This morning’s key headlines from GenerationalDynamics.com
- China quadruples rice imports for no apparent reason
- Obamacare causes health insurance rates to surge
- 2013 versus 1913, the year before the start of the Great War
China quadruples rice imports for no apparent reason
Shoppers purchase discount rice at a supermarket in Chongqing (China Daily)
United Nations agricultural experts are reporting confusion, afterfigures show that China imported 2.6 million tons of rice in 2012,substantially more than a four-fold increase over the 575,000 tonsimported in 2011. The confusion stems from the fact that there is noobvious reason for vastly increased imports, since there has been norice shortage in China. The speculation is that Chinese importers aretaking advantage of low international prices, but all that means isthat China’s own vast supplies of domestically grown rice are beingstockpiled. Why would China suddenly be stockpiling millions of tonsof rice for no apparent reason? Perhaps it’s related to China’saggressive military buildup and war preparations in the Pacific and incentral Asia.
Heaven knows that I’m not a paranoid person, but it was just threedays ago that I reported thatAustralians are running short of powdered milk formula because Chinesetourists are visiting Australia, buying large quantities of theformula in bulk, and taking it back to China. There’s no apparentreason for that, either. China Daily and Bloomberg and Wall Street Journal
Obamacare causes health insurance rates to surge
According to a study by the New York Times, as President Obama’s firstterm ends, health insurers in many states are demanding double-digitrate increases, sometimes as high as 20-25%, because of higher medicalexpenses resulting from Obamacare. President Obama promised in 2008that Obamacare would “bring down premiums by $2,500 for the typicalfamily” by the end of his first term. According to Aetna, a supporterof Obamacare, for people who are unlucky enough not to have subsidizedpremiums, rates will rise 20-50% on the average, and some will see100% increases. Young people will pay the most astronomicalincreases, since they will be subsidizing the coverage of olderpeople. Young adults should expect to see premiums double underObamacare.
We are now seeing Obamacare’s increasingly destructive effects on theeconomy that I predicted when the law was first proposed. (See “Obama’s health plan, a proposal of economic insanity” from 2009)
Inflation rate following the imposition of wage-price controls on August 15, 1971 (econreview.com)
At that time, I wrote a detailed analysis comparing the Obamacareproposal to what had previously been the most disastrous economypolicy in my lifetime — President Nixon’s wage-price controls. Nixonimposed wage-price controls on August 15, 1971, in an effort tocontrol inflation which, at that time, was at 4% and falling. Insteadof controlling inflation, the wage-price controls caused enormouseconomic distortions that cause inflation to spiral out of control.The controls were a disaster, and were rescinded in 1974, as inflationrates surged to an astronomical 12% level.
Now we see an even worse disaster in the making. Obamacare isdestroying the medical industry, pushing medical prices and insuranceprices through the roof. Lobbyists are flooding into Washington todemand special favors, whether they’re acupuncturists or chiropractorsor fertility specialists or medical device manufacturers, and thegroups that have contributed the most to the Obama’s campaign will getthe most favorable treatment.
President Obama lives in Camelot, where you can pass a law that snowmay never slush upon the hillside or that insurance premiums won’tgrow up. And let’s not forget that it was only a few months ago thatPresident Obama was on the Tonight Show, bragging that he was unable to do eighth-grade math, which isentirely believable.
Ohhhh, isn’t it wonderful that all we have to do is pass a law, and wecan do anything we want. Let’s pass a law to make alcohol illegal.Oh wait, we tried that. Let’s pass a law that makes women’s salariesthe same as men. Oh wait, that is a law. Well, then let’s pass a lawthat says that men will get pregnant from now on, rather than women.That makes as much sense as Obamacare.
Actually, there was one more economic policy in my lifetimethat’s worth mentioning, and it was even worse than Obamacare.It’s Mao Zedong’s Great Leap Forward in China, startingin 1958. Here’s a summary:
- 500,000,000 million peasants were taken out of their individual homes and put into communes, creating a massive human work force. The workers were organized along military lines of companies, battalions, and brigades. Each person’s activities were rigidly supervised.
- The family unit was dismantled. Communes were completely segregated, with children, wives and husbands all living in separate barracks and working in separate battalions. Communal living was emphasized by eating, sleeping, and working in teams. Husbands and wives were allowed to be alone only at certain times of the month and only for brief periods. (This was also a birth control technique.)
- All workers took part in ideological training sessions, to provide for ideological training of the Chinese masses.
Like Obamacare and Nixon’s wage-price controls, it was a disaster,though worse than either of the others. The Chinese bureaucracy atthe regional levels lied about crop yields until it was too late, andby the time the government figured out that there wasn’t enough food,many tens of thousands were forced to die of starvation. New York Times and Forbes
2013 versus 1913, the year before the start of the Great War
The world of 1913, a century ago, was an exciting place where life wasgood. The world was dynamic, modern, interconnected, smart — justlike ours. Radio telegraphy was being introduced, meaning thatinformation would speed around the world with no need for wires. Andwith life so good in an interconnected world, it was thought that warhad become impossible.
On the other hand, a historically minded person might have seen thingsdifferently. Particular themes recur throughout history — humangreed, the manipulation of technology, the importance of geography indetermining military outcomes, the power of belief in shapingpolitics, a solid conviction that this time is different. You thoughtthat the debt-fueled boom of the 2000s was different from all thoseother booms throughout history? Wrong. The ancient Greeks, with theirunderstanding of greed, self-deception, hubris, and nemesis, wouldhave been quite able to interpret the 2008 financial crisis withoutthe need for an advanced degree in financial astrophysics from HarvardBusiness School. In 1913, as in previous years, an internationalexhibition was held to commemorate the advances of the world towardgreater integration — held in Belgium this time, in a city that wouldquake with the sound of artillery shells within a year. In 1913,German Kaiser Wilhelm II was viewed by some as a peacemaker. WorldWar I, the Great War, changed everything. To take one example of howthings might change today, a miscalculation in the South China Seacould easily set off a chain of events not entirely dissimilar to ashot in Sarajevo in 1914, with alliance structures, questions ofprestige, escalation, credibility, and military capability turningwhat should be marginal to global affairs into a central question ofwar and peace. Charles Emmerson, Foreign Policy