Congratulations China, Now the World’s #2 Economy!

Deep down beneath the Rich Tehrani many of you know, I am fiercely competitive. I believe if you lose, you learn from your mistakes and try again. Lose again, try again and so on. I have seen enough semi-talented people succeed in sports due to sheer will and I have seen many uneducated, relatively unintelligent people make it to the top in business with nothing but guts and courage and the inability to take no for an answer.

I will never claim to be the smartest, most talented and especially not thinnest but I focus on my goals and get there regardless of how long it takes. I draw my inspiration from the success I see all around me in the US and elsewhere.

It is for this reason I read with some discomfort that China is now the world’s #2 economy surpassing Japan. It goes without saying that at this rate we are next to be overtaken. While I am proud of the US, I am more proud of the US of old, one where our leadership reminded us we could achieve anything. We could put a man on the moon. We could win the cold war. We could defeat the Nazis and Japanese in World War II. This is a country which has always inspired me to go farther and push the limits.

But something is different with the current leadership in the Senate, Congress and White House. I sense these people don’t know we are now competing in a global war for jobs and industry. They don’t seem to get that the American people are winners. When we set our mind on something, we achieve it.

Sure, there are all sorts of goals that have been thrown at us like we will be leaders in green technology and other such nonsense but I ask our leaders, if green technology is all about manufacturing and manufacturing in the US costs 10x more than manufacturing in China, then how exactly can we win if our prices are at least 10x greater than our competition?

The reason you never hear Harry Reid, Nancy Pelosi or Barrack Obama address these issues is because they are out of touch with how business works. In their world they will spur demand with stimulus spending in certain areas but the reality is these dollars will just flow to China as they are the lowest cost producer.

We have over 200 years of successful experience with free market capitalism. Our system has lifted more people out of poverty than any other system on the earth. As the technologies we have invented like fiber optics and IP communications have been exported worldwide we are in turn lifting India, China and the rest of the third world out of poverty.

But where are the politicians to mention this when they address the nation? Where are the reporters to ask our leaders about such issues in press conferences?

Instead of acknowledging the new reality of global competition for jobs, our answer is to have government sponsored, central planned growth based on what Nancy Pelosi, Harry Reid and Barrack Obama think are the best areas for spending. Yet, it has been proven time and time again, you can’t predict the next big thing… Green technology may produce a million jobs in the US next year but then again it may not. Spending tens of billions of dollars on green jobs which are paid for by raising taxes on entrepreneurs who are investing in many other potentially more lucrative areas reduces the chance of the US finding the next Google while it simultaneously commits our resources to areas where jobs will likely be created in China and elsewhere.

As a reminder, it was our free enterprise system which invented the transistor, integrated circuit, the zipper, the dimmer, the jackhammer, the mousetrap, the remote control, the charcoal briquette, the semi-automatic shot gun, the flashlight, the thumbtack, assembly line production, the hearing aid, the postage meter, air conditioning, the tea bag, the fly swatter, road surface marking, the fast food restaurant, the electric blanket, the fortune cookie, the supermarket, the tow truck, the pop up toaster, the flowchart, the adhesive bandage, the bulldozer, masking tape, cotton swab, liquid fuel rocket, garbage disposal, bubble gum, sunglasses, car audio, the chocolate chip cookie, the Xerox machine, deodorant, the microwave oven, the tractor, the PC, the mouse, the GUI, the laser printer, Ethernet, the laptop, the cell phone and the telephone, the airplane, the mass produced automobile, television, radio, the light bulb, concentric wiring, the record player and the CD. It was free enterprise which is responsible for the millions jobs created by Boeing, HP, Dell, General Electric, IBM, Microsoft, Proctor & Gamble, 3M, Google, DuPont, Apple, Disney and Berkshire Hathaway. It was not politicians who lacked business experience who launched these companies – if anything these corporations had to lobby the government to keep them from enacting poor policies which would doom their businesses and workers.

For those of us who hate to lose it is sad to watch other countries grow while we plod along. We can be so much better and we need to revisit our roots of free market capitalism (with protections which are actually enforced). The path we are on now of excessive regulation and taxation will surely allow India and China to continue to grow at our expense.

And I should note I want people lifted out of poverty in China, India and elsewhere. I want them to grow quickly and I want to work hard to catch them (or stay ahead). That is what competition is all about – we should hope our competitors excel and then do our best to beat them. But we need to compete on an equal playing field with these countries. I want the government to align its interests with employers and ultimately those people who would rather have jobs with a ladder that goes up instead of endless unemployment, welfare, food stamps and HUD/Section 8 housing.

I for one am ready for our leaders to speak with us candidly about how we will retain our standing as a global economic superpower. But it would seem to me if we want to win this economic war, we will have to undo the last two years worth of alleged political accomplishments full of job and business killing regulations and extra taxes.

For more, check out this very well written piece from J.D. Foster about how China is embracing economic freedom while the US heads in the exact opposite direction.

  • Peter Radizeski
    August 16, 2010 at 5:31 pm

    I would like to point out that the US is far from a Socialist society. The engine of Wall Street has turned to the government to not just make laws that help Corporate America but to grab some cash. The government is overrun with lobbyists for special interest. And none of this interest corresponds to Innovation or the Taxpayer.
    When GOOG and VZ make a pact on Net Neutrality, all is lost.

  • Rich Tehrani
    August 16, 2010 at 5:46 pm

    If your contention is we have crony capitalism I would agree but it is morphing into crony capitalism/socialism/statism. Just plain old-hands-off capitalism with appropriate consumer protections works best.
    As President I would abolish paid lobbying and the other behavior which politicians engage in but would put you in jail in the private sector.

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