Even with the Bribes Chinese Health Care is Better since Privatization

Posted by PITHOCRATES - April 12th, 2014

Week in Review

China has recently privatized their health care system.  Sort of.  They have private health care providers and a state health insurance that helps pay for it with a small patient ‘co-pay’.  Quality of care did increase.  But health care providers don’t get paid a lot in China.  And turn to other means of compensation that is not without its problems (see ‘Guardian angels’ to protect Chinese doctors from patients by Malcolm Moore posted 4/9/2014 on The Telegraph).

Hospitals in Beijing will recruit 1,500 “guardian angels” to protect their doctors from violent attacks by patients.

In recent years, angry patients have killed a number of Chinese doctors, often citing frustration at how they have been handled by the healthcare system…

Doctors and nurses in hospitals are violently attacked every two weeks on average, the state media said, by patients angry at long waiting times, high medical bills and haughty or uncaring doctors…

The government has promised to root out corruption in the healthcare system, and the Health Ministry said in February it would target patients who bribe doctors for better treatment.

Yes, bribes.  Or hongbao, as it’s called in China.  If you want some decent care in a Chinese hospital you have to slide an envelope with money in it to your health care provider.  Otherwise you’ll only get what the state health insurance will buy you.  Long waiting times, high medical bills (for what the state insurance doesn’t cover—a high deductible, if you will) and haughty or uncaring doctors.  Which tells you how bad the health care system must have been before they privatized it.  For it’s a lot better now than it used to be.

So China made their health care better by privatizing it (although it is still so bad that angry patients who paid good bribes for their loved one’s care are assaulting their doctors and nurses every two weeks on average).  While the United States is going the other way.  Towards more state control.  Pity the Obama administration can’t be more like China when it comes to health care.  And try to improve the quality of health care instead of making it worse.  Which they will likely do as their cost saving measure is simply to pay health care providers less.  Which will likely discourage doctors from entering the system.  Or remaining in the system.  Leading to longer waiting times.  And, perhaps, bribes.  At least from those who want good care for their loved ones.

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Abortion is Good in the United States but Bad in China

Posted by PITHOCRATES - January 26th, 2014

Week in Review

Advanced economies with expansive welfare states are incurring large budget deficits and growing national debt.  Why?  Because of birth control.  And abortion.

These massive welfare states were implemented before the Sixties.  When people were having more babies than they are now.  Following World War II there was a baby boom.  Following the baby boom, though, there was a baby bust.  Fast forward to today and a lot of those baby boomers are leaving the workforce and collecting taxpayer-financed benefits in retirement.  While the smaller baby bust generation is paying the taxes for those benefits.  Resulting in less money going into the welfare state than is going out in benefits.  Giving those deficits.  And that growing national debt.

A declining birthrate is the death knell of a welfare state.  So if you want a healthy welfare state you need people to have more babies.  So each generation is bigger than the one before it.  So there is always more money going into the welfare state than is going out.  Allowing the state to pay for those generous benefits without going bankrupt.

So birth control and abortion can bankrupt advanced economies with generous welfare states.  But abortion can do something else (see One-Child Policy Is One Big Problem for China by Susan Scutti posted 1/23/2014 on Newsweek).

Late last year, China’s National People’s Congress eased the one-child policy. The government didn’t exactly admit it was a mistake; according to Chinese officials, the guidelines helped avert 400 million births and in so doing, accelerated modernization…

Enforcement of the one-child policy during the early 1980s was controversial not only in China but around the globe. Early stories emerging from the rural villages focused on coercive practices, including forced late-term abortions and involuntary sterilization, as well as the “neighborly” snitching on pregnant couples who dared to conceive a second child…

…In China, there are currently 32 million more boys under the age of 20 than girls.

Medical advancements and technology have played a key role in creating this surplus of boys. “The Chinese government contracted with GE to provide cart-mounted ultrasound that could be run on generators so that the most obscure village had access to fetal sex determination,” said Hudson. Given the ability to know the sex of their unborn children, many parents aborted female fetuses…

It appears that the outraged cries from within and without have been heard. The Chinese government has spent millions of dollars in recent years to fund research into the implications of this radical skew in gender population numbers.

Having more men than women has led to a lot of single men who want to marry but can’t.  As there are not enough women to match up with men.  Which has caused a lot of these men to turn to prostitutes.  Something human traffickers are more than happy to supply them with.  Sending women there from neighboring countries to work in the sex industry.

The world is outraged over the number of aborted female fetuses in China.  Including the American left.  Yet they have no problem with abortion.  Aborting female fetuses is wrong.  But aborting male AND female fetuses is fine.  Apparently.  As abortion is sacred to those on the left.  Just mention that you want to revisit Roe v. Wade and see them go apoplectic.  For that is settled law.  And anyone who wants to take away a woman’s right to have an abortion is waging a war on women.  While in China abortion itself is the war on women.  So on the one hand abortion is the great liberator of women (outside of China).  While on the other hand it is the great exterminator of women (inside of China).  So it’s both good and bad.  When you use the imaginary logic of liberals, that is.

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China’s Fettered State-Capitalism puts Poisonous Gutter Oil on Store Shelves

Posted by PITHOCRATES - January 11th, 2014

Week in Review

There’s a myth in America that if we don’t have government food inspectors that evil corporations will sell poisonous food to unsuspecting Americans.  As if people will keep buying from a food manufacturer who has a reputation of poisoning their customers.  They won’t.  For every food brand has a competitor just waiting to take their business away.  Which they will do if the people believe they sell a higher quality product.  So there is a huge incentive to sell people nothing but the best and safest food they can.  For without government limiting a business’ competition it is only their good name that keeps customers coming back.  Unlike in China (see Ten jailed for producing, selling ‘gutter oil’ posted 1/7/2014 on China Daily USA).

A man was given a suspended death sentence and two others life in jail for producing and selling poisonous food, a court in east China ruled on Tuesday…

In 2006, they began to produce “gutter oil”, which refers to oil illegally made by reprocessing waste oil or even leftovers from restaurants. It was then marketed and re-used as cooking oil.

They then sold the “gutter oil” to 17 edible oil dealers in Shandong and Shanxi provinces, with a sales value of 52.4 million yuan…

China has been clamping down on “gutter oil” as part of its food safety efforts. The oil, which contains carcinogenic substances, is dangerous if consumed.

This is what happens when you fetter unfettered capitalism.  And transform it into state-capitalism.  Or a planned economy.  Where the government picks winners and losers.  Favoring their friends.  And hurting their competition.  Such as by limiting competition to protect their friend.  Giving them a state-enforced monopoly.  The only way a monopoly can exist.

Without competition you can sell crap and the people have little choice but to buy it.  Which is why a lot of businesses in a planned economy like China do things like this.  Because they can get rich.  Until someone catches them.  Because without unfettered capitalism other competitors can’t enter the market to keep them honest.  Leaving you to rely on a bloated, ponderous and often corrupt public sector to police that planned economy.  And because they aren’t that good you get people trying to sell gutter oil in China.  While food manufacturers police themselves in the United States.  Because they know their brand is not the only brand on supermarket shelves.

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The Chinese Communists to embrace Free Market Capitalism more than President Obama

Posted by PITHOCRATES - December 21st, 2013

Week in Review

During the Eighties Democrats said the Japanese economy was the smart way to go.  Government partnering with business.  With government helping to make that messy capitalism more ordered and manageable.  Improving economic efficiency.  And economic output.  But all that government intervention and cronyism brought on a deflationary spiral.  Japan’s Lost Decade.  Which they’re still trying to recover from.

Over the last decade Democrats said the Chinese economy was the smart way to go.  Government partnering with business.  With government helping to make that messy capitalism more ordered and manageable.  Improving economic efficiency.  And economic output.  But it doesn’t appear the Chinese agree with them (see China factories stuck in cruise control by Charles Riley posted 12/15/2013 on CNNMoney).

After a long period of steady progress and faster growth, China’s factories have lost some momentum in the final months of the year…

…analysts said that sluggishness in the manufacturing sector suggests economic growth has started to weaken, a trend that will continue into next year…

China’s party leaders have spent much of the year plotting a course for economic reform that aims to deliver results by 2020.

Beijing’s plan calls for opening its financial markets and promoting greater foreign investment. The leadership also hinted at changes in how companies file for stock market listings, the introduction of a bank deposit insurance scheme and an acceleration of interest rate liberalization.

The roadmap seeks to roll back government control of state-owned enterprises and allow for greater competition with private firms.

The Chinese export economy created economic activity.  But the key to that was their low labor costs.  With the power of the state keeping labor costs low.  Which helped to make their exports inexpensive.  But it did not help grow a middle class.  Which meant all of China’s economic growth relied on those exports.  And when nations were suffering anemic economic growth those export sales fell.  And without a prosperous middle class there was nothing to replace those sales.  Causing the Chinese economy to lose momentum.

And what is China doing to regain that momentum?  Reduce the role of government in the economy.  Unlike President Obama.  Which could forever change the balance of power in the world.  For if the Chinese privatize their economy while the Americans strangle theirs with more government involvement the Chinese economy will grow greater and overtake the American economy.  Allowing the Chinese communist do something the Soviets could never do.  Beat America economically.  Because the Chinese communists embraced free market capitalism more than President Obama.

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Powerful Government Forces suppressing the Economic Principles of Friedrich Hayek in China and America

Posted by PITHOCRATES - November 16th, 2013

Week in Review

Large governments like to control their economies.  And their people.  Because those in power always want one thing.  More power. 

The United States became the world’s number one economic power before the federal government grew into the thing it is today.  Way too big.  Reaching way too far into the private sector economy.  Before Keynesian economics became all the rage to empower the growth of governments there was classical economics.  With simple principles.  Thrift.  People thought long-term and saved their money instead of buying everything they wanted today.  Banks collected their savings and transformed them into investment capital.  The more people saved (i.e., the thriftier they were) the more capital there was available to loan to entrepreneurs.  Thus lowering interest rates.  There was also sound money.  Backed by gold.  In various forms of the gold standard.  That held the value of money over time.  And the federal government taxed little.  Regulated little.  And spent little.  These classical economic principles stimulated strong economic growth.  (Principles similar to the Austrian school of economics championed by Friedrich Hayek.)  And it is these principles that we have moved away from as we turned to Keynesian economics.  And a form of state-capitalism that we have today.

During the Nineties China turned to classical economic principles.  As they slowly allowed people some economic liberty.  But just a taste of it.  For the ruling Chinese communists did not want what happened during the collapse of the Soviet Union to happen in China.  The Chinese Communist Party would not collapse like it did in the former Soviet Union.  While there were free thinkers that embraced the principles of Friedrich Hayek the state kept them on a short leash.  A leash that appears to be even shorter these days (see A Lonely Passion: China’s Followers of Friedrich A. Hayek by DIDI KIRSTEN TATLOW published 10/30/2013 on The New York Times).

Hayek believed that economic planning by the state leads to a loss of individual liberty, and that a private economy run by people whose rights are protected and enlarged by good laws delivers the best life.

‘‘There is some distance between Hayek and the current realities’’ in China, Gao Quanxi, a prominent Chinese Hayekian and law professor at Beihang University in Beijing, said in an interview this week.

Mr. Gao was probably choosing his words carefully. The gap is enormous, as he explained last Friday in a talk at the Unirule Institute of Economics, a think tank in Beijing…

In his talk, titled ‘‘Reconsidering Hayek’s Theoretical Legacy,’’ Mr. Gao did not mince words: China is less free now than 10 years ago, at the end of the Jiang Zemin era. There is no ‘‘free market of ideas’’ in universities. Publishing on topics the authorities disapprove of has become more difficult. The state is on the march…

Capitalism, several participants said, functions in China according to the unwritten rules created by the power holders, not by good laws, as Hayek urged.

‘‘Communism has failed. Socialism has failed. What we have here is statism. And Hayek really opposed that. So how should we understand Hayek in the context of today’s China?’’ asked Mr. Gao…

Many economists, scholars and politicians believe that China is facing deep challenges to its economic model, that it needs to shift from a fixed investment-fueled economy, where the hand of the state is heavy, to one with more private enterprise and market forces.

President Obama and the Chinese communists share something in common.  They both are trying to move their economies in the same direction.  Only the Chinese communists don’t publicly bash capitalism as much as President Obama and his fellow Democrats do.

When China was enjoying double digit GDP growth the liberals in the United States wanted to do what the Chinese were doing.  To manage the economy more.  As they thought they were even more brilliant than communist state planners in China.  And could even outperform the Chinese economy.  If they could only control it.  Decide what we make.  Like solar panels.  And electric cars.  Of course, most of China’s economic growth produced exports.  And they sold well because of China’s low wages.  Which is pretty much all they had going for them.  Their middle class did not grow.  And with the worldwide decline in economic activity thanks to Keynesian economic policies by state planners everywhere who think they are smarter than the market their export market cooled.  As it cooled so did their GDP growth.

China is suffering a little economic malaise now because they don’t have a thriving middle class of entrepreneurs starting small businesses.  All they have are large state-run factories.  That produce exports.  Because they don’t have a thriving middle class to buy these products.  Which is what happens when you don’t have individual liberty.  Friedrich Hayek understood this.  Pity the Chinese communists don’t.  Or President Obama and his fellow Democrats.  Then again, perhaps they do.  But they know the price of individual liberty is less government power.  And that’s just something anathema to communists.  President Obama.  And Democrats.

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China’s Continuing Credit Expansion is Starting to Worry the IMF

Posted by PITHOCRATES - September 15th, 2013

Week in Review

As the U.S. fiscal year draws to a close the Republicans and Democrats are digging in their heels over the upcoming debt ceiling debate.  The Republicans want to cut spending and taxes to rein in out-of-control spending.  So they don’t have to keep borrowing money.  Running up the national debt.  The Democrats, on the other hand, say, “Who cares about the debt?  We’ll be dead and buried when the nation collapses under the weight of this mammoth debt load.  As long as we get what we want why should we care about future generations?”  At least, that’s what their actions say.

A lot of leading economists on the left, Keynesians economists, see no problem in running up the debt.  Print that money, they say.  Keep that expansion growing.  What could possibly go wrong?  Especially when the federal government has the power to print money?  Just look at what the Japanese did in the Eighties.  And what the Chinese are doing now (see As the West Faltered, China’s Growth Was Fueled by Debt by Christina Larson posted 9/12/2013 on Bloomberg Businessweek).

As demand for Chinese exports diminished in the wake of the financial meltdown, the Chinese economy kept humming at more than 9 percent annual gross domestic product growth each year from 2008 to 2011. The trick? “A huge monetary expansion and lending boom,” says Patrick Chovanec, chief strategist at Silvercrest Asset Management and a former professor at Tsinghua University’s School of Economics and Management in Beijing. With bank lending restrictions loosened in late 2008, “Total debt accelerated from 148 percent to 205 percent of GDP over 2008-12,” according to a May 2013 report from research firm CLSA Asia-Pacific Markets. When Beijing tried to rein in the banks beginning in late 2010, shadow banking—lending outside the formal sector—exploded. Today “China is addicted to debt to fuel growth,” according to the CLSA report, with the economy hampered by “high debt and huge excess capacity with only 60 percent utilization.”

The Beijing-based firm J. Capital Research dubbed 2012 the “Year of the (White) Elephant” in a report detailing some of China’s questionable infrastructure build-out. To take one example, 70 percent of the country’s airports lose money, yet more are being built in small and remote cities. At the shiny new Karamay Airport in far western Xinjiang province, there are four check-in counters serving two flights daily. Local governments have splurged on “new towns” and “special zones,” many of which have already fallen into disrepair. The $5 million Changchun Zhenzhuxi Park, intended as a scenic area, is now a large public garbage dump, as the local landscaping bureau never agreed to provide maintenance. Near the southern city of Hangzhou, a forlorn replica of the Eiffel Tower overlooks a faux Paris—the ersatz arrondissement attracted hardly any residents, and local media have dubbed it a ghost town.

“In China, you often hear people say they’re building for the future,” explains Chovanec. “But if you build something and it’s empty for 20 years, does that make any sense? By that point, it may already be falling apart.”

The classic Keynesian argument for economic stimulus is the one about paying people to dig a ditch.  Then paying them to fill in the ditch they just dug.  The ditch itself having no economic value.  But the people digging it and filling it in do.  For they will take their earnings and spend it in the economy.  But the fallacy of this argument is that money given to the ditch-diggers and the fillers-in could have been spent on something else that does have economic value.  Money that was pulled out of the private sector economy via taxation.  Or money that was borrowed adding to the national debt.  And increasing the interest expense of the nation.  Which negates any stimulus.

If that money was invested to expand a business that was struggling to keep up with demand that money would have created a return on investment.  That would last long after the people who built the expansion spent their wages.  This is why Keynesian stimulus doesn’t work.  It is at best temporary.  While the long-term costs are not.  It’s like getting a 30-year loan to by a new car.  If you finance $35,000 over 5 years at a 4.5% annual interest rate your car payment will be $652.51 and the total interest you’ll pay will be $4,018.95.  That’s $39,018.95 ($35,000 + 4,018.95) of other stuff you won’t be able to buy because of buying this car.  If you extend that loan to 30 years your car payment will fall to $177.34.  But you will be paying that for 30 years.  Perhaps 20-25 years longer than you will actually use that car.  Worse, the total interest expense will be $23,620.24 over those 30 years.  That’s $58,620.24 ($35,000 + 23,620.24) of stuff you won’t be able to buy because of buying this car.  Increasing the total cost of that car by 50.2%.

This is why Keynesian stimulus does not work.  Building stuff just to build stuff even when that stuff isn’t needed will have long-term costs beyond any stimulus it provides.  And when you have a “high debt and huge excess capacity with only 60 percent utilization” bad things will be coming (see IMF WARNS: China Is Taking Ever Greater Risks And Putting The Financial System In Danger by Ambrose Evans-Pritchard, The Telegraph, posted 9/13/2013 on Business Insider).

The International Monetary Fund has warned that China is taking ever greater risks as surging credit endangers the financial system, and called for far-reaching reforms to wean the economy off excess investment…

The country has relied on loan growth to keep the economy firing on all cylinders but the law of diminishing returns has set in, with the each yuan of extra debt yielding just 0.20 yuan of economic growth, compared with 0.85 five years ago. Credit of all types has risen from $9 trillion to $23 trillion in five years, pushing the total to 200pc of GDP, much higher than in emerging market peers…

China’s investment rate is the world’s highest at almost 50pc of GDP, an effect largely caused by the structure of the state behemoths that gobble up credit. This has led to massive over-capacity and wastage.

“Existing distortions direct the flow of credit toward local governments and state-owned enterprises rather to households, perpetuating high investment, misallocation of resources, and low private consumption. A broad package of reforms is needed,” said the IMF.

Just like the miracle of Japan Inc. couldn’t last neither will China Inc. last.  Japan Inc. put Japan into a deflationary spiral in the Nineties that hasn’t quite yet ended.  Chances are that China’s deflationary spiral will be worse.  Which is what happens after every Keynesian credit expansion.  And the greater the credit expansion the more painful the contraction.  And with half of all Chinese spending being government spending financed by printing money the Chinese contraction promises to be a spectacular one.  And with them being a primary holder of US treasury debt their problems will ricochet through the world economy.  Hence the IMF warning.

Bad things are coming thanks to Keynesian economics.  Governments should have learned by now.  As Keynesian economics turned a recession into the Great Depression.  It gave us stagflation and misery in the Seventies.  It gave the Japanese their Lost Decade (though that decade actually was closer 2-3 decades).  It caused Greece’s economic collapse.  The Eurozone crisis.  And gave the U.S. record deficits and debt under President Obama.

The history is replete with examples of Keynesian failures.  But governments refuse to learn these lessons of history.  Why?  Because Keynesian economics empowers the growth of Big Government.  Something free market capitalism just won’t do.  Which is why communists (China), socialists (the European social democracies) and liberal Democrats (in the United States) all embrace Keynesian economics and relentlessly attack free market capitalism as corrupt and unfair.  Despite people enjoying the greatest liberty and economic prosperity under free market capitalism (Great Britain, the United States, Canada, Australia, Hong Kong, Taiwan, South Korea, etc.).  While suffering the most oppression and poverty under communism and socialism (Nazi Germany, the Soviet Union, the communist countries behind the Iron Curtain in Eastern Europe, the People’s Republic of China under Mao, North Korea, Cuba, etc.).

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Big Brother is Watching You…Pee in China

Posted by PITHOCRATES - August 24th, 2013

Week in Review

The problem with big government bureaucracies is that they’re always looking at ways to create new public sector jobs.  It’s why the U.S. federal government grows with each passing year.  And why the Chinese are considering this (see Miss your mark in the toilet? Pay $16 fine by AFP posted 5/20/2013 on The Times of India).

People with a poor aim are to be fined if they miss their mark when using public toilets in a Chinese city, officials said — [sic] provoking online derision over how the rule will be enforced.

The penalty will apply to those who urinate outside the bowl of facilities in Shenzhen, the southern boom town neighbouring Hong Kong, although draft regulations seen by AFP did not specify a minimum quantity of spillage required to be classed as a violation…

Users of China’s rumbustious weibo social networks poured scorn on the measures, raising the prospect of hordes of toilet inspectors being deployed to inspect performance.

“A number of new civil servant positions will be created. There will be a supervisor behind every urinating person to see whether the pee is straight,” wrote one poster.

Another added: “Very good measures. I expect they can create 20 jobs on average for every public toilet…”

Chinese toilet discipline can be notoriously wayward, with pictures of people defecating in public sometimes appearing on weibo.

No surprise, really.  Dirt-poor peasants who have nothing of the basic comforts of life—such as indoor plumbing and flush toilets—are moving to the big cities into a world they’ve never known.  But the public defecation is not the outrageous part of this story.  That thing about the potty police is.  And I feel sorry for the nervous pee-er who can’t go when someone is watching them.  Waiting to observe his urine stream.  So the potty police can give them a slap on the buttocks and say, “Nice pee pee.”  Or go Sergeant Hartman all over them.  (That’s a reference to the drill sergeant in the movie Full Metal Jacket.  We’d link to a YouTube clip of one of his many R-rated tirades but decided not to.  Those who are familiar with the movie will understand the reference.  And those who aren’t probably won’t enjoy hearing his abusive potty mouth.  On a side note, I met him once at an air show.  Active duty Marines waited in line to have him insult them and make them drop and do pushups.  Just so they could say he did.  People love R. Lee Ermey that much.  He’s a great American.  A Vietnam veteran who served in combat.  And was a real-life drill instructor.  But I digress.)

Can this happen in the United States?  Well, if anyone had said the federal government would force you to buy something against your will a decade ago no one would have believed it.  But here we are with Obamacare.  And the individual mandate.  So, men, enjoy your urinations in public restrooms while you can.  For it may not be long before you have a federal bureaucrat observing your urine stream.  For Big Brother may be watching you…go pee pee.

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Study finds Coal cuts Lives by 5 Years for some who wouldn’t have Survived Childhood if it weren’t for Coal

Posted by PITHOCRATES - July 13th, 2013

Week in Review

Early man did not have a long life expectancy.  Thanks to infectious disease and poor (or nonexistent) medical care people who got sick or injured often died.  Unhygienic living spread communicable diseases which killed large numbers in the community.  The lack of fuel to heat your home or cook your food exposed people to the elements and food-borne bacteria.  Causing illnesses that went untreated and added to the death toll.  And a high infant mortality rates brought down the average lifespan further.

There were a lot of old people in their 70s throughout history.  But go back a couple of centuries so many children didn’t survive their childhood that the average lifespan was in the 30s.  But thanks to the modern world of energy and medicine our life expectancies have never been higher.  Even though coal is taking some years off the additional years it gave some (see Burning Heating Coal Cuts Lives by 5 Years in China, Study Finds by Daryl Loo posted 7/9/2013 on Bloomberg).

People in northern China may be dying five years sooner than expected because of diseases caused by air pollution, an unintended result of a decades-old policy providing free coal for heat, a study found.

Coal burning leading to heart disease, stroke, lung cancer and respiratory illnesses may cause the 500 million Chinese living north of the Huai River — a rough line dividing the country’s north and south — to lose an aggregate 2.5 billion years of life expectancy, according to the research published in the Proceedings of the National Academy of Sciences today.

The government gave free heating coal for people living north of the Huai River over a period of central planning from 1950 to 1980, and such indoor systems remain common today, the study showed. Burning coal in boilers is linked to the release of particulate matter that can be extremely harmful to humans, raising health costs and suggesting a move away from using fossil fuels would be attractive, according to Michael Greenstone, one of four authors of the study.

If the government took away fuel to heat and cook with how would that impact their life expectancies?

Yes, it’s sad that breathing particulate matter can remove 5 years of your life.  But how many more years did these people live because of coal?  They had to stay warm somehow.  And they needed to cook their food with something.  If they didn’t have coal these people would have been collecting firewood year round and burning that inside of their homes.  Releasing particulate matter into their homes anyway.  Only with a rise in lost appendages from swinging an axe.  More infected wounds from axe slips.  And they’d have rodents living in their wood piles.  Bringing disease into their homes.  Carried by the fleas on these rodents.

Coal may be taking 5 years away these people.  But they may be taking these years from a person who might not have survived his or her childhood if it weren’t for coal making their home a better place to live in.  It’s time we stop seeing only the bad that coal does.  And start recognizing the good that coal does.  For when it comes to human existence the good of coal far outweighs the bad.  For look where coal has taken us.  To the highest life expectancies in our history.  And it is still making our world a better and healthier place by creating electric power.  The essential ingredient in making the best medical care possible.  Thank you, coal.  Some of us appreciate the good that you do.

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China raises the Price of Cotton and Chases the Textile Industry out of China

Posted by PITHOCRATES - June 9th, 2013

Week in Review

Communists think they are smarter than capitalists.  They think they can manage an economy better than market forces.  Despite the failure of the Soviet Union, China (under Mao), North Korea, Cuba, etc., there are many Western nations with activist governments.  Believing like the Chinese that smart bureaucrats can make the economy operate better than those market forces can.  But the problem is they can’t control all market forces.  So when they intervene there are always unintended consequences that usually make things worse after their intervention.  As this example in China shows (see China’s cotton procurement policy hurting textile industry by Staff Reporter posted 6/9/2013 on Want China Times).

China has jacked up the domestic price of cotton to 20,400 yuan (US$3,325) per tonne as of May 13, 4,500 yuan (US$730) higher than the international price, reports Shanghai’s First Financial Daily.

Industry insiders said that the current procurement policy does nothing to benefit cotton farmers and will have a serious effect on the domestic mid-stream textile industry, forcing many firms to move their operations overseas, the paper said…

The government has justified its cotton procurement at prices higher than international levels, by arguing that the policy can protect the interest of farmers and stabilize domestic cotton farm acreage and output, which assures the domestic supply…

The high cost has forced textile firms to abandon orders, with a growing number of firms relocating to Vietnam, Bangladesh, and India. Downstream firms, in dyeing and printing, have also been affected.

China expanded their cotton production when international cotton prices rose.  Then international prices fell.  Leaving them with a surplus of cotton selling at a price that did not recover the costs of that expanded production.  So these wise bureaucrats decided to raise the price of cotton.  And restrict imports.  Problem solved.  They forced the domestic textile industry to buy the higher priced domestic cotton.  Which, of course, raised the price of the textiles they sold.  Above the prevailing international price.  Pricing them out of the international markets.  So this economic reality forced them to relocate to a country that did not force them to purchase cotton above market prices.  Allowing them to produce textiles and sell them at prices the international markets would pay.

This is the same reason why the U.S. doesn’t have a domestic textile industry anymore.  Only it wasn’t government forcing textile manufacturers to buy cotton at above market prices.  It was the unions forcing them to pay labor at above market prices that increased the price of their textiles.  And priced them out of the international markets.  Because there are always unintended consequences whenever we interfere with market forces.  Always.  And the end result is always worse after the intervention.  Always.

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Chinese Family Planning to Include Fining Unmarried Mothers

Posted by PITHOCRATES - June 8th, 2013

Week in Review

Liberal democrats always want to regulate business more.  And they want to tax business more.  Because they don’t like capitalism.  Which they see as unfair, immoral and unfeeling.  As well as chaotic.  Worse of all it’s a system based on the basest human desire.  Greed.  No.  They don’t like that.  Instead they would prefer a neater and tidier system that limits a business’ greed and its pursuit of profits.  Something like they have in China.  Where an all-loving, all-powerful government puts people before profits.  And gives the people the best of all possible worlds.  Just like the liberal Democrats so earnestly want to do in the United States.  But there are problems with an all-powerful government.  For one it is all-powerful (see Chinese city plans to fine unmarried mothers by Louise Watt, Associated Press, posted 6/3/2013 on Yahoo! News.

A Chinese city’s plan to fine mothers who have a child out of wedlock has sparked criticism that the policy is discriminatory and could lead to an increase in abandoned babies.

One expert said Monday that it was the first time that out-of-wedlock children had been expressly singled out for penalty by one of China’s municipalities, which have flexibility in how they enforce China’s population-control policies…

Babies resulting from an unmarried relationship or an affair with someone who is already married will provoke a “social compensation fee,” an official at the family planning committee of Wuhan city in central Hubei province said Monday. He refused to give his name, as is common with Chinese officials.

Social compensation fees are levied on people who break China’s strict family planning policy, which restricts many urban couples to one child. The fee depends on the province and the whim of the local family planning bureau, and the children are denied education and health benefits.

Hubei province, in which Wuhan is located, sets its social compensation fee as three times the average annual disposable income.

This is something the left has all but accused the Republicans of wanting to do.  Force women to stop enjoying sex.  And force them against their will into loveless marriages.  They and their friends in the media discussed the Republican ‘war on women’ more than they discussed Benghazi during the 2012 election.  And Benghazi was real.  While the ‘war on women’ was not.

But it is real in China.  And china is a leftist communist nation.  During the Sixties the hippies and radicals wanted to replace capitalism with communism.  For the left has always been sympathetic to communism.  They rejected materialism and lived in communes.  Where no one owned anything.  And the people owned everything.  That was their utopian dream.  Communism.  Like they had in China under Mao.  Like they have now in China though it’s a bit watered down these days with some state-capitalism thrown in.  But the state is still all-powerful.  Just as it was under Chairman Mao.

If the casual left (the young and those too preoccupied with social media and entertainment to pay attention to current events) doesn’t think this can happen here they should ask themselves this.  Why is the left so adamant on providing free birth control and access to abortion in this country?  Is it so women can enjoy more consequence-free sex?  Or is it just state family planning?  Like in China?

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