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    Elizabeth Warren did not Google “China commodity prices collapse”

    Elizabeth Warren did not Google “China commodity prices collapse”

    Elizabeth Warren famously wants us to be more like China and devote even greater percentages of our GDP to infrastructure construction.

    Warren is making this push despite the fact that we already spend huge sums on infrastructure, we just don’t do it very efficiently as state and local governments have proven to be very bad at managing infrastructure costs.

    Part of the problem is that federal projects and many state projects require union labor or equivalent pay scales which costs a fortune (the Boston Big Dig was a prime example) so we get a lot less for more.

    The more important problem is that Warren is completely clueless about China. I previously pointed out that Warren seemed unaware of the Chinese real estate and construction bubbles resulting from use of infrastructure construction to stimulate the economy.

    There’s even more evidence that the Chinese infrastructure bubble is bursting, reflected in a collapse of commodity prices, as pointed out by Walter Russell Mead (via Instapundit):

    The latest sign that China’s economy is slowing dramatically? A plunge in the price of steel and iron ore. The Financial Times has the numbers:

    Hot rolled steel, an industry benchmark, traded at Rmb3,562 ($560) a tonne this week, having tumbled 19 per cent since April to its lowest level in almost three years.

    The collapse in steel prices is already roiling the industry:

    Last month the China Iron and Steel Association said domestic steelmakers saw profits plunge 96 per cent in the first half compared with a year ago, turning the industry into a “disaster zone”. . .

    According to Reuters, Chinese steel mills have either defaulted on supply contracts or deferred shipment of up to 4m tonnes of iron ore this month following the fall in prices.

    Meanwhile, investors are taking money out of the country, exports have hit a six-month low and growth forecasts are down considerably.

    Is it too much to ask that Warren at least do a Google search before she comes up with an economic plan for the country?

    Apparently so, because expecting a female Senate candidate to use Google must be anti-woman, or something like that.

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    Comments



     
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    jakee308 | August 24, 2012 at 11:01 am

    Hardest hit; Tom Friedman.


     
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    LukeHandCool | August 24, 2012 at 11:50 am

    “… we just don’t do it very efficiently as state and local governments have proven to be very bad at managing infrastructure costs.”

    Somebody tell Lizzy Warren and Tommy Friedman that economies of scale don’t pertain to the expansion of liberal ideas or to the growth of government.

    Dreams of instant gratification, whether physical, material, or ego, have consequences in the real world. Not only have the communists created a massive bubble for their profit and as a pretense to appease the people, but, a progressive number of Chinese recognize the environmental damage, human rights violations, and the simple deception of promises unfulfilled.

    Americans should pay heed to their plight. We already have a large minority which has accepted involuntary exploitation (i.e. redistributive change) as normal. This is not to mention that a majority have set dreams of instant gratification as a priority in stark conflict with evolutionary principles. If it wasn’t for the large immigrant, legal and illegal, population, the illusion of a viable society would have already been broken.


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