Bidenomics will WRECK our Economy
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There’s not a day that goes by I don’t get more evidence and how Bidenomics is just a destructive, it’s a wrecking ball, came in like a wrecking ball. It’s two podcasts in a row I started singing. Anyway, I gotta stop doing that. Okay, we equated Bidenomics to China, called it. Bidenomics equals Chinanomics yesterday. Like clockwork, we beat the Wall Street Journal to the punch every single day here on this podcast today.
Bidenomics, this is Wall Street Joe, Bidenomics, Chinese Capitalism with American Characteristics. Yeah, yeah, we’ve been telling you that. Joe Biden wants to take a page from China’s economic playbook. In a recent speech, the president officially embraced the term Bidenomics to describe his economic policies, which he characterized as the federal government investing in key industries of the future.
making targeted investments to promote domestic production for semiconductors, batteries, electric cars, yada, yada. Yeah, industrial policy, Soviet five-year plans. Government mandates picking and choosing winners and losers. Again, highly un-American. Yeah.
Again, one of the things that they pitch out there is, hey, you’re just gonna worry about China. He’s gonna beat us. Hey, let’s go to China and get the hawks out there and all that stuff talking about military and we need more ships and guns and boats and trucks and fireworks and all sorts of stuff because we gotta beat China. We’re falling behind China. Yeah, what’s China do? China subsidizes its industries, subsidizes industries.
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Well, again, the conventional wisdom out there is that China is gaining market share in industries once dominated by American companies. Conventional wisdom. That’s what they tell you. Hey, talk about it on Fox News all the time too. I mean, they parade everybody out there. China monster.
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together suggest China’s industrial policy successes are overblown.
Yeah, who’s been telling you that? Yeah, we have. China’s various industrial policies such as Made in China 2025, which like binonomics, targets, direct subsidies, tax incentives, and government loans to key sectors such as aerospace, robotics, energy efficient automobiles, and biopharmaceuticals, don’t just fall flat, they do more harm than good.
Again, again, one of the things that we tell you over and over and over and over and over again is central planning fails every single time it’s tried. The authors find little evidence that the Chinese government picks winners. If anything, the evidence suggests that direct subsidies tend to flow to less productive firms rather than more productive firms.
Indeed, firms became less productive after receiving subsidies and showed little improvement in research and development spending, patenting or profitability.
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Don’t we know this already? Didn’t we get this with Obama’s American Recovery and Reinvestment Act? Okay, this is what we’re trying to emulate right now. Again, Joe, it didn’t work when you were vice president under Obama. These people, I mean, you want to talk about stupidity. They’ll bang their head against the wall again and again and again, and they’ll expect that there’s gonna be some sort of different result coming out of it. I mean, it’s absurd.
Government subsidies don’t improve Chinese firms, productivity or profitability, but they do goose employment. Again, this popped into my head. I wrote about this, talked about this before. Milton Friedman was visiting China in the 1960s, and he was looking at this infrastructure project that was being done, saw thousands of people.
thousands of people out there working on this infrastructure with shovels out there digging. And he asked his little communist government minder at the time, he said, you know, why don’t you guys buy, you know, heavy earth moving equipment from Caterpillar, whatever. It would make this project much more efficient. Ah, the government minder says, this is not so much a public works project, it’s a jobs project. And then,
Milton Friedman thought to himself and told his government minder, oh, I got an idea. Then if it’s a jobs thing, why don’t you have them dig with spoons? Anyway, anyway, Chinese government craves social stability. So the subsidies are as much a jobs program as they are an attempt to improve productivity and technology. The most visible measurement of success for many subsidy programs is the number of jobs.
created, not new technologies brought to market, political considerations trump economic efficiency.
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Worse, China’s industrial policies have created a culture of corruption. Companies try to manipulate the system to their advantage. The most politically connected firms tend to get the most subsidies. Some firms cook the books to get government innovation grants while others reclassify unrelated expenses as R&D to qualify for more subsidies. Still others manipulate employment numbers to get subsidies. Sound familiar?
The same shit is happening here right now. Notable example is the Big Fund, shorthand for China’s National Integrated Circuit Investment Fund. The Big Fund invested as much as 50 billion and dozens of China’s semiconductor firms, as well as government guidance funds, which acted like venture capital firms. It was considered a huge success story until a series of corruption scandals surfaced in 2021 and 2022,
many high-level executives affiliated with the big fund and recipient companies. The subsequent mass jailing of executives cast doubt in the program’s purported successes. The CHIPS Act, an inflation reduction act here in this country won’t necessarily lead to corruption, so says the Wall Street Journal, but I’m saying it’s going to. Yeah, well, you think the IRS is gonna be able to monitor this and evaluate all these corporate tax incentives?
they’re going to be able to figure that out? Oh man, it’s not hard these companies how they go about you know rigging the system to their advantage. The estimates right now put the eventual cost of the Inflation Reduction Act subsidies at more than one trillion dollars. One trillion dollars. Oh the energy department that doesn’t create any energy?
They did a real good job picking like Cylindra and Fisker Automotive and I go right on down the list. Yeah. Wall Street Journal got it today. We’ve been telling you this for a while. Vine Anomics is China Anomics. Is that what we really want to be? Watchdog on wallstreet.com
