We suppose we should say something about the 'historic' transition of Chinese political power that occurred yesterday. But we won't. There's a torrent of opinion in the world's media about what it all means, and we don't intend to add to it...not today anyway.
Except for this: China has already sown the seeds of its economic problems. There's simply a younger generation of privileged power brokers now in place to oversee those problems. Job number one of the powerful is to entrench that power base. Job number two is to maintain a 'harmonious society', in order to reinforce job number 1.
Everything else is just the method by which the powerful seek to retain and reinforce that power. Pretty simple really.
Contrast the motives of China's elite with those of a true American patriot, Ron Paul, who gave his farewell speech to congress last night. Paul reflected on a political career of trying to 'promote peace and prosperity by a strict adherence to the principles of individual liberty.'
'In spite of my efforts, the government has grown exponentially, taxes remain excessive, and the prolific increase of incomprehensible regulations continues. Wars are constant and pursued without Congressional declaration, deficits rise to the sky, poverty is rampant and dependency on the federal government is now worse than any time in our history.
'All this with minimal concerns for the deficits and unfunded liabilities that common sense tells us cannot go on much longer. A grand, but never mentioned, bipartisan agreement allows for the well-kept secret that keeps the spending going. One side doesn't give up one penny on military spending, the other side doesn't give up one penny on welfare spending, while both sides support the bailouts and subsidies for the banking and corporate elite. And the spending continues as the economy weakens and the downward spiral continues. As the government continues fiddling around, our liberties and our wealth burn in the flames of a foreign policy that makes us less safe.
'The major stumbling block to real change in Washington is the total resistance to admitting that the country is broke. This has made compromising, just to agree to increase spending, inevitable since neither side has any intention of cutting spending.
'The country and the Congress will remain divisive since there's no "loot left to divvy up."
'Without this recognition the spenders in Washington will continue the march toward a fiscal cliff much bigger than the one anticipated this coming January.
'Some complain that my arguments make no sense, since great wealth and the standard of living improved for many Americans over the last 100 years, even with these new policies.
'But the damage to the market economy, and the currency, has been insidious and steady. It took a long time to consume our wealth, destroy the currency and undermine productivity and get our financial obligations to a point of no return. Confidence sometimes lasts longer than deserved. Most of our wealth today depends on debt.
'The wealth that we enjoyed and seemed to be endless, allowed concern for the principle of a free society to be neglected. As long as most people believed the material abundance would last forever, worrying about protecting a competitive productive economy and individual liberty seemed unnecessary.'
for The Daily Reckoning Australia
From the Archives...
The Grand Plans of the Chinese Communist Party
9-11-2012 - Greg Canavan
The Superannuation Gravy Train
8-11-2012 - Greg Canavan
Using the Habit of Optimism to Find Great Investment Opportunities
7-10-2012 - Dan Denning
The US Presidential Election: The other race that stops the other nation...
6-10-2012 - Dan Denning
Why Gold Hasn't Risen
5-10-2012 - Bill Bonner