As we wait to see whether the American Recovery and Reinvestment Act will provide a jolt to the U.S. economy with its grab bag of tax cuts, hastily cobbled together "shovel-ready" construction projects, and infusions of funding into existing government spending programs, on the other side of the Pacific ocean, reported Keith Bradsher in The New York Times on Monday, China is showing us what a real stimulus plan looks like.
The country is using its nearly $600 billion economic stimulus package to make its companies better able to compete in markets at home and abroad, to retrain migrant workers on an immense scale and to rapidly expand subsidies for research and development.
Construction has already begun on new highways and rail lines that are likely to permanently reduce transportation costs.
And while American leaders struggle to revive lending -- in the latest effort with a $15 billion program to help small businesses -- Chinese banks lent more in the last three months than in the preceding 12 months.
China has some unique advantages, notes Bradsher, not least that it is "a country with piles of cash and a strong banking system." In the not-so-long-run, he suggests, China will emerge stronger and more competitive once the crisis passes.
So here's the irony: Conservative cable and radio TV talk show hosts are regularly castigating President Obama's agenda as "socialist." Is that supposed to be a bad thing? The country that pledged its allegiance to the free market most fervently in the entire world is floundering, up to its neck in debt, with a banking system on life support and a housing sector in freefall. Meanwhile, the country that is ostensibly "socialist" has cash to burn, is pursuing an aggressively counter-cyclical fiscal policy that would make John Maynard Keynes utterly delighted, and is steadily improving its competitive ability to dominate global markets.
Of course, Obama is no socialist and China's Communist Party leaders are hardly doctrinaire Marxists. And the same freedom from political opposition that allows China's leaders to push through whatever stimulus package they please has obvious and significant drawbacks. But still, when one looks at the wreckage of the American financial system, one really has to wonder: Socialism, where is thy sting?
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