Thomas Friedman penned an interesting article the other day in the New York Times. The title could not have been more provocative: "Is China the Next Enron?" In the piece, Friedman writes that James Chanos, the famous short seller who foresaw Enron's demise, now believes that China represents a bubble due to burst in a magnificent way.
Friedman dismisses Chanos' concerns, and he explains why: "I am reluctant to sell China short, not because I think it has no problems or corruption or bubbles, but because I think it has all those problems in spades — and some will blow up along the way (the most dangerous being pollution). But it also has a political class focused on addressing its real problems, as well as a mountain of savings with which to do so (unlike us)."
Here is what struck me about Friedman's comments: One could have said the exact same thing about Japan in the late 1980s. How did that work out for them?