Chairman Mao must be turning in his crystal sarcophagus

ìChinaís Revolutionary Tactic: Bailout,î by Peter S. Goodman, Washington Post, 26 August, p. E1.

Fascinating story of Chinaís government bailing out a big private corporation whose potential bankruptcy is seen as too dangerous to social stability to allow the scenario to unfold. Before you say, ìSee, Chinaís still socialist!î Letís remember how many times the U.S. Government has bailed out big corporations in this country, or the S&L crisis for that matter.

I have often said, and I said in China in August to my hosts: the biggest danger to global stability right now is a banking crisis in China. If DíLong International Strategic Investment Co. is Chinaís version of Long-Term Capital Management, then I say, bravo for seeing the writing on the wall and taking the necessary steps in time.