Socialism Doesn't Work - Even In China
- Dick Morris - GOPUSA
- Jul 28, 2009
Buried amid its astonishing annual growth rate, even in the recession, is the sad story of China's socialist sector, a huge and perennial drag on its economy. The failure of government control amid the success of private initiative is a story that President Obama would do well to study as he brings government control and management to the automobile and banking industries in the United States.
In China, 80 percent of all investment activity comes from bank loans largely controlled by the government -- a harbinger of what Obama will bring to the United States as TARP-funded banks increasingly have to bow to federal regulation and pressure. And, as is to be expected when the state runs the banks, the lending goes disproportionately to state-owned enterprises (read: General Motors). These companies get 70 percent of the nation's investment capital (and the figure is rising) but only produce between one-quarter and one-third of all output in the country.
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