Hollande's 75% Tax Isn't Dead--Not Even Sick

More laissez-faire readers are likely to be pretty excited skimming the headlines and learning that the 75% tax on the wealthiest Frenchmen has been struck down by the Constitutional Committee.

Having read this myself, I paused: "how does a constitution possibly bar some arbitrarily high tax rate?" The only reasonable possibility of this in my mind would be if the Committee made a pretty long stretch of one's liberty from unreasonable seizure.

Reading more deeply revealed that the Committee repealed the law due to what are ultimately minor structural details (targeting individuals rather than households, primarily), and Hollande has already declared that a re-structured law will come right back in 2013 with full force.

The first observation here is that the headlines of some very reputable news organizations are simply deceptive in their oversimplification--the casual reader would clearly interpret the headlines below to say that the law is dead. It's very much not--it's in fact going to be quite fine.

What this means for France is that its flow of super-rich citizens to London and Bern won't end any time soon. French national debt is nearing 90% of its GDP (which compares to a staggering 110% for the US) and climbing quickly--obviously losing this income stream will hurt, though France is likely to generate more income from increases on those who stay than it loses by those who leave. Geopolitically this tax wash may not be massively significant, but French unemployment is at 10.7% and--unlike the US, UK, or Germany--has been climbing for 19 months in a row.  France's biggest risk is that it loses those well-suited to launch or fund new companies or projects that will push its economy forward and hire its labor force. French labor & consumer laws aren't exactly business-friendly, but the fact that starting companies is difficult in France makes it even more critical to have individuals that can muster lots of money/resources at once.

And, just for chuckles, Monty Python brings us a timely analogy for the tax law.

Obama's Economic Policies Alienate Rest of World

As much as Obama's domestic critics may be criticizing his policies for having a European socialist tone, it is becoming increasingly clear that the road that Mr. Obama is marching down seems so destructive that the rest of the world--socialist and communist alike--is rallying to criticize it, perhaps in the dim hopes of reversing it.

Obviously, China is not thrilled. China worries that the massive static reserves built up by panicked money-printing by the US Treasury, bailout-tossing by Congress, and Stimulating by the President, will lead to enormous inflation once US money velocity increases. Enormous inflation will gravely devalue the US dollar, giving China two serious problems: first, its large reserves of US bonds will be worthless. Second, it will become extremely difficult to export anything to the US if the dollar is weak against the yuan. There are people that would tell you this is a good thing, but these people would be wrong. In response to the spendthrift policies of the new administration, China has called for a "global super-currency" to replace the dodgy dollar. And before you give China a hard time for being simply selfish, note that the United Nations is making a report recommending that the entire world ditch the dollar, too.

Even Europe is fed up with US spending. EU (and Czech) President Topolanek called US spending a "road to hell," saying that bailouts and obsessive stimulating will nuke the world economy. Frankly, he's probably right. The Japanese are trying to quietly remind the United States about Japan's lost two decades, where they tried time and time again with no avail to stimulate their way out of recession and stagnancy.

Why is US spending bad for Europe? There are a few reasons. First, the state propping up broken financial companies with money that does not exist is a bold form of anti-competition. Europe is resisting the temptation to dump tons of money into most of its sectors, financial and auto-making sectors included. But European companies that were otherwise able to weather the storm will suffer if they are not able to compete with US companies that are receiving subsidies that are nearing 10% of the US GDP. It goes without saying that such propping-up decreases market growth opportunities for companies that managed to not drop the ball; it creates perverse incentives for American business executives (because currently, the way to make lots of money quick is to make your company look like it's broken and needy, rather than strong and efficient); it will lead to horrifying inflation down the line; and, of course, "buy American" policies sprinkled all over the stimulus plan will grossly damage developing nations and anyone that depends on exports, as well as generally shrink the world economy.

So, the President's (and Congress', to be fair) policies are doing very little to improve the US image abroad--and very little to help the world economy. As much as promises of free money now are keeping Obama's US constituency opiated and placated for now, those abroad that are not receiving these checks are much more cognisant of the terrible consequences of reckless spending and panicked economic intervention. When socialists and communists around the world are uniting to tell you to free your markets, perhaps it is time to consider that you're doing something wrong.

On The MedU Solar Plan

For your reading pleasure, a paper I wrote for a grad class this semester (Politics and Conflict in the Middle East) that goes a bit outside my normal subject material. I explore the political/economic/social feasibility of the Mediterranean Union's plan to drop down a bunch of solar thermal plants in the Middle East/ North Africa (MENA) region. The idea would have 4 potential benefits:

1) Help the EU meet its carbon reduction goals for 2020 and 2050.
2) Reduce European dependence on Russian gas and oil; The EU favors North African politics to Russian.
3) Develop the economies of North African countries.
4) Kick-start solar thermal economy by introducing economy of scale, allowing it to become competitive with fossil fuels. This would allow countries with lots of desert to start producing competitive electricity, and hedge energy needs from oil (which is volatile in price, vulnerable in transport to pirates and the like) to something more stable.

I'm not planning on publishing it, so the paper is accessible here. It is still copyrighted, and all rights are reserved. Some notes are below.

There are some serious issues with the plan, including the fact that it predicts that oil prices will stay the same or go up--if there is a sudden increase in electrical supply, then the price of oil is likely to drop--simple economics. China and India will happily slurp up this cheap oil to power their own economies, and then the EU's hopes of reducing carbon emissions might be undercut. Instead, this project is simply likely to subsidize India and China's industrial development on the backs of European taxpayers. At least it's not me.

Nonetheless, other goals are likely to be met. Europeans will indeed hedge their dependence from Russia and towards North Africa. The economy of scale is likely to allow wealthy nations like the US (with lots of desert of its own) to build its own solar thermal industry, and the EU and US can then supply to areas like the Arabian Penninsula, India, and Mexico. Finally, as long as trade deals are carefully sculpted by the EU, North African countries will likely benefit from the foreign investment. If the trade deals are poorly or sloppily formed, then solar power could become a "new oil"--a cheap source of revenue for tinpot dictators or ineffectual republics that encourages inefficiency, bureaucracy, and central planning. The trade deals will be the most important part.

China's Recession Crisis

While Western powers are worrying about a six-month recession and the belt-tightening it entails, the Chinese are worrying about much greater consequences. Rather than simple approval ratings declines, the Chinese are facing a crisis of legitimacy that may undermine the very fabric of the Communist Party's authority.

For decades, the Communists have been terrified of large-scale unrest and demonstration. They frequently underplay the number of local demonstrations in the country and tightly control information to prevent potential dissenters from hearing that there is momentum. When times are good, there are hundreds of large protests in China per year, according to the CIA. Even if it's significantly fewer than hundreds (only dozens), it's still more than Beijing admits, and still more than they're comfortable with.

The Chinese diaspora tends to be highly nationalistic and defensive of their nation of heritage, and many wealthy Chinese are happy to protest against the Japanese when the state tells them to. But in this very group-oriented country, the state has not managed to make itself the only source of authority, as much as it has tried to do so.

With a global economic slowdown, China is going to get hit hard. Its wealthy customers--the US, Canada, the EU, Japan, Australia, etc--are going to trim their budgets down to essentials, and many Chinese products are going to be the first to go. Exports are already falling, and factories in China are already closing their doors. Luckily, oil is cheap--otherwise, imports from China would be so expensive that production would re-localize, and that's a trend the Chinese can't afford.

The world may be impressed with China's 8% sustained growth, but Chinese economists see it as a bare minimum to sustain. Beijing's biggest worry is unemployment, and extremely rapid growth is necessary to prevent it from shooting up--as technology, supply chain efficiency, and competition from Latin America and Southeast Asia make Chinese labor obsolete, the Chinese government tries to expand its economy laterally (that is, with simply more factories) to incorporate laborers. It has kept the official rate down to 4%, but this only includes registered workers--hundreds of millions of rural farmers and migrant laborers are underemployed and unemployed, and the Chinese cannot currently afford an extensive welfare program to keep these people sated in bad times.

Worse, the Chinese have continued to rely on expanding export production to keep the economy going--it's quick-and-dirty, but inefficient, and discourages sustainable national consumption-based economies, skilled labor, etc. It also leaves the economy very vulnerable to fluctuations in spending by Westerners and oil prices--both of which have been extremely vulnerable in the past few months. Beijing has been sweating.

But news for them is getting worse. Nation-wide taxi cab driver protests have taken hold, and while they are unlikely to become a nationwide uprising, it's a sign that the Chinese are starting to lose control over the population. The official unemployment rate has gone above 4.5%, and the minimum wage has not increased in years--fine during good times, but bad when costs of living stop decreasing, as they're doing. There are a whole lot of people that might latch onto a movement by taxi cab drivers, or day laborers, or factory workers, or textile makers, or all sorts of people, if they manage to get organized. Unemployed and underpaid labor is a serious threat to the Chinese government as a potential source of mass dissent.

The Chinese Communist Party retains its legitimacy through promising economic growth and a better tomorrow for China. "Don't change horses when you're winning the race" has been a fine line to repeat since 1979, but what happens if China's unemployment goes up and its GDP growth slows too much? Dissent that starts by calling for reform may start calling for new leadership if the current leadership cannot deliver. The earthquake-Olympic honeymoon of the summer faded faster than Beijing would like, and they need to keep reform and growth chugging along to hold on.

China's economy has been zooming along a teetering precipice for years, and Chinese economists have had to manipulate with pure genius to keep its export-led plan from crashing. But if the world economic slowdown deepens, there will be nothing even they can do. To achieve sustainable, hands-off growth and economic stability, the answer is to follow the West--liberalized, privatized economies that increase efficiency with domestic consumption and comparative advantage will keep the GDP growing on its very own. But China can't easily switch into such an economic stance. Decades of kicking the economy into an export-on-steroids stance have created massive inequalities between the coast and the west, creating huge demographic pressures that would turn into chaos if Beijing took the lid off. The transition to a liberal domestic consumption economy would mean a temporary closing of many factories that are literally exporting at a loss and subsidized by the government, the temporary unemployment of those workers, and a decrease in the minimum wage to try to encourage investors to sop up the newly unemployed. It would be a mess, but Chinese state controls have set up the economy for a transitional disaster unless the transition occurs during an economic boom.

But these are not good economic times, and massive economic liberalization would likely lead to enough temporary chaos to lead to an unseating of the CPP's monopoly--if not a revolution. China faces a serious crisis if its economy gets a lot worse, and there is little Beijing can do to satiate its population. Its economic controllers have set it up for failure in this kind of market.

What this means for the US--Chinese GDP growth is not going to be sustained. The Chinese economy will not overtake the US economy in the next 20 or 30 years, as many pro-protectionist policymakers in the US suggest. Either the Chinese will successfully bounce out of this crisis and continue down the road of WTO integration (whence their GDP growth will slow into a more sustainable, free, labor-inclusive, and income-equalized market with lots of domestic consumption), or the Chinese economic controllers will falter, leading to a short chaos followed by a new regime (with a honeymoon and new mandate to make tough changes).

The former is very good for the US--Chinese domestic consumption and a lowering of import tariffs will mean that, as the Chinese grow, they will be able to afford American exports. A China of free trade and liberal policy will be one that US labor interests should encourage to grow, such that it becomes a market of high-quality US goods.

The latter is bad for everyone (besides, perhaps, the Tibetans). A collapse of the 4th-largest economy in the world will lead to a deep global depression, particularly in East Asia. The US can almost afford to live without Chinese imports (though many US manufacturers, construction firms, retailers, and financial institutions will dry up), but much of the rest of the world is likely to go down with China.

Therefore, the likely consequences of all this is that the EU and US may have to work to bail the Chinese out--they will try to crank up imports of Chinese goods with "stimulus" packages and consumer support, but hopefully in return for concessions by China to reform in the medium-term.

The Humbling of China

China in the last few years has gotten some bad publicity from exports: milk, toothpaste, dogfood, Barbie Dolls--all tainted and dangerous in some way. For most of it, one simply has to admit that sometimes things go wrong in the sheer mass of exports that China puts out each year. The milk was the boulder that broke the camel's back--when your government has crafted an export-dependent economy, your international image is critical. 54,000 babies sickened by melanine in milk, and some dead--Western and even wealthy Chinese families don't trust the safety and efficacy of Chinese products. If nobody trusts your products, nobody will buy them.

This is very bad news for China. It's brought a very large magnifying glass to the export control machinery in its government--and that glass has found little. The term "crisis in confidence"--being tossed around about US financial markets--is surprisingly relevant here. China is overhauling its entire milk industry and oversight bureaucracy to try and restore confidence in its already-strained exports. With oil prices high and real disposable income down, its ships crossing the pacific aren't making as much money as they used to be. The last thing the Chinese Communist Party--which bases its legitimacy in growth--needs is a recession, and it's willing to do anything it can to try to boost buyer confidence in its products. The Chinese government has rounded up 32 people allegedly involved, and whether or not they are is largely inconsequential--they need a scapegoat, they need to be able to say "we got the bad guys, they're gone now."

But China did something strange. This crisis has been so bad that the Chinese government called its own industry "chaotic." It has admitted something is wrong with the way that its country is currently doing things. This is a rare sort of admission that is the closest thing to an apology one is ever going to get out of the Chinese government. They are clearly embarrassed, and a bit humbled: they are not perfect.

Chinese humbling has to come from within. Strong nationalism means that criticism from without will be met with significant backlash, and will feed such nationalism. Trying to shake one's finger at China is seen as insulting and petty, and won't "socialize" the Chinese government, as the US and the West hope to do. China has to learn from its own mistakes the hard way; it must see the consequences of them.

Personally, I would cite the biggest mistake here as the one in which the Chinese government tried to build an export-dependent economy--when you make exports the backbone of your wealth, then drops in exports lead to disaster. But despite the fact that I think the Chinese reaction is not fully economically optimal, it is a good political sign--the Chinese export economy does indeed require China to keep a good reputation abroad. As long as it does not try to overhaul its entire economy to something more mixed or "independent," it will depend on its reputation to keep a strong economy--and the Party needs a strong economy to maintain its one-party legitimacy. If the economy is good, don't shake things up, they say. But if it's bad... why not?

So the Party will continue behaving in the future. A humble China is a peaceful China, and a peaceful China is a wonderful partner for the future, even if it will disagree with the West.

The Critical and Fundamental Nature of Economic Freedom

It is an increasingly flimsy secret that I am a strong Free-Market Liberal, and a civil liberties nut. I have tried to keep my opinions on these topics out of Foggofwar--I had hoped Foggofwar would tie me down to a topic I was less feverishly passionate about, such that I would not be destroyed by the apathy of my audience--but the threads on that anchoring are beginning to unravel. So I will share this thought with you today.

I was walking back from work, listening to The Protomen as I do (quite literally) every day--they have a truly epic rock opera on the individual's stand against tyranny for the sake of safety. And I realised--the greatest losses of liberty occur when the government exploits a tragedy or fear, and whittles away at one's liberties for his own safety. I then realised that, in the realm of economics, the exact same process occurs. The US government has terrified its citizens of foreign countries (Japan in the 1980's and then China more recently), of robber barons, of outsourcing, of multinational corporations, of investment banks, of oil, of pharmaceuticals. Besides the fact that most of the true pain caused by any of these alleged ills comes when each exploits poor government regulation, the government's use of such ills to remove your civil liberties is an evil equal in scope and magnitude to tis use of the ills of terror to strip you of rights to privacy, speech, and justice within the courts.

Today, I will not touch on the pragmatic superiority of economic freedom to regulation (as this argument can stand alone without it, and also, that it is a more complicated subject that I understand less, and leaves a fair number of exceptions, like Tragedies of the Common, Freerider problems, imposed externalities, etc). I intend to argue only the following:

1) Economic Freedom (freedom of property) is a fundamental freedom, like speech, privacy, justice, etc. I intend to derive this from common law and moral intuition.

2) Economic Freedom is critical to the preservation of other freedoms, those which some might call more fundamental. I intend to derive this from a "tyrant government" hypothesis, and support it with examples from real life.

*Ahem.*

Economic Freedom is a fundamental freedom. Some would argue differently. There are some freedoms as granted to us by the constitution that we may not consider fundamental rights of the individual simply for being an individual. For example, the right to bear arms (the 2nd amendment) may well not be a fundamental right, but is a means to an end of giving the American population a threat of force in the case that the federal government stops obeying the will of the people. We might say in this sense that the right to arms is not fundamental. So we must ask: is the freedom of your property a fundamental right, or a means to an end (that end almost certainly being a functional economy--something that Deng Xiaoping realized, despite a Communist-style denial of individual liberal civil liberties)?

In some ways, it seems we treat it as a means to an end. We certainly regulate the economy, hoping to achieve a universal outcome. But I am here, of course, to argue that such an approach is a violation of a fundamental human right.

So, the moral intuition. Let us agree for a moment that your right to not be punched on the street is a fundamental one, something we can all agree on. How does the government treat someone who punches you on the street? The government jails them. This is because the government uses force to enforce that others respect your fundamental rights. Now, let's say your jaw was broken. Will the government automatically cough up money to fix it? No; you would have to sue your assailant separately.

Now let us think of theft. I don't mean armed robbery, I mean a minimally offensive form of burglary--let us say that you leave your purse on a chair, and you get up for a moment to wave down a friend. If someone comes by and steals that purse, what does the government do to punish him? It jails him, just as if he had punched you in the face. Now, of course, the police would then re-deliver your purse to you. But if he lost it in a river? The government would not pay for your purse, you would have to sue your thief in court. Just like the punch to the face, treated exactly the same way. You do not simply sue a man for stealing from you and leave it at that, you throw him in jail, because he has violated a fundamental right to freedom of property.

I believe this comparison is a (rather simple) argument that it is morally intuitive that your property is yours on the same fundamental that your privacy, your expressions, and your body are yours--and those who violate the integrity of these things you possess are thrown in jail. Therefore, I believe that your property is an order-of-magnitude equally fundamental right to speech, property, and body integrity (if I had to rank the most fundamental rights, I believe others would certainly come before property).

I believe, equally importantly, that this is outlined rather clearly in the government's founding documents. The Declaration of Independence, of course, names "Live, Liberty, and Pursuit of Happiness" as the three basic rights of the individual, derived from "Life, Liberty, and Property" (from the First Continental Congress of 1774). In the Constitution, the government has the ability to levy taxes (but a very limited number of measures on how it can spend them, which it conveniently ignores for many expenditures), and regulate interstate commerce--but the Federalist Papers make it clear that this line is not designed to allow the government to force anyone to do what said government wants with their money--I am thus not arguing that most regulation is blatantly unconstitutional, but that it violates the spirit of the founding documents of this country.

Why is regulation a violation of this right? It does not take your money (like taxes, do, but let us call them a necessary evil), it simply restricts what you can do with it. But let us apply this to other realms: "You have freedom to speak your mind, except for criticizing the central government, talking about Falun Gong, talking about the Tiananmen Square Incident, or talking about Tibetan Independence." Sound familiar? Well, it's how the Chinese deal with their right to free speech. Just a few restrictions with what you can do with it, really. Mostly, you can talk about what you want. I think this example (I could make others) should make it clear that serious "restrictions" on your freedoms--especially those designed to protect you from your own bad decisions, or keep you from undermining the state, as most economic regulations are--mostly gut out the entire point of the freedom. If one does not consider the Chinese to have freedom of speech due to these few restrictions, then I do not think one can consider Americans to have freedom of property, due to serious limitations of how one can use his own property.

I thus believe that economic freedoms are fundamental, and that the United States undermines said freedoms.

Economic Freedom is critical to the preservation of other freedoms, those which some might call more fundamental. Ironically, it is economic liberals (I believe FDR started this craze) that argue that freedoms mean nothing without the means to exercise them. What does this mean to me? Freedoms mean nothing without property. And property means nothing when the government can take it away on a whim--that is, if the government can simply snatch your property from you, then you have no freedoms. Why? Let us consider the case in which you criticize the wrong member of government. That member can use current regulatory laws to strip you of property--perhaps not as harsh a punishment as jailing, but certainly a tool to keep you in line, to keep you from mustering the courage to criticize. Hypothetically, the federal government could easily use its rather broad interpretation of eminent domain to force you to sell that house you like so much for sub-market if you forget to give a donation to your senator's campaign fund this year. Decent argument, you say, but where are the examples?

In 2002, a Mr. Cory Booker ran against Sharpe James for the position of Mayor of Newark (an excellent film, Street Fight, outlines the corruption of Mr. James in the battle). He was doing surprisingly well in the polls against a man who held the position for 16 years. But Mr. Booker started seeing a pattern--most companies that supported him openly were getting visits from the City Health Inspector, and being shut down. You see, it turns out that in Newark, as well as most cities, Health Codes are so thorough and superfluous that approximately every single company in the city is violating them in some way. Most of the time, inspectors say "you violated this, fix it," or ignore the trivial stuff. But when it is cast into the lawbooks, inspectors have the power to crush companies they do not like. In this 2002 election, that is exactly what happened. Mayor Sharpe James sent the City Health Inspector, over and over, to companies that held rallies for Booker, or even put his campaign poster in their window. Mr. James used the power of regulation to deny these companies their very right to speech, their right to dissent--but he did it in a completely legal way. In 2007, he was convicted of corruption, but it was for spending public funds on property for his mistress--nothing of his use of health inspections to take down those that dissented came up in the courts, because what he did was completely legal.

Other examples flourish. Richard Nixon, who started the EPA, reportedly used his very hard-line appointee for the position to coerce companies to give money to his campaign--campaign managers would mention that "Tricky Dick is putting a tough guy in charge of the EPA--you're going to want a friend in the Oval Office." Such extortion used the threat of economic punishment to violate the freedom of speech of the owners and operators of these companies--but despite Nixon's resignation for Watergate, such extortion was never brought upon him, because it was completely legal.

These are just a few examples of how the government can use--and uses--regulation to corrupt other freedoms of American citizens. Such behavior is unacceptable, and can only truly be stopped if the power of regulation is removed from the hands of these politicians. Thus, economic freedom is critical to the preservation of (arguably) more fundamental freedoms, like freedom of speech and dissent.

I thus ultimately argue that the excessive regulations imposed on the market of the United States not only violate a fundamental freedom of property for the American people, but also give the government, local and federal, the power to use economic pressure to tyrannize their opposition and coerce neutral parties into support, undermining not only free speech but the entire political process. Restrictions of economic freedom (which we gently call "regulation") create violations both in the freedom of property and in other freedoms more explicitly granted by the constitution.

Most of you reading this probably do not believe that, in general, security is more important than liberty. You do not believe in wiretapping to keep us safe from the terrorists, you do not believe in torture to learn more about terror operations, and you do not believe in a suspension of Habeas Corpus to "more rapidly" deal with terrorist threats. And these restrictions of your freedom address a much more serious threat than economic woes--terror threatens your life. Even if you do not agree with me that the free market is a pragmatically more optimal economic solution, it is inconsistent to believe that the government should not restrict your freedoms to protect your life from terrorists, and yet that the government has a mandate to restrict your freedoms to protect your job security from robber barons, multinational corporations, oil companies, and pharmaceutical companies. Such a stance (typically liberal) is at least as inconsistent as the opposite conservative one (I know you guys are out there, too). Even if you argue that the working class is in danger from the free hand of companies, it is not an excuse to restrict the freedom of Americans to use their property as they wish, just as threats from terror are not an excuse to restrict the freedom of Americans to use their speech as they wish.

And therefore, I believe it is intuitive and logical that economic freedom is a critical and fundamental freedom to the American people--fundamental in that it is something that should not be violated for its own sake, critical in that its violation leads to greater powers that the government can use to restrict your other freedoms.

The Chinese "Get It Done" Society

Continuing my ad-hoc series on Chiense economy and society, I would like to share with you two things today:

The first is an article by Mr. PJ O'Rourke bout the US Trade Deficit with China, and why we are worrying about nothing. I should say that I disagree with him, only slightly, in two parts:

1) I think the IOU phenomenon he speaks of tends to translate into foreign ownership of US assets (right now the US assets foreigners own minus foreign assets that Americans own is about $2.4 trillion). So essentially, we are selling assets for goods, which makes our capital investment more dependent on rich foreigners... not that such a thing is necessarily significantly worse than making it dependent on domestic rich guys. That said, his argument about the Japanese export-asset purchase-bubble burst story is rather convincing.

2) If the US drops trade barriers (even slowly, as would be intelligent) without reforming its economic regulation, it will find that there's not much it can do, and that's bad. We cannot compete on the international market freely if our own internal economic operations are not relatively free--we would just be too inefficient. He doesn't address this problem well.

Otherwise, great article, including my favorite quote: "America is wrong about economic principles so basic that even a doddering old Commie with a high school education like Deng Xiaoping understood them."

The second thing I'd like to share with you is a few observations about the current state of Beijing. I have already mentioned that it's in a "frenzy" of building and motion, but I am starting to realize just how epic this is--and what it means for the Chinese economy.

Over the weekend, I walked home on south Sanlitun road, and saw some guys with shovels digging up loose shrubs along the entire street. Okay, I thought. I walked to work Monday, and the entire road had new, prettier, orderly trees and shrubs planted, and it has been cleaned. Just like that. But that's nothing.

While walking to work today, I saw the power go out along that road. Within minutes, literally minutes, police and construction workers were on the scene, directing traffic and climbing poles to assess and fix the problem. Soon later, great spools of wire came. It was not quite fixed by the time I got to work, but I would be shocked if it wasn't fixed by the time I go home--as if nothing happened.

Last night, while touring around, we saw a police building torn down. "...this was here yesterday, people were working here yesterday." But the next day, sans red-tape, bureaucracy, and waste, it was torn down to be replaced.

Cranes operate on nights and weekends (in part because labor is so cheap, it's cheaper to pay overtime than let the cranes sit idle). I'm watching buildings rise before me, in timespans of months (not years). It's like every job is a rush job.

One of my friends harkened Beijing to Snowcrash, or Firefly. Big, mean, and changing with incredible speed at all times. One truly does not know what to expect when he walks out of his building the next day. Something new will be there, or something old will be gone. The city is changing quickly, growing, staying with the times. It is progressing at break-neck speed. If only all of China could do that.

Mr. O'Rourke mentioned some of the serious hinders to progress that the Chinese government has in place--certainly, this government is very far from perfect. But my impression is that the Chinese government is less concerned about scrutinizing every private project on private property for its social/spiritual impact as much as Americans are--they are less happy with towns passing ordinances to arbitrarily block a private project on private ground because local citizens "just don't like it," or because some local PTA lobbying group doesn't want a Starbucks in their town. Their workers are not allowed to wallow in wasteful time, and slowly roll to a construction site when it is convenient. When something needs getting done, they are called to arms, and they come, and they work, because that is the only way to make money. Many Americans consider labor union workers to be somewhat lazy. My Chinese friends were shocked that this could be true.

Ultimately, China's current economy is one that just Gets It Done. Are there costs to this? Certainly. Sometimes, something Not Good gets built, sometimes people get irritated, sometimes there are environmental impacts. There may be a middle road to be reached. But I cannot criticize the Chinese for the speed at which they are allowing their city to change--besides some historical artifacts, there is no sense that something should be preserved over something newer and better just because it was there first. If someone wants to buy it, smash it, and build anew, well, that is their initiative. The US tendency to scrutinize every plan to build, every plan to spend, of its citizens, and tell them what they can and cannot do with their private property for reasons as wild as view obstruction, asthetics, etc, has created a society so terrified of doing something wrong that it cannot find the courage to do anything at all.