Happy New Year everyone. Well, perhaps not “happy,” but it definitely is a new year. According to a lot of folks, this year is fraught with danger. Aside from the whole Mayan Calendar story, which I do admit is entertaining, the China doomsayer contingent is coming out of the woodwork, armed with scary statistics about everything from manufacturing orders to electricity consumption and stories about mass protests in the hinterlands. As we would say back in Southern California, it’s The Big One, and it’s coming soon!
I’ve had a few people ask me why I’ve been silent over the past few days instead of jumping on either the “Year in Review” or “2012 Preview” bandwagons, missing the opportunity to explain why/why not Chinese civilization as we know it will cease to exist over the next 12 months.
Yeah, it was tempting [he said drolly]. As a rule, though, I try to stay out of the prognostication business. Aside from not being able to predict the future (my midi-chlorian count is shockingly low), there are three good reasons to totally ignore this kind of commentary. Consider the following not a substantive or useful discussion of 2012, but rather a skeptic’s guide to reading about 2012:
Numbers Never Lie, But They Can Mislead
Be careful when reading all these statistics about China’s economy, particularly those arguments that spend 99% of the time explaining how bad things are going to get and then sort of slip in the assumption that because, for example, the unemployment rate will probably tick up, there will be mass panic that will foment political change. The one fact does not necessary lead to that specific result.
To put it in much broader terms: don’t let folks use numbers to mislead you. It happens all the time. For example, here in China we just finished up our New Years holiday, which you might have heard was a “three-day holiday.” This is true, but the statement is misleading. A “three-day holiday” suggests that we all enjoyed three well-earned days off work.
This is not the case at all. In fact, the official schedule had everyone working up to and including last Saturday (December 31), and then taking off Sunday, Monday and Tuesday. Yes, there were three days in a row designated as a holiday, but if you take into account the two weekend days (one of which was shifted around), there was really only one additional day off. In my book, that’s a “one-day holiday.”
Wait, what was my original point again? Something about statistics or something?
The Embarrassment of Getting Ahead of Oneself
The basic problem with prognostication of course is the assumption that we know enough today to guess what will happen tomorrow. Sometimes we’re correct, but very often we’re wrong. That’s because there are simply too many unknowns out there (both known unknowns as well as unknown unknowns, as the philosopher once said).
To put it another way, be wary of anyone with too much confidence. Case in point: my recent struggle with my Android phone. After finding out that Motorola had decided to force me and my fellow Me501/Quench users to remain in a state of perpetual low-techitude (i.e. no updates to the hopelessly creaky 1.5/”Cupcake” OS), I took matters into my own hands.
The next day, I triumphantly announced on Twitter that I had successfully, as I blithely stated, “rooted the bastard.” This was true, but I was getting ahead of myself and tempting the gods with my arrogance. Mere hours later, I had, also successfully, soft bricked the phone after flashing to a recovery file that somehow gave my hardware severe indigestion. It hung both on normal bootup and in recovery mode. I panicked, immediately gave up and, with the utmost confidence, told my wife that the phone was a lost cause and that she should buy me a new one on her upcoming trip to Hong Kong.
Yes, I had yet again gotten ahead of myself. After further research, I found out that I still had bootloader access, allowing me via RSD Lite to flash new firmware. It took me quite a few tries, but eventually I found some original Chinese firmware lurking on the Intertubes, and I found myself (two days later) back at the status quo hacke.
If you’re still awake at this point, the lesson here is obvious (and you’re a geek). Well, two lessons I suppose. The first is that I should stop screwing around with my electronic devices. The second, however, is more important: confident pronouncements might sound reasonable at the time, but reality can bite you on the ass and make you look like an idiot very soon thereafter.
“Their Stuff is Shit, and Your Shit is Stuff”
Or to put it another way (although Carlin did say it best), everyone is hopelessly biased, and many folks have an agenda. As I’ve written before about the China gloom and doom crowd, you’ve got your short sellers, who literally make money off this racket, the “buy my crazy book” group, who thrive on the attention of outrageous pronouncements, and the Cold Warriors, the sad guys who are still fighting against the Red Chinese Communists and see every economic blip as presaging the inevitable downfall of an illicit regime.
Bias is a bitch, and it makes me question everyone. Even myself.
I was sitting home yesterday evening when I heard one of my neighbors get off the elevator and walk towards her apartment. As is her usual habit, she grunted very loudly in a throat-clearing sort of way. I noted to my wife that between The Grunter (this woman) and The Whistler (another guy on the hall who whistles shrilly every time he comes home), it was like living in a zoo and that perhaps I should start lurking in the hallway and flinging my feces at unsuspecting visitors.
As the voice of reason, she pointed out to me that The Grunter and The Whistler were merely setting off the noise-activated lights in the hallway. Upon reflection, I realized that they probably thought of my wife and I as The Stampers, as we stamp our feet outside when we require illumination.
Our biases and point of view color our judgments in many ways, and often we are not even aware it is happening. Describing what is going on around us is difficult enough, given this psychological distortion field, but when we extrapolate into the future? Forget about it.
Now, I’m not saying that every proponent of Sinopocalyse 2012 is so biased that their opinion should be completely ignored. Maybe only 98% of them – for any of my readers who has written one of these 2011/12 Year in Review/Preview pieces and feels moved to write me a nasty email, rest assured that you are one of the two percent!
Let’s consider one of the most famous doomsayers of them all, Gordon Chang, who made a name for himself as a nattering nabob of negativity with the 2001 book “The Coming Collapse of China.” At the time, China was experiencing some significant problems with its financial sector, and many of its big trust and investment companies had to be bailed out due to non-performing loans. The book probably seemed like a good idea in the wake of the Asian Financial Crisis when Chang wrote the book. Since that time, however, he has been the butt of numerous jokes as the years go by and the country/government endures.
Chang recently penned a column about the coming year, essentially doubling down on his doom and gloom predictions. His new thesis (same as the old thesis) was that yeah, my timing was a bit off, but really, 2012 it is. This invited the usual eye-rolling responses, such as:
Why on earth would I want to go out on a limb with a China prediction and invite the kind of scorn and ridicule that has been heaped on Gordon Chang over the past decade? I might be a really bad phone hacker, but I’m no idiot.
Be careful what you read out there.