China: US Shutdown Exposes ‘Ugly Side of Partisan Politics’

Reuters Shanghai:

China on Wednesday said the U.S. government shutdown had exposed “the ugly side of partisan politics” in Washington and expressed concern about its effect on the world economy.

An editorial on the state-run Xinhua news service, considered a channel for Beijing’s official views, said: “The United States, the world’s sole superpower, has engaged in irresponsible spending for years.”

“In the view of the latest political failure, a replay of the 2011 summer drama seems likely, which is certainly a concern for U.S. foreign creditors,” it said.

“With no political unity to redress its policy mistake, a dysfunctional Washington is now overspending the confidence in its leadership,” the editorial said.

Chinese leaders must be both puzzled and perplexed by the current spat between Congress and the Senate. How can a government which considers itself a beacon of democracy — and which advocates democracy to emerging nations — exhibit such disfunctional behavior? Separation of duties between the President, Congress and the Senate — designed to safeguard the nation from excessive concentration of power — have evolved into a recurring political logjam. Both major parties are guilty of burdening future taxpayers with public debt, in order to buy off existing voters, and kicking the can down the road — avoiding unpopular political decisions that are in the long-term interests of the nation. Failure to address unsustainable welfare spending, for example, has allowed unfunded liabilities to balloon to more than $70 trillion by 2012.

Weak political coalitions have also led to unstable government and a short-term focus in many Western democracies. These issues are completely foreign to China’s Central Committee.

The Central Politburo Standing Committee (“PSC”) of the Communist Party of China is a committee of 7 members appointed by the Chinese Communist Party to run the country, with Li Jinping acting as General Secretary. No political group has the power to block decisions of the Committee, allowing them to focus on long-term goals rather than short-term considerations. Ascendancy of the PSC is one of the major contributing factors to China’s phoenix-like rise from the ashes of decades of political turmoil.

I am not advocating that we abandon democracy and revert to a one-party state, but we need to address the weaknesses in our current system and adopt some of the strengths of others. An outstanding example of this is the Swiss system where a similar central committee is democratically elected, based on proportional representation. All parties are represented on the 7-member Federal Council and decision-making is collective. Council members serve one year terms as the largely-ceremonial head of state. The strength of the system is its stability, with only one change to the composition of the 7-member Council over the last 50 years. This enables members to focus on long-term goals rather than on short-term political concerns — one of the reasons why the Swiss economy is one of the most stable and successful, ranked 8th in the world in terms of GDP per capita according to the IMF.

Powers of the central committee are restrained by a vibrant direct democracy where citizens regularly vote on national referendums. The power of voters to overturn their decisions maintains a strong check on the central committee throughout their elected term and would also curb the influence of special interest groups, another abscess on butt of many democracies.

While most recognize the need for change, a major obstacle is the power of vested interests that are likely to impede progress at every turn. Only a major ground-swell of popular support could sweep them aside. In a way we should welcome crises like the current impasse, as further cracks in the dam wall of public opinion. When the wall breaks, hopefully we can build a better system…..if we have learned from our past mistakes.