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Why 95% of Traders Fail

Meat, Milk and Motors: The New China Syndrome

Economics / China Economy Feb 16, 2009 - 01:06 AM GMT

By: Robert_Singer

Economics Best Financial Markets Analysis ArticleAugust 21, theatres around the nation screened the documentary I.O.U.S.A. and a live discussion with America's most notable financial leaders and policy experts, including Warren Buffett; William Niskanen, chairman of the Cato Institute; Pete Peterson, senior chairman of The Blackstone Group and former U.S. Comptroller General, Dave Walker.


August 25, Mr. William Niskanen, CEO of the Cato Institute, confirmed his remarks on the I.O.U.S.A. post-broadcast panel discussion.

Dear Mr. Singer,
I do not have a tape of my remarks last Thursday evening. As I remember, however, I expressed being puzzled why the central banks of China, Japan, and South Korea have continued to invest so much in U.S. Treasury securities.  For these central banks have earned a negative real return on these securities, for which the interest rate has been lower than the depreciation of the dollar.

I would value your judgment about this puzzle... William A. Niskanen

China is a "Hot Topic" at the nationally and internationally recognized Center for Trade Policy at Mr. Niskanen's Cato Institute, but the research staff has been unable to find a political, diplomatic, military or economic solution to the China puzzle, because there isn't one.

China's economic policy is an enigma that would baffle Ludwig von Mises and Karl Marx.  The answer to the Chinese enigma: China is now the Air Pollution champion of the world.

No country in history has emerged as a major industrial power without creating a legacy of environmental damage. But just as the speed and scale of China's rise as an economic power have no clear parallel in history, its pollution problem has shattered all records as well.

China's environmental degradation is so severe it has become the world's problem. Sulfur dioxide and nitrogen oxides spewed by China's coal-fired power plants fall as acid rain on Seoul, South Korea, Tokyo and according to the Journal of Geophysical Research, much of the particulate pollution over Los Angeles originates in China.

Chinese officials, before and after the Tiananmen Square massacre, pretend to pursue economic development and industrialization for the benefit of their population, but in spite of the glitter of China's big cities and the rise of its billionaire class, the vast majority of the Chinese people are repressed, working in slave labor camps and living in poverty.

The path China took to industrialization was unusual.  John Watson, Professor at Reno-based Desert Research Institute, notes: "They're making a lot of the same mistakes we made in our air pollution history. You can just see the parallels: they're building more highways and encouraging more sprawl."

Mistakes?  Consider the Communists First Five-Year Plan
When Communism became the ideology of the people in 1949, they fought pollution during the successful First Five-Year Plan from 1953-57 and were moving towards 100% recycling until 1958 when the Great Leap Forward became the Great Leap Famine and between 16.5 million and 40 million people died before the experiment came to an end in 1961.

During the Five-Year Plan, Chinese articles and journals extolled the benefits of recycling. "When a case of pollution arose, there was scientific and collective action to undo the damage. The most harmful industrial wastewater is that which contains phenol. If this kind of poisonous industrial water is drained into a body of water (such as a river, lake, or sea) before treatment, it will pollute the water, kill the fish, and endanger the health of the people. And if such poisonous waste water is drained into the farmland, it will badly affect the normal growth of the crops."

The "Mistakes" explanation requires you believe no one in China read or studied the industrialization of the Western Countries. "Cost-benefit analyses in the U.S. show that emission reduction programs have provided much greater benefits than their costs, by a ratio of up to 40 to 1. Air pollution damage not only impacts the ecosystem but imposes major economic costs as well as, from premature mortality, increased health care and lost productivity and, more importantly, decreased crop yields."

Air Pollution thick as Pea Soup
A World Bank study found China is home to 16 of the world's 20 worst cities for air quality. Three-quarters of the water flowing through urban areas is unsuitable for drinking or fishing.

Pea-soup air in Beijing is caused in part by a sudden switch from bicycles to automobiles as a means of transportation. With nearly 156 million motor vehicles, bicycles are no longer welcome in cities that are being rebuilt to accommodate automobiles.

China's bike lanes have been sacrificed in the name of road and highway construction. In the Fujian province, Chinese city and regional officials went so far as to ban electric bicycles because they were worried "the lead-acid batteries are an environmental risk, and that the use of electric bikes undercuts the use of public transit." Both arguments apply far better to automobiles, but automobiles are encouraged and riding a bicycle without a license can get you arrested.

Following Western Pollution's Footsteps The U.S. also sacrificed mass transit in the 1930's when the National City Lines (NCL) converted the nation into an automobile-dependent society by dismantling most streetcar systems throughout the United States.

John D. Rockefeller, the #1 wealthiest man in all recorded history, was a founding member of the NCL holding company and our "Federal" Reserve Bank.  Under the ruse of Christian temperance, he gave $4 million to a group of old ladies, and the temperance movement was no longer about drinking alcohol but about the knob on the dashboard of the Model T.

The knob allowed the driver to adjust the fuel-air mixture for either alcohol (ethanol) or gas. Henry Ford said that alcohol was "a cleaner, nicer, better fuel for automobiles than gasoline."  Ironically, no one followed Henry's advice until 2000 when George W. Bush subsidized Archer Daniels Midland to burn up, according to the distinguished McKnight University Professor C. Ford Runge, enough calories to feed one person for a year every time we fill up the 25-gallon tank in our SUV.

The Federal Reserve and John D. were behind our automobile-dependent consumer society and the outlawing of the production and sale of alcohol. John D. was a notorious "robber baron", so we naturally assume his motivation was greed and profit.

But Rockefeller, known as a brilliant businessman and visionary, already owned or controlled most of the world at the end of the 19th century and as a member of the Federal Reserve he understood no one gets wealthier printing their own Monopoly money.

Therefore, if profits were the motive of the world's richest man--John D. would have bought up all of the farmland in the United States or for that matter all of the farmland in the world, so he could really control the knob on the Model T.

Then Henry Kissinger's quote would have been: "Control ethanol you control nations and people"

Rockefeller and the Federal Reserve were critical to our fossil-fueled industrial and consumer society, but that also made them responsible for much of the environmental damage done to the planet.

China's leaders and their Central Bank were critical to the unprecedented growth of the Chinese economy that benefited the West, but replacing bicycles with automobiles is responsible for much of the environmental damage done to the East, West, North and South.
The vast trade surplus of $1.4 trillion and counting, a result of official Chinese government intervention to depress the Renminbi (RMB), is that every person in the (rich) U.S. has borrowed about $4,000 from someone in the (poor) People's Republic of China so the Chinese economy can produce the most environmental damage in our history.

All too often we see the result of failed public policies, government actions and inactions, and conclude the leadership is inept, arrogant or just "stupid."

Our last president Bush wasn't "stupid" if his goal was Ecocide.
At the G8 summit, George W. Bush said, "Goodbye, from the (then) world's biggest polluter." He proposed drilling in the Arctic National Wildlife Reserve, which would trash America's last arctic wilderness. Sonar testing is about torturing whales and dolphins, and the border fence that keeps everything out but the illegals is disrupting an extraordinary source of biological diversity along a 2,000-mile-long region that includes deserts, mangrove forests, plains, mountains, river valleys and wetlands.

Chinese officials are worried about their people eating...meat
On November 11, 2008, NPR aired the story: "Chinese Government Fights Recession," where Beijing's correspondent Anthony Kuhn reports:  "there is a lot of worry in the government that ordinary Chinese were not going to be able to afford to eat meat."

In 1980, when China's population was still under one billion, the average Chinese ate 20kg (44lbs) of meat. Last year (2007), with an additional 300 million people, it was 54kg.

Promoting meat in the world's highest populous country and diverting grain to fatten animals will be "the end of self-sufficiency for China," says James Rice, Chief of China Operations for Tyson Foods. "This year will be the last in which China produces enough corn for itself, and the last that it is self-sufficient in protein."

The editors of World Watch state that "the human appetite for animal flesh is a driving force behind virtually every major category of environmental damage now threatening the human future-deforestation, erosion, fresh water scarcity, air and water pollution, climate change, biodiversity loss, social injustice, the destabilization of communities and the spread of disease."

Lee Hall, the legal director for Friends of Animals, is more succinct: "Behind virtually every great environmental complaint there's milk and meat."

Automobiles, milk and meat are the answer to the Chinese enigma;

China is on the bridge to ecocide.

by Robert Singer

Robert Singer is a retired information technology professional and an environmental activist living in southern California. In 1995 he and his cousin Adam D. Singer founded IPC The Hospitalist Company, Inc., where he served as chief technology officer. Today the company manages more than 130 practice groups, providing care in some 300 medical facilities in 18 states. Prior to that he was president of Useful Software, a developer and publisher of business and consumer software for the personal computing industry.

In September of 2008 he wrote his first commentary for OpEdNews about our consumer society. Since then over 20 articles have been published on Opednews, Marketoracle, Silverseek and many other Internet sites.  They cover social, economic and environmental issues facing Americans and the rest of the world in the 21st century.

Many of the articles are also available on his authors page at OpedNews: http://www.opednews.com/author/author20310.html

© 2009 Copyright Robert Singer - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Robert Singer Archive

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