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.'
We encourage you to read the full speech here. Like a great novel that only gains prestige long after it's written, Ron Paul's wisdom will only become widely apparent in hindsight.
Regards,
Greg Canavan
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
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About the Author
Greg Canavan is the editor of Sound Money, Sound Investments, a financial report devoted to unearthing great value investments amid today's "money illusion" of fiat currency. For a free trial of Greg's service, go to Sound Money, Sound Investments.
Comment by Pat Warriner on 16 November 2012:
Retire to Australia Ron Paul. You have a broad streak of plain common sense that I believe most Australians would love and admire. I say most, because you will never appeal to people within a system who have vested interests to protect. And will work against you ensure that the system stays the same. But the USA's loss could be our gain
I reckon there's more than enough Australians with common sense, to vote you in to power and get this country back on track.
You're a man to be admired, and it's a damn shame that you have not achieved your modest and humble goals of creating an environment where all can achieve and be safe.
What a truly great man you are.
Comment by Ross on 16 November 2012:
Good call Pat. There is a bed for him at my place anytime.
On Greg though, China's elite is doing a better job at advancing their 99%'s lot than the US. Looking after number one and family is followed by a healthier dose of looking after the majority than in the US. Ron didn't get anything much on his agenda implemented so the hide of you to play red team blue team with the US and China. Ron laments that the US is not the image of its constitutional potential so your image of the US is unrealistic in Tocqueville parlance equally as much as your image of China.
Take out the prizes of wars (USD & debt hegemony) and you could say that the US failure of the 99% has been continually the case ever since Teddy Roosevelt took power for the phi kappa wanka exceptionalists.
Sinophobes have all apparently taken courses in feigning blindness and recklessness.
Comment by Lachlan on 17 November 2012:
I believe Ron did exactly what he should have done. For the best part he just stated the truth. People need not be disappointed he did not save them. When they are ready they will do something to help save themselves with maybe just a grain of the man's wisdom resonating within them..or some other wisdom. That's all he needed to do. Sow the seed.
Personally I know we cant save the world. The direction we are heading in is what counts. Towards personal responsibility is the hope. Ron can see it.
Comment by David on 17 November 2012:
Imagine how great Australia could become under the leadership of someone like Ron Paul. Let's offer him citizenship before another country gets him.
Whilst it would be preferential to have a home grown leader, clearly our political system is as corrupt and incompetent as any and the chances of an independent thinker getting into any position of influence is very remote.
Comment by Educated Citizen on 19 November 2012:
@Pat
"I reckon there's more than enough Australians with common sense, to vote you in to power and get this country back on track."
If you take a good look at our local political climate, social climate and economic climate (debt and housing), I am not sure you can honestly say that.
Which collective is more stupid? The one that forget after a generation and repeats the mistakes? Or a country that watches every other nation globally commit financial suicide and still assumes 'it's different here'.
Whilst there's a small minority of people who are woken up to the system, rest assured the majority still are not.
I've absolutely no doubt 99% of Australians have never even heard of Ron Paul or what he stood for.
We're too busy borrowing hand over fist to get rich in flipping property to find out.
Ron is well connected and loved within his own community. He speaks the truth, but for all his campaigning and efforts, his message will be swept under the carpet to maintain the status quo.
He is trying to change the system from within it.
Ghandi knew first hand this is impossible & so too has Ron Paul (which is why he's getting out after the nomination debacle). The entire system is compromised and corrupt, it cannot and will not change until it's forced to and there's absolutely no way a voice of reason in such a torrent of white noise can be heard.
Ron's total contribution to the US political climate will be a foot note in historical references for future student projects on 'where did it all go so wrong for the US economy'?