Lawrence Solomon: China’s coming fall

Lawrence Solomon  January 22, 2011 – 12:27 am

Like the Soviet Union before it, much of China’s supposed boom is illusory — and just as likely to come crashing down

In 1975, while I was in Siberia on a two-month trip through the U.S.S.R., the illusion of the Soviet Union’s rise became self-evident. In the major cities, the downtowns seemed modern, comparable to what you might see in a North American city. But a 20-minute walk from the centre of downtown revealed another world — people filling water buckets at communal pumps at street corners. The U.S.S.R. could put a man in space and dazzle the world with scores of other accomplishments yet it could not satisfy the basic needs of its citizens. That economic system, though it would largely fool the West until its final collapse 15 years later, was bankrupt, and obviously so to anyone who saw the contradictions in Soviet society.

The Chinese economy today parallels that of the latter-day Soviet Union — immense accomplishments co-existing with immense failures. In some ways, China’s stability today is more precarious than was the Soviet Union’s before its fall. China’s poor are poorer than the Soviet Union’s poor, and they are much more numerous — about one billion in a country of 1.3 billion. Moreover, in the Soviet Union there was no sizeable middle class — just about everyone was poor and shared in the same hardships, avoiding resentments that might otherwise have arisen.

In China, the resentments are palpable. Many of the 300 million people who have risen out of poverty flaunt their new wealth, often egregiously so. This is especially so with the new class of rich, all but non-existent just a few years ago, which now includes some 500,000 millionaires and 200 billionaires. Worse, the gap between rich and poor has been increasing. Ominously, the bottom billion views as illegitimate the wealth of the top 300 million.

How did so many become so rich so quickly? For the most part, through corruption. Twenty years ago, the Communist Party decided that “getting rich is glorious,” giving the green light to lawless capitalism. The rulers in China started by awarding themselves and their families the lion’s share of the state’s resources in the guise of privatization, and by selling licences and other access to the economy to cronies in exchange for bribes. The system of corruption, and the public acceptance of corruption, is now pervasive — even minor officials in government backwaters are now able to enrich themselves handsomely.

This ethos of corruption is captured in a popular song in China, I want to marry a government official, whose lyrics explain why an official makes for a good matrimonial catch: “He has power, a car and house; He only needs to drink tea and read the newspaper during work; He never spends his own money on cigarettes and alcohol; He can get free food every day; He can get promoted by only kissing his boss’s ass.”

If the corruption were limited to awarding contracts to friends and giving mines, power plants, and other public assets to relatives, the upset among the poor, who would realize some trickle-down benefits, would be constrained. In fact, the corruption deprives the poor of their homes, livelihoods, health and lives.

Take golf courses, a status symbol among China’s new rich. To obtain the immense tracts of land needed near urban markets, developers have been cooking up deals with local officials that see land expropriated and typically tens of thousands of residents and businesses evicted per golf course, generally with unfair compensation. Although the construction of new golf courses is officially banned, thousands more are expected to be built in the next few years.

Golf courses aside, countless other real estate developments abetted by officialdom likewise wipe out entire communities. Then there are resource projects such as hydro dams that can displace numerous people and businesses — the Three Gorges Dam alone displaced several million people.

The corruption extends to the enforcement of regulatory standards for health and safety, which few in China trust. In recent years China has endured a tainted milk scandal and a tainted blood scandal, each of which implicated corrupt officials in widespread death and debilitation. In a devastating 2008 earthquake, some 90,000 perished, one-third of them children buried alive in 7,000 shoddily built “tofu schools” that skimped on materials. Nearby buildings for the elites that met building standards, including a school for the children of the rich, were largely unscathed.

The government tries to tamp down the outrage over the abuses inflicted on the public by banning demonstrations and censoring the Internet. But it is failing. Year by year, the number of demonstrations increases. Last year alone saw 100,000 such protests across the county, directly involving tens and indirectly perhaps hundreds of millions of protesters.

China is a powder keg that could explode at any moment. And if it does explode, chaos could ensue — as the Chinese are only too well aware, the country has a brutal history of carnage at the hands of unruly mobs. For this reason, corrupt officials inside China, likely by the tens of thousands, have made contingency plans, obtaining foreign passports, buying second homes abroad, establishing their families and businesses abroad, or otherwise planning their escapes. Also for this reason, much of the middle class supports the government’s increasingly repressive efforts.

What might set off that spark? It could be high unemployment, should China be unable to control inflation or the housing bubble that now looms. It could be another natural disaster such as the 2008 earthquake which spawned outrage — rapidly organized via cellphones and the Internet — that the government had difficulty containing. It could be a manmade disaster — many fear that a “tofu dam” might fail, leading to hundreds of thousands of downstream victims.

Whatever might set off that spark, it is only a matter of time. The government shows no interest in relaxing its grip on power — if it did so, the officials in power might face retribution.

Meanwhile, we in the West see a China that by all measures is becoming stronger and stronger, not realizing that it is also becoming more and more brittle. The Soviet regime, when it fell, went out with a whimper. China’s will more likely go out with a bang. No regime can contain the grievances of a billion people for long.

Financial Post
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Lawrence Solomon is executive director of Energy Probe and a founder of its sister organization, Probe International.

Father & Daughter Talk

A young woman was about to finish her first year of college.  Like so
 many others her age, she considered herself to be very liberal, and among
 other liberal ideals, was very much in favor of higher taxes to support
 more government programs, in other words redistribution of wealth.
 
  She was deeply ashamed that her father was a rather staunch conservative,
 a  feeling she openly expressed.  Based on the lectures that she had
 participated in, and the occasional chat with a professor, she felt that
 her father had for years harbored an evil, selfish desire to keep what he
 thought should be his.
 
  One day she was challenging her father on his opposition to higher taxes
 on  the rich and the need for more government programs.
 
  The self-professed objectivity proclaimed by her professors had to be the
 truth and she indicated so to her father.  He responded by asking how she
 was doing in school.
 
  Taken aback, she answered rather haughtily that she had a 4.0 GPA, and
 let him know that it was tough to maintain, insisting that she was taking
 a very  difficult course load and was constantly studying, which left her
 no time  to go out and party like other people she knew.  She didn't even
 have time  for a boyfriend, and didn't really have many college friends
 because she spent all her time studying.
 
  Her father listened and then asked, "How is your friend Audrey doing?"
 She replied, "Audrey is barely getting by.  All she takes are easy
 classes,  she never studies and she barely has a 2.0 GPA.  She is so
 popular on  campus; college for ! her is a blast.  She's always invited
 to all the  parties  and lots of times she doesn't even show up for
 classes because she's too  hung over"
 
  Her wise father asked his daughter, "Why don't you go to the Dean's
 office and ask him to deduct 1.0 off your GPA and give it to your friend
 who only has a 2.0.  That way you will both have a 3.0 GPA and certainly
 that would be a fair and equal distribution of GPA."
 
  The daughter, visibly shocked by her father's suggestion, angrily fired
 back, "That's a crazy idea, how would that be fair!  I've worked really
 hard  for my grades!  I've invested a lot of time, and a lot of hard
 work!
 Audrey  has done next to nothing toward her degree.  She played while I
 worked my  tail off!"
 
  The father slowly smiled, winked and said gently, "Welcome to the
 conservative side of the fence."
 
  If you ever wondered what side of the fence you sit on, this is a great
 test!
 
  If a conservative doesn't like guns, he doesn't buy one.
 If a liberal doesn't like guns, he wants all guns outlawed.
 
  If a conservative is a vegetarian, he doesn't eat meat.
 If a liberal is a vegetarian, he wants all meat products banned for
 everyone.
 
  If a conservative is down-and-out, he thinks about how to better his
 situation.
 A liberal wonders who is going to take care of him.
 
  If a conservative doesn't like a talk show host, he switches channels.
 Liberals demand that those they don't like be shut down.
 
  If a conservative is a non-believer, he doesn't go to church.
 A liberal non-believer wants any mention of God and religion silenced.
 (Unless it's a foreign religion, of course!)
 
  If a conservative decides he needs health care, he goes about shopping!
 for  it, or may choose a job that provides it.
 A liberal demands that the rest of us pay for his.
 
  If a conservative reads this, he'll forward it so his friends can have a
 good laugh.
 
 A liberal will delete it because he's "offended."
 
  *Well, I forwarded it to you.*

Palin Criticized for Praying to God, Obama Given a Pass for Playing God

When Sarah Palin recently cited the legendary C.S. Lewis and the phrase “divine inspiration” in the same sentence during a Barbara Walters interview, liberal talking heads went apoplectic. MSNBC’s Richard Wolffe thought there were a lot of things Palin could have read besides C.S. Lewis if “divine inspiration” was the goal, and The View’s Joy Behar mocked her for reading books that were (supposedly) written for children. Such desperate and unprofessional commentary from Wolffe and Behar is undone by the fact that millions upon millions of people have read Lewis for divine inspiration throughout the years. Moreover, those reading him for such inspiration are adults, not children. (Sure, children do enjoy Lewis’ “Chronicles of Narnia,” but his eye-opening works like “Mere Christianity,” “The Great Divorce,” and “The Abolition of Man,” to name but a few, are so in depth that an adult must read them time and again to grasp everything that Lewis is saying.)

Judye Sellier to run for House Seat

Obama Gets Busted on Mythbusters

Super-fan President Barack Obama makes a guest appearance on a very special episode of Mythbusters this week. But will he still like Jamie and Adam after they bust his first two years in office? Check out this super-secret Reason.tv trailer for this Wednesday’s show. Approximately 45 seconds long. Written by Austin Bragg, Nick Gillespie, and Meredith Bragg. Produced by Meredith Bragg

http://www.youtube.com/watch?v=44QB4nTr2DY&feature=player_embedded

Hold the Brownies! Obama Set to Sign Bill Limiting School Bake Sales

The Federal Communications Commission (FCC) is poised to add the Internet to its portfolio of regulated industries. The agency's chairman,Julius Genachowski, announced Wednesday that he circulated draft rules he says will "preserve the freedom and openness of the Internet." No statement could better reflect the gulf between the rhetoric and the reality of Obama administration policies.

With a straight face, Mr. Genachowski suggested that government red tape will increase the "freedom" of online services that have flourished because bureaucratic busybodies have been blocked from tinkering with the Web. Ordinarily, it would be appropriate at this point to supply an example from the proposed regulations illustrating the problem. Mr. Genachowski's draft document has over 550 footnotes and is stamped "non-public, for internal use only" to ensure nobody outside the agency sees it until the rules are approved in a scheduled Dec. 21 vote. So much for "openness."

It's not clear why the FCC thinks it needs to intervene in a situation with obvious market solutions. Companies that impose draconian tolls or block services will lose customers. Existing laws already offer a number of protections against anti-competitive behavior, but it's not clear under what law Mr. Genachowski thinks he can stick his nose into the businesses that comprise the Internet. The FCC regulates broadcast television and radio because the government granted each station exclusive access to a slice of the airwaves. Likewise when Ma Bell accepted a monopoly deal from Uncle Sam, it came with regulatory strings attached.

The New Normal: Obamaville 2010, Where We Pay People Not to Work

The unemployment number, 9.8%. Now, this is very timely. See, I can't help but look at this stuff as a cynic. Nine-point-eight percent is going to facilitate the discussion of extending unemployment benefits. It is also gonna give Obama and whoever else needs it cover to go along with the idea of temporarily extending the Bush tax rates, that 9.8%. Who would have ever thought the number woulda gone up after the election, I ask cynically. He-he-he-he-he-he-he. It went up, by the way, we added 39,000 jobs. Now, I want you to stop and think of that. We've had people try to tell us this week the economy is starting to boom, starting to recover. In the United States of America we added 39,000 jobs. That is such a small number that it is impossible to represent statistically. That's less than one-tenth of one millionth of 1%. Thirty-nine thousand jobs in the United States. That's so small I don't even know how you calculate. That's a rounding error.

View Source: http://www.rushlimbaugh.com/home/daily/site_120310/content/01125110.guest.html