Thin Asians and Fat Americans

Thin Asians and Fat Americans crowded into Disneyland last
Thursday, along with your editor and his conspicuously lean
family. Each of us ponied up $76 apiece to enter the
"Happiest Place on Earth." The food was not included, of
course…But that did not prevent either the thin Asians or
the fat Americans from consuming lots of it.

In one particular eatery, we observed a diverse crowd of
"thins" and "fats" chowing down the identical fat-laden
grub. As your editor surveyed this scene, he imagined he
was witnessing an epic shift in global consumption trends –
a shift from West to East.

Even if we Americans tried to stuff more junk into our
over-stuffed bodies and homes, we could not possibly keep
up with the Chinese. Since the Chinese outnumber us four-
to-one, and since the Chinese economy is growing more than
twice as fast as ours, the Asian nation is certain to
overtake U.S. demand for many of the world’s resources.

As present, Americans represent only 5% of the world’s
population, but consume 26% of its resources. Purveyors of
consumption, therefore, have prospered handsomely in the
America of the last forty years – McDonalds and Disneyland
being two notable examples. But we would expect the next
forty years to belong to the purveyors of consumption in
China.

"Disneyland, like so much of America, is about consuming
more than we need," observes Joel Beers in a witty "OC
Weekly" column. "Anywhere in America is a perfect place to
view the chunky, plump, rotund, stout and robust.  But
there are few places where you can witness the truly
elephantine, corpulent, distended and gargantuan.
Disneyland is one of them.  Anyone who has hung out at the
park can attest to this fact: fat people are all over Walt
Disney’s bucolic division of long-lost America."

Disneyland, of course, does not discriminate against any
guests, regardless of their nationality or socio-economic
standing or weight or cholesterol count. To the contrary,
Beers believes, the park actually attracts a
disproportionately large percent of disproportionately
large tourists. The reason, he theorizes, is that the
implicit biases of the classic Disney stories project a
fat-friendly ethos.

"The happiest of the Seven Dwarfs is, duh, Happy.  He’s
also the fattest," Beers writes. "The skinniest of the
dwarfs is Dopey. He’s also borderline retarded.  Few Disney
villains are as dastardly as the dog-napping Cruella De Vil
or the terrible witch in Sleeping Beauty.  They’re also
emaciated anorexics. Meanwhile, few characters are as
lovable as the Jungle Book’s Baloo, Dumbo or that honey-
guzzling, potbellied Pooh Bear named Winnie. Clearly, in
Walt Disney’s wonderful world of imagination, thin is evil
and manipulative…Fat and lumpy, meanwhile, is lovable
warm goodness incarnate."

When Disneyland opened for business in the summer of 1955,
it featured 19 attractions and a family of four could walk
in for less than five-dollar bill. The present-day
Disneyland features many more attractions and costs about
60 times more money to visit.

"But one thing," Beers relates, "has stayed eerily
consistent: the grub. Although the original park has
expanded greatly, there are still only six more places to
eat.  And the food offered in 1955 is still, by and large,
the food offered now: hot dogs, hamburgers, fries, candy,
ice cream, fried chicken, cookies, sugar-saturated soft
drinks, potato chips."

Disney-style junk-food may not have changed much over the
last 50 years, but we Americans are eating more of it than
ever. Over the last 35 years, the average American woman’s
daily intake of calories rose from 1,542 to 1,877 and the
average American man’s from 2,450 to 2618.

Not surprisingly, therefore, the "fats" are getting fatter.
"In 1963," Beers notes, "the Center for Disease Control
reported that 44.8 percent of the American population was
overweight.  In 2000, that number had risen to 65.2
percent.  In 1963, 13 percent of Americans were obese; in
2000 it was 31 percent.  In 1970, 4.5 percent of American
children were overweight; in 2002 it was 15.8 percent."

And yet, we continue to consume ever-growing quantities of
everything – from Big Macs to SUVs to home-equity loans.
Clearly, we cannot help ourselves. Nothing short of an AA-
style "intervention" could halt our over-consumption. But
even as we try to gorge ourselves, we cannot possibly keep
up with Chinese consumption trends.

In 2002, for example, the US consumed more copper than any
other nation. China now claims that distinction. Then, last
year, China consumed twice as much steel as the U.S. The
Chinese have also become conspicuously large oil consumers.
World oil demand since 1988 is up 25%, but Chinese demand
has rocketed 175% over the same time frame. Looked at
another way, China’s absolute consumption has risen more
than the US since 1998. American consumption grew by 3.08
million barrels a day while China’s grew by 3.98 million
barrels a day. China now consumes more oil than Japan, 7.6%
of the world total compared with 7.4% for the world’s
second largest economy.

The increasingly prosperous Asian nation has also become a
voracious consumer of agricultural products. While we add
calories to our diets, the Chinese are adding protein, a
phenomenon that drives demand for poultry products, for
example. The recent successes of Yum! Brands (NYSE: YUM)
illustrates the trend.

"Thanks partly to China," the Economist notes, "Yum! is
making about two-fifths of its operating profits outside
America, up from one-fifth in 1998…With 1,378 KFC
restaurants in China, and 201 Pizza Huts at mid-2005, Yum!
owns two of the best-known brand names in the world’s most
populous market." Business is booming, which is why the
company is on pace to open about one new restaurant per DAY
in China.

The feeding (and fattening) of America over the last three
decades contributed mightily to the prosperity of companies
like McDonalds. History is in the process of repeating
itself: the feeding (and fattening) of China will provide
opportunities for innumerable companies. The appetite of
1.3 billion individuals is not easily satisfied.

To Americans, the suggestion that the dollar is losing
value is unthinkable — unpatriotic even. The problem is
found not only in the lack of understanding about the
nature of wealth and investments used to create and sustain
it; in America’s money culture, policy makers and
economists make no distinction between wealth created
through saving and investment in the real economy, versus
"wealth" created in the markets through asset bubbles,
brought about by credit policies. Even when suggestions
about the flaw in this thinking arise, the distraction of
consumerism has created a type of attention deficit
disorder. We’re trying to tell people to lose weight while
meeting with them for lunch at the soda fountain.

We not only spend at a high level; we also prefer
accumulating wealth on the same fast track. Traditionally,
economists recognized that it took time to build an estate.
People and countries could build wealth slowly, but today
the new approach requires that a state find ways to
increase the market value of its productive assets. [In
such a strategy] an economic policy that aims to achieve
growth by wealth creation therefore does not attempt to
increase the production of goods and services, except as a
secondary objective.

This a perfect description of the economic thinking that
rules in America today, not only in corporations and the
financial markets, but even among policy makers, elevating
wealth creation— that is, bubble creation—to the ultimate
in economic wisdom. The asset bubbles in recent years—in
stocks, bonds, and housing—were primary elements of
economic growth. Considering, though, the lopsided effect
on consumer spending and borrowing, is this a reasonable
and sustainable policy? Should it be encouraged? It works
in the short run from the demand side, but where does it
lead? Just as mercantilism in eighteenth-century Europe
ultimately fell under its own weight, the modern economic
trend toward house-of-cards wealth creation may become a
twenty-first-century version of past lessons not fully
learned or appreciated.

America’s grinding credit machine makes all the difference
in economic growth and wealth creation between our country
and the rest of the world. Lately, China is overtaking the
United States in so many ways, but ironically, based on a
more tangible economic viewpoint.

It may prove to be the great irony of the twenty-first
century that the Chinese—once viewed as the most puristic
of the Communist regimes, rabidly anticapitalist at the
height of their fervor—may turn out to be the most
successful model of worldwide capitalism. (On a recent trip
to China, I had a good chuckle while touring the Forbidden
Palace in Beijing. The tour was sponsored by Nestlé, and
the plaques that explained where the concubines slept had
American Express logos in the lower-right corners.)

China’s growth is investment-driven, with a capital
investment rate close to 38 percent of GDP. By U.S.
standards, that is very, very high.