Roubini on China, which he predicts having to deal with some significant 'issues' in the not too distant future: basically he reminds everyone that 50% of China's GDP is gov't investment and that this kind of autocratic largesse in an environment of seeming unending growth inevitably leads to waste and gross inefficiencies - which is exactly the point I've made often about China [as if I know what the hell I'm talking about - I don't - still, even a blind dog...] - namely, it's stunningly naive to think that this flood of wealth into a closed system does not lend itself to abuse by a bureaucracy intent on fooling itself and the enthralled masses it serves into imagining that everything is fine. I'd say this is the one thing that truly differentiates open systems like democracy from closed ones like communism, even those hybridized by the provisional adoption of capitalsim: we democracies expect gov't to be flawed, indeed, especially when speaking of Americans, seriously flawed, and the fluid nature of the system and the culture that abides it necessarily reflects that skepticism by placing great emphasis on the relative freedom of individuals and their rights and responsibilities thereof; but the dynamic in authoritarian systems is the exact opposite - an illusion of perfection is vital to keeping the invested authority inviolable - allow the ruled to believe those that wield power over them are flawed, make bad decisions, then how is their continuing subservience to that power to be justified? Thus it is that, to express it with tautological plainness, closed systems need to be closed and their mistakes, flaws, accordingly need to be hidden away.
Of course the question for us needs to be: how long can the charade last? Possibly a long time - certainly, all the money flowing into China right now can buy a lot of stability - and possibly you can buy enough stability to carry you over into a new era of openness - but count me less than sanguine on that - I'm sure the Chinese leadership thinks its got it all figure out - but I'm guessing Mubarak thought the same thing - systems that have a vested interest in fearing change do not respond well when change finally surprises them with a visit.
Which is not to engage in blind optimism concerning the future of Western democracy - it's not fated that Churchill's splendid quip that our system sucks except when compared to the alternatives will forever ring true - but at least we know the idiosyncrasies of it, we have a good sense of what it does well and not so well, of the benefits and liabilities, we have a reasonably good idea how it plays with others - and at the same time we have a pretty good sense of all the problems, shortcomings, inherent weaknesses and ultimate dangers associated with the alternatives; dictatorships, autocracies, repressive regimes driven by unstable ideologies - the morphology of these things is a conditional fact of history and should leave an honest observer skeptical viz China and the putative peaceful or otherwise uncomplicated rise of our erstwhile enemy.
Anyway, Roubini's point about the Chinese economy specifically is also true of the country in general: don't be fooled by the engorged GDP - there are flaws there and eventually they're gonna make themselves known - I won't go so far as to call the Chinese economy a gigantic Ponzi scheme as one analyst did recently, but that charge does get the point across - we're still talking about a closed system here and closed systems are inherently unstable because they are ultimately dependent on the perpetuation of fraudulent perceptions that are unsustainable - remember, both communist Russia and Nazi Germany experienced periods of rapid, exaggerated growth that fooled the naive into thinking them post-American success stories - not that I'm gonna insult a billion Chinese by calling them Nazis in the making - it's utterly conceivable the country evolves just like the optimists hope - my point is history suggests that's probably not the way it's gonna play out and we better be prepared for worst case scenarios.
