Property Implosion: China Pours 'Stimulus' Into the System

The Ultimate Crony Capitalist State starts bailing, again

I remember the Crash in the fall of 2008 almost day by day. Some days I remember almost hour by hour. I remember hearing Alan Greenspan say we were witnessing a once in a century economic crisis. I remember exactly where I was when I heard that Lehman was going under. I remember George Bush going full crony when he said he was “abandoning capitalism to save capitalism”. I remember the taxpayer reaction against the bailout, and then Congress going back and giving the bankers exactly what they wanted despite what the taxpayers thought. I remember feeling like the cronies were forcing an end to anything that looked like an at least marginally honest marketplace to save their hides. I remember Goldman Sachs, which some believe was leveraged over 100 to 1 at the time of the Crash, taking the bailout money and distributing it (in the form of massive bonuses) to its employees two quarters after the initial crash so that the money couldn’t be clawed back. I remember kids moving into their parents homes and parents moving into their kids homes all around me in my middle class suburban neighborhood. I remember the pain.

After the Crash of 2008 it was clear to the world that our system was a crony capitalist one, not a capitalist one. The connected got saved. The banks that were leveraged far beyond their means were indemnified by force by the taxpayer. The system was rigged and now it was official. I am convinced that much of the resurgence in interest around economically suicidal “socialist” policy emerged as a reaction to the bailouts, which many thought, wrongly, was capitalism at work. It is particularly tragic that socialist theory was given new life as it was state intervention that caused the Crash in the first place. But that is for another discussion.

During 2008 China did OK. Where the US and Europe took it right on the chin, China would feel the economic downturn down the road a little bit - which it met with a wave of “stimulus”. China never had the full on economic vomitfest that the West did. Instead it has had a sort of low grade economic flu since the early 2010s.