Trust us – when you’re in the pundit-busting business, like the gang here at GLOBALIZATION FOLLIES, it doesn’t get any better than this.

We’re reading the latest Washington Times column by CNBC shrieker Larry Kudlow, and we’re marveling at the looney audacity of his central argument :  If the United States ran its economy more like China, with its low capital gains and corporate taxes, it would be enjoying more China-like growth rather than stumbling toward bankruptcy.   Currency manipulation, high tariffs, whopping industrial and export subsidies, not to mention outright state ownership of much of the economy – none of these pillars of Chinese strategy has registered with the Kudlow-verse.

Then came the clincher: On top of all of the Obama administration’s supposedly socialist sins, Washington Democrats are plotting to “finance so-called health care reform [by ] raising the tax rate on capital gains and dividends...while installing a value-added tax (VAT) that would begin at 1.5 percent.”

The implication: Those brilliant Chinese would never consider anything so foolhardy.  Except, of course, that the Chinese have had VATs for 25 years.  That’s VATs – plural – because they’re such a building block of China’s economic policy that the government imposes different VAT rates on different products, and rebates them in even more variegated ways in order to promote exports.  And since January, China has been transforming its VAT from a production- to a consumption-based system – which would more closely resemble the VATs used by virtually every other country on earth.

Sound like the column’s opening description of China – a country “moving in the direction of free market capitalism”?  We didn’t think so, either.  But that’s punditry for you.  Never let standards, accuracy, or even coherence get in the way of a good rant.    

---