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China Has U.S. By The Purse
Who has real power over U.S. decision-making? If you think it is the White House, or even the Congress, think again. There has been a power shift underway for years and, believe it our not, our future and fortune rests in the hands of bureaucrats on the other side of the world. Sorry folks, but our red, white and blue economy is afloat because of members of the Politburo of the Chinese Communist Party.
Yes, the Red Menace that we spent so many years fearing as a military threat now represents a far more serious economic threat. Mao must be turning in his grave with the news that no less than six U.S. Cabinet members are on their way to the Middle Kingdom on Wednesday to beseech, beg, lobby and try to persuade the new mandarins not to sell off their vast reservoir of dollars.
There¡¯s an old saying that a person can be in trouble when he owes a bank a hundred bucks. But if he owes $100 million, the bank could be in trouble. We owe China billions, but they realize that collapse of American capitalism¡ªonce a goal¡ªcould also trigger a collapse of Chinese ¡°communism.¡± That¡¯s how mutually intertwined we have become, and how complicit we are with a government which the Committee to Protect Journalists says now jails more journalists than any other.
The New York Times reports on the big trip that will bring Treasury Secretary Henry Paulson and company on their ballyhooed "excellent adventure" to Beijing. Yet it doesn¡¯t look like much will happen:
Mr. Paulson conferred this week with business leaders urging him to bring about changes in China¡¯s economic practices, particularly its regulated economy, manipulation of currency levels to spur exports and its failure to crack down on piracy of software, pharmaceuticals and other items.
So we will hear a lot of rhetoric in the days to come about China¡¯s failures to honor agreements and violations of trade regimes. They will all be true¡ªbut besides the point. Who has the power to bring China into line? We don¡¯t. We are as dependent in Beijing as we are in Baghdad.
And that war could do more damage to the U.S. than the defeat in Iraq.
Already, as I have reported , the Treasury Department has opened a global crisis management center that sounds very much like an economic war room. It is headed by none other than Jim Wilkinson, the GOP info warrior who ran the Coalition Media Center during the opening days of the Iraq War, when great victories were all we read about in the news.
What we are not reading today is how serious this is. And how our national and consumer debt is at the center of it. Reports The Economist:
A slump in the American economy is likely to be cushioned by banks and investors overseas because it could bring them down, too. What this means is that we are dependent on what others do or fail to do. Washington is actually undermining the dollar in hopes it will make our exports cheaper and thus ease the deficit. It¡¯s our way of pressuring the Chinese and try to get them lower the value of their currency.
Clever? Don¡¯t be so sure. They are not fools.
Forget the Beijing Olympics. This is the real game in town.
Unfortunately, the real news about these manipulations is buried in the labyrinth of the business pages, where many claim of having the "MEGO¡± (My Eyes Glaze Over) effect.
While we watch one war go up in flames, the matches are being lit for another one.
Danny Schechter edits MediaChannel.org. He is the director of "In Debt We Trust," a new film on the credit crunch, and author of Falun Gong¡¯s Challenge to China. Comments can be sent to firstname.lastname@example.org.
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