China

Infrastructure and the meaning of “Investment”

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In the field of accounting traditionally assets were “hard” assets, like land, cash on hand, factories, and other similar items. You could “touch” an asset, and you saved up capital in advance and then “invested” it into projects that would expand your capacity to do business or do it cheaper than your competitor (improvements). This “traditional” view of assets came under attack in the 2nd half of the 20th century, as accountants pointed out that brands had value (the classic example – the “Golden Arches” at McDonald’s). As the economy moved more towards services, the public accounting firms also noted that people did not have value in this model; the famous line was “all my assets go out the door each night”.

The traditional view of government was that they 1) built things like roads, bridges, schools, and jails 2) provided critical services like police, fire and military protection. In this manner citizens could see with their own eyes the value of the taxes that they were paying to the government; with it came roads, schools, and essential services.

Analogous to what occurred with accounting practitioners, those lobbying for higher taxes, which mainly go to transfer payments to favored constituencies, re-defined what an “investment” means. An investment used to be something tangible, like a highway extension or a new school; but now it is an investment in people, meaning that you as a citizen are in effect paying for a transfer payment to someone else.

It is astounding to see the degree to which the “traditional” view of government investment has been crowded out by the new view of investment being a transfer payment to someone else. In the City of Chicago we see the rotting, rusting hulk of the “L” tracks over our head every day, with holes in the streets and bridges and the only things that are new are the buildings erected with private funds that comprise our skyline.

Meanwhile in China they are building ENTIRE CITIES the size and scale of Chicago FROM SCRATCH. Now that is the traditional view of investment; power plants, roads, bridges, and all manner of hard assets to boot. It is amazing to think of what they are constructing there vs. the pathetic state of our infrastructure in the United States. And yet our government spends much more, but we direct it into transfer payments to other citizens or for retired government employees, rather than those “old school” ideas of traditional investments.

This rhetorical sleight of hand has gotten out of control; we need to re-label transfer payments as transfer payments and investments to be those things that actually serve the population for the future. This is not to say that all money spent on education and health care isn’t an investment; it IS when those individuals gain significant and useful skills that they can utilize for the economy. But overall, the building of even a highway or power plant is now beyond the pale even with government spending far higher than the historical norm; transfer payments have been re-defined as investment. Just look at those rusting “L” tracks to prove it.

Cross posted at LITGM

Not So Superior Chinese Mothers

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Via Instapundit comes a question in response to Amy Chua’s interesting article on the superiority of Chinese mothers:

Then again, as I said above, one wonders why Asians, if they’ve got things so figured out, need to emigrate to the land of the substandard “Westerner” in order to live prosperously and free.

I think Chua provides the answer herself:

Here are some things my daughters, Sophia and Louisa, were never allowed to do:
 
Ӣ attend a sleepover

Ӣ have a playdate

Ӣ be in a school play

Ӣ complain about not being in a school play

Ӣ watch TV or play computer games

Ӣ choose their own extracurricular activities

Ӣ get any grade less than an A

Ӣ not be the No. 1 student in every subject except gym and drama
 
Other studies indicate that compared to Western parents, Chinese parents spend approximately 10 times as long every day drilling academic activities with their children. By contrast, Western kids are more likely to participate in sports teams.[emp added]

Noticeably excluded from her children’s activities is any kind of team activities. The secret of American’s collective success as a people is our ability to self-organize ourselves on both the small and large scale into highly effective teams The relative inability to self-organize into teams is why China and some other cultures have lagged behind in the modern world. Americans have long relied on activities like sports, theater, marching band etc to teach that one critical American cultural skill. By excluding such activities from her children’s life, Chua is depriving them of one of the most crucial skills an American must have.

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Quotes of the Day

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Victor Davis Hanson (at around 14:00):

What Thomas Friedman would need to do is get on a bicycle and go across rural China, and then compare that with biking across Nebraska, and see which society is more resilient and stable.

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Ann Althouse:

Well, you will pull the plug on grandma, but only after grandma has signed the document the doctor explained to her long before she got into the situation she’s in now, back when it seemed like autonomy and control.

“Using unwanted procedures in terminal illness is a form of assault,” [said Dr. Donald M. Berwick, administrator of the Centers for Medicare and Medicaid Service].

The question is what do patients want and how what they want will be determined. It seems to me that the effort is to get people to commit in advance to death-hastening choices, by getting everyone to sign these documents. Now, all the new regulation seems to do is to authorize Medicare reimbursements for the time health care professionals spend counseling patients about the value and importance of signing the document. It’s hard to see what’s wrong with that. If treatments are covered but advice about forgoing treatment is not covered, then there’s an incentive to do expensive things.

In a recent study of 3,700 people near the end of life, Dr. Maria J. Silveira of the University of Michigan found that many had “treatable, life-threatening conditions” but lacked decision-making capacity in their final days. With the new Medicare coverage, doctors can learn a patient’s wishes before a crisis occurs.

Treatable? You have a condition that can be treated, but you can’t think well enough anymore to decide whether you’d prefer to die? If you’ve signed the document, the answer is you’d rather let the condition kill you, because you allowed the doctors to “learn [your] wishes before” this “crisis” occurred. You didn’t know what the crisis would be or how you would feel when it happened, but you had “wishes” then and these will be taken as your “wishes” now.

(Many of the comments are also worth reading, particularly the one by Bender at 10:21 AM on 12/26/10 and the one by Ann Althouse at 2:21 PM on 12/26/10.)

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Oleg Atbashian:

* Why do those who object to tampering with the environment approve of tampering with the economy? Isn’t the economy also a fragile ecosystem where a sudden change can trigger a devastating chain reaction?
* Isn’t the latest economic crisis such a chain reaction?
* Aren’t most of today’s social ills the result of tampering with social ecosystems?
* Why is bioengineering bad, but social engineering good?

 

Book Review — Wolff — Tibet Unconquered

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Wolff, Diane, Tibet Unconquered: An Epic Struggle for Freedom, Palgrave McMillan, New York, 2009, 248pp. Foreword by Robert Thurman.

The publisher kindly provided a copy of this book for review.

A year ago, my Holiday 2009 Book Roundup on chicagoboyz here recommended Christopher Beckwith’s Empires of the Silk Road as an outstanding overview of Central Asian culture from prehistory to the present day. Complementing that title is Diane Wolff’s new and approachable overview of Tibet’s relationship with China.

It’s hard to imagine an extended American family that doesn’t have at least one member who’s been fascinated by Tibetan Buddhism in some way. The Dalai Lama remains as one of the few religious leaders given wide respect in the Western world. His recent emphasis on the preservation of Tibet’s environment (which forms the headwaters of five major Asian river systems) gives him even more popularity with Greens. As Wolff notes, Buddhism has been the default “cool” religion in Hollywood for many years apart from the recent and occasional forays into Jewish Kabbalah by the Malibu crowd. In turn, Tibetan Buddhism also appeals to adolescents looking for a way to peeve their parents … without getting kicked out of the house.

A book that tries to give a general reader a solid historical understanding of Chinese-Tibetan relations is welcome. It’s a tangled and tragic piece of history, one fraught with opportunities missed on both sides and historical trends that have largely worked against Tibetan culture. We have a vivid “virtual Tibet” (in Orville Schell’s phrasing) but will we still have a Tibetan culture in 2050? Wolff offers a heart-felt and practical solution to the current style of Han occupation of Tibet. She’s also realistic enough to understand that the current generation of Chinese leaders may not be suited to making the adjustments and compromises necessary to pull a Tibetan thorn from the Chinese paw. A Fifth Generation of Chinese Communist Party leaders may be needed.

Wolff’s book is written for the non-specialist. It requires close reading (because she often approaches subjects thematically with a certain amount of bouncing back and forth between time periods) but Tibet Unconquered is pitched for mortal readers, without a forest of footnotes.

An intelligent high school student can easily make their way through this book, with profit. So if you’ve suddenly found your kids flying Tibetan prayer flags in your backyard, Diane Wolff’s book definitely belongs on your 2010 holiday book buying list. You can bask in some of that reflected “cool” yourself. It’s a very affordable, useful introduction to a fascinating subject. It works fine as a springboard to the specialist literature for motivated readers. Those interested in China’s capacity to adapt to a world demanding more transparency, more honesty and more credible self-reflection could hardly find a better ongoing touchstone than Tibet. Educating yourself about how things got the way they did in Tibet (and China) is therefore well worth the time. The Han Chinese have plenty of challenges facing them. Tibet is where the world proclaims they are most “uncivilized.” That’s a slur the Han cannot, cannot bear after a millennium ruled largely by northern barbarians and more recent humiliations by industrial nations. So the Roof of the World is where the Han must come to a successful solution without losing face. For them, let alone the poor Tibetans, the stakes couldn’t be higher. It’s a situation worth watching.

Even better for those of you racing into the e-book world, Amazon offers an even more affordable Tibet Unconquered. Consider this title as a gift or for a thought-provoking bit of holiday reading.

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How to deal with North Korea

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While I’ve been purposefully avoiding any news shows or blogs this weekend, the situation in North Korea forces me to post this potential solution to the problem. Let’s start with some premises.

1. NK is a buffer state for China. It exists at China’s will.
2. NK is a clear and present danger to its own people and to the world.
3. China, belligerent and “ascendant” as she may be, is linked to our currency and to our consumption of her cheap goods.

While I could add details and subheadings to the above, I think the premises are sound. If not please correct me.

With that in mind, why shouldn’t America, in the person of its CEO, simply offer China the ultimatum below.

Dear Hu,

This nation tires of the dangerous and evil games played by Kim Jong Il. He is a dangerous man who is actively destroying his own people. The United States has played the diplomatic games with this madman long enough, yet fully realizes that we have no optimal military option.

Given that you have it with in your power as a nation to change the nature of NK, and that you clearly are using NK as a threatening buffer state, I see no reason to remain diplomatically engaged with the buffer state puppet – Kim Jong Il. I think we will deal with your nation alone.

With that in mind, I offer the following ultimatum. You will immediately begin the process of forcing regime change in NK. The best solution would be for you to begin the process of reunification, but I would be happy to hear other alternatives.

If you fail to begin this process, I will use all my administrative powers, and lobby Congress to use its powers to shut down all trade with China until such regime change is effected.

Sincerely,

President Obama (or his successor)

Why shouldn’t we use trade as weapon in this situation? Aside from hurting Walmart’s stock price for a few quarters and losing a few transportation jobs in the interim, why can’t we do this? Discuss.