Brett Arends of MarketWatch tells us “the International Monetary Fund has just dropped a bombshell, and nobody noticed.” The IMF believes “China’s economy will surpass that of America in real terms in 2016 – just five years from now.”
This assessment is based on a comparison between “purchasing power parities,” a comparison of “what people earn and spend in real terms in their domestic economies.” This metric sees the Chinese economy growing to $19 trillion by 2016, while America’s will contract to $18.8 trillion. As Arends points out, “just 10 years ago, the U.S. economy was three times the size of China’s.”
Of course, a lot of people will rush to draw exactly the wrong conclusion from this forecast. Arends quotes one of them in his article: NYU research professor Ralph Gomory, who says “what we have done is traded jobs for profit… the jobs have moved to China. The capability erodes in the U.S. and grows in China. That is a big reason why the U.S. is becoming more and more polarized between a small, very rich class and an eroding middle class. The people who get the profits are very different from the people who lost the wages.”
The end of the American era will not come about because the Chinese government has won some kind of contest with free-market capitalism. If anything, this is a contest between government control of the economy in China and America, in which the remainder of our economic freedom is a handicap for our domestic central planners.
For example, President Obama has been on a major class warfare kick lately. He actually told an audience in Reno the other day that if he doesn’t soak the Evil Rich with higher taxes, it would be tantamount to telling the wealthiest among us, “well, you can just relax and go count your money and don’t worry about it. We’re not gonna ask anything of you.” His Administration is now preoccupied with searching the oil industry for signs of villainous price gouging.
In China, no one is allowed to question the riches of Party leaders. There are no public witch hunts for price gouging. When the government wants to implement a large scale industrial plan, it does so, without worrying about whose “freedoms” might be trampled. It spends a good deal of time working to inspire blind loyalty in the State, but very little on castigating the Party-approved rich people who get richer when its plans work out.
If China thinks it needs oil, it drills for oil. It does not fritter away its energy on ridiculous moratoriums or neurotic environmentalist dogma. It loses interest in “climate change” rhetoric the moment environmentalists ask Chinese leaders to slap on their “sustainable” handcuffs. Of course their economy is growing, while ours is shrinking. The Chinese government controls its economy, while the American government is making war against ours.
American media outlets and college professors are perpetually obsessed with the gap between that “small, very rich class” and “eroding middle class.” What’s the gap between the super-rich and poor in China? How is life for the poorest Chinese, compared to the poorest Americans?
Western liberals always claim the Evil Rich have somehow “stolen” their wealth from the Noble Poor and Sainted Middle Class. How is that supposed to be working? Are the poor and middle class so incredibly weak and stupid that they just sit there and let the Evil Rich butcher them like cows? Robbery requires force, and the Evil Rich in America have no force to deploy against their prey… unless they get it from the government.
Billion-dollar subsidies to create products nobody wants to buy, while government policies drive up the price of the commodities they truly desire, looks a lot more like rich people “stealing” from the poor to me. Show me a company people truly have no choice but to deal with, and I’ll show you the well-thumbed cards for bureaucrats and lobbyists in their Rolodexes. If you choose an example with over ten million in annual revenue, I can tell you which Obama “czar” they have on speed dial.
Contrary to Obama’s childish demagoguery, rich people don’t spend their days counting the piles of gold that fell into their lap. Most of them acquired their wealth by creating positive value, which their customers willingly purchased. Some of them did it by gambling big money on risky opportunities that paid off. Virtually all of them needed the help of many employees who voluntarily joined their companies… and the richer they got, the larger those teams of employees became.
If we want to extend the Age of America beyond the IMF’s expiration date, we need to replace the tarnished currency of political influence with wild, dangerous, glittering freedom. To generate any more political currency, we would have to become more like China… which should be an attractive notion to those who think they would end up sitting in the Politburo, and no one else. The tired, bankrupt statists who engineered America’s decline have a lot of nerve shifting the blame to a “free market” that hasn’t existed in decades.