Don't count Chinese chickens before they're hatched

I once heard a U.S. Postal Service worker, while waiting on some unlucky customer, preach for all the world to hear that it was "a matter of when, not if" America was overtaken by China .

But before we start learning Mandarin and hanging portraits of Chairman Mao in every public place, it might be worth considering a second opinion.

The same sort of prophesies were made in the 1980s and into the '90s, when the coming colossus was supposed to be Japan. Or Germany. Or in the 1970s, when the Soviet Union was supposed to have been winning the Cold War.

Today’s visions of a Chinese future got some clarification late last year, when the World Bank reported what may qualify as the world’s biggest accounting error. It found that “the size of China’s economy is overestimated by some 40 percent based on most current measures....” That overestimation was a ballyhooed factoid in more than a few forecasts of Chinese ascendancy and American decline.

It must be said that China is a great power already, and has been for some time. China began its double-digit annual growth in the 1980s; it was a foreign policy obsession in Washington in the 1970s; it has been a nuclear power since 1964; it has had a space program since 1956; it held American-led forces to the 38th Parallel in Korea in the early 1950s; and it has been one of only five permanent members of the Security Council since the UN's founding in 1945.

So China has been a leading power in the world for 60 years. But it is a long way from there to global hegemony. And China is a big country with problems to match.

The numbers show much more than an unstoppable sprint to global domination. China ’s economy is now second only to America ’s, but U.S. GDP is still twice China ’s, and equal to the second, third, and fourth largest economies combined. China is awash in cash -- enough to help finance U.S. debt -- yet mainland China’s market capitalization is not very much higher than tiny Hong Kong’s, and only about a quarter of America’s.

Many Chinese cities – Beijing , Shanghai , Guangzhou -- are truly impressive, even evocative of some futuristic science fiction film. But outside the favored urban centres, China remains profoundly impoverished. 800 to 900 million of China 's 1,300 million souls are peasants, and nearly half the Chinese people live on less than $2 a day.

China ’s success has been largely propped atop its exports to the West, and China produces those exports to Western designs, in Western factories, for Western consumers. The Chinese export economy is an enormous branch plant. And branch plants are derivative and dependent. Taiwan was once the West’s preferred branch plant location. India could easily be our next, or even Vietnam. What happens to Chinese growth then?

And the fear of dependence on China should be mutual. China has precious little natural resources for its size. Even the Chinese staple of soy beans has to be imported, largely from the United States.

China is also getting old. As a predictable consequence of the Communists' forced one-child-per-couple policy, every generation is twice the size of its children’s generation. China 's ratio of retirees to workers hit 1:3 in 2003. So it's not for nothing that China-watchers often say " China will get old before it gets rich."

America, meanwhile, has increased its fertility rate to the highest in 35 years, reaching the "replacement rate" in 2006 for the first time since 1972.

And the one-child policy has had another consequence. The male-to-female ratio in China has already become imbalanced, at 6:5, and it is difficult to see how that trend can be anything but problematic.

The fantasies of a Chinese-dominated world are in some part a product of resentment and contempt for America. And though it may be appealing to certain people to imagine a world in which Washington takes orders from Beijing, such a world would be appreciably less free, less democratic, less humanitarian, even less environmentally-friendly.

The recent satellite shoot-downs may put things into some perspective. When China decided to shoot down a satellite in 2007, it did so unannounced and at an altitude that put the thousands of shards into the paths of other satellites and spacecraft. When the United States decided to shoot down a satellite in February, it informed the affected governments directly, then the international press, and it smashed the satellite at just the altitude to cause the debris to be incinerated in re-entering the atmosphere.

A crass assessment would call both powers bulls in china shops, so to speak, but clearly there is a bad way and a better way of going about being a superpower.

China has been a top-tier global power for some time already, and it has room to grow. But to conjure the future and see China in anything like the role America now plays is wildly speculative and takes far too little account of China’s gargantuan problems.

The kind of nation that denies its citizens the right to have children as they wish, or to worship as they wish, let alone to vote, is not the sort of nation that can hope to compete over the long term with the boundless creativity and energy, the self-correction and dynamism, of the great free societies.

Andrew W. Smith

Published in The Chronicle-Herald, Halifax, Nova Scotia

Presidential predictions

My amateur prognostication last October -- when John McCain was polling third among Republicans and his campaign was in debt -- was that McCain was the Republicans' strongest candidate, and that winning the Republican nomination would be the harder part for him: If John McCain won the Republican nomination, he would be most likely to win the presidency.

That seems about right today, now that John McCain has in fact become the Republican nominee and Democrats have managed the impossible and turned a broadly favorable political situation with no real policy disagreements into a civil war and the longest primary fight since 1968.

The latest poll averages at Real Clear Politics show John McCain edging out both Hillary Clinton and Barack Obama, by 0.5 percent and 1.2 percent respectively.

I would expect McCain to "close hard" in the last days before the election. McCain is the safe vote. He has no real liabilities in experience, credibility, partisanship, corruption, plausibility, or likeability.

I would also expect the economic/financial picture to be brighter by Election Day. The numbers may worsen in the current quarter and possibly into the next, but unemployment is still very healthy, at 4.8 percent, and the economy was still growing in the last quarters for which we have statistics -- 0.6 percent in Q4 and 4.9 percent in Q3. The problems so far have been related to the mortgage crisis and the high cost of a barrel of oil. But the stimulus package should help offset the oil inflation, and federal mechanisms are right now being brought to bear on the financial dislocation. Even some of the analysts preaching recession are looking for better numbers by the third quarter.

Iraq is a won war, though it could still be lost, and today the Iraq issue is not the vote-loser for Republicans that it was just a year and a half ago. What is more, Iraq became America's showdown with international jihadism and al Qaeda, and America won. John McCain can be expected to make that point forcefully and repeatedly.

Democrats have become the anti-war party, which historically has shut them out of the White House. Democrats became the anti-war party in 1968 and lost seven of the next ten presidential elections; they became the anti-war party in 1864 and didn't elect a two-term president until 1916. Americans do not elect pacifists, or those who can't take their own country's side in a war, as president.

McCain's age may be an issue, but 71 isn't as old as it used to be, and a solid, young vice presidential pick should mitigate any age concens, plus McCain should be able to make a virtue of necessity with his age, like Reagan did in 1984 especially.

And McCain will be the only candidate in November who fits the presidential "profile". John McCain is an old male WASP (not "Anglo-Saxon" per se in McCain's case, but Protestant British Isles), Episcopalian, which happens to be the most common denomination among presidents, and even named "John", which happens to be the second-most common name among presidents. McCain matches the profile of 42 of the 43 presidents of the United States (the Irish Catholic John Kennedy being the one real exception to the "profile" rule).

I do think a black man or a white woman could become president of the United States, incidentally, but that it would more likely be a conservative woman or conservative black man, not the Clinton and Obama types.

Much ink has been spilled on the subject of the President's low approval ratings, but the lesser-told other side to that story is that the Democrat-controlled Congress has consistently had approval ratings of about ten points lower than the President's for nearly a year now. And all the talk about Democrats out-fundraising Republicans in the presidential race has neglected the fact that Republicans have been winning the fundraising battle of the National Committees.

Plus which, Democrats have no strategists and organizers -- to my knowledge, at least -- to equal Ken Melhman or Karl Rove, both of whom have started advising the McCain campaign. Rove is a towering intellectual of American politics and government, and understands every heartbeat.

And at this point there are no apparent spoilers -- third party vanity candidates who siphon enough votes from one of the big two to throw the election result. The only third party character with a hat in the ring thus far is Ralph Nader, who could only possibly take votes from Democrats, but who is of course unlikely to manage much more than half a percent or so of the national vote.

So there is one man's forecast. I do think the race will be close, that the campaign against Hillary Clinton would differ from the campaign against Barack Obama, and that there are any number of unforeseeable events that could alter the landscape radically, including even attacks in America or overseas. But based on everything I know now, and everything I can foresee, John McCain is the most likely next president of the United States.

The New York Times: Rooting against America's economy since November 2000

"Sharp Drop in Jobs Adds to Grim Picture of Economy" read the March 7 headline in The New York Times.

That "sharp drop" to which The Times refers was 63,000 for the month of February, which is undeniably unwelcome news, at least for those of us who want to see America moving from strength to strength.

But what was The New York Times reporting for the record 52 consecutive months of job growth that ended just this January? The four years and four months in which the U.S. economy created a net 8.3 million jobs?

The Times can take pride in having predicted this downturn. Indeed, The New York Times has anticipated hard economic times nearly every month since sometime around November, 2000.

When the Labor Department reported last November 3 that the U.S. economy had gained 166,000 jobs in October, The New York Times demurred. "Despite Gain in Jobs Data, Wall Street Is Skeptical". At The Times, "despite" is always a good sort of way to start a headline reporting good news.

128,000 jobs were added in August of 2006, but The Times had the cold water ready for that. The September 2 story was headlined "Jobs and Wages Increased Modestly Last Month", and began, "Job growth seems to be reaching its peak," just in case the poor reader was getting carried away with all the wet blanket-wrapped good news.

The Labor report for July of 2006 found an increase of 113,000 jobs. The August 5 New York Times headline? "Job Growth Slackened Last Month".

And what would The Times do if jobs grew at such a pace that it would be impossible to deny the improvement without losing all credibility? Like a quarter of a million jobs added in a single month?

The jobs report of March 10, 2006 was a blockbuster. In February, the U.S. economy had added 243,000 jobs. So, The New York Times avoided adjectives altogether. " U.S. Says Employers Added 243,000 Jobs in February". Note that "U.S. Says", as if the numbers might be in dispute, or are just one opinion on the subject.

It only got worse from there. The Times actually found a way to turn an explosion of 243,000 jobs in a month into a troubling development, within the first paragraph: "...igniting concerns among many Wall Street economists that higher wages could fuel inflation and increase expectations that the Federal Reserve will raise interest rates further."

In fact, only five of the article's 23 paragraphs were upbeat, and the piece was peppered with lines like, "But the increase in wages was greeted with some furrowed brows." Including at The New York Times, apparently.

The Times even managed to work in a little global warming-ism among the economic data. "January's average temperature of 39.5 degrees was the highest ever recorded." What that has to do with the price of tea in China is unclear, but The Times does have the world's temperature to worry about as well as the negative ramifications of a quarter million fewer jobless Americans.
Give credit where it's due. In 2005, when the United States was busy adding 2 million jobs and there were no national elections for The Times to worry about, the headline writers were good enough to toss the optimists a bone: "Creation of Jobs Surged in April, and Income Rose".

But on May 7, The Times editorial writers calmed their excitable scribes. "If April's numbers are the start of a new upward trend, great. But it's too soon to tell. Policy makers must be especially mindful that the economy has been at this juncture before, and then failed to deliver on its promise."

October 9, 2004: Labor Department reports 96,000 new jobs in September; New York Times reports "Growth of Jobs for Last Month Seen as Sluggish". You'll have to forgive The Times for that one -- you can't have good news getting through at election time.

And as the 52-month job expansion was beginning in August of 2003, The Times headlined "Not Much Job Growth, but Mediocre May Look Good in 2004".

So, at The New York Times, a loss of 63,000 is "sharp" and a gain of 128,000 is "modest"; 96,000 is "sluggish", 113,000 is "slack", and the less said about 243,000, the better.

Play down the good news, play up the bad. That's how The Times makes the news fit to print. Unless of course The Times supports the president of the day, in which case, reverse those rules exactly.

Now The New York Times has that slowdown they've been dreaming of since the last boom began in President Bush's first term, and just in time for a presidential election, too. Better hope the stimulus package doesn't work. But even if it does work, The Times can always say it's only made things worse. An election season would be no time to start acknowledging good news.

It's not for nothing that The Times' circulation and advertising taken the same direction as its writers and editors have been wishing on America 's economy. The bad news is that among those stragglers who still worship at The Times' Gothic nameplate are almost the entirety of the English-speaking world's journalist class, amplifying the axe-grinding of The New York Times in newsrooms from Houston to Halifax .