Saturday, 21 November 2009

Forget The ECFA


William Lowther reports (Saturday 21st November) the chairman of the Congressional US-China Economic and Security Review Commission, Carolyn Bartholomew, as saying that "Beijing continues to comprehensively plan, direct, support and control its economy". I shall restrict myself to two comments on this.

First, although the content of Ms Bartholomew's remarks would not be news to anyone but the most deluded anti-capitalist, the fact that such remarks seem to have some currency in the U.S. Congress is interesting. I wonder whether similar remarks about Washington are made by officials of corresponding rank in Beijing. For the fact is, whilst Beijing depends upon a U.S. market for their export commodities (hence their currency manipulation), Washington depends upon the Chinese purchase of U.S. government debt (hence their near-silence on Taiwan). The people of Taiwan should look to the governments of neither the U.S. nor China for their economic future because the long-term prospects for both look positively Soviet. The people of Taiwan should look to cut back the scale of their own government. Here are some problems areas:

Banking - the Bank of Taiwan prints a fiat currency backed by nothing, and the commercial banks are all fractional reserve.

Education - there has been significant State malinvestment in schools and universities for decades.

Healthcare - the "health insurance" is both a tax on the young, and a system of welfare for the large pharmaceuticals.

Transport - the high speed rail has enormous debts which threaten its' closure and significant losses for the banking sector.

Military - the costs of Taiwan's superfluous army unnecessarily diverts much needed funding from the navy and the airforce.

Bureaucracy - how many souls have become pointless public burdens in the State bureaucracy on the promise of handouts?

These are all areas of significant public spending which, if cut off from further State funding, could present significant business opportunities to enterprising Taiwanese people to produce goods of value to other Taiwanese people. Forget the ECFA; large scale public spending cuts would be a genuine economic "stimulus". I once again urge you at the Taipei Times to shift your editorial and reporting focus away from your state-centric tunnel vision and toward consideration of the lives and freedom of individuals.

Yours sincerely,
Michael Fagan

(Sent: Saturday 21st November 2009. Unpublished by the Taipei Times)

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