by John Rubino
When the US housing bubble burst in 2007, most observers were focused on the threat to Wall Street banks and their massive derivatives books. This was a legitimate fear, since the worst case scenarios involved the death of Goldman Sachs and JP Morgan Chase, with all the stock market carnage that that implied.
But for China the stakes were a lot higher — picture half a billion people taking to the streets and demanding an end to a government whose only claim to legitimacy was its ability to provide millions of ever-more-lucrative jobs.
So while the US was bailing out every bank in sight with lower interest rates and loan guarantees, China upped the ante by ordering pretty much every sector if its economy to start building things with borrowed money.