the rest of the world. As the rest of the world sinks into the worst recession since the 1930s, China has maintained a phenomenal 8% annual growth rate. Those are the reports, but commentators are dubious. They ask how that growth is possible, when other countries relying heavily on exports have suffered major downturns and remain in the doldrums. Economist Richard Wolff skeptically observes:
"We now have a situation in the world where we have a global capitalist crisis. Everywhere, consumption is down. Everywhere, people are buying fewer goods, including goods from China. How is it possible that in that society, so dependent on the world economy, they could now have an explosive growth? Their stock market is now 100 percent higher than at its low -- nothing remotely like that hardly anywhere in the world, certainly not in the United States or Europe. How is that possible? In order to believe what the Chinese are saying, you would have to agree that in a matter of months, at most a year, no more, they have been able to transform their economy from an export-based powerhouse to a domestically focused industrial engine. Nowhere in the world has that ever taken less than decades."
How can China's stimulus plan be working so well, when ours is barely working at all? The answer may be simple: China has not let its banking system run roughshod over its productive economy. Chinese banks work for the people rather than the reverse. So says Samah El-Shahat, a presenter for Al Jazeera English who has a doctorate in economics from the University of London. In an August 10 article titled "China Puts People Before Banks," she writes:
"China is the one leading economy where the divide "" the disconnect between its financial sector and the world normal Chinese people and their businesses inhabit "" doesn't exist. Both worlds are booming again and this is due to the way the government handled its banks. China hasn't allowed its banking sector to become so powerful, so influential, and so big that it can call the shots or highjack the bailout. In simple terms, the government preferred to answer to its people and put their interests first before that of any vested interest or group. And that is why Chinese banks are lending to the people and their businesses in record numbers."
What Wolff calls a "global capitalist crisis" is actually a credit crisis; and in China, unlike in the U.S., credit has been flowing freely, not just to the financial sector but to industry and local government. State-owned banks have massively increased lending, with local governments and state enterprises borrowing on a huge scale. The People's Bank of China estimates that total loans for the first half of 2009 were $1.08 trillion, 50% more than the amount of loans Chinese banks issued in all of 2008. The U.S. Federal Reserve has also engaged in record levels of lending, but its loans have gone chiefly to bail out the financial sector itself, leaving Main Street high and dry. Writes El-Shahat:
"In the UK and US, the financial sector is booming, while the world of normal people seems to be going from bad to worse, unemployment is high, businesses are folding and house foreclosures are still taking place. Wall Street and Main Street might as well be existing on different planets. And this is in large part because banks are still not lending money to the people. In the UK and US, banks have captured all the money from the taxpayers and the cheap money from quantitative easing from central banks. They are using it to shore up, and clean up their balance sheets rather than lend it to the people. The money has been hijacked by the banks, and our governments are doing absolutely nothing about that. In fact, they have been complicit in allowing this to happen."
Cracks in the Chinese Wall?
The Chinese economy is not perfect. The push to make profits, particularly from foreign investment capital, has encouraged speculative ventures, with a great deal of money going into high-rise apartments and other real estate developments that most people cannot afford. Chinese workers are now complaining of too much capitalism, since they are having to pay for housing, health care and higher education formerly picked up by the State. And while efforts are being made to make more loans available to medium-sized and small businesses, state-owned businesses and large corporations are still getting most of the loans. This is because the banks have been told to tighten their lending standards, and these larger entities are safer credit risks.
Wolff thinks China's "miracle" is a bubble that is about to burst, with catastrophic consequences. Historically, however, when bubbles have collapsed suddenly it has been because they were punctured by speculators. When the Japanese stock market bubble burst in 1990, and when other Asian countries followed in 1998, it was because foreign speculators were able to attack their currencies with exotic derivatives. The victims tried to defend by buying up their own national currencies with their foreign currency reserves, but the reserves were soon exhausted. Today, China has accumulated so much in the way of dollar reserves that it would be very difficult for speculators to do the same thing to the Chinese stock market. A gradual stock market decline due to natural market forces is something an economy can take in stride.
Economic Role Reversal?
For the time being, at least, China's stimulus plan is clearly working better than those of the U.S. and the U.K.; and a chief reason it is working better is that the government has a grip on its banking sector. The government can operate the banks' credit mechanisms in a way that serves public enterprise and trade, because it actually owns the banks, or most of them. Ironically, that feature of China's economy may have allowed it to get closer to the original American capitalist ideal than the United States itself. China is often referred to as communist, but it has never really been communist as defined in the textbooks, and it is far less so now than formerly. Communist Party leader Deng Xiaoping, who opened China to foreign investment after 1978, famously said that it doesn't matter what color the cat is, so long as it catches mice. Whatever the Chinese economy is called, today it provides a framework that effectively encourages entrepreneurs.
Jim Rogers is an expatriate American investor and financial commentator based in Singapore. He wrote in a 2004 article titled "The Rise of Red Capitalism":
"Some of the best capitalists in the world live and work in Communist China. . . . No matter how long China's leaders persist in calling themselves Communists, they seem quite intent on creating the world's dominant capitalist economy."
Meanwhile, the U.S. has sunk into what Rogers calls "socialism for the rich." When ordinary U.S. businesses go bankrupt, they are left to deal with the asphalt jungle on their own; but when banks considered "too big to fail" go bankrupt, we the taxpayers pay the losses while the banks' owners keep the profits and are allowed to continue speculating with them. The bailout of Wall Street with taxpayer money represents a radical departure from capitalist principles, one that has changed the face of the American economy. The capitalism we were taught in school involved Mom and Pop stores, single-family farms, and small entrepreneurs competing on a level playing field. The government's role was to set the rules and make sure everyone played fair. But that is not the sort of capitalism we have today. The Mom and Pop stores have been squeezed out by giant chain stores and mega-industries; the small private farms have been bought up by multinational agribusinesses; and Wall Street banks have gotten so powerful that Congressmen are complaining that the banks now own Congress. Giant banks and corporations have rewritten the rules for their own ends. Healthy competition has been replaced by a form of predator capitalism in which small fish are systematically swallowed up by sharks. The result has been an ever-widening gap between rich and poor that represents the greatest transfer of wealth in history.
The Best of Both Worlds
The Chinese solution to a failed banking system would be to nationalize the banks themselves, not just their bad debts. If the U.S. were to adopt that approach, we the people would actually get something of value for our investment "" a stable and accountable banking system that belongs to the people. If the word "nationalize" sounds un-American, think "publicly-owned and operated for the benefit of the public," like public libraries, public parks, and public courts. We need to get our dollars out of Wall Street and back on Main Street, and we can do that only by and we can do that only by breaking up our out-of-control private banking monopoly and returning control over money and credit to the people themselves. If the Chinese can have the best of both worlds, so can we.
Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust."
For more than a year, many critics following the dollar have been warning of an eventual meltdown of the currency. Mostly, these predictions have been ignored and labelled as doomsday conspiratorial mumbo jumbo.
Most people in the US are still yapping about health care and Obama's birth certificate while the rest of the world tries to cope with austere fiscal constraints and unemployment. Yet there is a bigger picture which dampens the hope of all for a near recovery, more than most people want to be aware of.
I have posted numerous articles on this blog following the impending decline of the dollar as world reserve currency.
In the article below, this fear is expressed from a highly credible source. I would say the time is right to batten down the hatches for a currency storm that will rock the world.
‘The World Is in Trouble’: Deutsche Bank Chief Economist
12 Aug 2009 By: CNBC.com Source The global economy still faces turmoil as governments try to figure out how to move out of fiscal rescue packages, which could lead to another two downturns, Deutsche Bank Chief Economist Norbert Walter said Thursday.
In addition, nervousness on the part of major dollar holders could pressure the greenback and lead to a very worrying 2010, Walter said.
Norbert said recently in research notes “the world is in trouble.”
“I believe that the rescue packages brought on have been so costly for so many governments that the exit from this fiscal policy will be very painful, very painful indeed,” he said. “Some of us are already talking about a W-shaped recovery. I’d probably talk about a triple-U-shaped recovery because there are so many stumbling blocks here to get out of this.”
“There are a few countries that have not dismissed people, they had a dramatic drop in their sales but they kept on people because they believed the recession would be very shallow,” Walter said. “They now have to fire people. That will increase unemployment and they therefore, of course, may be endangering retail sales in some countries.”
If Australia hikes rates in September or October, markets “will certainly shiver” and cause zig-zagging at the bottom of the recession, Walter said.
And while the White House struggles with issues like health care and puts a fiscal policy exit strategy on the back burner, there are big concerns of about the direction of the U.S. dollar.
“I’m deeply worried about the worries of those investors who have invested a lot, really a lot into the dollar” like the Chinese, Japanese, Arabs and Russians, he said.
“If they have second thoughts about the quality of this currency then the dollar is bound to weaken” which means higher long-term interest rates for a country where government debt is approaching 100 percent of gross domestic product, he said.
If that happens, “2010 could be a worrisome year for all of us,” he said.
Ever wonder why when you have enough money, you don't have enough time to enjoy it? We seem to have the money to buy books on how to appreciate the 'now' and become happier - but not the time to actually read them and experience their promised contentment and pleasure.Time is the one essence of life which is truly limited.
There are only 24 hours to a day and there are only so many days to our lives. How many hours in the day do modern people spend to make money to buy things? And are these things they buy really necessary at all?
I recall a lecture in International Trade, where the instructor compared the GDP of the USA to the GDP of the Eurozone. (This was a few years ago.) Her conclusion seemed to be that more GDP is better. But after looking into the figures, I discovered that not only is the GDP of Europeans less than US GDP, but their work week was also significantly shorter. Most Europeans enjoy from 7 to 10 weeks of paid holidays from work. Yes, Europeans spend more time on leisure activities and more time with their loved ones. From my perspective, this is a healthier lifestyle: GDP does not a happy heart make.
Americans are the best 'consumers' in the world. Looking at the definition of consumerism: Consumerism is the equation of personal happiness with consumption and the purchase of material possessions. Now John Naish has brought us its antithesis, Enoughism.
Enoughism is the theory that there is a point where consumers possess everything they need, and by buying more it actually makes their life worse off. Enoughism emphasizes less spending and more restraint in buying behaviour of consumers. Unlike Consumerism which Mirriam-Webster defines as "the theory that an increasing consumption of goods is economically desirable", Enoughism is an antonym to consumerism.
It is true that if people enjoy what they have (when their necessities are provided for), that corporations will be very unhappy indeed - because their profits will shrink. The ultra rich will have to be satisfied with only 150 pairs of shoes, only 2 townhouses, only 2 Rolls Royce etc.I don't just don't give a flying fart...let them adjust. That's what we all must do if we are to create a sustainable lifestyle on earth for the future. I am not an economic commodity for the use of the elite capitalists: economies exist for the well being of people primarily, all people not just a few.
One thing is for sure: either we will collectively say 'enough is enough' voluntarily NOW; or future generations will be forced to exist on what is 'not enough'. I hope the conclusion we come to is that More is LESS - less happiness, less loving, and less quality living and less time for the people we love.
"We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of." - Edward Bernays
To many in both politics and business, the triumph of the self is the ultimate expression of democracy, where power has finally moved to the people. Certainly the people may feel they are in charge, but are they really? The Century of the Self tells the untold and sometimes controversial story of the growth of the mass-consumer society in Britain and the United States. How was the all-consuming self created, by whom, and in whose interests?
A pretty lucid summary of the geopolitical manuevering to gain control over Earth's remaining resources. My reading confirms much of what Engdahl says. Great minds think alike, or, fools seldom differ. You decide. A video in 2 parts.
Ever wonder why when you have enough money, you don't have enough time to enjoy it? We seem to have the money to buy books on how to appreciate the 'now' and become happier - but not the time to actually read them and experience their promised contentment and pleasure.Time is the one essence of life which is truly limited.
There are only 24 hours to a day and there are only so many days to our lives. How many hours in the day do modern people spend to make money to buy things? And are these things they buy really necessary at all?
I recall a lecture in International Trade, where the instructor compared the GDP of the USA to the GDP of the Eurozone. (This was a few years ago.) Her conclusion seemed to be that more GDP is better. But after looking into the figures, I discovered that not only is the GDP of Europeans less than US GDP, but their work week was also significantly shorter. Most Europeans enjoy from 7 to 10 weeks of paid holidays from work. Yes, Europeans spend more time on leisure activities and more time with their loved ones. From my perspective, this is a healthier lifestyle: GDP does not a happy heart make.
Americans are the best 'consumers' in the world. Looking at the definition of consumerism: Consumerism is the equation of personal happiness with consumption and the purchase of material possessions. Now John Naish has brought us its antithesis, Enoughism.
Enoughism is the theory that there is a point where consumers possess everything they need, and by buying more it actually makes their life worse off. Enoughism emphasizes less spending and more restraint in buying behaviour of consumers. Unlike Consumerism which Mirriam-Webster defines as "the theory that an increasing consumption of goods is economically desirable", Enoughism is an antonym to consumerism.
It is true that if people enjoy what they have (when their necessities are provided for), that corporations will be very unhappy indeed - because their profits will shrink. The ultra rich will have to be satisfied with only 150 pairs of shoes, only 2 townhouses, only 2 Rolls Royce etc.I don't just don't give a flying fart...let them adjust. That's what we all must do if we are to create a sustainable lifestyle on earth for the future. I am not an economic commodity for the use of the elite capitalists: economies exist for the well being of people primarily, all people not just a few.
One thing is for sure: either we will collectively say 'enough is enough' voluntarily NOW; or future generations will be forced to exist on what is 'not enough'. I hope the conclusion we come to is that More is LESS - less happiness, less loving, and less quality living and less time for the people we love.
"We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of." - Edward Bernays
To many in both politics and business, the triumph of the self is the ultimate expression of democracy, where power has finally moved to the people. Certainly the people may feel they are in charge, but are they really? The Century of the Self tells the untold and sometimes controversial story of the growth of the mass-consumer society in Britain and the United States. How was the all-consuming self created, by whom, and in whose interests?
All blogs are really just small snapshots of a person's mind, heart and soul as they evolve together through life....
Small bits of the thread of life we weave together into the fabric of ourselves, in the hope we will make sense of our existence, individual and collective.
On this page, is the cloak I have fashioned from my fabric to warm myself in a universe which often makes little sense.
Inside my cloak, it is warm enough to face the blistering cold winds of the insane world in which I find myself.
If you find some a bit of 'the good stuff' here, it has been my pleasure.
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by Ellen Brown 
by Ellen Brown 
