Saturday, August 07, 2004

The Washington Post reports of clashes between rural farmers in China and the authorities over land siezures.

SHIJIAHE, China -- Hundreds of police stormed this village in central China before dawn last Saturday and fired rubber bullets into large crowds of unarmed farmers who had threatened a protest in the provincial capital, injuring dozens
in one of the most violent clashes known to have taken place in the Chinese countryside in recent years. No villagers were killed, but residents said about 10 were hospitalized with serious injuries, including a woman who was shot nine times in the back and another who was shot five times. As many as 50 other villagers suffered moderate injuries, residents said, and a local doctor said dozens of police officers were hurt.

At least 100 government officials moved into a school in this
village outside Zhengzhou, the capital of Henan province, to calm tensions in the aftermath of the July 31 incident and to hush it up. But witnesses described what happened in surreptitious interviews in villagers' homes Thursday, and
others provided details by telephone or in Zhengzhou. One resident provided digital photos of his bloodied neighbors and of ammunition collected on the street the next morning.
The confrontation is a reminder of the stark challenge that rural unrest poses for the Communist Party, which took power in China 55 years ago in a peasant revolution but is now struggling to contain rising anger in the countryside over high taxes, official corruption and farm incomes that are stagnating even as the national economy booms.

Here in Shijiahe, a relatively prosperous hamlet of corn fields and vegetable farms about 400 miles southwest of Beijing, villagers are protesting another problem that has emerged as an explosive issue in rural China: the seizure of farmland
by local officials to build roads, dams, factories or real estate projects, often for personal profit. In part because the state still owns all land in China and has granted peasants only long-term leases to their plots, local officials managed to take control illegally of at least 300,000 acres from 1.5 million farmers between 1999 and 2002, according to conservative estimates by the Land and Natural Resources Ministry. And official police statistics show a rising wave of protests over such land transfers.

Residents said hundreds of villagers staged two protests in Zhengzhou, a few miles away, in recent weeks against plans by the village's party chief to expropriate 80 acres of land, which would reduce each family's plot by about a third. The party chief had seized nearly 250 acres from the village's 6,000 residents since 1996, they said, selling some of it for a huge profit.

I think this is noteworthy because when rural towns begin to fight back then the propesct of a real revolution is all the more likely. Student protests can easily be dismissed as elitist, but the rural disent is grassroots at its core.

China is a mystery to me and I suspect to many. On the one hand you
think of it as this repressive place and then you hear about it being very much like the West in commerce and its urban areas--freedom of movement, free press to an extent, etc. But then things happen like these land siezure attempst that snap you back to reality.


Much analysis today in the newspapers about the terrible July jobs numbers. The Washington Post reports that Bush economic advisors are conceding that the tax cuts have not had the staying power they had hoped for.

The problem with supply side is that if you are going to give it a legitimate shot, you have to cut spending not increase it. But the main thing about supply-side economics is that it is wholly dependent on the munificence and benevolence of the rich. You have to give the rich enough tax cuts that they feel good about hiring and make stimulating economic activity.As long as the rich feel skiddish, supply side doesn't work.

Demand-side economics, on the other hand, focuses on increasing demand and economic activity is pushed and stimulated by actual and sustained demand and not anyone's good feeling. If the minimum wage was increased to $7/hr, that would be a massive structural change because people at that wage actually spend money and that would pump billions into the economy. Such an infusion would not be a one time silly $50/person tax cut that is undercut by healthcare increases.

Clearly, the most commonsense approach is one that combines both sides in varying degrees. Address supply-side cost concerns such as healthcare and bump up demand by increasing minimum wage and you have a recipe for decent growth. Kerry clearly gets this, Bush doesn't. What the President doesn't seem to get is that you can't make the economy work just by declaring it so or buying into a philosophy, you have to find out how it actually does work.

Unfortunately, the President, instead of acknowledging that something is not quite right is still proclaiming that we are about to turn a corner . . . as Teresa would say, to Hell.


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