March 4, 2009
Lessons on Markets from the Chinese
China announced a $560B stimulus plan and our market went up 200 points on the Dow. When President Obama passed a $780 B plan our market dropped like a rock. We need, apparently, to take some lessons on capitalism from the Chinese.
March 4, 2009 | Permalink
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Right, let's learn from them.
They've got liberal Communist Party elders (whatever that is) that are "extremely worried that the privileged and the corrupt will seize this opportunity to fatten themselves, damage the relationship between the party and the people, and intensify social conflict."
Beyond the, so far, lack of unbiased oversight and transparency to monitor the spending, I'm not sure that we have many details. The overall dollar amount is the same as we've known about for a while now. I've read that they have vague goals with only specific numbers for 1) a target growth rate and 2) they're increasing military spending by 14.9% (which is more the 2.5% lower than the increases in both 2008 and 2007.) It seems that their expected to figure out the details (which may or may not be measurable w/o unbiased oversight) starting on Thursday, but apparently there's no reason to wait for that now that we know the stimulus is funding military spending at a more than 2.5% cut in the growth rate from 2007 and 2008, so it's time to have stock market and commodity rallies.
And according to the NYT the central government is financing less than one-third of the package, leaving local governments, banks and private enterprise to finance the rest. So, does that mean that two thirds of the stimulus is an unfunded mandate? How will that work out?
It's almost (I repeat; almost) enough to make a person feel sorry for Geithner after the way his vague (though less vague than the Chinese) plans have been received.
Working toward universal health care is one of the (not supported w/ details) goals for the Chinese stimulus. So, I guess BHO can now say that his health care plan is stimulus, just like the Chinese. Right?
Posted by: 1jpb | Mar 4, 2009 9:54:19 PM
Sorry going to have to disagree with you, the nation we should be looking at is Germany as their economy seems to be based around sound reasoning (with the exception of the Porsche/VW buy out).
Posted by: Dave Chapman | Mar 9, 2009 9:07:14 AM