Chinese Economic Data: More Tall Tales

November 11, 2010 · Posted in The Capitol · Comment 
style="float: right; margin-bottom: 1px; margin-left: 1px;"> href="http://blog.heritage.org/wp-content/uploads/China-s-Stocks-0204101.jpg"> class="alignnone size-full wp-image-39784" title="China-s-Stocks-020410" src="http://blog.heritage.org/wp-content/uploads/China-s-Stocks-0204101.jpg" alt="" width="200" height="166" />

The Conference Board, a global research association, made a splash with their 2011 global outlook. The group’s most interesting href="http://www.conference-board.org/press/pressdetail.cfm?pressid=4057">claims are that emerging markets will drive “global growth” and that China could pass the U.S. on one measure of economic size as early as 2012. The Conference Board is making two mistakes many observers make, and which the media gladly eats up.

First, the Conference Board projects China could have a larger economy than America when adjusting for purchasing power parity (ppp). PPP is a way to account for different prices across countries. For example, most things are cheaper in China than the U.S., so a dollar’s worth of money, or 6.7 yuan, generally buys more in the PRC than the U.S. id="more-46451">

In that light, the dollar value of China’s GDP should be revised higher in comparison to America’s. For 2009, the World Bank has American GDP near $ 14.3 trillion and Chinese GDP at $ 9.1 trillion using ppp, where using normal GDP China was at $ 4.9 trillion.

Moreover, China almost always revises GDP higher after the fact and boasts much faster growth than the U.S. It’s not going to pass the U.S. in 2012 but, in current ppp terms, it could get close. Hence the headline.

Now the part headlines miss: prices change. What a dollar’s worth of money buys in the PRC is slipping. Chinese prices are rising faster than American prices, arguably much faster. The ppp comparison between the U.S. and China’s is going to change, making China’s economy look smaller.

This has happened before. The last time the World Bank adjusted its ppp href="http://www.fas.org/sgp/crs/row/RS22808.pdf">measurements, the ostensible size of the Chinese economy fell 40 percent. PPP has advantages but, as you move farther in time from the price measurements that give purchasing power across economies, ppp can tell a very inaccurate story.

The Conference Board might have adjusted for prices changing over time but they gave no indication of having done so. More important: most commentators will not adjust for changing prices; they will take the current ppp measurement and run. That will in turn generate a lot of false claims that China’s economy is soon to be bigger than America’s.

The second mistake the Conference Board made is already common: fast-growing economies drive global growth. That seems sensible but it gives fast-growing economies too much credit. Fast-growing economies may be helping everyone but they may be only helping themselves.

In 2010, China will not add to the rest of the world’s GDP, its trade surplus means it will take almost $ 200 billion away from the rest of the world’s GDP. This is just a function of how GDP is counted. The PRC does contribute to the world economy in many ways but it is badly misleading to suggest that it is doing the most to help the rest of the world. China is raising the average of GDP growth among countries but doing so in part by continuing to drain GDP from the rest of the world.

In terms of adding to the rest of the world’s GDP, even though we’re growing slowly, the U.S. remains by far the biggest contributor.

The Foundry: Conservative Policy News.

Standing tall: The rise & resilience of conservative women

October 29, 2010 · Posted in The Capitol · Comment 

My column today pays tribute to some of the conservative women on the campaign trail who have not only weathered the nastiest ad hominem attacks, but who have risen above them with amazing grace. Is it any wonder that women are abandoning the Democrat Party? Readers of this blog have known that women played a critical role in the Tea Party movement from day one. Now, the “fire in the heartland,” as Citizens United calls it, has liberal elites like Katie Couric wringing their hands over “unwashed” moms, grandmoms, and young women in revolt.

Speaker Mop and Glo Nancy Pelosi had her chance to clean up Washington. She failed. Miserably. Move over and make room for the ladies of the Right.

***

Standing tall: The rise & resilience of conservative women
by Michelle Malkin
Creators Syndicate
Copyright 2010

My military friends have a favorite saying: “If you’re not catching flak, you’re not over the target.” This campaign season, conservative women in politics have caught more flak than WWII Lancaster bombers over Berlin. Despite daily assaults from the Democratic machine, liberal media and Hollyweird — not to mention the stray fraggings from Beltway GOP elites — the ladies of the right have maintained their dignity, grace and wit. Voters will remember in November.

When “comedian” and “The View” co-host Joy Behar lambasted GOP Nevada Senate candidate Sharron Angle this week as a “b*tch” who would be “going to h*ll” for using images of illegal alien gang members in a campaign ad, Angle responded by sending a lovely bouquet of flowers and a good-humored note: “Joy, Raised $ 150,000 online yesterday. Thanks for your help. Sincerely, Sharron Angle.”

Outgunned in the comedy department, Behar sputtered nonsensically and with bitter, clingy vulgarity: “I would like to point out that those flowers were picked by illegal immigrants and they’re not voting for you, b*tch.” Illegal aliens are not supposed to vote at all, Miss B. But why let such pesky details get in the way of a foul-mouthed daytime TV diatribe?

Just a week earlier, Behar delivered a hysterical rant against GOP Rep. Michele Bachmann of Minnesota, accusing the mother of five and foster mother of 23 of being “against children” for opposing the expansion of federal health care entitlements for middle-class families and children (the SCHIP program) and for opposing the costly Obama takeover of health care. Behar merely parrots the demagoguery of Democratic leaders in Washington, who have ducked behind kiddie human shields to avoid substantive debate about the dire consequences of their policies.

As a result of the Obamacare mandates, of course, insurers have canceled child-only plans across the country. And there are plenty of compassionate reasons for opposing SCHIP expansion beyond its original mandate to serve the truly working poor. Behar called me a “selfish b*tch” three years ago over the same issue. Why is it “against children” and “selfish” to challenge the wisdom of redistributing money away from taxpayers of lesser means who are responsible enough to buy insurance before a catastrophic event — and then using their tax dollars to subsidize more well-off families who didn’t have the foresight or priorities to purchase insurance with their own money?

But never mind those pesky details. Behar persisted in smearing Bachmann as “anti-children, anti-children.” Facts be damned.

Distortions on “The Spew” are bad enough. But the “mainstream” media’s complicity in spreading false narratives about GOP women is an affront to the First Amendment. When Republican Delaware Senate candidate Christine O’Donnell challenged Democratic opponent Chris Coons in a constitutional debate last week to name the five freedoms in that First Amendment, he blanked out after freedom of religion. Instead of reporting on the flub, the Washington Post and Associated Press misleadingly reported that O’Donnell had questioned whether the establishment and free exercise clauses were in the First Amendment. What she actually said to Coons during the debate was: “So you’re telling me that the separation of church and state, the phrase ‘separation of church and state,’ is in the First Amendment?” It is not, of course. But never mind those pesky details.

In one of the most despicable last-minute campaign hits, gossip website Gawker — run by Internet smear machine operator Nick Denton — paid for and published on Thursday an anonymous tell-all from a man purporting to have had a “one-night stand” with O’Donnell. This misogynistic trash can’t be verified, and the author admits that the sensationally titled “one-night stand” did not actually include sex. The sole purpose and intent of such checkbook journalism: Humiliation.

Pundits and late-night TV pranksters have ridiculed O’Donnell for exposing liberal bias against conservative female candidates. But these same smug mockers have spent the past two years deriding Republican vice presidential candidate and former Alaska Gov. Sarah Palin, her children, her body, her accent and her brain. They snickered at reports of Democratic California gubernatorial candidate Jerry Brown’s campaign calling GOP challenger Meg Whitman a “wh*re.” And they shrugged off “The View’s” “b*tch” sessions as shtick.

The conservative women-bashers can laugh all they want. On November 2, success will be our best revenge.

Michelle Malkin

Tall Tax Tales

October 22, 2010 · Posted in The Capitol · Comment 

Summary
Republican Sharron Angle says in a TV ad that Nevada Sen. Harry Reid “voted to raise taxes” 300 times. A “staggering 300 times.” He didn’t.
We reviewed the 304 votes provided by the Angle campaign and found its final tally was padded:

86 votes were against proposed tax cuts, not votes …
FactCheck.org

Debunking the Tall Tales of the Great War, Now that it’s ‘Over’!: Diario Economico, Portugal

October 20, 2010 · Posted in The Capitol · Comment 

In addition to World War I history buffs, this article is for Republicans who detest John Maynard Keynes and the stimulus packages his theories justified - and which are still in use today - most notably by President Obama and most of the developed world last year.

As was reported in September, World War I is officially over, now that Germany has delivered its last chunk of reparations imposed on it at Versailles in 1918.

According to Fernando Gabriel of Portugal’s Diario Economico, not only is President Wilson’s post-war influence overblown, but it’s a myth that reparations imposed on Germany after World War I led to hyperinflation and the rise of Adolph Hitler. He calls into question this and other theories of economist John Maynard Keynes, whose work has been used not only to explain Hitler’s rise, but laid the basis for modern post-Depression economics, including the use of government stimulus packages in times of economic crisis.

For the Diario Economico, Fernando Gabriel writes in part:

The more acceptable approach to historical truth suggests a very different Germany after the Armistice; in particular in regard to the relationship between the macroeconomic policies pursued after the war and the reparations that Germany was forced to pay. The amount of reparations didn’t give rise to an unsustainable debt, nor were reparations the principal cause of German hyper-inflation. In 1921, as a percentage of GDP, German debt was less than Britain’s. And the reparations never exceeded 8.3 percent of German national income - far removed from the forecasts of 50 percent put forward by the “clairvoyant” Keynes. By the way, German macroeconomic imbalances were caused by the strategy advocated by Keynes: devalue the currency to increase exports and generate income to pay off foreign debt; increase public spending by boosting inflation and reducing the real value of domestic government debt.

Another persistent myth depicts American President Woodrow Wilson as a stubborn “destroyer of empires.” It is indisputable that Wilson believed in potentially dangerous ideological vacuities such as “making the world safe for democracy” - a slogan, the destabilizing potential of which is well-illustrated by the neo-conservatives, who are Wilson’s intellectual progeny. What’s doubtful is that Wilson’s convictions were at all decisive in regard to the geopolitical reordering of Europe.

The major preoccupation of the Allies was to prevent the “global revolution” announced by Trotsky. Wilson’s orders concerning the withdrawal of the U.S. military personnel who had fought in Europe are instructive in regard to the fear of the communist “contagion.” In 1919, concerned that Black soldiers returning from Europe would provide a means of disseminating Bolshevist ideas in the U.S., Wilson ordered a kind of “quarantine.” Why this applied only to Black soldiers isn’t clear, but the measure is informative of the fear of the spread of communism.

READ ON AT WORLDMEETS.US, your most trusted translator and aggregator of foreign news and views about our nation.


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