China, hit by the current global economic crisis, with some foreign-operated plants closing down, took immediate, emergency action. Its State Council approved a $586 billion public works program to build new low-cost homes, mass transit and airports. The program will employ tens of thousands of unemployed workers and at the same time build or repair urgently needed infrastructure like bridges, roads and tunnels.
At the top of the agenda is rebuilding Sichuan Province, devastated by an earthquake that left millions homeless. (What a striking contrast to the abandonment of Hurricane Katrina victims by the Bush administration).
The Asian stock market soared 5.6 percent in response to China’s initiative and stocks in Hong Kong and Shanghai rallied strongly.
The New York Times pointed out that unlike China’s rescue package, our recently approved $700 billion bailout “helped strengthen bank balance sheets” but did not “mandate new lending or support specific investment projects in the United States.”
Because of their fanatical right-wing “free market” ideology, Bush and fellow Republicans are fighting tooth and nail against any steps to restrict corporate greed or government action to get our “real” economy going and growing.
The administration is using the bailout to help financiers who created the crisis but it has not slowed the plunge toward a deep recession. Last month 240,000 jobs were lost and the jobless rate zoomed to 6.5 percent. Meanwhile the bankers are using our tax dollars to buy up rival banks rather than free up credit to help jumpstart the economy.
The Times points out that “Beijing maintains far more control over investment trends than Washington does so it has greater flexibility to increase investments and counter a sharp downturn.”
In other words, China’s government has the power to command that these socialized institutions allocate resources to head off a depression.
China’s President Hu Jintao is scheduled to meet Nov. 15 with President-elect Barack Obama. Obama would do well to study China’s bold initiative. We do not have socialism and our banks are certainly not nationalized. But the people are losing patience as they watch their jobs, retirement accounts, and employer-provided health care go up in smoke. They are going to demand strong action to help the folks on Main Street.