China’s Ministry of Railways’ Inefficiencies and Bloated Bureaucracy represents State Capitalism at its Worse

Posted by PITHOCRATES - February 5th, 2012

Week in Review

Big Government liberals in the U.S. say state capitalism is the way to go.  And high-speed rail.  Just like the Chinese.  In fact, they can’t get enough of what the Chinese are doing.  Because they say the Chinese get capitalism right.  By putting ‘state’ in front of it.  Instead of what we normally see in front of it.  Free market.  But their big state funded rail system is far from perfect.  Far, far from perfect (see China’s push for rail reform could be dead in its tracks by Michael Martina posted 2/2/2012 on Reuters).

The ministry’s touted web-based ticket booking system was supposed to replace the antiquated ordeal of waiting in long queues. It didn’t. The system crashed minutes after its launch before the annual holiday migration of 200 million people by rail, and proved as frustrating as any line-up at a station…

The online fiasco — which spurred a barrage of criticism — was the latest in a litany of troubles for the ministry, which has been plagued by scandals and missteps. Some of those problems have been deadly, including a July crash of a new high-speed train that killed 40 people.

But for decades the Ministry of Railways has proven impervious to reform efforts, fending off attempts by leaders to merge it with other ministries or close a separate court system run by the 2.1 million-employee ministry…

The current reform drive could also stumble, said Zhao Jian, a rail expert at Beijing Jiaotong University who has criticized China’s expensive bullet train expansion. For one, the ministry’s $2.2 billion debt load could deter any splitting of its business and regulatory arms.

“If you separate the government function from the business function, the transportation enterprise must take on the debt. But if the debt is so great that the enterprise will immediately become bankrupt, then who will take it on?” Zhao said.

The problems of state capitalism are plain to see.  You have a 2.1 million public sector bureaucracy.  Who speak with a loud and unified voice and could play havoc with the system if they don’t get their way.  And public spending so great that nothing in the private sector can manage the accompanying debt.  No amount of ticket revenue can fund current operations and service this debt.  It’s just impossible.  Which means it can’t be spun off from the government.  Because only government funding (taxes, borrowing and the printing press) can support this behemoth.  Because large-scale rail like this is just not a viable economic model.  Which means it will never be reformed.  And it will always remain a fiasco.  Until it and the state finally collapse.  Sort of like in Greece.  Only without anyone large enough to bail them out.

And this is exactly what the Big Government liberals in the U.S. want.  Of course, when they start running things everything will be perfect.  So they won’t make the same mistakes the Chinese have made.  Or the Greeks have, for that matter.  Even though they can’t point to a single success story in the history of Big Government liberalism.  For sharing the wealth and growing government has never increased economic activity.  But only led to growing bureaucracies and out of control spending.  Like the Chinese.  Only without their booming manufacturing sector powered by cheap labor to help pay for some of these costs.

No, China’s state capitalism is not the economic model to follow.  If you want robust economic activity you need to get the state out of the economy.  And let free market capitalism do its magic.  Like it did for the British during the Industrial Revolution in the 19th century.  And like it did for the Americans in the late 19th century and early 20th century.  Before the growth of government in both countries grew.  And sucked the life out of their economies.


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Moderate (mŏd’ər-ĭt), n., One who holds or champions moderate views or opinions, especially in politics or religion.

Posted by PITHOCRATES - November 3rd, 2011

Politics 101

Moderates just want to Get Along with Everyone and Believe in Consensus and Bipartisanship

Moderates are people who like to pick and choose.  A little from this philosophy.  And a little from that philosophy.  For example, a moderate Catholic may approve of abortion.  Because they disagree with the extreme view of no abortions in Catholicism.  Of course, there is no such thing as being a little bit Catholic.  Just like you can’t be a little bit pregnant.

A moderate, then, has no philosophical basis.  And doesn’t have a definite opinion.  They don’t know what they want.  But they know what they don’t want.  Extreme opinions.  Even just your run of the mill opinions.  To them everything is just an opinion.  And no opinion is right.  Or wrong.  It’s just an opinion.  And they don’t like to face the extreme unpleasantness that is life.  They’d rather avoid addressing problems that can make life unpleasant.  So they procrastinate.  And are great procrastinators.  Their motto is this.  Why solve today what we can solve tomorrow?  And then they hope that tomorrow never comes.

Moderates just want to get along with everyone.  They believe in consensus.  Reaching across the aisle.  Bipartisanship.  For they believe that there is a middle ground in every issue.  And they desperately seek the middle ground to avoid confrontation.  Which means that you can lie to them.  If you tell them what they want to hear.  And they will believe you.  Because they want to believe you.  Especially if you’re telling them what they want to hear.

Adolf Hitler lied Charismatically to Win Votes and Seize Power

Moderates are good people.  Who can be led astray.  Such as in Nazi Germany.  The vast majority of Germans were not Nazis.  If they were they wouldn’t have needed such an oppressive police state.  And there would have been no Gestapo.  But there was a police state.  And a Gestapo.

Most Germans just wanted to work.  And support their families.  Which was hard to do coming out of World War I, the Great Depression and hyperinflation.  Caused by Keynesian policies.  That is, printing money.  To pay their war reparations per a rather harsh Versailles Treaty.

Adolf Hitler knew how to sweet talk the masses.  Tell them what they wanted to hear.  And he did.  He was charismatic.  A populist.  Could give a great speech.  And he lied through his teeth.  The people heard what they wanted to hear.  And they voted for him.  That’s right.  Hitler didn’t seize power in a military coup.  He seized power by winning votes.  And passing populist laws.  After he had failed to seize power in a military coup.

Moderates may not Know what they Want but they Sure Know what they Don’t Want, such as National Health Care

In the U.S. the moderates typically determine elections.  Because about 40% of the people are limited-government conservatives.  About 20% are big-government liberals.  And the rest are moderates.  And they tend to vote Democrat.  Because the Democrats say the things they want to hear.  Consensus.  Bipartisan.  Working together to solve the people’s problems.

Some big-government liberals run as conservatives during elections.  And they lie so well that often a large percentage of these moderates vote Democrat.  Because, for some reason, they want to vote conservative.  But only if the conservative is a Democrat.

Both Bill Clinton and Barack Obama campaigned as moderates.  In fact, some even compared Barack Obama to the great Ronald Reagan.  A conservative Republican.  And it worked.  Clinton and Obama won their elections.  By lying.  They campaigned as limited-government moderates.  But they governed as big-government liberals.  They swung so far to the left that they both lost their mid-term elections.  Clinton lost the midterms for trying to pass Hillarycare.  And Obama loss the midterms for passing Obamacare.

The moderates may not know what they want.  But they know what they don’t want.  And they sure don’t want national health care.

The Consequence of having no Philosophical Basis is that Decisions are based on Populist Views and Feelings

Moderates don’t like extreme opinions.  Like the government can’t spend money it doesn’t have.  So Democrats campaign saying they will get the rich to pay their fair share.  Which sounds good.  Because moderates aren’t rich.  They’re hardworking middle class people.  So moderates vote Democrat because it seems like the nice thing to do.  The fair thing to do.  So the government continues to spend money it doesn’t have.  Knowing that they can continue in their irresponsible ways as long as they can get moderates to believe their lies.

This is the consequence of having no philosophical basis.  Decisions are based on populist views.  And feelings.  Which a cunning big-government liberal politician can always exploit.  And they have to if they ever hope to win an election.  For they aren’t going to convert the 40% of the people who are limited-government conservatives.  Because limited-government conservatives actually believe in something.  And tend to be impervious to their lies.


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