Friday, December 2, 2011

Clueless Goldberg Attacks Clueless Stern

American Enterprise Institute's Jonah Goldberg is out with an absurd attack on an Andrew Stern op-ed commentary.

It's a Stern commentary that I have already plowed into the grave. But Goldberg's attack on Stern deserves comment, also. He writes regarding Stern's attack on free markets and hailing of Chinese planning:
Stern sees the Chinese government’s allegedly keen ability to “plan” its way to prosperity as the new model for America. It is an argument of profound asininity. China had five-year plans before it started getting rich. Under the old five-year plans, China killed tens of millions of its own people and remained mired in poverty. What made China rich wasn’t planning, it was the decision to switch to markets (albeit corrupt ones). The planners were merely in charge of distributing the wealth that markets created.

Indeed, rapid economic growth always makes government planners look like geniuses when the reality is that the planners are more like self-proclaimed rainmakers who started dancing only after it started raining. When the rain stops, which it will, they’ll have much to answer for...

To the extent that China’s economic planning “works,” it does so because China is an authoritarian country...You can hit your building quota a lot more easily when you can shoot inconvenient people and trample property rights at will...

If you want to copy China because its authoritarian capitalism is better than our democratic capitalism, it seems pretty obvious that what you envy is the authoritarianism.
What's wrong with Goldberg's take? His assumption that
A. Planners can successfully distribute "the wealth that markets created."


B. "rapid economic growth always makes government planners look like geniuses."

This means that Goldberg is buying into the great fiction that China is having huge magical growth in the first place. It is not, the GDP numbers are basically a fraud. I repeat from earlier posts, even Joe Biden stated that China has 30 to 50 million vacant apartments.

Goldberg's argument is, if I may use a Goldberg phrase, "an argument of profound asininity".

Free markets mean just that--there are no central planners. Somehow, Goldberg has taken the view that there are free markets and authoritarians both functioning on the same sectors of the Chinese economy at the same time. That wealth has been created and that the planners are just "distributing the wealth." An important key to free markets is the distribution that is directed by price signals and profit and loss statements. Where the hell is there room for central planning?

The fact of the matter is that there are pockets of free market activity in China, but a good part of the country is a disaster because of the centrally planned distribution that Goldberg somehow believes can successfully occur.

As for his statement that:
 "rapid economic growth always makes government planners look like geniuses."
Again,  "an argument of profound asininity". There is never rapid economic growth when there is significant amounts of government planners. There is no deus ex machina by which growth soars in a country, whereby government planners can then distribute it. If you have the government planners, the growth doesn't occur in the first place.

The coming massive Chinese economic crash will make fools out of both Goldberg and Stern.

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