The Road to Economic Demoralization

Townhall ^ | 07/11/2009 | Larry Kudlow

[fiscon1]

There’s no question that current government policies for taxes, spending, and regulation are causing the U.S. to lose competitiveness in the global race for capital, prosperity, and growth.

Of course, China has been moving in the direction of free-market capitalism for years. To some extent, this shows the positive benefits of America’s free-trade policies and its open-mindedness in helping nurture not only China growth, but also middle-class prosperity worldwide.

[theBuckwheat]

China has freed its people to make money any way they can. This is not free-market capitalism. Just try to get intellectual property rights protected. For an American injured by a Chinese product, just try to get one of their courts to find in your favor. If you are trying to start a business in China, just try to get their law to keep your Chinese partner from breaking his contract with you and walking away with it.

Capitalism requires a sufficient rule of law, and courts that will reliably be faithful to that law to decide disputes. It needs a government that does not exist at the lower levels by graft and corruption.

The Communist government has realized that communal-ism cannot feed, clothe or house a billion people, so they have let them to fend for themselves. As long as they are no threat to the government, they can pretty much do as they please. Should some producer embarrass the government, like when they had too much lead in their toys, then someone gets shot and everyone gets the message.

It may be an extreme form of mercantilism, but it sure is not capitalism.