Jonah Goldberg thinks predictions of Chinese domination are off the mark, noting that the same was said for Japan in the ’80s, before their economy tanked.

The Japan example not only demonstrates that smart people can be wrong and that the elite chattering classes are prone to groupthink, but it helps illuminate why they are so prone to this sort of thing.

For more than a century, countless American intellectuals and business leaders have looked enviously at how foreign countries “planned” and “managed” their economies. Woodrow Wilson and the Progressives drooled over Otto von Bismarck, and today every self-proclaimed “global strategist” gazes at China’s managed capitalism like a kid with his nose pressed against a candy-store window.

Of course, China has made enormous progress since it decided that markets are a more desirable means of improving the lot of its citizens than organized mass murder. But China’s fans still have an enormous blind spot.

Ask yourself this: Why are we in this financial crisis?

Any short list of reasons would include a lack of transparency in markets and regulatory rule-making; collusion between business and government; the politicization of lending practices (including the socialization of risk and the privatization of profit through giant governmental entities like Fannie Mae); and, of course, simple greed.

Does anyone honestly think China doesn’t have these problems ten times over? It has no free press, no democratic accountability, and no truly independent regulators.