Don’t Bank on China ‘Rebalancing’

Posted by , 20th January 2011

China shopJoseph Sternberg
1/20/2011

There are deeply rooted reasons–from banking habits to government policy–why the Chinese are unlikely to increase consumption anytime soon. For starters, China lacks the infrastructure of modern consumer finance and is years–possibly decades–away from building it to the standards of the developed world. Its banks face significant structural and regulatory barriers to offering more consumer-finance products. China needs to reallocate capital and labor to orient itself toward producing goods and services that its consumers want. China’s investment-driven growth may already be witnessing declining marginal returns. Shifting to a new model for GDP growth will require changes at every level, right down to the bank branch.

Sternberg is an editorial page writer for the Wall Street Journal Asia.

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Hubris heading for a fall

Posted by , 20th January 2011

larry summersGeorge F. Will
1/20/2011

The political class in America has come to be defined by its hubris and Larry Summers exemplified such conceit in his departing speech wherein he warned of profound government demoralization in the face of inadequate funding. Summers should concern himself with the reverse scenario: government recklessly expanding its scope and squandering its limited resources, says Will. Such a scenario is likely to worsen due to the slow or non-existent increase of productivity in “labor-intensive service industries” (Princeton economics professor emeritus William J. Baumol) and the migration of such services to the public sector (senator Daniel Patrick Moynihan). Because those industries relegated to the public sector tend toward stagnation, the government should be cautious about any expansion of its responsibilities.

Will is a twice-weekly columnist for The Post and approximately 400 other newspapers, writing about foreign and domestic politics and policy.

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Sharing the Burden of Peace

Posted by , 20th January 2011

PeaceRobert Wright
1/19/2011

Wright says if America wants to actually cut defense spending it should correct the disproportionate role America plays as the world’s police. We not only foot the monetary bill for this role, but we also pay for the ill will as a result of playing this role. The United Nations Security Council is the mechanism through which threats to peace should be recognized, the military action necessary to deal with them authorized, and the burdens of that military action shared. Wright also suggests non-military ways for global governance to share peace. As our days of global hegemony are passing, we should craft instruments of global governance to assure security in a world we don’t dominate that will equitably distribute the costs of that security.

Wright blogs on culture, politics and world affairs for The New York Times.

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How to Freeze the Debt Ceiling Without Risking Default

Posted by , 19th January 2011

DebtPat Toomey
1/19/2011

Regarding the coming Congressional debate over whether to raise the US debt ceiling, Toomey says that under no circumstances is it acceptable for the US to default on its debt. By honoring our debts we benefit from the nearly universal conviction that those who lend to us will always be repaid in full. We should never undermine that conviction. Toomey opposes raising the debt ceiling without regaining control of federal spending. The recent surge in spending, both in absolute dollars and as a percentage of our GDP, has produced record deficits and debt. Congress can address the looming fiscal crisis created by overspending without jeopardizing the full faith and credit of our country–and it should.

Toomey, a Republican, is a US senator from Pennsylvania.

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Mr. Obama, speak up for human rights in China

Posted by , 19th January 2011

Barack Obama and Hu JintaoYang Jianli
1/19/2011

The author makes an appeal to President Obama to consider human rights and the democratization of China when he meets with Chinese President Hu Jintao this week. He suggests that President Obama politely but pointedly ask President Hu about his father’s denunciation by the Communist Party and draw the parallel between Hu’s father and political prisoners like Nobel Peace Prize laureate Liu Xiaobo. Obama could ask why Liu Xia, wife of Liu Xiaobo, remains under house arrest without being accused of any crime (Chinese law makes no provision for imprisonment without cause). Obama could then press Hu toward a more democratic approach to government, which would be in the best interest of the United States, China, and “all humanity,” says Yang Jianli. While the writer understands the potential awkwardness of such an encounter between Obama and Hu, he also recognizes the opportunity.

The writer is president of Initiatives for China and a Harvard fellow. He served a five-year prison term in China, from 2002 to 2007, for attempting to observe labor unrest. He is the liaison to the Nobel Peace Prize Committee on behalf of Liu Xia, the wife of Nobel laureate Liu Xiaobo, who is serving 11 years in prison for his writings.

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Big business is back in business

Posted by , 13th January 2011

US Chamber of Commerce logoDana Milbank
1/12/2011

The US Chamber of Commerce is enjoying renewed influence in Washington after this past November’s elections. Not only did the Chamber support a number of winning candidates across the nation, but corporate interests have returned to prominence among both the legislative and executive branches. Lobbyists have gained key staff positions with incoming Representatives and Senators and the Chamber expects a more business friendly tone in the years ahead.

Milbank writes about political theater in the nation’s capital.

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An American Message for the Chinese President

Posted by , 13th January 2011

President Hu JintaoKelly Currie
1/12/2011

Chinese President Hu Jintao arrives in Washington for a state visit next week as the Obama administration’s thinking on the US-China relationship has evolved. Curry suggests that Obama may give greater prominence to human rights as he recalibrates relations with Beijing. She thinks freedom of expression should be the leitmotif of the summit. The summit provides an opportunity to contrast the weaknesses of the Chinese political system with the strengths of the American one. Aspects of the visit involving freedom of expression should be non-negotiable. If the Chinese side objects, the White House should be willing to cancel events of importance to Beijing’s protocol-obsessed leaders.

Currie is a senior fellow with the Project 2049 Institute.

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When Congress Was Armed And Dangerous

Posted by , 13th January 2011

CongressJoanne B. Freeman
1/12/2011

From the 1830s-1850s, members of Congress wore weapons on the House and Senate floor and often used them, Freeman says. She looks at the history of violence in Washington, including an incident when Senator Henry Foote of Mississippi pulled a pistol on Senator Thomas Hart Benton of Missouri during a debate. Things began to change after the invention of the telegraph, which promised instant publicity of these deeds. Now politicians are considering carrying weapons again to protect themselves against the public. Freeman says we are reminded that words matter and communication should be fruitful and civil.

Freeman, a professor of history at Yale, is at work on a book about violence in Congress.

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Why Teacher Pensions Don’t Work

Posted by , 10th January 2011

TeacherJoel Klein
1/10/2011

Throughout the country public-employee pension plans have been massively underfunded and defined-benefit systems aren’t merely Ponzi schemes. They discourage talented teachers who would prefer front-loaded compensation. Defined-benefit pensions helped bring the once-vibrant US auto industry to its knees. The promised benefits just proved too costly. The same kind of pension is now hollowing out public education. Because there’s essentially no competition in education, however, the effect has been hidden from public view. Today incoming governors–Democrats and Republicans–faced with this dismal equation are looking for a way to undo the damage and get out from under these unsustainable promises.

Klein, former chancellor of New York City’s public schools, is the CEO of News Corporation’s educational division.

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