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Standing Strong for America in 2014

China's Banking Mess

China's economic miracle may prove a bigger fraud than American prosperity before 2008, which was really built on shabby lending and rampant consumer spending.

Many Chinese businesses that stock Wal-Mart (WMT) with unimaginably inexpensive gadgets were built on loans that I don't think they can repay. Similarly, banks have financed provincial governments to build cities that in my view are occupied by displaced farmers that have no jobs.

Beijing has raised interest rates to gradually deflate bubbles in stock and land prices. As I see it,  borrowers cannot pay those rates and banks and private lenders could face ruin.

A financial crisis wouldn't end the rise of China, but it would expose a great fraud: the superiority of state-directed capitalism over western democracy and free markets.

No one would be more disappointed than National Public Radio, PBS and other liberal media, who celebrate each Chinese achievement with the enthusiasm with which the French cheered General Washington's victories over the British.

The simultaneous debunking of the ACA and Chinese miracle offer conservatives the opportunity to refocus the debate in America away from the shortcomings of free markets and private enterprise. The new focus could be on helping free markets and private enterprise thrive and contribute to middle class prosperity as they did in the 1980s and 1990s.

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