Tuesday, December 30, 2014
China's economy isn't No. 1 — but if it were, so what?
by Jeff Jacoby
HAVE YOU been lying awake at night, fretting over the news that China has surpassed the United States to become the world's largest economy? If so, let me offer some reassuring advice: Turn over and go back to sleep.
The International Monetary Fund's most recent compilation of global economic data isn't exactly a page-turner, but buried among its eye-glazing statistical appendices was a detail that had some financial writers hyperventilating. In 2014, the IMF estimates, China's economic output will total $17.6 trillion, putting it slightly ahead of the United States, where GDP this year is valued at $17.4 trillion. That means China now exercises 16.5 percent of the world's economic clout, outranking the United State, with 16.3 percent.
Assuming the IMF's calculations are right, the flustered headlines aren't surprising. "It's official: America is now No. 2," announced MarketWatch. "China just overtook the US as the world's largest economy," a Business Insider story was titled. Vanity Fair's forthcoming issue proclaims this "The Chinese Century" — and illustrates it with an image of a panda crushing an eagle.
But what if those IMF calculations aren't right? Or to be more precise, aren't all that meaningful?
The standard yardstick for measuring and comparing different economies is to convert each country's data into a common currency (typically the US dollar), using prevailing foreign-exchange rates. By that benchmark, China's economy still lags well behind America's, by roughly $7 trillion as of 2014.
It is only by expressing each country's GDP in terms of what analysts call "purchasing-power parity," or PPP, that China can be portrayed as the foremost economic power on Earth. This is a way of adjusting the value of national currencies to account for different costs of living in different countries. The intention is to yield a value that makes comparisons more realistic, at least in terms of buying power — "so a Starbucks venti Frappucino served in Beijing," as MarketWatch's Brett Arends puts it, "counts the same as a venti Frappucino served in Minneapolis, regardless of what happens to be going on among foreign-exchange traders."
But while purchasing-power parity is a useful theoretical concept, it isn't money in the bank. Theoretical concepts can't be spent. The Chinese can't use PPP currency to pay for airplanes and oil and computers. They have to pay, like everyone else, in real currency at prevailing exchange rates. And by that measure, the United States remains the most potent economic force on the planet.
More to the point, China is nowhere near outstripping America in per-capita terms, the most important gauge of a nation's economic strength.
With a population nearing 1.4 billion, China has a vast distance to cover before its economic output per person begins to resemble America's. According to the IMF, China's economic output this year — after adjusting for purchasing power — will amount to $12,893 per person. The comparable value for the United States is more than four times as much: $54,678. Even a booming Chinese economy will need time to close such a yawning gap. It took Americans almost 75 years to pull it off. China's per-capita GDP stands today where America's stood in 1940.
And China faces a daunting challenge. Its fertility rate has fallen sharply, and its population is aging. In 1980, its median age was 22; today it is 35; by 2050 it is likely to reach 49. With fewer children being born today, China's workforce will shrink tomorrow, even as its population of nonworking elderly swells. As the Economist observes, "China will grow old before it gets rich."
That isn't a prospect we should relish. There is no competition for the title of World's Largest Economy; with or without the "We're No. 1" bragging rights, Americans' quality of life will remain high. We should welcome other people's progress up the economic ladder, just as we welcome their advances in democratic liberties and human rights. And we should regret any handicap that impedes their gains — whether that handicap is an authoritarian Communist government or a looming demographic collapse.
A world of burgeoning GDPs will be a happier, healthier, cleaner, and more educated world. Nearly one-fifth of the human race lives in China, and the better off those men, women and children are, the better off we're all likely to be. When other nations prosper, America isn't the poorer.
China ranks No. 1 in some things — population, exports, electricity, telephone use. By the most meaningful standard, however, its economy is still far from the world's most largest. Will it get there one day? Let's hope so.
Be less romantic about the past
by Jeff Jacoby
FOR MANY people, Christmas and New Year's feel like anything but the most wonderful time of the year. Some find the long winter nights depressing. Others can't muster much merriment in the face of what can seem like an endless procession of bleak headlines. Still others yearn for the sweetness of auld lang syne, when life moved at a more humane pace, and concerns that generate such angst today — global warming, identity theft, Islamist terror, campaign finance — troubled no one's sleep.
Well, for anyone who could do with some extra cheer, a book published 40 years ago — "The Good Old Days — They Were Terrible!" — brims with reminders of all the blessings we have to count.
Its author was Otto L. Bettmann, a refugee from Nazi Germany who created the Bettmann Archive, one of the world's most important and extensive collections of historical images. In 1974 he set out to dispel the notion that life in America two or three generations earlier had been an idyll of freshness and simplicity, the benign and picturesque era of Currier & Ives prints and classic Christmas carols. Bettmann acknowledged that his famous archive had helped create that impression of a lost golden age. Many of its most popular pictures "do indeed exude an aura of charm and well-being," he wrote. But there were countless others, less sought-after, that told a far more realistic tale.
It was dangerous to romanticize the past, Bettmann argued. For one thing, it was an assault on the truth: Living conditions in America on the eve of the 20th century were frequently poor, nasty, and brutish. Bettmann filled his book with images refuting the idea that the "good old days" were a paradise from which we have sadly fallen. Like its title, "The Good Old Days — They Were Terrible!" is unflinching yet confident. To read it is to be liberated from unhealthy nostalgia, and to be buoyed by a powerful reminder of our potential for human progress.
We are endlessly hectored these days about the evils of the automobile and "carbon pollution," to take a single example of a contemporary boon all too often condemned by those nostalgic for an illusory past. Bettmann supplies invaluable perspective, recalling how befouled American streets and cities were before the "timely arrival" of the internal-combustion engine.
At the turn of the last century, he recounts, transportation in US cities required about 3 million horses, each producing 20 to 25 pounds of manure per day. "These dumplings were numerous on every street, attracting swarms of flies and radiating a powerful stench. The ambiance was further debased by the presence on almost every block of stables with urine-saturated hay." In one modest-sized city — Rochester, NY — 15,000 horses "produced enough manure in 1900 to cover an acre of ground with a layer 175 feet high."
The ubiquitous pollution didn't come only from horses. All the "wastes of daily life, including kitchen slops, cinders, coal dust, horse manure, broken cobblestones, and dumped merchandise, were piled high on the sidewalks. There was hardly a block in downtown Manhattan that a pedestrian could negotiate without climbing over a heap of trash or, in rain, wading through a bed of slime."
Parking hassles in our era can be maddening, but who wouldn't prefer them to the foul congestion of the Gilded Age? Bettmann describes "sidewalks . . . lined with unharnessed trucks, beneath and between which dirtier citizens threw their filth." At times New York reeked like a vast stable, one visitor commented — and what was true of the nation's largest municipality was true of smaller cities as well: "Pioneers trekked westward to breathe what they expected would be the fresh air of small frontier towns. What they often encountered was air like that of a malarial swamp." A photograph of Helena, Mont., illustrates the point, depicting a busy street clogged with wagons, where hitching places for horses regularly turned into cesspools.
But at least roads were safer before the advent of car accidents, right? Wrong. Runaway horses were a serious danger, creating "havoc [that] killed thousands of people," Bettmann writes. "According to the National Safety Council, the horse-associated fatality rate was 10 times the car-associated rate of modern times."
From housing to education, street crime to medical care, urban sweatshops to rural despair — on topic after topic, Bettmann's pictorial history strips away the idealized sheen of wholesomeness from America's "good old days." Neither paean to laissez-faire capitalism nor endorsement of vigorous government regulation, it is instead a frank reality check into the past that makes clear how blessed we are to be alive in the present.
The cynic's definition of optimist is a man who never had much experience. Bettmann knew better, and was happier for it. He relished being "a man of experience who remains a confirmed optimist." Forty years on, his book is still in print — and more than ever an antidote to the blues, holiday or otherwise.
CNN Executive Asks Pro-Israel Teenage Activist: 'Are You Brain Dead?'
Brain dead to call terrorism terrorism, apparently. Such is the world of CNN
In an article posted on the website for the Times of Israel newspaper, high school senior Hayley Nagelberg described a testy exchange between herself and Richard Davis in which the executive vice president of news standards and practices for the Cable News Network asked her if she’s “brain dead.”
The clash was a result of CNN's coverage of an attack on a synagogue in Har Nof, Jerusalem, on November 18 by two Palestinians who wielded meat cleavers, axes and a gun to kill American Israeli rabbis Moshe Twersky, Calman Levine and Aryeh Kopinsky; British Israeli rabbi Avraham Shmuel Goldberg; and first responder Zidan Saif.
The attackers were two Palestinian cousins, Abed Abu Jamal and Ghassan Muhammad Abu Jamal, and the student at Golda Och Academy in West Orange, New Jersey, said she was horrified when the first CNN headline on the incident read “Two Palestinians Killed,” followed by “Four Israelis, Two Palestinians Killed” in a story that claimed the violence took place inside a mosque and not a synagogue.
“CNN does not have a great reputation for a fair and balanced coverage of events involving Israel,” the student noted before stating that many cars throughout the country have bumper stickers with Hebrew words that translated in English read “CNN Lies.”
One month later, on December 21, more than 700 Jewish teenagers from around North America gathered in Atlanta, Georgia, for the United Synagogue Youth’s 64th annual international convention.
On the following day, Nagelberg joined approximately 30 other students and staff members “to listen to representatives from CNN, which has headquarters right next to our convention center.”
During an hour of listening to Davis and CNN's mobile editor, Etan Horrowitz, “I felt my jaw drop lower and lower in disbelief, and the scowl on my face grow increasingly intense in anger and frustration,” she stated.
“Davis told me and my peers and staff that it is up to us, and everyone else, as consumers to check other news sources if we think we may want more information,” Nagelberg recounted.
“I was confused” by his remarks, she indicated. “Isn’t it a news organization’s job to provide the facts? While an educated reader should always check a variety of news sources for different presentations, one should expect a leading news distributor to get the basic story right.”
Nagelberg continued: “Davis’s explanations for the aforementioned, horribly misleading and false headlines boiled down to human error.”
He then said that “these headlines only surfaced for minutes before being taken down.” However, he claimed, someone took a screenshot and circulated those headlines around the world, which was not CNN's fault.
“As our time with the CNN execs came to a close,” Nagelberg stated, “Davis explained to those of us that … when one person has an opinion about anything, a news report may seem wrong to that person. However, to everyone else, it could be perfectly right.”
After deciding that the answers the students received were nothing short of “a farce,” Nagelberg “decided to go get in one last word” with Davis, who said that calling the incident “a terrorist attack” would mean they had jumped to a conclusion without any evidence to back it up.
“Okay,” the high school senior said, “fully understanding the weight that the word 'terrorist' carries. But by the time it was known that it was four Israelis and two Palestinians, it was known that there were meat cleavers and stabbings involved. Why couldn’t you call it an ‘attack’?”
His response? “You’ve got to be kidding me! One word? Are you brain dead?”
At the end of her article, Nagelberg had harsh words for Davis.
"To answer your question: Yes, I am serious. Yes, it’s one word. It makes a difference. No, I am not brain dead. I am a 17-year-old girl from New Jersey who is appalled by the biased media coverage of Israel here in America.
How many mornings must I wake up in fear as I reach for my phone to scroll through countless stories, from countless news organizations, trying to get a complete picture of what happened in my homeland while I slept?
“How many hashtag campaigns, angry teenagers [and] nasty emails must you see before you understand that your news is not balanced, is not fair, and is not accurate?” she continued.
“I cannot sit back any longer and watch people like you continue to misreport the truth,” Nagelberg stated. “The time for change is now, and if you are not prepared to be a part of the change, I ask you: ‘Are you serious? … Are you brain dead?’”
If this pro-Israel activist isn't getting the information she's looking for on CNN, perhaps it's time to turn to another cable news channel, one that has “fair and balanced” as its motto.
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Posted by JR at 1:34 AM