The lasting contributions of infrastructures come from their usage, not from their construction. This is why a bridge to nowhere can boost GDP temporarily, but it has no long-run positive effect. On that, China falls short. It has several “ghost cities,” rows and rows of apartment buildings that are unsold and vacant, and lightly utilized highways and airports.
He makes it sound like China has the socialist calculation problem in spades.
Why would we expect any better from the ChiComs? The Communist Party still clings to power and they are not free market fans. Are they any better at “directing” an economy than the geniuses who have been in place in DC since January 2009?
Well, the current crowd in DC may not be “geniuses”, they have done a creditable job of managing the economy out of the worst crisis since the 1930’s, over the monolithic opposition of the GOP whose members have clearly sought to prolong the misery intentionally, in order to prevent the Administration from claiming a victory.
[comment deleted for lack of substance]
Do you realky want me/us to respond to the comments above with substance?
This is the problem with comments software and school bullying, defense gets punished.
Rich, since we can’t possibly hope to affect the thinking and behavior of of Mike Ball, can you please not make partisan commentary here?
Mike Balls comment might be the dumbest one I’ve ever seen except that it has been made by every liberal on the internet so that makes it a tie. At least he didn’t say it is because Obama is black. So he gets one point. But now everyone had known Obama is mediocre even without GOP help for a few years so he loses 2 points there.
You know how we know they haven’t done a creditable job with the great recession recovery? Because they haven’t done anything.
For the crash, after helping to cause it, the Fed almost performed it’s lender of last resort function, but didn’t really so government bailouts may have reduced the damage, but I don’t believe that. And for the recovery, we are to believe that had the GOP gone along with the job killing ACA, and the boondoggles on gay marriage, the racial red herrings, the defense of the NSA, wars for Isis in Syria, etc., that Obama had economic recovery the very next thing on his list? Ridiculous.
Substantive?
And why, might you ask do I not believe in the bailouts? We’ll because I don’t think blind squirrels really find nuts, ever. But more importantly because implicit bailouts likely caused the crisis.
Well, this is not only a socialist calculation problem; this is also a “GDP measurement problem”.
There you go, China has a calculation problem in spite of their super computers!
Hm…Maybe the middle income trap is a special case of the calculation problem. Countries that partially liberalize start to experience catch up growth, and that catch up growth covers up the shortcomings of remaining illiberal policies. Eventually, catch up growth winds down, miscalculations are revealed, and the subsequent difficulties undermine trust in institutions that is required for further liberalizing improvements…..
I still don’t understand why people believe China’s gov’t data.
Its pretty obvious that China has suffers from the socialist calculation problem and it has caused major damage to their economy. It’s also almost certainly true that their made up data is much more ridiculous than our made up data.
That is why it is so important that we acknowledge reality. What China has been able to accomplish despite this is remarkable. You can argue it is all smoke and mirrors if you choose to, but it is undeniable that there has been a major improvement in public welfare there. A lot less people are going to bed hungry each night, and that matters.