Mr. Xi is consolidating more economic control in the hands of the Communist Party state. That includes real estate, where one effect of the shake-up has been to bolster state-owned property developers. The Party has rolled out the concept of “new productive forces,” a catch phrase that appears to encompass aggressive industrial policy in areas such as artificial intelligence and green tech.
Because most economists understand the limits of this gambit, China watchers are waiting for another credit-and-fiscal blowout of the sort Beijing used to gin up economic growth after the 2008 financial panic. But Beijing appears to fear such a “stimulus” now would mainly stimulate inflation, and has concluded that rapidly rising prices would be a bigger political threat to the Party than slowing growth. On this Mr. Xi might be right.
If Beijing can’t stir the economy its old, credit-exploding way, and won’t pivot to a new, private-entrepreneurship-led way, the result will be slower growth. That’s a tragedy for millions of still-poor Chinese, and a challenge for a world that would benefit from a healthier, freer Chinese economy.
Arnold Kling puts economic activity in context. A slice:
Specialization and trade, or outsourcing by choice, is one of the set of behaviors that is unique to humans. Start with two creatures, not mates, each of whom is capable of fishing or gathering berries. If one of them specializes in fishing and the other one gathers berries, and they trade with one another, then I bet that the creatures are humans. I can think of no examples of other species in which two creatures who are not mates will choose to specialize and trade.
George Will is a fan of Rob Henderson’s new book. A slice:
Henderson wryly notes that, in 2015, a person acquired status by seeing “Hamilton.” By 2020, however, when the masses had made the musical contemptibly popular, former enthusiasts turned against it, saying it insufficiently reflected America’s failings. Its creator, Lin-Manuel Miranda, performed the expected grovel: “All the criticisms are valid.”
Randy Holcombe understands the reality of politics. A slice:
As the political season ramps up this year, notice that the “policies” that politicians will propose are not really policies at all; they are aspirations. They say, “Here are some good things I would like to accomplish if I am elected,” but they don’t say how they intend to accomplish them. They amount to feel-good slogans rather than actual public policies.
Most people will be in favor of mitigating climate change, reducing crime, securing the border, and reducing the budget deficit. Those are feel-good aspirations. Fewer people will favor specific policies aimed at realizing those aspirations. That’s why politicians talk about aspirations rather than specific policies. That’s also why those aspirations often fail to be realized.
John Stossel makes the case that government should stop subsidizing ‘green’ energy.
