In contrast to the Soviet Union, China’s leaders recognize that strong economic performance is essential to political legitimacy. Like the Soviet Union, however, they are paying through the nose for a few friends, gaining only limited benefits while becoming increasingly entrenched in an unsustainable arms race with the US.When the Soviet Union imploded in 1991, the Communist Party of China (CPC) became obsessed with understanding why. The government think tanks entrusted with this task heaped plenty of blame on Mikhail Gorbachev, the reformist leader who was simply not ruthless enough to hold the Soviet Union together. But Chinese leaders also highlighted other important factors, not all of which China’s leaders seem to be heeding today... But overseeing a faltering economy was hardly the only mistake Soviet leaders made. They were also drawn into a costly and unwinnable arms race with the United States, and fell victim to imperial overreach, throwing money and resources at regimes with little strategic value and long track records of chronic economic mismanagement. As China enters a new “cold war” with the US, the CPC seems to be at risk of repeating the same catastrophic blunders... China spent some $228 billion on its military last year, roughly 150% of the official figure of $151 billion... the issue is not the amount of money China spends on guns per se, but rather the consistent rise in military expenditure, which implies that the country is prepared to engage in a long-term war of attrition with the US. Yet China’s economy is not equipped to generate sufficient resources to support the level of spending that victory on this front would require.If China had a sustainable growth model underpinning a highly efficient economy, it might be able to afford a moderate arms race with the US. But it has neither... China’s growth is likely to continue to decelerate, owing to rapid population aging, high debt levels, maturity mismatches, and the escalating trade war that the US has initiated. All of this will drain the CPC’s limited resources. For example, as the old-age dependency ratio rises, so will health-care and pension costs... while the Chinese economy may be far more efficient than the Soviet economy was, it is nowhere near as efficient as that of the US. The main reason for this is the enduring clout of China’s state-owned enterprises (SOEs), which consume half of the country’s total bank credit, but contribute only 20% of value-added and employment... the CPC is that SOEs play a vital role in sustaining one-party rule, as they are used both to reward loyalists and to facilitate government intervention on behalf of official macroeconomic targets... Dismantling these bloated and inefficient firms would thus amount to political suicide. Yet protecting them may merely delay the inevitable, because the longer they are allowed to suck scarce resources out of the economy, the more unaffordable an arms race with the US will become – and the greater the challenge to the CPC’s authority will become... The second lesson that China’s leaders have failed to appreciate adequately is the need to avoid imperial overreach. About a decade ago, with massive trade surpluses bringing in a surfeit of hard currency, the Chinese government began to take on costly overseas commitments and subsidize deadbeat “allies.”.. Exhibit A is the much-touted Belt and Road Initiative (BRI), a $1 trillion program focused on the debt-financed construction of infrastructure in developing countries... An even more egregious example of imperial overreach is China’s generous aid to countries – from Cambodia to Venezuela to Russia – that offer little in return... from 2000 to 2014, Cambodia, Cameroon, Côte d’Ivoire, Cuba, Ethiopia, and Zimbabwe together received $24.4 billion in Chinese grants or heavily subsidized loans. Over the same period, Angola, Laos, Pakistan, Russia, Turkmenistan, and Venezuela received $98.2 billion... Like the Soviet Union, China is paying through the nose for a few friends, gaining only limited benefits while becoming increasingly entrenched in an unsustainable arms race. The Sino-American Cold War has barely started, yet China is already on track to lose.
Game of Trump
So far in life, Donald Trump has survived and thrived on the same philosophy espoused by Littlefinger in “Game of Thrones”: “Chaos isn’t a pit. Chaos is a ladder.”
.. First we learned there were six, not four, people in the meeting, including a lobbyist who just happened to be a former member of the Soviet unit dealing in counterintelligence. Then we found out there were eight. Next, we’ll find out Putin was FaceTiming from Moscow.
.. Jared Kushner has had to amend his list of foreign contacts three times, adding more than 100 names that had somehow eluded him. “His lawyers have said this was inadvertent and that a member of his staff had prematurely hit the ‘send’ button for the form before it was completed,”
.. The Daily Beast recalled that back in the ’80s, when Goldstone represented John Denver and Michael Jackson, he went to Ethiopia for Band Aid, a rock concert to help famine victims, and managed to gain seven pounds.
As he explained to The Sydney Morning Herald, “I mean, what else is there to do in a country like Ethiopia but eat?”
.. According to ProPublica, after a man watching Rachel Maddow emailed Kasowitz Wednesday telling him to “Resign Now,” the lawyer shot back with a bunch of nasty messages, such as “Watch your back, bitch” and “I already know where you live, I’m on you. … You will see me. I promise. Bro.”
.. Kasowitz, ProPublica reports, has a drinking problem that could hamper him getting a security clearance. He has grown increasingly frustrated by Trump’s lack of discipline as the president sulks and rages in his tent
.. He bragged about his cunning when he brought up the hacks with Putin. After citing it once, Trump said, “I then said to him again, in a totally different way.”
Wow. That must have really outfoxed the lethal former K.G.B. agent. You know nothing, Donald Trump.
Everything We Knew About Sweatshops Was Wrong
As the economist Joan Robinson said, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”
.. Unlike agriculture or informal market selling, these factories pay a steady wage, and if workers gained skills valued by the market, they might earn higher wages.
.. The factories seemed professional and clean. Whenever a new factory line opened, we saw long rows of applicants — mostly young, unmarried women.
.. By the end of a year only a third of the people who had landed an industrial job were still employed in the industrial sector at all.
.. the factory jobs carried dangerous risks. Serious injuries and disabilities were nearly double among those who took the factory jobs, rising to 7 percent from about 4 percent. This risk rose with every month they stayed. The people we interviewed told us about exposure to chemical fumes and repetitive stress injuries.
.. Why were people lining up for hazardous jobs? Partly it was because they did not appreciate the risks, or how hard the work was, until they started. Others anticipated the risks but used factory work as a safety net when times were tough. The people who stayed longer had few alternatives.
.. In 1913, the Ford Motor Company recorded turnover rates of over 300 percent. Pay was poor and the work hard, and workers left in droves. Many of the modern management strategies we think are about factory efficiency started as attempts to lower this turnover.
.. For poor countries to develop, we simply do not know of any alternative to industrialization. The sooner that happens, the sooner the world will end extreme poverty.