Symbolic Economies: U.S. and China (December 22, 2009)
The symbiotic partners of "Chimerica" both present symbolic economies which mask the structural rot in their real economies.
I am indebted to Australian analyst John Craig of the Centre for Policy and Development Systems for the concept of a symbolic economy which is presented as "evidence" of "healthy growth." Behind the symbolic facade, the real economy is devolving toward structural implosion.
Such a substitution by the Power Elites/State partnership of symbolic prosperity for broad-based, real prosperity is what I term a simulacrum of prosperity in the Survival+ analysis.
For China, the symbolic economy is a highly suspect GDP growth rate of 8%, mostly fueled by stupendous Central Government stimulus and unprecedented borrowing. Correspondent B.C. submitted this article China May Have 8 Trillion Yuan in New Loans in 2010 (Bloomberg) and this commentary:
Lenders, under government pressure to finance part of the nationís 4 trillion yuan stimulus plan, advanced a record 9.21 trillion yuan of new loans in the first 11 months, more than double the amount offered in the same period last year.
Thank you, B.C. As noted elsewhere in the blogosphere, much of this gigantic flood of borrowed money has flowed into
1. questionable infrastructure projects
2. a massive expansion of capacity in industries which already have too much capacity
3. empty malls, towns, luxury condos and other buildings, reinflating China's real estate bubble.
In the U.S., unprecedented Federal borrowing and bailouts have created a symbolic economy of the stock market rally and bogus "recovery" statistics.
Even as measurements of the real economy show structural devolution (tax receipts continue to plummet, incomes and hours worked remain at Depression levels, jobs are still being lost, etc.), the stock market's 70% rise is in effect the symbolic evidence that the "economy is recovering." Behind this symbolic facade, the real economy lies in ruins.
How can GDP be growing at a robust 3.5% clip (oops, already adjusted down to 2.7% a few weeks ago and now it's been adjusted down again to 2.2%) while employment and tax receipts are both falling? The answer: statistics are ginned up to support the symbolic economy of recovery, rising corporate earnings and a "new Bull Market" in stocks.
As a reader noted here earlier in the year, the stock market is the sole accomplishment of this administration and Congress. Without the "feel good" "New Bull Market," then the emptiness of the real U.S. economy would be in full view.
The Powers That Be might be questioned at that point, so a facade of "recovery" and a rising stock market are presented as a symbolic U.S. economy.
The Real Con: "More Complex Is Better" (Michael M.)
Things are getting more and more complex in today's world. That is a statement few would doubt.The Real Con: "More Complex Is Better" is chockful of interesting and provocative ideas.
Recommended books and films has been updated--take a look.
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