The Business of China and U.S.

Given this blog’s recent flogging of the China versus U.S. (“us”) question, here is  a primary example of how China may surpass the U.S. by becoming more business friendly as it decentralizes while the U.S. risks having to learn the lessons of socialist history all over again as our over-regulated economy grinds down to a slow crawl.

In this linked article at the American Spectator, an entrepreneur compares and contrasts the difficulties of and disincentives for creating new businesses in our country, under our increasingly socialist, statist form of governance.

http://spectator.org/archives/2011/05/10/killing-manufacturing

Money quote: “Now, this is China so the government and the state share 30% of your business, but considering the ease of entry, increased in-country sales and helpful attitude, this is a small price to pay, especially considering America’s 35% plus corporate tax rates.”

Here, the author makes an excellent point: when the State demands 35% of a company’s earnings (I believe that Mafia shake-down artists usually demand a smaller percentage in protection money, but I may be wrong), the State de facto owns a 35% equity interest in the company…with only one major difference: it shares 0% of the risk borne by shareholders.

Is America on the road to becoming a socialist paradise like, say, Europe’s former Soviet Block during the 1960s? Naaah…don’t think so! Our future will not be one of mythical straight-line Progessive projections.

I predict instead that, given American individual initiative and creativity, our trajectory will be more like that of an Argentina – once a leading economic jewel, now a pathetic, tired, broke 3rd-world backwater. In such economic environs, two groups will prosper: the government-sanctioned nomenklatura and those clever and adept enough to profit from the inevitable underground economy.

Sad story!