For the past eight years, Liu Zhijun was one of the most influential people in China. As minister of railways, Liu ran China’s $300 billion high-speed rail project. U.S., European and Japanese contractors jostled for a piece of the business while foreign journalists gushed over China’s latest high-tech marvel.
Today, Liu Zhijun is ruined, and his high-speed rail project is in trouble. On Feb. 25, he was fired for “severe violations of discipline” — code for embezzling tens of millions of dollars. Seems his ministry has run up $271 billion in debt — roughly five times the level that bankrupted General Motors. But ticket sales can’t cover debt service that will total $27.7 billion in 2011 alone. Safety concerns also are cropping up.
Faced with a financial and public relations disaster, China put the brakes on Liu’s program. On April 13, the government cut bullet-train speeds 30 mph to improve safety, energy efficiency an
d affordability. The Railway Ministry’s tangled finances are being audited. Construction plans, too, are being reviewed.
Liu’s legacy, in short, is a system that could drain China’s economic resources for years. So much for the grand project that Thomas Friedman of the New York Times likened to a “moon shot” and that President Obama held up as a model for the United States.
Rather than demonstrating the advantages of centrally planned long-term investment, as its foreign admirers sometimes suggested, China’s bullet-train experience shows what can go wrong when an unelected elite, influenced by corrupt opportunists, gives orders that all must follow — without the robust public discussion we would have in the states.
So Obama, an admirer of both China's brutal dictatorship and command & control economy, has a choice: To fess up to the American people that he was punk'd by the Chinese, and that high-speed rail, with its apparent inefficiencies and high cost, is not the right direction for America to take at this time, or he can keep on plowing ahead and chasing the dream. As in forcing construction despite the public's utter unwillingness to pay for it and ride on it.
Gee, what do you think Barack Obama will do? Well, to use "climate change" as an example, at a San Fransisco fundraiser this past week he derided members of Congress as "climate deniers", while having never publicly mentioned, or apparently even taking into intellectual consideration, the Climategate scandal, in which scientists were found to be altering climate data to provide "proof" for global warming, even as evidence for the opposite effect - planet-wide cooling - became stronger and stronger...
So expect the same for Obama's precious high speed rail. Facts be damned, it's part of his utopian vision, and even if it doesn't work, or doesn't even exist, he's gonna jam it down our throats, and makes us all go bankrupt paying for it.