Chinese leader Xi Jinping knows something Barack Obama doesn’t: America is finished. The U.S. economy is an ocean liner holed below the waterline. In the stateroom, the band plays on – but, on the bridge, the outcome is clear. With the arguable exception of the late-era Soviet Union, America is sinking faster than any Great Power in history. As a proportion of national output, America’s foreign debts are already larger than those of any Great Power since the egregiously corrupt Ottoman Empire a century ago. For those who need reminding, the Ottoman empire, which had flourished for more than six centuries, was then within a decade of final collapse. Because every dollar of current-account deficit (the current account is the largest and most meaningful measure of trade) represents an extra dollar that has to be funded from abroad, America’s foreign indebtedness is now accumulating at a rate of more than $1 billion a day. There is no way America can export its way back to national solvency – U.S. industry has just become too hollowed out. Even apparently solid U.S. manufacturers likeBoeing BA +0.47%, Caterpillar CAT +0.46%, and Corning Glass have long since sourced many of their most advanced components and materials from Japan, Korea, Germany, and other manufacturing-focused nations. (For a closer look at Boeing, click here and here. Much of Boeing’s most valuable technology has long since been transferred to East Asia, not least its avionics and its incomparable wing technology.) In proceeding full steam ahead towards national bankruptcy, the United States is world history’s ultimate example of the triumph of ideology over commonsense. Beginning in the Eisenhower era, succeeding Washington administrations have bet the farm on ever-freer trade. Supposedly this would strengthen American economic leadership. To say the least, the powers that be in Tokyo, Seoul, and Taipei, as well as in Bonn, Frankfurt, and West Berlin, discreetly laughed at such epochal naïveté. No nation has understood the stupidity of America’s trade policy more clearly than post-Mao China. On the one hand, American leaders have thrown the U.S. market wide open to Chinese exports. On the other, they have ignored Beijing’s in-your-face blocking of all advanced American exports to China. The United States has undoubtedly been by far the most serious victim of Chinese protectionism. As Chinese leaders know better than anyone, the ultimate issue is American corruption. Washington is actually far more corrupt than Beijing. If you want to get something done in Washington, you do what you do in Jakarta: just slip some money to the right people. The point was made as far back as a generation ago by the prominent Japanese commentator and author Shintaro Ishihara. From an East Asian point of view, the United States is already, in its political dynamics, a Third World country. Even South Korea, with just one-seventh of America’s population, is a bigger exporter to China than the United States. On a per-capita basis, South Korea’s China exports are eight times larger than America’s. Korea’s exports moreover consist almost entirely of leading First World goods such as highly miniaturized electronic components, whereas the main things America sells to China are Third World-ish items such as iron ore, coal, and wheat. This is not to suggest that American brands are absent from China. Actually they are everywhere. But virtually all American-brand goods sold in China are made there. Corporate America has been offered a deal: if it wants to sell in China, it has to manufacture there. The effect on America’s job base is devastating. But this is not the half of it: China insists that U.S. corporations bring their most advanced production technologies – knowhow that the American nation has taken generations to build up. In an egregious sell-out of the American national interest, U.S. corporations have complied. Unlike their peers in places like Korea, Japan, Germany, and Taiwan, they have not had much choice: whereas other nations’ governments stand behind their corporations and work hard to stem the leakage abroad of key production technologies, Washington lets the “wisdom” of the market prevail. As the New York Times has pointed out, a current example concerns Intel and Qualcomm, which have very similar technologies that China is angling to acquire. From Beijing’s point of view, it is taking candy from a baby. The two American companies can be pitted against one another in the certainty that one or other will soon cave. It is the group versus the individual and in a well-organized groupist society, the group always prevails. But don’t tell that to Barack Obama and the Wall Street advisers he trusts. Eamonn Fingleton
So let me get this straight. Many conservatives (not Republicans, but conservatives) have been saying these exact things for well over a decade, and suddenly the left is waking up to it as well? Excellent! Welcome, glad to have ya. Finally. Maybe Libertarians/conservatives can actually see some unity with some views on the left and finally push forward in the same direction for once - for the common man's benefit. I won't hold my breath, but it's nice to see a moonbat and his ilk finally acknowledging some of this for once.
Obama makes deal with China where the US has to cut emissions and China needs to start cutting emissions later. Way later. LoL Yes, the US is finished with pols like Obama and the people who voted for him.
We also have significant foreign assets. Last time I saw the data, admittedly a few years ago now, the offset looked to be about 90%.
From the author: In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity (1999) Blindside: Why Japan Is Still on Track to Overtake the U.S. By the Year 2000 (1995). The old are rarely able to adapt. Good fishing expedition, Db.
Ah, trouble in paradise as the liberals fracture. Let me get my popcorn.....ok, please proceed. Oh, and Covertibility - once again attacking the source and not answering any of the content. Never saw that before.
Db, Tsing is right. To resolve our difference of opinion without a big internal brawl, should we turn to The Bible, or to The Fountainhead, for the truth?
The Constitution might be a good place to start. Its the basis of our strength, or at least it *was*.