The consensus among the allegedly wise is that China is “enduring its worst economic slowdown in years.” If the latter described the United States, economists and pundits would be calling for massive increases in government spending. How very backwards.
Recessions are the surest sign of a looming, booming recovery as bad ideas, bad hires, and bad habits are fixed. Where it gets interesting is that Xi Jinping, the alleged cause of China’s economic malaise, is according to the Wall Street Journal “delaying the country’s response” to the downturn. “Officials in charge of day-to-day economic affairs” are said to be up in arms at his lack of action, as would they be in the U.S. Except that Xi is right. Whether he’s rejecting “do something” for the right or wrong reasons misses the point.
The point is that do-nothing is always the correct response to economic difficulties. This may explain why U.S. equity indices (very sensitive to China’s economic outlook) aren’t losing it in the way that nailbiting Chinese economists are. Benjamin Anderson would agree with Xi’s approach, as should the myriad conservative critics of China. Xi’s doubtless a bad guy, but in this instance he’s right if reports out of China are correct.
Read the rest at Forbes.
