Saturday, February 27, 2010

China's Great Leap Forward

Barack Obama is confronting the same problem that all his predecessors confronted: He knows too well what the long-term solvency of the country demands, but he can’t act, because our political system won’t allow it. The majority rules, and the majority wants to live on the cuff, because that’s the way it has always worked, and if President Obama told us the hard facts – that we’re broke – the voters wouldn’t stand for it. So we are treated to the same old “the richest country on earth ought to be able to give everyone___________.” You fill in the blanks.

Some people in other countries have grown up wanting a system like ours, but now they are not so sure. Maybe, they are thinking, China has got it right. They have the fastest growing economy on earth, but....their government is COMMUNIST! You know, the system that says the state owns all the land and the means of production. The system that says “from each according to his abilities, to each according to his needs.”

Well, not quite. The new breed of Chinese communist is shopping for Mercedes and BMWs in Beijing showrooms, while America is giving “cash for clunkers” to prod people to buy new cars with money that comes from the U.S. government, which borrows it from…..China!! What’s wrong with this picture?

For a quarter century, from roughly 1960 through 1985, we had it made: The transistor (Bell Labs) begat the semiconductor industry (Fairchild, Intel, TI, Motorola), which begat the computer industry (IBM, DEC, H-P), which begat the personal computer industry (Apple, Compaq, Dell). I was there, and it was a wild ride, a once-in-a-lifetime high.

The chief perceived threat in 1980 was Japan, and there was widespread anxiety here about the Japanese obsession with quality. They took what American quality gurus had taught them and then raised the bar. If anybody was looking for other threats, there was Korea, and possibly Taiwan. Nobody, but nobody, was thinking about China. China? You’ve gotta be kidding!

I’m sure a lot of books will be written about China’s leap into high-tech, but here’s my take: Like many others, I had visited our sales offices in Singapore, Taiwan, and pre-1997 Hong Kong often, offices that were staffed by expatriate Chinese, and in my dealings with them one distinguishing characteristic stood out: They were all capitalists down to their bone marrow! The Chinese were deal-makers, whatever government was in control. And it occurred to anyone who thought about it that if the government in Beijing ever decided to adopt a market-based economy, it would need a very short runway, because they had a billion born capitalists ready to roll, The decision was made around 1980, and within a relatively short time the Chinese machine was airborne.

It remains to be seen whether Chinese capitalism can coexist with centralized control. But I believe (and have heard this echoed by Chinese in Beijing) that there is no turning back. Economic liberalism breeds political liberalism, especially now that the Chinese people have a taste of market success. Only two outcomes are possible: (1) The Chinese authoritarian government will soften and eventually be indistinguishable from our government (which has been drifting leftward, in case you haven’t noticed) and (2) The Chinese leadership, feeling threatened by an increasingly assertive, increasingly acquisitive middle class, will try to force the genie back into the bottle, leading to widespread instability. I don’t know which option will prevail, but I would probably bet on (1). Things are going well in China today, and Hu Jintao doesn’t need to rock the boat.

And he doesn’t have to worry about getting this or that bill through Congress. He doesn’t have to fret about filibusters and blue states and red states. When he decides that something makes sense for China, he just does it, making a few phone calls to get his ministers on board.

Meanwhile, when Barack Obama decides that something makes sense for the United States, he has to deep-six it because it won’t play in Chicago or on CNN, and he could never get it through Congress anyway,

Democracy is messy, but people will put up with the mess – as long as they are winning.

Wednesday, February 17, 2010

Too Many Papers, Too Little Time

For a span measured not in years but in decades, I have been a subscriber to The New York Times, The Wall Street Journal, and The Economist. Good newspapers all, each deserving of more time than there is in my day. (I know, when you’re retired you’re supposed to have oodles of free time, but I don’t.) And they’re getting pricey, because their business model, based mostly on advertiser revenue, has broken down. I don’t mind paying for value received, but paying for newspapers that I don’t read is just plain stupid. So something has to go. But which one?

The New York Times is still a fine newspaper, though it no longer deserves its “All the news that’s fit to print” mantra. “All the trends that are fit to print” would be more like it. The Times sponsors or co-sponsors polls, and this leads them to tell us endlessly about – us. It is as if the Times newsboy is shouting, “Wuxtry, wuxtry, read all about rising discrimination against women!!” Or middle-aged mid-western factory workers. Or the plight of the uneducated or the poor or the needy.

And the Times is becoming more provincial. Today, while most of page 1 told us that New York’s Governor has an aide with a shadowy past, news about a political assassination in Dubai was given one column on page 4.

The Times still has a good crossword, especially toward the end of the week, and it has by far the best sports coverage of the three publications under review here. Its Arts section is very good, reflecting the fact that New York is still the cultural capital of this country. Its financial pages are so-so and can’t compare with the Journal’s. The decision to drop TV listings, made years ago, was a mistake,

The editorial page features some very good writing, notably the columns by David Brooks, surely one of the best political writers around. Of the op-ed crowd, Maureen Dowd and Gail Collins write more for entertainment than for enlightenment, Tom Friedman has taken up a cause (energy), and this is his blessing and his curse. As for Paul Krugman, the less said the better. He does have a Nobel Prize, but unless you are as ardently liberal as he is, you will skip his columns, for the writing is tendentious.

The paper’s main editorials are strongly, often passionately, a mirror of the Democratic Party’s platforms, but their extreme positions are no more fanatical than those of the Journal. Most of the times I just hurry by the editorials of both papers without reading them.

The Wall Street Journal has improved dramatically since Rupert Murdoch took it over. It now covers world news even better than the Times. Having feet on the ground in Yemen and Beirut and China and Venezuela costs money, and the Journal is ready to spend it. Indeed, you will find out more news from more places on the planet in the Journal than you will in the Times. Ten years ago, such a statement would have been impossible.

The Journal, however, does have its problems. The biggest one is the three-page editorial section, called “Opinion.” Except for a token moderate, the franchise seems to belong entirely to the American Enterprise Institute, whose members apparently have total access to the pages. They – John Bolton, Frederick Kagan and other neocon exiles – beat the war drums as hard as they can, but no one in Washington, I devoutly hope, is listening.

The Journal’s drama and movie critics are excellent, and the weekend paper is a particular treat, with Peggy Noonan and the not-to-be-missed de gustibus column.

The paper is trying gamely to mount a sports section, but so far it is a waste of space.

Carps: The Journal’s Friday edition contains a good crossword puzzle, but it is not designed for the eyes of mere mortals. The same editor who is responsible for those teeny squares must be the culprit who reduces the excellent Pepper and Salt cartoons to microscopic size.

The Economist is by far the most literate and the most insightful of the three newspapers. Yes, it has a week to prepare each issue, but it is still impressive. From the often witty cover to the in-depth stories from all over the world to the technology quarterly surveys, there is too much to feast on, but I leave the accumulating back issues on the coffee table with promises to myself that I will return to this or that story.

The Economist is of course a British publication, so it devotes a fair amount of space to Old Blighty, but I’m probably more interested in this material than I am in Governor Patterson’s cronies.

The newspaper (as it calls itself) is organized by geographic sections
(Middle East and Africa, The Americas, Europe, etc) and by subject matter (Science and Technology, Finance and Economics, etc). The constant is the quality of the writing. In this, it leaves the Times and the Journal in the dust.

What the Economist offers is information of value, presented by masters of exposition. That, and not crosswords or fiery editorials or lifestyle columns, is what I look for in a newspaper. So I will drop the Times and the Journal and give each week’s Economist the time it deserves. As for the rest – sports, movie reviews, stock-market news – I’ll pick that up on television or the internet, thank you.