Comments From Readers About China Bubble Post
First, you have to watch this insane video "China's Ghost Cities" from Dateline.
This is as crazy as Mao's backyard steel production. It looks like China creates Potemkin towns just like North Korea does.
The guy at the toy store in South China Mall is obviously an actor
playing a real tenant. By the way, filming an empty shopping mall in China means the police come to kick you out.
A correspondent writes in,
"Empty Chinese cities will be the copper mines of the future. It will be a while before Leftist investors understand this. Meanwhile, you can arbitrage the difference.Further, in relation to the SR-72 post,
Keynesian economics is a version of building Chinese ghost cities. A privileged elite whose skill is politics, not technological development, uses state power to take resources away from productive people at gun-point. It spends the resources on violence, threats of violence, weapons for violence and bribes for supporters. The supporters spend their bribes on consumption.
Productive activity starves because of this misallocation of capital. R&D spending wanes. Consumption spending depletes reserves for depreciation. Consumrs eat seed corn. Bridges fall down."
"In America, today, men with IQs of 125 are as rare as men with IQs of 140 used to be in 1900. Forget about finding large numbers of men with IQs of 140. And it takes large numbers of men with IQs of 140 to make an SR-72, to launch a moon rocket or to keep a space shuttle from exploding. Even if there were large numbers of men with IQs of 140, their resources would be taxed away to support the hordes of low-information voters. Any real innovator in China would lack the resources to develop innovations."I'm becoming convinced that 2008 was just the tremor before the real global depression. A town with 12 million housing units that's 70% unsold?
17 comments:
Another combination of insight and babble. IQ has been falling for quite some time (though, of course, as one goes further back data grows perhaps less reliable), but the US population is 4 times what it was in 1900. I'd wager there are more 140 IQ people now than there were 113 years ago, even if they are rarer percentage-wise. For my two cents, I'd say the national rent-seek-suck has a lot to do with the (alleged) lack of high-IQ individuals in productive fields. If you raise your babies to be investment bankers, don't be surprised that bridges fall down.
Separately: ah, yes, the equivalence between Leftist investment (whatever that is), Keynesian consumption, and the epic mountaintop snowball that is China. I'd have a slightly easier time believing this particular shell game sleight-of-hand if China (misallocated capital notwithstanding) didn't have one of the highest savings rates in the world. If the same root cause leads to both overconsumption and oversaving, could there perhaps be a problem in defining the issue?
Agree with Anon about the IQ numbers being someone's uninformed, bar-stool rambling.
First, 1900 was no bed of roses. Do a little reading on when and why they started adding iodine to the salt supply. hint: WWI
Second, IQ is a Gaussian distribution, with 100 defined as the mean, and each std dev equal to 15 pts. A 125 IQ is about 5% of the population and 140 IQ is about 0.5%, ie. 10x as many 125 as 140.
Yes, our immigration policy is absolutely ridiculous (literally an outrage to anyone paying attention) and has us well on the path to becoming Brazil. But, we've not remotely diluted the talent pool by 10x.
Further, the problem isn't a lack of IQ or even IQ density. We have a 4-fold increase in raw numbers solving the former and modern transportation and communication systems solving the latter.
The problem, as Anon said in this post, and I alluded to in my comment on the original SR72 post, is that the areas in which our smart people are applying themselves are largely zero-sum financial rent-seeking and non-productive bread & circuses (ie. social media).
"The problem, as Anon said in this post, and I alluded to in my comment on the original SR72 post, is that the areas in which our smart people are applying themselves are largely zero-sum financial rent-seeking and non-productive bread & circuses (ie. social media)."
What about people like Warren Buffett, Michael Bloomberg, Bill Ackman, John Arnold, who are donating that said money to charities?
I know personally that I could use my intellect for something better than being an investment manager but this is what I enjoy the most. At some point, (as I am still poor) intend to make significant donations (not putting myself in their category).
I know Warren Buffett and Bill Ackman have both said they would do what they do even if they did not get paid for it.
Interesting.
The New York commenters get very uncomfortable at any mention of IQ or the results of their failed multicultural experiment.
IQ, failed multicultural experiment
A better metric in this wider social context might be 'smart fraction':
THE SMART FRACTION THEORY OF IQ AND THE WEALTH OF NATIONS
I'm a New York commenter, and not at all uncomfortable with discussion of IQ. Open discussion is important!
If you're referring to New York as a failed multicultural experiment, though, I have to laugh. New York City is many things--multicultural, problem-ridden--but, to my mind it's very, very far from a failure.
@Josh: To clarify, I don't think all wealth gathering is rent seeking (and not all charitable donations, for that matter, are useful). And anyway, maximizing social utility is a somewhat scary concept. Was just saying that the tranching class's excesses of the last 20-30 years are among the many problems we face as a country.
But hey: there are always problems, and the solutions to those problems create new ones!
Noo no, the failed multicultural experiment is being imposed on the rest of the country ("flyover" as you call it) by New Yarkers.
Stop & frisk for me but not for thee.
My favorite depiction of New York City is from the movie “Taxi Driver.” Back then (the 1970s), NYC was mostly a filthy big city. Sure, there were rich people in the city, but they mostly stayed in their small enclaves. The police of that time were corrupt, inept and understaffed. The politicians of the era were also mostly corrupt and inept, after all NYC almost went bankrupt in the mid-1970s. There were the signs of decay everywhere. It was as if the poor and the blacks had slowly overtaken most of the city. The future looked so bleak that the movie “Escape from New York” (from 1981) depicted Manhattan as a large maximum security prison by the year 1997.
http://lionoftheblogosphere.wordpress.com/2013/11/04/new-york-city-before-twenty-years-of-giuliani-and-bloomberg/
"One good thing about de Blasio becoming the next mayor of NYC is that the liberals in NYC will finally pay the piper. For years they have been electing a Republican mayor while at the same time voting for Democrats nationally. Now they are finally going to feel the pinch. This time they will be electing a true, blue leftist."
Re: China bubble,
ABCT can explain simultaneous growth in consumption and investment originating at the nexus of fractional reserve banking. The idea that you can't have a bubble with a high savings rate seems odd... it just increases the amount of capital that can be misallocated.
This really touched a nerve! Prize for the best comment.
"Stop & frisk for me but not for thee."
Mayor Bloomberg puts Sheriff Bull Connor of 1960's Birmingham Alabama to shame as a total milquetoast in comparison.
Connor it was merely trying to maintain order, while Bloomberg is engaged in racial cleansing of undesirables from Manhattan, otherwise known as Tel Aviv West.
As for New York City being "multicultural" that is a joke as white anglo saxons and other white protestants are less than 6% of the population of all five boroughs, having been ethnically cleansed, for the most part, many decades ago.
Take a cab from North Bronx to Kennedy Airport and it is a sea of brown. "Multiculturalism" has become a code word for very few whites.
But then multiculturalism is a very valuable tool for a tiny minority elite to maintain political control, and so it must be defended against criticism through censorship and repression.
And importing low IQ populations is an ideal strategy for a tiny elite, as the voting power of poor and dependent masses is easy to control.
It is the middle class in the "flyover" areas that is the real threat, apparently. The solution, of course is to ship their jobs to China, reduce their living standards to poverty levels, and hope against hope that they remain docile and dependent.
Good luck with that!
What's with all the NY fervor today? Is this because of their election for mayor?
@Anonymous 1: I'm glad to hear that New York controls the country! I thought people mostly ignored us...
@Anonymous 4: Yup, we'll see what shakes out. Bloomberg was about as Republican as he was 6'2", but he was more or less his own man. De Blasio not so much.
@Taylor C: Very interesting! Oof, the thicket of rates and money transmission in China. I guess I was just wondering whether you could say that the malinvestment can really be classified as consumption. Half semantics, and half a person (I!) who quite possibly doesn't know enough to ask the right questions.
@Mises: I think it's because we like to talk about ourselves! And/or because we rule the country!
@John:
Well, that's a lot of vituperation!
Not quite sure where you're getting your 6% WASP in New York (strikes me as low), or why it seems such a tragedy to you. The city is 40%+ white (a plurality, and not what I'd call "very few") and contains a multitude of ethnicities and races. That's multiculturalism. The city's makeup is different from what it was a decade, a century, or two centuries ago. That's why we're not speaking Dutch. Ethnic cleansing, by the way, usually involves something nastier than people moving to the suburbs...
I'm all for importing a diverse population, by the way, including plenty of high-IQ foreigners. It's worked so far for the US...
And I'm all for free trade, even if there are winners and losers within the country (how free trade is/can be is another question), though I'm not for shipping jobs off willy-nilly (BTW, NY unemployment is quite a bit higher than it is in the Great Plains, which I think of the quintessential "flyover"--not a term I like to use, actually)
Who won the prize?
I'm holding it open for rebuttals.
Post a Comment