The American Left loves the Chinese Economic System despite its Inefficiencies, Income Gap and Crimes Against Humanity

Posted by PITHOCRATES - January 6th, 2013

Week in Review

The American Left looks at China with awe and reverence.  They see that huge export economy and they know how they did that.  Massive government control over the economy.  And Keynesian economics on such a grand scale that it would  even impress Paul Krugman.  Nobel-winning Keynesian economist who’s constant refrain is that the government just never spends enough.  Something no one can say about the Chinese Communists.  And that’s why the American Left loves China.  For when it comes to the economy they wield dictatorial power.  If the American Left had those powers they could accomplish so much.  Beginning with the arrest of the Republican opposition and deportation to reeducation camps.  Then they could make our economy hum.  Just like in China.  Where brilliant government bureaucrats educated in the finest Ivy League universities called all the shots.  For only those who despise free market capitalism would know how to truly optimize economic output (see Game Over for China’s Photovoltaic Manufacturers by Gao Zitan & Frank Fang posted 1/6/2013 on TheEpochTimes).

It was in October of 2011 when the U.S. and European PV companies decided that enough is enough. Over the last years they had to compete against Chinese companies selling their products below cost. As a result many European and U.S. companies had to close down. The remaining ones chose to appeal to regulators to stop the unfair practices.

Note once again who is complaining about companies selling things too cheaply.  It is not the consumer.  For the consumer never complains that they aren’t being charged enough.  It is always another business requesting antitrust protection against a company they cannot compete against.

The Chinese regime viewed solar photovoltaic production as a promising industry with rapid scalability and production, and high profits. It could add to GDP growth and employment. This is why the regime greatly promoted the growth in the domestic PV market through business-oriented regulations and incentives. Banks, local governments and other financial agencies were ordered to heavily subsidize the solar industry with cheap loans.

Starting in 2009, the regime sponsored some large-scale national PV projects. The Solar PV building program comprised 111 projects and the Golden Sun program included 275 projects. Provincial or municipal funded programs provided the framework for many other PV related projects.

This is exactly what the Left wants to do.  What the Obama administration did.  They want smart government bureaucrats to tweak market forces to make things better.  At least this is what these government people think.  Because they are so smart.  Even though they have no business experience.  So the American Left wants to do exactly what China did.  What the Americans did but on a much grander scale.  Because their communist government had the power to do it on a grander scale.  Something the American Left laments that the American government doesn’t have that kind of power.  Yet the Americans want to penalize the Chinese for unfair practices.  Despite constantly championing the Chinese way.

In 2008, there were less than 100 PV enterprises. But by the end of 2011 there were more than 500 PV companies, a five-fold increase, according to Guangzhou-based business newspaper 21st Century Business Herald…

On the surface, Chinese companies were doing well. Revenue of the PV industry was more than 300 billion yuan ($48 billion) and Chinese companies occupied five spots in the top 10 of global solar cell manufacturers, according to the report. However, the fast expansion of PV production capacity did not match domestic demand.

According to statistics of EU ProSun, in 2011, China reached a total PV production capacity of 45 GW but domestic consumption was only 2 GW. The production capacity spurred by massive subsidies and state incentives was over 20 times higher than actual demand for solar powered electricity. The only way out was exporting the surplus production…

As a result of lower subsidies in Europe and tariffs in the United States, the overproduction stimulated by state subsidies can no longer be exported. One indication is a rapid growth in inventories. Sixty-six listed Chinese PV companies of the Shanghai A-Share Stock Market showed a 20 percent increase in inventories compared with the same period of the previous year…

President of EU ProSun Milan Nitzschke said, “Chinese subsidies shield manufacturers from insolvency, and are pumped into solar companies even if they are unprofitable. Most Chinese solar companies would have gone bankrupt a long time ago if not for endless government subsidies.”

This is what happens when you have ‘smart’ government people take over the free market economy.  You build a lot of stuff no one will buy.  Just like the Soviets built a lot of tractor parts that sat on store shelves unsold while people stood in line to buy soap and toilet paper.  This is why the command economies of communism failed.  And while the command economy of the Chinese Communists will fail, too.  What Friedrich Hayek of the Austrian school of economics called malinvestments.  Which directs resources from making things people want to making things people don’t want.  Creating shortages of the things people want (like soap and toilet paper in the Soviet Union).  And overflows inventories with things people don’t want (like solar panels in China).  All because a government bureaucrat decided to make more tractor parts and solar panels instead of soap and toilet paper.

And if that wasn’t bad enough there are other costs for the Chinese way (see Never Mind the Fiscal Cliff, China is Headed For a ‘Real’ Cliff by Michelle Yu posted 1/6/2013 on TheEpochTimes).

China is dangerously close to a catastrophic political, economic, and social meltdown, according to a Chinese business scholar, who cites China’s growing income gap as one of its serious crisis indicators…

Rural versus urban inequality has long been recognized as a key factor in China’s income gap. Not only does the rural income level fall far below the urban level, but the income inequality is also more obvious within rural regions…

Another notable factor is high unemployment rate. The SUFE study suggests that China’s national unemployment rate was 8 percent in July 2011, suggesting an unemployed population of 27.7 million, which is almost twice as high as what authorities have admitted to. The unemployment rate doubles for 51-55-year-olds, reaching 16.4 percent, and is attributed to mergers and standardized bankruptcy of state-owned enterprises in the early 2000’s. (An explanation of mergers and standardized bankruptcy are available here  and here.)

Surprisingly, the unemployment rate for 21-25-year-olds who hold college or above degrees is also 16.4 percent—the same as for the 51-55-year age group. By contrast, the rate for 21-25-year-old poorly educated migrant laborers from rural areas is only 3.4 percent. A shortage of cheap labor has affected some of China’s key export industries such as apparel and electronics, especially on the east coast.

But the root cause of the income inequality and a battery of other economic problems in China can be found in the communist regime’s overexploitation of social wealth, according to Winifred Tung, an attorney and commentator from Taiwan.

The exploitation has been realized largely through preferential policies in favor of state-owned enterprises and suppression of the private sector, Tung told NTD Television, citing recent data, which says that the GDP of large-scale state-owned enterprises (SOEs) accounts for 60 percent of China’s overall GDP. However, among the different culprits of tax evasion in China, SOEs came in first place with 26-28 percent.

So this is why they can make so many solar panels (and other export goods) so cheaply.  By exploiting poor rural laborers in their big city factories.  Resulting in something the American Left say wouldn’t exist if they had control over the economy like the Chinese do.  An income gap.  Income inequality.  Something that is apparently worse in the country where the government has the power to make life fair.  But it’s more than just an income gap.

The Chinese factory workers aren’t like UAW workers.  They have low pay, no benefits and often live in dormitories in the factory compound.  And these have it good (see The Difficulty of Smuggling a Slip of Paper From a Chinese Labor Camp by Guo Jufeng posted 1/6/2013 on TheEpochTimes).

Like the person whose plea made headlines around the world, I was also in Liaoning Province, China. Twelve years ago, I was imprisoned in Huludao City Forced Labor Camp, Liaoning, for 2.5 years for practicing the meditation discipline of Falun Gong. My companion Cao Yuqiang, who was eventually tortured to death, and I were watched 24 hours a day by two criminals, so that we could not exchange information regarding the persecution of Falun Gong.

One day, I came up with the bold idea to find a way to communicate information about the persecution to the outside world.

The first obstacle we faced was that we didn’t have pen or paper. So, as more and more information was passed on to me, it became quite a challenge to memorize everything! To improve my memory, I repeated the information to myself every day, since I couldn’t communicate regularly with Cao Yuqiang.

One day, out of the blue, Cao told me he had found a refill for a ball-point pen. I suspected he must have gone through a great deal of trouble to procure it, but I did not have the opportunity to ask him for any details at that time.

Now I had a pen, but there was still the question of what to write on. I finally realized that the only possibility was toilet paper, and to avoid being caught, I would have to write the message after midnight.

I had to keep strengthening my mind to overcome fear and anxiety as any negative thoughts could lead me to give up. Questions and doubts plagued my mind: “Would this work? How could we get the information out? Would I be able to withstand the torture if it was discovered? Had other prisoners found out about my plan? Were they waiting to catch me in the act?” I was certain that if my plan were discovered, I would be tortured mercilessly with electric batons.

This is part of that Chinese economic system the American Left so admires.  An economy that is based on cheap labor.  In some cases even slave labor.  And it’s no secret.  Which is odd for the American Left who are champions of the labor movement.  Who bankrupted countless businesses (GM, Chrysler, Hostess, etc.) by demanding ever higher pay and benefits packages.  Yet here they are.  Admiring an economic system that just exploits labor in the worst ways.  Even using torture.  And it bothers some.  Maybe not the American Left.  But the Chinese themsleves (see A Young Chinese Man’s New Year Wish for His Father by Gao Zitan posted 1/1/2013 on TheEpochTimes).

As 2013 begins with an atmosphere of joy welcoming in the new year, a young man from Hubei, China, is worried about his father who is a member of the Communist Party.

The term “San Tui” in Chinese refers to the three distinct renouncements. It means to quit the Chinese Communist Party (CCP) and its two affiliated organizations: the Communist Youth League, and the Young Pioneers, which people are made to join in their youth.

In recent years, “the three renouncements ensure safety” has become a well-known saying in China, and many consider it a rational choice for mainland Chinese to guarantee themselves immunity from all the crimes perpetrated by the Communist Party when the day of reckoning comes. So family members of those who refuse to consider the wisdom of this option are very worried for their loved ones…

“The three renouncements ensure safety” has been widely recognized by the Chinese public since 2004, when The Epoch Times published the truth about the CCP in “Nine Commentaries on the Communist Party” in 2004, and began registering those wishing to make the three withdrawals.

As of Dec. 30, 2012, more than 130 million people had registered with The Epoch Times to quit the CCP and its affiliated organizations.

The American Left may be enthralled with the Chinese communist way just as they were enthralled with the Soviet communist way but those living under those oppressive regimes weren’t.  And aren’t.  China is not the China it was under Mao.  But the hard-line communists are.  But even some of these committed their crimes against humanity for a higher purpose.  To prevent the anarchy that followed in parts of the former Soviet Union when the Soviet Union collapsed.  So some may commit their crimes for good.  While a lot no doubt just enjoy the privilege that comes with being in the party leadership.  And the very comfortable lifestyle.  Much like liberals in this country.  But not the average Chinese.  At least 130 million of them.

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2012 Endorsements: Karl Marx

Posted by PITHOCRATES - October 29th, 2012

2012 Election

Because Workers just don’t Spontaneously Join Together into a Functioning Business they need Capitalists

Karl Marx is the father of socialism.  And communism.  He was also the author (along with Friedrich Engels) of the Communist Manifesto.  The 19th century book that said, “Let the ruling classes tremble at a Communistic revolution.  The proletarians have nothing to lose but their chains.  They have a world to win.  WORKINGMEN OF ALL COUNTRIES, UNITE!”  Some people heeded his advice.  Vladimir Ilich Lenin, Joseph Stalin, Mao Zedong, Kim Il-sung, Fidel Castro, Ho Chi Minh and Pol Pot, to name a few.  The greatest mass murderers of all time.  No ideology has killed more than communism.  Not even the socialist Adolf Hitler, leader of the National Socialist German Workers’ Party (more commonly known as the Nazi Party) killed more.

According to Marx the history of society has been a class struggle.  Before his time it was the landed aristocracy oppressing the peasants in feudalism.  Then came along capitalism.  Where the new oppressor was the bourgeoisie.  The capitalist.  The employer.  The person that paid others to work.  And kept the profits of their labors.  Basically that means your boss.  Who you may hate while you’re working.  But if business is slow and layoffs are coming you desperately hope it’s someone else and not you.  And should you lose your job you desperately look for someone else who will pay you to work.  Because that’s the only way you know how to feed yourself and buy yourself nice things.  Like a home.  A cup of coffee at Starbucks.  Or a smartphone.  Marx called this oppression.  While most everyone else would call that being happy to have a job.  Because most workers don’t have a clue on how to run a business.  Let alone build one out of nothing.  For workers just don’t spontaneously join together into a functioning business.  They need capitalists.  For without capitalists there would be no jobs for workers.

So who does the bourgeoisie oppress?  The proletarians.  The laborers.  The employees of the bourgeoisie.  The people that actually do the work.  In his day that meant the factory workers.  Who were ruthlessly exploited in sweatshop conditions toiling away at monotonous tasks beneath the dignity of a human being.  The bourgeoisie was turning man into little more than a machine.  That worked until exhausted.  And what did they get for their labors?  Barely enough to survive.  Interestingly, whenever these cruel capitalists turned to actual machines to free these workers from this inhumane labor they cried out against this capitalist greed.  For replacing workers with machines was greedy.  And destroyed jobs.  So on the one hand these jobs oppressed the working class.  But on the other they were the best thing that ever happened to the working class.

Karl Marx summarized his Theory of Communism in One Tenet: The Abolition of Private Property

That’s something else Marx didn’t like.  Change.  The bourgeoisie was always changing things.  Updating their factories.  Installing new machinery.  Forcing the people that did things the old way out of a job.  Much like President Obama blames much of our economic woes on today.  And our high unemployment.  ATMs have put bank tellers out of a job.  Self-serve checkout lanes have put cashiers out of a job.  One man and a trenching machine put hundreds of ditch diggers out of a job.  The electric light put gas lighting workers out of a job.  And gas lighting put kerosene lighting workers out of a job.  And kerosene lighting put whale oil workers out of a job.  And whale oil lighting put candle makers out of a job.  It’s this modernization that Marx doesn’t like.  It disrupts labor.  Making the old worker obsolete.  So unions come in to protect these old jobs.  Allowing people to earn high wages without having advanced skills.  So instead of learning the skills to do the new jobs of the future they can keep doing the jobs of the past.  President Obama talks about bringing back high-paying manufacturing jobs.  Where workers toil away in those monotonous tasks that are beneath the dignity of a human being.  The kind of jobs the parents of college graduates toiled away at to put their kids through college.  So their kids wouldn’t have to do what they did.  Because the new jobs are better than the old jobs.  They’re easier.  Safer.  And offer higher pay.  But the downside is that they take more education and training.  Where some people will be better than others.  Which is unfair to those who aren’t as good.

Of course to help these factory owners pay these old jobs high wages they need to sell their goods at high prices.  Often at higher prices than the market price.  So they have to unlevel the playing field.  Governments pass minimum wage laws.  Union requirements.  And minimize the competition.  Either by restricting other domestic competitors by high entry costs.  Such as licensing fees.  Or by placing tariffs on lower priced foreign imports.  Raising their prices so they don’t cost less than the higher priced domestically produced goods.  Allowing these few factory owners to pay their employees these higher wages.  By forcing the general public to spend more money than they would have without these protections.  And thereby having to make sacrifices in their lives because they have less of their earnings for their own families.  For these reasons Marx called free trade exploitation.  Because free trade made it difficult for unskilled workers to earn high wages.

Marx summarized his theory of communism in one tenet: The abolition of private property.  For it was the bourgeoisie’s accumulation of private property that exploited the working class.  So no one can own anything.  Even laborers.  Because whatever private property the laborers accumulated came from only one place.  From the exploitation of other workers.  And that’s not the only thing Marx wanted to abolish.  He also wanted to abolish the past.  Even though he held on to the jobs of the past.  Marx advocated abolishing tradition, customs, institutions and religion.  Even families.  He wanted to replace education with communist indoctrination.  Much like they did in Nazi Germany.  In the Soviet Union.  In communist China.  North Korea.  Cuba.  Cambodia.  In a socialist/communist society everyone is equally subordinate to the state.  Where there is no private property.  No bourgeoisie.  Just a dictatorship of the proletariat.  A workers’ paradise.  A communist utopia.  Where no one looked anywhere but to the state for all of their needs.

If Karl Marx were Alive Today he would Likely Endorse the Democrat Candidates Barack Obama and Joe Biden

So what would it be like in this communist utopia?  This dictatorship of the proletariat?  There would be a heavy progressive tax.  (The US has a progressive tax rate.  And the Democrats want to raise tax rates higher yet at the high end.)  No right to inheritance.  (Democrats want to raise inheritance taxes.)  Confiscation of the property of emigrants.  (The Democrats want to highly tax/seize money invested outside of the United States that is trying to escape that heavy progressive tax.)  A central bank.  (The Federal Reserve is a central bank.)  Centralization of the means of communication into the hands of the state.  (The three television news networks have a Democrat bias.  Most newspapers have a Democrat bias.  And the two areas that don’t, talk radio and the Internet, the Democrats want to regulate.)  Free public education.  That indoctrinates our children.  (Public education tries to turn our children into Democrat voters.  By teaching the unfairness of capitalism.  America’s sins.  And by scaring our children about global warming.  And that only government can protect us from global warming by regulating private industry more.  Generous tuition subsidies help continue this work at our colleges.)

The Democrats further this class struggle, or rather create one, with their endless class warfare.  The top 1% isn’t paying their fair share of taxes.  The Democrats embraced the Occupy Wall Street movement.  Pitting the 1% against the 99%.  The Democrats employ racism.  Tuning any criticism of President Obama into a racist attack.  The Democrats try to scare women by warning them of the Republican war on women.  Saying ‘women should buy their own birth control’ is code for Republicans hate women and will oppress them if elected.  The Democrats constantly divide us.  Putting one group against another.  Trying to keep the people agitated.  And angry.  So they will welcome more government into their lives.  And the abolition of the capitalists’ private property through that heavy progressive tax.  The empowerment of unions.  Both private and public.  The restriction of our liberties through radical egalitarianism.  By punishing achievement.  So no one can rise to a higher level of success.  Or to a higher level of wealth.  So everyone is equally miserable in their workers’ paradise.

So if Karl Max were alive today who would he support in the 2012 election?  The party that includes a lot of Marxist doctrine in it all ready.  Marx would feel at home in the Democrat Party.  In fact it would be hard not to see a bit of communist revolution in it.  Especially with communist Fidel Castro and socialist Hugo Chávez already endorsing the Democrat Party candidates.  So it isn’t much of a leap to say that if Karl Marx were alive today he would likely endorse the Democrat candidates Barack Obama and Joe Biden.

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