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Ludwig von Mises and the Austrian School are morons, China is full of Geniuses (UPDATED)

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Worried Dollar

OK, maybe that's a bit strong, but von Mises, and the whole Austrian school are discredited.
Fortunately for them and for the Western world - which is essentially broke - China is NOT following the Austrian school at all, and they are so far ahead of the Chicago Quants and Austrian (supposedly) free-marketers that those two groups literally can't comprehend how China manages its economy.

To begin with, China IS managing its economy, something Bernanke and company are not - they are constantly playing catch-up, reacting instead of being proactive like China.
China has boosted its reserve requirements since the beginning of the year, to, now, about 16%, vs. 8% here (and really, when you strip away the smoke and mirrors, zero). Furthermore, they are requiring at LEAST 20% down on all home purchases, and as much as 50%(!) in hot cities like Beijing (where government employees get stipends and create a local housing bubble, it is true). This is not a perfect solution - simply collecting Ground Rent from landlords and speculators would be better and more direct, but it gets to the same place indirectly - cooling off a housing bubble before it can form.

The free marketers won't even admit that a managed economy is doable, hence their refusal to see a working model in action. They would rather have periodic booms and busts, than admit their economic model is fundamentally flawed, and fatally too.
China is miles ahead of the U.S. in economic management. It is an economy run by serious economists who learn from their mistakes - and ours - and who are not beholden to political partisanship and game-playing for the sake of the election cycle, from a public who is generally too stupid and selfish to understand how the real economy works.
Yes, there are serious human rights issues, but it is neither as bad there, nor as good here, as the Right and Tea Partiers would like us to believe. Besides, that's got little to do with macro-economic management.

Don't be fooled by wild swings of the Chinese stock market. That, unfortunately, remains a gambler's playground, both in China and from investors abroad who sell EVERYTHING at once, regardless of the fundamentals (witness the global sell-off yesterday based on fears of a Sovereign Debt Crisis - something China is NOT susceptible to). The Chinese economy is sound and will be the largest economy in 10 years (not 20 as is widely predicted), unless the West makes serious reforms in nearly every aspect of the economy. This does not mean giving up capitalism. It does mean giving up rigged, favoritism-based capitalism which reward monster failures and punishes small succeeders.

We also need:
1. serious tax reform to untax productivity and seriously tax natural resource use and abuse (e.g. the Gulf BP disaster, the West Virginia coal mine mess etc.).
2. State Banks to pry money away from Money Leveraging Institutions (MLIs).
3. Monetary reform to return money production back to the government where the constitution puts it (Article 1, section 8) and not the MLIs. A "Public Option for Money," as Max Keiser put it when he interviewed me. To prevent inflation, this newly created money should be targeted to things we unquestionably need, like infrastructure. See the American Monetary Institute for more information.
4. Educational reform to teach children about the real world, not the myths of one made up 2,000 years ago. Today's world requires leaders in science, math, reading comprehension, logical & rational thinking, not superstition and pandering.
5. Campaign finance reform to return the funding of candidates back to the People instead of We the Corporation or their proxies like Citizen's United. (We also need to end the escalating corruption of our actual voting process so elections aren't stolen, or given away by high-handed Supreme Court judges, like in 2000).
6. Serious media that investigates news and doesn't parrot back whatever the current administration says, and treats citizens like the adults they ought to be.

A tall order? Yes, absolutely. That's why I believe China, not America, will rule the century, even with their own problems of Authoritarian Capitalism. After all, the seat of human civilization was in Southeast Asia for most of human history, the bulk of human population is still there, and the leading innovations are now there too (including the lead in Green Energy - China now produces more wind power than we do). Why wouldn't things return to where they've been historically? you think we are just gifted by God and Race? Better rethink that one.
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This just arrived in my email today from Tony Sagami, a Financial Analyst that writes Uncommon Wisdom, specializing in Southeast Asia investments. Read this and then decide for yourself where the world economy is going to be in 10 years:

The International Monetary Fund is an international organization that oversees the global financial situation of its 186 member countries. The IMF was formed with the goal of stabilizing international exchange rates and to provide financial assistance to countries that experience serious financial and economic difficulties with loans and other forms of financial aid.

Tracking those economic developments on a national, regional and global basis requires an army of economists, so the IMF has a very good handle on the global financial picture.

What the IMF sees in China and India impresses the heck out of it. The International Monetary Fund is now forecasting that China and India will generate 40% of the world's growth in the next two years.

Forty percent? Wow! Let me give you some perspective on how impressive that is.

  • Twenty years ago, China and India generated just 10% of the world's economic growth.
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  • Ten years ago, it improved to 18%.

  • China alone will generate more growth than the entire G7 (the U.S., the U.K., Germany, France, Japan, Canada, and Italy).

  • India will generate more growth than all the 27 countries in the European Union.

China and India aren't the only countries in Asia that are prospering. The IMF says that China, Indian, and the 10 ASEAN nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myamar, Philippines, Singapore, Thailand, and Vietnam) will generate half the world's growth.

"By the end of 2009, output in most of Asia returned to pre-crisis levels even in those economies that were hit hardest by the crisis. After the deepest recession in recent history globally, we know that Asia is leading this global recovery," said Anoop Singh of the International Monetary.

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is President of Common Ground-NYC (, a Geoist/Georgist activist group. He has written (more...)

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But the harm done by the ethically and economicall... by Scott Baker on Wednesday, May 5, 2010 at 2:46:59 AM
1.) Yes, von Mises is a moron. "Austrian" economic... by Dick Thomson on Wednesday, May 5, 2010 at 7:18:15 AM
When George wrote Free Trade or Protectionism (188... by Scott Baker on Wednesday, May 5, 2010 at 9:53:49 AM
George's IF is impossible. IF there is one day per... by Dick Thomson on Wednesday, May 5, 2010 at 11:41:31 AM
George was perfectly fine with different labor con... by Scott Baker on Thursday, May 6, 2010 at 3:23:06 AM
"If some peoples pretend that history or geography... by John Newcomb on Wednesday, May 5, 2010 at 8:15:08 AM
von Mises advocated a borderless world with no imm... by Dick Thomson on Wednesday, May 5, 2010 at 9:17:51 AM
China has laws against sex-selection abortions, ju... by Scott Baker on Wednesday, May 5, 2010 at 10:04:48 AM
von Mises is the archetypal deity-like character f... by Rob Kall on Wednesday, May 5, 2010 at 8:49:22 AM
I have many friends that I served with in Vietnam ... by mike buchan on Wednesday, May 5, 2010 at 9:59:25 AM
I want to argue the cconsequence- ( no offense to ... by Mark Sashine on Wednesday, May 5, 2010 at 10:08:23 AM
How can anyone be a fan of China, when you see wha... by Ned Lud on Wednesday, May 5, 2010 at 10:43:09 AM
I am not a raving fan of China. I agree that human... by Scott Baker on Wednesday, May 5, 2010 at 11:30:33 AM
love your're an editor here? that's cool... by Ned Lud on Wednesday, May 5, 2010 at 12:06:36 PM
Maybe that's okay. Preying on other countries ad n... by Starla Immak on Wednesday, May 5, 2010 at 11:14:49 AM
China now graduates more engineers than we do. The... by Scott Baker on Wednesday, May 5, 2010 at 11:42:28 AM
I think I'd go for Monopoly. It's honest--try to o... by Margaret Bassett on Wednesday, May 5, 2010 at 12:11:53 PM
Really. It was called The Landlord's Game and the ... by Scott Baker on Wednesday, May 5, 2010 at 6:27:18 PM
I don't just mean that monopolists and speculators... by Scott Baker on Thursday, May 6, 2010 at 3:35:54 AM
I don't think China is an intellectual society. I ... by HarveyY on Wednesday, May 5, 2010 at 1:10:09 PM
HarveyY,You make a great argument, but you forgot ... by mike buchan on Wednesday, May 5, 2010 at 1:19:08 PM
I get feedback from people who question the validi... by HarveyY on Wednesday, May 5, 2010 at 1:59:18 PM
to run a country (that is why I should be dictator... by Daniel Geery on Wednesday, May 5, 2010 at 3:03:15 PM
Burma is a dictatorship too, but the majority live... by Scott Baker on Thursday, May 6, 2010 at 3:50:32 AM
I do appreciate Mr. Baker's frequent and illuminat... by JohnPeebles on Wednesday, May 5, 2010 at 3:14:20 PM
There's certainly nothing defensible about the pri... by Dick Thomson on Wednesday, May 5, 2010 at 7:29:45 PM
I don't know how Mises was popularly received, the... by JohnPeebles on Thursday, May 6, 2010 at 12:19:28 AM
America flourished during the age of tarrifs in th... by Scott Baker on Thursday, May 6, 2010 at 4:04:16 AM
Maybe I'm not using the word "inflate" properly - ... by Dick Thomson on Thursday, May 6, 2010 at 7:39:08 AM
Von Mises would certainly NOT fail to observe that... by Carol Thompson on Wednesday, May 5, 2010 at 5:39:28 PM
Let me get this straight. The fact that China has ... by Darren Wolfe on Wednesday, May 5, 2010 at 7:16:23 PM
What's needed is a mixture of capitalism (bottom-u... by Don Smith on Thursday, May 6, 2010 at 12:49:47 AM
What you say is basically correct, but you neglect... by Scott Baker on Thursday, May 6, 2010 at 4:12:06 AM
We definitely agree on that. I'm for free markets ... by Darren Wolfe on Thursday, May 6, 2010 at 5:14:26 AM
If you don't like rigging (corruption of the polit... by Dick Thomson on Thursday, May 6, 2010 at 8:49:44 AM
In typical left wing fashion, you can't grasp the ... by Darren Wolfe on Thursday, May 6, 2010 at 9:35:24 AM
I can see right through your rubbish. Without rule... by Scott Baker on Thursday, May 6, 2010 at 12:21:11 PM
This is the left's blindness they see the govt as ... by Darren Wolfe on Thursday, May 6, 2010 at 12:48:32 PM
China and the Development Myth(snip)While it had b... by Darren Wolfe on Wednesday, May 5, 2010 at 7:27:07 PM
All capitalism is favoritism based. Whoever has th... by Ty on Wednesday, May 5, 2010 at 7:50:12 PM we would (under a Georgist system) here at h... by Scott Baker on Thursday, May 6, 2010 at 4:20:16 AM
and to some extent, the rest of the world as well.... by Steven Leser on Wednesday, May 5, 2010 at 10:04:32 PM
Initially, the Chinese are very conservative spend... by Doc "Old Codger" McCoy on Thursday, May 6, 2010 at 4:04:58 AM
China is a difficult country to fully understand. ... by Doc "Old Codger" McCoy on Wednesday, May 5, 2010 at 11:23:52 PM
Hi Doc!I could not agree with you more! It sounds ... by mike buchan on Thursday, May 6, 2010 at 2:15:15 AM
You are correct - America cannot see beyond its id... by Doc "Old Codger" McCoy on Thursday, May 6, 2010 at 3:29:35 AM
I was wondering how to respond to all the comments... by Scott Baker on Thursday, May 6, 2010 at 4:29:42 AM
Based on the article and about 45 comments I've re... by Margaret Bassett on Thursday, May 6, 2010 at 1:48:55 PM
Banking, whether state or federal, always adds an ... by Peter Duveen on Saturday, May 8, 2010 at 10:07:18 AM