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    Elizabeth Warren apparently never heard of the Chinese bubble and Stimulus

    Elizabeth Warren apparently never heard of the Chinese bubble and Stimulus

    Elizabeth Warren is punching back against her own embarrassing “no one got rich on his own” rant and Scott Brown’s devastating viral (350k+ 800k views) video.

    Warren is doing so by insisting that we need to catch up with China on infrastructure spending.

    Warren’s campaign just released this ad:

    Warren has just demonstrated how clueless she is and how she is unable to look beyond government-spending talking points.

    China started from a much lower point of development, so it has to spend more on infrastructure just to catch up.

    China’s massive spending on infrastructure, intertwined with real estate construction, also has created a bubble of cities without people and bullet trains with no riders:

    China is rife with overinvestment in physical capital, infrastructure, and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns, and brand-new aluminum smelters kept closed to prevent global prices from plunging.

    The Chinese government is trying to manage the bubble:

    Moreover, in 2008, a nearly trillion yuan stimulus program had developers building up China residential properties in hopes that the urban trend would spike.  They built, but the people didn’t always come.  While the urban trend remains in place, many of those properties remain vacant, either as unsold developments or as investment properties without anyone living there.

    We also saw in the 2009 Stimulus Plan in the United States how funding infrastructure projects for the sake of funding infrastructure projects led to wasteful projects like sidewalk reconstruction.

    Warren’s answer to everything is to throw more government money at it.  How’s that working out for us?

    Elizabeth Warren may think she’s punching back, but she’s actually just shooting herself in the foot, once again.

    Update:  From Todd at WRKO Boston:

    In her new ad, Liz Warren complains that China is investing 9% of its GDP in infrastructure while our spending is running at around 2.4%. My rule of thumb is that whenever politicians are offerings statistics, there’s little truth to what they’re saying. The Warren campaign isn’t breaking the pattern.

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    Comments



     
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    WarEagle82 | July 27, 2012 at 10:20 pm

    I am glad to see this getting some exposure. I have been reading about this for over a year on other sites. 64 million empty apartments. Billions of square meters of empty real estate. People building buildings that will decay and fall down before they are ever occupied. The allocation of capital in China is insane.

    Anyone who believes the manipulated statistics of 8% growth year after year simply is ignoring reality in China. The only question is whether the US or Chinese economy falls apart first, or maybe they go down in flames together.

    It is all smoke and mirrors.


     
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    janitor | July 28, 2012 at 1:41 am

    Stop making fun of Elizabeth Warren. It is not her fault she doesn’t know stuff. She grew up in terrible isolation and deprivation somewhere on on an Indian Reservation in which she was the sole inhabitant, eating bowwow chow with French mayonnaise, which could have clogged the blood vessels in her brain… (oh, no, wait, sorry, that was Obama who ate bowwow chow…) At any rate, please. This woman has struggled so.


       
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      janitor in reply to janitor. | July 28, 2012 at 1:44 am

      Struggled so. Building roads… digging ditches, like on a chain gang… only she wasn’t, she was imagining stories from Aunt Bea while watching the Andy Griffith show, all alone…

    […] Legal Insurrection has more.  55.957870 -3.199357 Share this:FacebookEmailPrintRedditTwitterStumbleUponDiggLinkedInLike this:LikeBe the first to like this. Posted in International, Marxism/Communism/Socialism, Politics […]

    She’s been hittin’ the “peace pipe” far to long. Give her a teepee and send her to China.


     
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    OcTEApi | July 28, 2012 at 9:51 am

    “…those properties remain vacant, either as unsold developments or as investment properties without anyone living there.”

    Many of the newly created Chinese middle class (profits secured from American consumerism) had invested in those properties… but since the Chinese are working diligently (with massive mandates and regulation) to burst that housing bubble, many Chinese have looked elsewhere to put their money.
    Namely, Chinese investments in US property holdings (and our US corporations) are way up under Obama…
    -so WHO are “WE” supposedly “building that” FOR?
    Its important that know, is it no different than outsourcing jobs… if there is massive influx “insourcing” of foreign ownership?

    Former Gov Granholm destroyed Michigan business climate and after corporations started to crumble she relentlessly traveled on our dime to secure foreign “investment” … -which means they came, they plundered and now those corps are foreign owned.


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