The Conventions Cometh

The Republican and Democratic National Conventions are just around the corner.  The Republican convention comes first, beginning on August 27.  The Democratic convention then starts on September 3.

The conventions don’t have the same importance they had decades ago, when it was not uncommon for dark horse candidates to emerge after deadlocked conventions entered the wee hours.  As recently as 40 years ago unruly delegates at the Democratic convention delayed the acceptance speech by the party’s presidential candidate, George McGovern, until well after prime time TV viewers had gone to bed.  Now, of course, conventions are heavily scripted affairs, with little drama and a heavy emphasis on messaging.

This evolution has caused some to argue that conventions are useless and should be jettisoned.  I disagree.  There is a liturgical element to conventions that will always have a place in American politics.  The welcoming address, the platform debates, the nomination speeches, the keynote address, the acceptance speeches — all are steeped in tradition, and all can tell you something about where the parties are heading and what they want to project.  Who have the parties selected to speak, and what are they saying?  With the careful planning that goes into modern political conventions, you can be confident that party approves of every carefully tailored word being spoken from the podium.

The parties are just starting to announce who will be speaking at the conventions.  We know that the Democratic nominees, President Obama and Vice President Biden, will speak at their convention, and GOP nominees Mitt Romney and Paul Ryan will address the Republican gathering.  We also know the keynote speakers — and here there is an interesting contrast.  The Democratic keynoter will be dashing Julian Castro, the 37-year-old mayor of San Antonio, Texas, who is a Harvard graduate and has been described as the “Latino Obama.”  His Republican counterpart is bluff New Jersey Governor Chris Christie, who successfully dealt with his state’s budget problems and promises to tell some “very direct truths” during his address.  Can anyone doubt that these two keynote addresses are likely to sound very different themes?

I’m no political junkie, but I think conventions are fascinating.  When the gavels go down on August 27 and September 3, I’ll be watching.

The Empty Cities Of China

Those of us who believe that the free market typically make better planning decisions than governmental agencies — that motivated investors and entrepreneurs, who are looking out for their own money and returns, are likely to be more capable judges of economic realities than bureaucrats — need look no farther than China for confirmation of those beliefs.

China has been making massive investments in its infrastructure, raising entire cities from nothingness.  These huge investments, and the jobs they have produced, have helped to account for China’s impressive gains in its gross domestic product.  But, as the BBC reports, China’s central planners have made lots of bad decisions.  As a result, the country is dotted with vacant apartment buildings, shopping malls, and cities — even a deserted theme park — that are standing vacant and gathering dust.  The failed relics of China’s central economic decision-making include Chenggong, a planned city populated with apartment buildings, public art, and empty suburbs, but no people, and the New South China Mall in Dongguang, a sprawling shopping mall that has spaces for 1,500 stores, all but a few of which are unoccupied.

We often hear commentators citing China’s economic growth statistics and urging America to follow China’s lead.  China’s development has been extraordinary — but we also need to remember that those remarkable growth statistics have been produced, in part, by investments in ghost cities and empty apartment blocks that created construction jobs and not much else.  Vacant stores and buildings are not going to produce income streams and long-term economic prosperity.  In America, these would be viewed as utterly failed investments.

Proponents of big government always assume that government, presumably armed with reams of statistics and perfect information and unfettered by the profit motive that propels capitalists, will make nothing but good decisions in allocating resources and planning for the future.  As China’s experience shows — and as the Obama Administration’s failed Solyndra investment also reflects — that clearly is not the case.  China’s political system may allow its government to fritter away billions on ghost towns and crumbling theme parks without consequences.  How do you think Americans would react if their tax dollars were wasted in similar ways, in the interests of achieving a better short-term GDP?