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Mike Moschos's avatar

Hmmm, I wonder if there are some translation, either inter-language or perhaps intra-language in the sense of deafferent meanings of the same word, issues here. I say this because a core feature of China during its rapid rise has not only been its very -- at least relative to the USA -- decentralized nature and that nature's accompanying policy variability and moderate intra country trade protectionisms between areas as well a intra country capital flow inhibitors. The USA was like that fully for the first ~150 years of its existence and partially for the next ~40 years after that. In regards to internal capital controls, the USA had them for every single day of the first ~190 years of its existence, until it did away with them between the latter 1970s and the mid 1980s. It was a few big changes that did that, one the biggest or perhaps it was the single bggest, was mostly and de facto (and in some big ways quite arguably illegally!) eliminating of the the USA's interstate banking comeptition and asset allocation inhibitors; these were then fully and de jure elimitated by the very late 1990s. The results have been disaterous for the USA, off the bat they led to quick (over just a small umber of years between the latter 1970s and the mid 1980s) intra country capital flights and intense capital concentrations; and it played a huge role in the transformation of the USA from 150 to 200 years of semi-planned but mostly unplanned competitive market structures to where we partly arrived at in the mid 1980 and fully reached by the early 2010s: private sector central planning. And we have indeed had all the pathologies many would associate with such a system, its just that our centralized system has papered over all of its flaws via globally reaching highly extractive economic structures that enable it to run the triple blast of perpetual and large foreign trade deficits, perpetual and large central government budget deficits, and high liquidity; all without inflation. But if those structures go away all of its flaws would, I suspect, likely manifest...

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