Andy Stern's Chinese Lantern 4

This series began with our astonishment at SEIU union boss Andy Stern's accurate, workable suggestions how to fix the American economy to match Chinese performance.  After describing China's economic success, he said:

America needs to embrace a plan for growth and innovation, with a streamlined government as a partner with the private sector.  [emphasis added]

Andy Stern isn't the only Democrat who's impressed by the Chinese Miracle.  Steven Rattner, who helped the Obama administration restructure General Motors, said:

While developed countries bump along with little growth, China’s gross domestic product is expected to increase by 9.2 percent in 2011 and an equally astonishing 8.5 percent next year. ...

The country pulses with energy and success, a caldron of economic ambition larded with understandable self-confidence. Visit the General Motors plant on the outskirts of Shanghai and watch Buicks churned out by steadily moving assembly lines almost indistinguishable from those in plants in Michigan. ...

This illustrates China’s great strength: its ability to relentlessly grind down costs by combining high labor efficiency with wages that remain extraordinarily low. At Foxconn’s largest plant, in Shenzhen, 420,000 Chinese earning about $188 per month assemble electronic components for megacustomers like Apple, Hewlett-Packard and Dell. [emphasis added]

High labor efficiency based on high-tech factory automation and low labor costs is a potent formula for economic success.  Would General Motors have gotten in trouble if its UAW members cost $188 per month rather than $70 per hour?

The Chinese economic miracle is unmistakable:

Deng's numbers speak for themselves!

After being flatlined during Mao's 30-year era of enforcing Communist economic practices, the economy took off.  Mr. Stern explained why:

The current debates about China's currency, the trade imbalance, our debt and China's excessive use of pirated American intellectual property are evidence that the Global Revolution—coupled with Deng Xiaoping's government-led, growth-oriented reforms—has created the planet's second-largest economy. It's on a clear trajectory to knock America off its perch [as the world's largest, most advanced economy] by 2025.  [emphasis added]

Deng Xiaoping had to abandon his lifelong commitment to Communist theory and fully embrace capitalism by privatizing collective farms in the late 1970's.  Deng really meant his reforms - instead of trashing Hong Kong when the British lowered their flag and turned it over to China in 1987, Deng used Hong Kong's entrepreneurial skills to infect China with market-driven money-making.  The graph shows his success.

Deng is one of very few leaders who've managed a 180 degree turn.  Most companies and countries who're challenged like that go under.

RCA dominated the tube radio market but couldn't manage the transition to transistor radios; they're gone.   IBM had a near death experience when the mainframe market collapsed, but they found a Leader of Genius who could "teach the elephant to dance."  They came back strongly enough that Warren Buffet recently made a major investment in IBM.  The story is taught in business schools all over the world because it's so unusual for any leader to pull off a successful culture change.

Unchanging Leaders

American liberals don't seem to be able to abandon policies which aren't working.  Pres. Roosevelt went to his death convinced that his misguided economic policies helped turn the Depression-era economy around; his hagiographers have spread the same belief ever since.  In actual fact, the economy didn't come back to life until WW II destroyed the rest of the world's industrial capacity so that we could sell worldwide without competition.

Mr. Obama persists in spending money in ways that are known not to create growth and the Wall Street Journal reports that the governors of New York and California are doubling-down on increasing taxes and spending:

New York and California were once America's economic growth engines, but their political leaders seem determined to keep them sputtering. Their Democratic Governors are now pushing big new tax increases in the name of soaking the rich and balancing their budgets, as if that same strategy hadn't put them in their current fiscal straits.

Venezuela's boss doesn't seem to want to abandon his socialist policies despite a decade of dismal economic performance under his leadership:

Venezuela's Hugo Chávez says his Bolivarian Revolution needs more time to produce its utopian fruits. "We barely have 10 years here," he told a crowd of supporters in Caracas last week. "We will take it to 10 more and 10 more and 10 more to construct the new social virtues."

Other leaders who're going in the wrong direction have seen the handwriting on the wall and at least talk about change.  The BBC News reports that a few years after Raul Castro took over the Cuban government from his older brother Fidel, he started firing government employees and urging people to start businesses to create jobs for them:

We have to end forever the notion that Cuba is the only country in the world where you can live without working.

He's exaggerating, of course.  Cuba isn't remotely the only country where you can live perfectly well without working, and it's not even the country where you can live the most luxuriously in that sorry state.  As with Cuba, all countries which have generous welfare systems are in economic trouble.

As unpleasant as he may be in other ways, we must give the younger Castro credit for admitting the obvious, something our own leaders appear to be as incapable of doing as Fidel was.  Whether Raul can complete a 180 degree turn as Deng did remains to be seen.

What of Andy Stern?

Although Mr. Stern was impressed by Deng Xiaoping's economic reforms and praised the economic benefits of "streamlined government as a partner with the private sector," his actions show that he doesn't want to follow that course.  Mr. Stern has spent his life manipulating government, but instead of working to streamline government, he's labored to make government as costly, as overmanned, and as inefficient as possible.

Bloated government payrolls increased his union's income which increased his political power while driving state budgets towards bankruptcy.  His talk of streamlining government and his praise of economic reforms are the height of hypocrisy.

For decades, we've wondered whether liberals are evil or merely ignorant.  There's a saying, "Never blame evil for anything that can be explained by stupidity" which has served us well for years.

We wondered, however, if anyone smart enough to be elected, say, President of the United States or Speaker of the House of Representatives can possibly be so stupid as not to notice the economic success of Deng's reforms in China when contrasted with 30 years of economic stagnation under Mao's policy of enforced equality.

We know that, like the governors of New York and California, Mr. Obama has no intention of changing his disastrous economic policies.  The Economist reports that Mr. Obama recently said that America's worst problem wasn't our stagnating economy, but the gap between rich and poor.   He believes that the debate about inequality "is the defining issue of our time;" to him, enforcing equality by "taxing the rich" as Mao did is much more important than creating jobs.

Mr. Stern gave us a clear description of the right formula for getting the American economy to grow again.  President Reagan demonstrated that economic growth is the best way to help the poorest workers.  So did Pres. Clinton's welfare reforms.  What's more, during years of spending his union's money helping elect Mr. Obama and other Democrats, Mr. Stern became one of Mr. Obama's closest associates.  Anything Mr. Stern knows about the economy, Mr. Obama knows, and anything Mr. Stern suggests as policy, Mr. Obama will give careful consideration.

Yet despite knowing how to get the economy to grow, despite knowing that economic growth would give the government more money to spend without increasing the deficit, Mr. Obama has chosen to keep writing costly regulations that crush business.  He's putting the reliability of our electrical systems at risk and he's making it financially impossible for companies to grow past 49 employees because of his outrageous health-insurance mandates.

All these crushing regulations are enforced by an army of bureaucrats paid for by crushing taxes on the productive.  Mr. Obama and his minions are bulking up government despite all their bloviating about trimming spending.

In the end, Andy Stern has, despite himself, performed a vitally important service.  We no longer need to wonder about the motivations of Barack Obama, the Democratic leadership, or of union bosses like Mr. Stern.

Thanks to Mr. Stern's clear and persuasive article, we now know that Mr. Obama does know how to make the economy grow.  His speeches about his bogus "efforts" to create jobs in the exact opposite of the way which would actually work stand revealed as pure hypocrisy.  His economy-destroying policies are not due to ignorance; thanks to the writings of his good friend Andy Stern, we know that he knows better.

Thus, Mr. Obama is not destroying our economy out of stupidity or ignorance, he's causing great suffering on purpose.  He's not stupid, and as Mr. Stern so eloquently demonstrated, he's not ignorant either.

Once you have eliminated the impossible, whatever remains, however improbable, must be the truth.

 - Sherlock Holmes as quoted by Sir Arthur Conan Doyle

Given that ignorance and stupidity have been eliminated, the only hypothesis left is that Mr. Stern, Mr. Obama, and all their friends are in fact evil.

We'd suspected as much for a long time, but it's sad to know it.  What a blinding illumination from Andy Stern's Chinese lantern, shone directly into the dark place of the Obama administration's heart!