I am about to tell you something which you probably don’t know.
The reason I say this is because I, myself, and most people I know didn’t know this basic fact, despite reading a lot about politics and economics.
The man below is called Michael Pettis
He is a professor of finance, working at Guanghua School of Management at Peking University (Beijing).
He alleges that China’s growth is less than half of what is reported:
So far, so “mainstream”. Many others have made this point. What is fascinating about his analysis is that he isn’t alleging that China is “faking” the numbers.
He is merely stating something he says is a fact – the way China calculates GDP is different from the rest of the world.
GDP isn’t a standardized thing. Even France and the UK calculate GDP in a slightly different way. China just calculates it in a very different way.
You could argue, perhaps legitimately, that every country has a right to calculate GDP in the way it sees fit.
That may be true, but we also, therefore, have to see how these different definitions might affect the overall picture.
As the old saying goes, “lies, damn lies and statistics”!.
To quote him directly “the Chinese economy operates under soft budget constraints. A hard budget constraint means “you’ve got to have the money to spend it,” whereas a soft budget constraint means there’s no limit to one’s spending and losses can in principle be rolled over indefinitely.
Local governments in China operate under soft budget constraints, in contrast to the hard budget constraints of other major Western economies, and because they comprise a significant share of economic activity, China’s GDP numbers are fundamentally different in nature and as such, incomparable.
He illustrates this point by two hypothetical, identical Chinas—with the only difference being one has hard budget constraints and the other has soft budget constraints.
In the first China, a construction firm spends $100 digging a hole, then $100 filling it up. “In a hard budget constraint economy or in a normal accounting, you have an expense of $200 and nothing to show for it,” said Pettis.
In the second China, a construction firm similarly spends $100 digging a hole, then $100 filling it up. “But in [this] China, you don’t expense it,” he explained. “You call it an asset.
You say, I have now built an asset worth $200.” This, Pettis noted, is how GDP accounting works in the China that we all know. What this means is that China’s official GDP figures as currently reported are significantly inflated relative to actual economic conditions, and are also impossible to compare with the GDP figures of other nations.
You can see the full article here:What China means when it says it wants “high quality” GDP growthBeijing wants to focus on quality over quantity of GDP growth, but that’s much easier said than done.https://qz.com/2119395/what-china-means-by-high-quality-economic-growth/
To give a simple example to his point, let’s say one province in China has a GDP of 600billion and the target is 6% growth (so 630 billion is needed).
Now let’s say there is so real growth of 3%. However, it is fairly easy, with the soft budget constraints for the local government to engage in unproductive (or low-yielding at least) investments to achieve the other 3%, which wouldn’t be counted in a hard constraint economy.
That is one reason there are so many ghost cities and excessive infrastructure projects in China, such as second and third airports in cities that don’t need them.
So, China grew by 5.95% in 2019 versus 2%-3% for the US, using both country’s accepted GDP growth measurements.
However, if you were to standardize the measurements, China and the US would have grown by a similar amount.
What is interesting is that he also appears regularly on the Chinese state, so his findings aren’t seen as embarrassing by the regime, and China itself is now focusing on “high-quality growth” because they recognize the problem.
I have yet to find somebody who has actually refuted his central claim that there is not necessarily any lying or manipulation going on, but the different use of statistics is distorting the total figures.
This should be interesting for investors thinking about investing in Mainland Chinese private companies.
I don’t think it makes any difference to those looking to invest in Chinese stocks because GDP growth and stock market performance often aren’t linked.
So, we can’t say that weaker GDP growth will mean lower valuations for Chinese stocks, especially as they look very cheap compared to some markets.
“Here in the US, there’s a growning recognition that this is a bit like WWF. That it’s entertaining, but it’s not real. And I kknow people want to say,, yeah, they believe in the “Big Lie” in some cases, but I think people recognize that it’s a lot of show and bombast. But it’s going nowhere. The election is over. It was fair … let’s move on.”
What is something unrealistic that you often see in movies that annoys the hell out of you?
- no headrests
- Villains can’t shoot
- Heroes never reload their weapons
- Women fighting with long hairs. How do they even see?
- Teenagers with flawless skin and looking like they are in their mid-20s
- How do heroes remember who has killed their father or mother when he was 5. Most people forget what has happened at that time.
- How do women knock out men twice their size without a scratch? Men have height and weight advantage.
- Highly-trained snipers missing a very clean shot
The ways he dealt with crises in his business, real estate and even his personal life prove jarring as he leads the government’s response to a pandemic.
WASHINGTON — During his campaign for the White House in 2016, President Trump’s advisers briefly tried to run through with him how he would address a large-scale disaster if he won. What, for instance, would he have done during Hurricane Katrina?
“I would have fixed that,” Mr. Trump replied with certitude, referring to the government’s bungled rescue and recovery efforts, according to a campaign official who was present for the exchange. “I would have come up with a much better response.” How? He did not say. He just asserted it would have been better and advisers did not press him to elaborate.
Mr. Trump is no stranger to crisis. He has spent a lifetime grappling with bankruptcy, fending off creditors, evading tax collectors, defending lawsuits, deflecting regulators, spinning reporters and dueling with estranged wives, usually coming out ahead, at least as he defines it. But these were crises of his own creation involving human adversaries he knew how to confront. Nothing in his background in business, entertainment or multiple marriages prepared him for the coronavirus pandemic now threatening America’s health and wealth.
Mr. Trump’s performance on the national stage in recent weeks has put on display the traits that Democrats and some Republicans consider so jarring — the profound
- need for personal praise, the
- propensity to blame others, the
- lack of human empathy, the
- penchant for rewriting history, the
- disregard for expertise, the
- distortion of facts, the
- impatience with scrutiny or criticism.
For years, skeptics expressed concern about how he would handle a genuine crisis threatening the nation, and now they know.
“When he’s faced a problem, he has sought to somehow cheat or fix the outcome ahead of time so that he could construct a narrative that showed him to be the winner,” said Michael D’Antonio, a Trump biographer. “And when it was all about feuds with other celebrities or contests over ratings or hotel branding, he could do that and no one cared enough to really check. And the bluster and bragging worked.”
“But in this case,” Mr. D’Antonio added, “he tried that in the beginning and you can’t brag or bluster your way out of people dying. And I think more than the suffering, the human suffering, it’s been the inexorable quality of the data that’s forced him to change.”
Only after viral projections grew more dire and markets began to tank did Mr. Trump shift tone and appear to take the threat more seriously, finally adopting a more aggressive set of policies to compel Americans to stay away from one another while trying to mitigate the economic damage.
Some in the public seem to have responded. Fifty-five percent of Americans approved of his handling of the crisis in a poll by ABC News and Ipsos released on Friday, up from 43 percent the previous week. A Reuters poll, also conducted with Ipsos, put approval of his handling of the pandemic at 48 percent, up from 38 percent a couple weeks earlier, while surveys by The Economist and YouGov showed a smaller rise, from 41 percent to 45 percent.
But even as he has seemed to take the crisis more seriously, Mr. Trump has continued to make statements that conflicted with the government’s own public health experts and focused energy on blaming China, quarreling with reporters, claiming he knew that the coronavirus would be a pandemic even when he was minimizing its threat only a few weeks ago and congratulating himself for how he has managed a crisis he only recently acknowledged.
“We’ve done a fantastic job from just about every standpoint,” he said Tuesday. “We’ve done a great job,” he said Wednesday. “We’ve done a phenomenal job on this,” he said Thursday.
The next day he grew irritated when Peter Alexander of NBC News asked if he was giving Americans a “false sense of hope” by promising immediate delivery of a drug that experts said is not proven. Mr. Trump said he disagreed with them. “Just a feeling,” he said. “You know, I’m a smart guy. I feel good about it.”
Mr. Alexander moved onto his next question, a “softball” by his own reckoning, asking what Mr. Trump would say to Americans who were at home watching and scared. Most presidents would use the opportunity to offer reassuring words. But Mr. Trump was still steamed and snapped, “I say that you’re a terrible reporter. That’s what I say.”
Later in the same briefing, Yamiche Alcindor of PBS’s “NewsHour” asked when everyone who needed a coronavirus test would be able to get one, as he asserted two weeks ago that every person already could. “Nobody is even talking about it except for you, which doesn’t surprise me,” he said dismissively. How about people with symptoms who could not get a test, he was asked. “I’m not hearing it,” he replied.
The White House rejects any criticism of the president as illegitimate. “This great country has been faced with an unprecedented crisis, and while the Democrats and the media shamelessly try and destroy this president with a coordinated, relentless, biased political assault, President Trump has risen to fight this crisis head-on by taking aggressive historic action to protect the health, wealth and well-being of the American people,” Hogan Gidley, a White House spokesman, said in a statement.
Mr. Trump acted at the end of January to restrict travel from China, where the outbreak was first detected, and repeatedly points back to that decision, arguing that he saved lives as a result. But he resisted stronger action for weeks. Even as governors, mayors and businesses decided on their own to curb large gatherings and eventually close down schools, restaurants and workplaces, the president at first offered no guidance about whether to take such action.
He has repeatedly misrepresented the state of the response — promising a vaccine “soon” that will actually take at least a year to develop, insisting that tests were available while patients struggled to find any, boasting about the availability of millions of masks while health care workers took to stitching together homemade versions. And dismissing the threat for weeks may have led to complacency among some Americans who could have acted much sooner to take precautions.
Mr. Trump’s defensiveness over the pandemic has become a central dynamic inside the White House as officials wrestle with difficult policy choices. Aides have long understood that Mr. Trump needs to hear support for his decisions, preferably described in superlatives. He often second-guesses himself, prompting advisers to ask allies to tell him he made the right call or go on Fox News to make that point in case he might be watching.
Over the last week, as Mr. Trump has faced ever more draconian and expensive options, Jared Kushner, his son-in-law and senior adviser, sought to coax him into action by using bits of praise in news coverage or from other officials as a motivator, according to people familiar with the discussions.
Officials have learned that the president craves a constant diet of flattery, which they serve up during daily televised briefings. Vice President Mike Pence makes a point of repeating it day after day, sometimes repeatedly in the course of a single briefing. “Mr. President, from early on, you took decisive action,” he said during one.
Other advisers have followed suit. “Thank you, Mr. President, for gathering your public health experts here today and for your strong leadership in keeping America safe,” Alex M. Azar II, the secretary of health and human services, told him at one point. “I want to thank you for your leadership during this coronavirus outbreak,” Dr. Stephen M. Hahn, the commissioner of the Food and Drug Administration, told him at another.
Even Dr. Anthony S. Fauci, the veteran infectious diseases expert known for his just-the-facts style, has sometimes joined in praise of the president, at one point referring to Mr. Trump’s “proactive, leaning-forward, aggressive, trying to stay ahead of the curve” approach. While Dr. Fauci does not hesitate to correct the president’s facts, as he did on Friday over the unproven drug, he does so politely, careful to maintain his viability within a political team. Still, many noticed that he put his hand to his face in seeming disbelief when Mr. Trump referred to his diplomats as the “Deep State Department.”
Representative Peter T. King, Republican of New York, said Mr. Trump had been unfairly criticized for his handling of the virus. “The media virtually ignore the president’s massive effort mobilizing the federal government, our industrial base and the scientific and medical community to combat this pandemic, rivaling F.D.R.’s arsenal of democracy,” he said.
Mr. King said that Mr. Trump was working with Democrats but the news media “prefer to dwell on initial failure of C.D.C. test kits and low inventory of masks and ventilators going back two administrations.” Still, he said of Mr. Trump, “He too often takes the bait.”
None of which comes as a surprise to those who dealt with Mr. Trump or studied his life before he became president. In real estate, he found he could overcome crises by bluffing his way past regulators, bullying the bankers and bamboozling the tabloids.
When banks came after him for overdue loans, he pushed back, arguing that it was in their interest that his brand not be harmed by calling him out. When contractors demanded to be paid, he found complaints about their work and refused, leading in part to more than 3,500 lawsuits. When his first two marriages fell apart, he took a scorched-earth approach against his wives, leaking to New York’s gossip columnists even if it meant his children watched ugly divorces play out in public.
“The typical modus operandi from him is to bluff, is to fake, is to deny,” said Jack O’Donnell, the former president of Trump Plaza Hotel and Casino in Atlantic City.
When Mr. Trump prepared to open the Trump Taj Mahal in Atlantic City in 1990 and ran into trouble with the authorities, he summoned Mr. O’Donnell. “He told them I was an expert in operations and I could fix this,” Mr. O’Donnell recalled. “And they believed him. I was dumbfounded. He was completely bluffing them.”
To Mr. Trump, most of his crises were about paper and money, not people. The self-described “king of debt” treated loan repayments almost as if they were optional and made it a mantra never to back down. “I figured it was the bank’s problem, not mine,” he wrote in one of his books. “What the hell did I care? I actually told one bank, ‘I told you, you shouldn’t have loaned me that money.’”
Perhaps the only time before his presidency that the human toll of a crisis really struck Mr. Trump in a personal way came when three of his executives died in a helicopter crash heading to Atlantic City. He seemed genuinely shaken, visiting the widows to share in their grief.
“I actually think he handled that situation about as well as you could expect from him,” Mr. O’Donnell said. “It was such a shock to him. It was the first time I heard fear in his voice. It was the first time I saw empathy, that I saw emotion from him, because he realized the human loss there.”
Even then, Mr. Trump could not help inserting himself into the story, suggesting falsely that he almost boarded the helicopter himself. And within months, with his Taj project flailing, Mr. Trump began publicly attributing problems to the dead executives. In a crisis, “he always was more focused on who he could blame versus fixing the problem,” said Mr. O’Donnell, who quit in disgust.
Nor did Mr. Trump exhibit much empathy for the workers who lost their jobs when his casinos went bust. Instead, when asked about his failed Atlantic City ventures, he emphasizes his own ability to escape unharmed. “The money I took out of there was incredible,” he once told The New York Times.
The closest analogue to the current situation may be the aftermath of the Sept. 11, 2001, attacks, another national trauma. Mr. Trump tried to thrust himself into the news coverage, telling an interviewer by phone that day that with the destruction of the World Trade Center he now had the tallest building in New York City, a claim that was not even true. He also has said he spent extensive time around the site trying to help the cleanup, a claim that has never been verified.
With the airports closed at the time, Mr. Trump was asked to provide his private plane to fly Mayor Rudolph W. Giuliani and Gov. George E. Pataki to Washington for President George W. Bush’s address to Congress. Mr. Trump agreed — but in return asked for help getting permission to travel from Washington to another destination when others were grounded.
By his own account, Mr. Trump never imagined that he would be facing a pandemic, an invisible killer immune to bluster. “In every previous occasion, he was facing a human being or groups of human beings,” said Gwenda Blair, the author of a biography of the Trump family. “And obviously the coronavirus, it’s not a person, can’t be bullied.”
So Mr. Trump, with his recent descriptions of a war to be won over a “foreign enemy,” is seeking a dynamic that he is familiar with, personifying the virus as an opponent to be beaten, framing it as the kind of crisis he knows how to tackle. “He’s trying to make it into a win-lose situation,” she said. “That’s how he sees the world — winners, him, losers everybody else. He’s trying to make the coronavirus into a loser and himself the winner.”
They’re imitators. They’re operators. And they’re turning their teacher’s lessons against him.The problem with being Donald Trump isn’t just being Donald Trump. It’s all the other, lesser Trumps around you. It’s the versions of yourself that you create, the echoes of yourself that you inspire. They’ll devour you in the end... From the master she learned how to draw and hold the spotlight: Mete out revelations. Hurl accusations. Contradict yourself. Leave everyone gasping, gawking and coming back for more... “Trump and Omarosa Are Kindred Spirits” reads the headline on a new Bloomberg column by Tim O’Brien.. The president, he notes, was “fascinated by her self-absorption and nastiness.” Trump stares into every mirror he passes.
“She may be the purest of all the Trump characters,” an unnamed former Trump administration official told Axios’s Jonathan Swan. “She may be the most Trumpian.” No maybe about it.
She made secret tapes, just like Michael Cohen, Trump’s former lawyer. No one should be surprised, least of all Trump. When you grease the walls of your sanctum with lies and put fun-house mirrors everywhere, is it any wonder that the dazed people inside try to protect themselves with a lifeline like proof?
And didn’t Trump himself record people who called him at Trump Tower and later taunt James Comey by suggesting that he had audio of their conversations? Imitation isn’t just the sincerest form of flattery. It’s the cleverest kind of revenge.
Ask Michael Avenatti, Stormy Daniels’s lawyer. He’s flirting with a presidential bid or at least realizing that such a flirtation is a brand multiplier. Last week he visited Iowa, and not for the soybeans. He made a big speech. Said that when they go low, he’ll go subterranean. He’ll tunnel. He’ll spelunk.
He’s not just Trump’s adversary. He’s Trump’s analogue, with a similar timbre and bag of tricks. Like Trump, he vents his scorn in crude put-downs. Like Trump, he views media ubiquity as a credential in its own right... Avenatti was “a perfect foil for Trump, because he actually sees the world just like Trump does.”.. In a way, Cohen sort of is Trump, too, with shady ties, bendy rules and limber ethics. His exposure is now Trump’s vulnerability. There’s actually a scene in Manigault Newman’s book where she and Cohen watch Trump eat a piece of paper rather than leave it around for presidential record-keepers... Manafort faked an altitude of affluence that he no longer possessed, forgoing any salary as Trump’s campaign chairman, because he suspected that this would impress Trump, who has exaggerated his own wealth.
- His hunger for attention became Rudy Giuliani; his
- thirst for pomp, Scott Pruitt; his
- taste for provocation, Avenatti; his t
- alent for duplicity, Manigault Newman.They’re an army of emulators, adding up to Trump. And they’re on the march.
The episode was also inspired by a fascinating passage about Barack Obama in the book Game Change. So you’ll hear from Mark Halperin, one of the book’s authors, who will explain the dilemma that had Obama faking it. You’ll also hear from Kara Newman, a kosher-keeping food writer, who comes clean on her illicit love for bacon; and from a guy we call Brian, who maintains a series of mirages about his faith and family.
John Edwards took faking it to whole new levels.