China beats U.S. fiscal stimulus plan
TEXT OF COMMENTARY
KAI RYSSDAL: The House Energy and Commerce Committee has passed its big climate change bill. That’s going to let U.S. negotiators hold their heads a little bit higher at a global warming meeting in Paris next week. Chinese officials will be there as well. And they came in for some praise from the Obama administration’s special envoy for climate change yesterday. Todd Stern called Beijing’s efforts on cutting greenhouse gas emissions impressive.
Commentator and economist Todd Buchholz says the U.S. could stand to follow China’s lead in more ways than just one.
Todd Buchholz: Name almost any category, and you get China. Tallest man? China. Smallest man? China. Best Chinese food? Well, maybe not that one. But here’s a sad comparison: best fiscal stimulus plan? Yep, China.
Caterpillar and DuPont report that China’s plans are already generating orders. Meanwhile, Goldman Sachs economists have already upgraded their old GDP forecasts. Now, how did China win the stimulus game?
Quite simply, our Congress decided to throw money where it wouldn’t do much good. Most of the $800 billion is dribbling out to government, health care and education – sectors where the average unemployment rate is about 4 percent. Meanwhile, 21 percent of construction workers sit idle next to their lunch pails, waiting, as do 12 percent of factory workers.
Well, at least the jobless aren’t forced to sit in traffic, which won’t improve much, since only about 6 percent of the plan went for bridges, tunnels and freeing up bottlenecks. A majority of China’s $587 billion is aimed directly at infrastructure.
Why did China get it right? Their leaders have bigger incentives. Our Congressmen care mostly about doling out favors. We get a $650,000 study of beaver management in Mississippi.
China’s leaders face a more serious threat than a re-election campaign. China has 30 million more young men than women. When you have that many frustrated, randy and jittery young guys on the prowl who can’t get a date, you better at least give them a job. And China will.
China must grow pedal to the metal for the next 15 years. After that, it smacks into the Great Brick Wall of China – its terrible demographics. China won’t have enough young people to support its retirees. China will look like the old country — Florida. For now, though, they beat us in the stimulus competition.
But, of course, some American firms are doing just fine, right here in America. P.F. Chang’s, a thoroughly American company announced a 33 percent leap in first quarter profits. A “great leap forward.”
RYSSDAL: Todd Buchholz is the author of New Ideas From Dead Economists.
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