Saturday, February 27, 2016

Does 'boy' Trudeau still admire China?


Does 'boy' Trudeau 

still admire China?



The Chinese economy has had one of its worst weeks in recent history.
This past Monday, on a single day of trading, Asian stock markets lost over a trillion dollars in value.
To give you some perspective, that’s like having a company the size of Blackberry disappear from the economy every single hour.
Things are bad in China.
In many ways, its wounds are self-inflicted, prompted by decades of government manipulation of the markets and harsh restrictions on economic freedom.
Watching China’s markets implode — and bring down the world’s interconnected economy with it — one has to wonder, does Liberal Leader Justin Trudeau still admire this country’s government?
It wasn’t that long ago Trudeau stated we should look to China for an example of how to manage economic growth.
When asked to name a country’s whose government he admires, with a smirk and an unrehearsed explanation, Trudeau told us he admires China.
Despite China’s grave human rights abuses against minority religious and ethnic groups, its horrendous environmental degradation, and the serious restrictions it imposes on the rights and freedoms of its citizens, Trudeau said he admired China’s “basic dictatorship.”
Specifically, Trudeau mused about the Chinese government’s ability to turn its economy around on a dime.
Yes, it was China’s market manipulation that specifically wooed Trudeau.
To be fair, at the time and on the surface, things looked pretty good in the Middle Kingdom.
Since the 2008 recession, China’s economic growth has been the equivalent of adding the entire economies of Britain, France and Germany combined.
China’s staggering growth seemed unstoppable, but most analysts agreed it was unsustainable and largely embellished. Propped up through the central government’s manipulation of its currency and significant government spending on endless and often unnecessary infrastructure projects, China seemed on pace to pass the U.S. as the largest economy in the world.
That is, until this summer when China’s poor economic management finally caught up with it.
China’s government spent money it did not have, purposely devalued its own currency to boost exports, and treated its economy as though it were a puppet show, easily controlled through a central government.
All that toying and tinkering is beginning to backfire.
The sad reality in China should prove, once again, that governments cannot design economic outcomes or fake economic growth.
Trudeau, however, seems unwilling to accept these truths.
In the face of what may be a long and unpleasant market correction, Trudeau seems to have doubled down on his admiration of command and control economic policies.
Amidst the chaos in the world markets, Trudeau told us this week that he is no longer concerned with balancing the budget. If he becomes prime minister, he is willing to run deficits, borrow and spend money we don’t have, plus insert the government into the economy in new ways.
Only someone like Trudeau could stand on a stage and hammer Prime Minister Stephen Harper for running deficits following the 2008 recession — forgetting his party’s repeated demands for more spending — then moments later discuss his own plans to run a deficit. Deficits for me, but not for thee.
Following last year’s budget, Trudeau said his plan was to grow the economy so the budget can “balance itself.”
Just what magical policies can grow an economy so a budget can balance itself?
As China can certainly tell us today, there’s simply no such thing.