Thursday, August 06, 2015

Sino-Austrian Business Cycle

Back when the Chinese government couldn't spend money fast enough (meaning, at the latest, earlier this week), a new subway line was planned to go right up our street. Then the absolutely insane spending plans died (except for the ones for the Winter Olympics--those are still around) and the subway line was going to be a monorail line. Then the economy got softer still and the Redefales (remember, Red Federales; it's a thing now) decided not to needlessly antagonize the citizenry (unless you're a dancing granny), so they cancelled the monorail line that would have blocked out the sun for the first three stories of every building and went back to a subway line, now much further in the future.

Meanwhile, developers who moved on the initial declaration of a subway line now have really nice, completely empty malls on our street. Last week one of the malls hung the largest banner ad I've ever seen (not counting some of those GeoCities pages) trying to attract tenants. The fact that you can see this mall from my classroom was really helpful when I was teaching Hayek's concept of malinvestment.

But today I happened to see that the other empty mall is getting ready for a new tenant: WuMart. What is WuMart? It's where you go in China when Walmart is too upscale for you.

Here's what WuMart has going for it in my family's perspective: it's not Chaoshifa, our local grocery store that does not have much of what we want, and it's closer than Chaoshifa, too. Here's what it has going against it: WuMart owns 25% of Chaoshifa, so winning our business is somewhat cannibalistic, and the walk to WuMart will require us to walk past the garbage substation.

What's a garbage substation? Well, this is how trash collection works here. A dude with a three-wheel bicycle and a metal bin on the back comes along and picks through the garbage, then takes it to this building on our block. There it is compacted and loaded onto a small garbage truck to take who-knows-where. The garbage substation is the second-smelliest thing I've ever smelt in my life (Number 1 was a guy's house in Humbird, Wisconsin). The stink is the kind that not even mouth breathing can overcome; you just end up tasting the garbage.

My son was excited to live on a monorail line, so he's pretty upset about the malinvestment problem. I was excited to live across the street from a Uniqlo and a Paris Baguette, so I'm pretty upset about it, too. But at least I should still have my teaching visual when I get to Hayek's malinvestment theory.

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