Blaming the Chinese

I find some of  the comments I’ve read about Chinese “currency manipulation” that have been made by some Americans on this site and others quite interesting. Maybe it’s because I’m not an American, but I don’t find Chinese economic policies nearly as objectionable as many of you do.  The way the American political system is structured makes it very hard for your country to establish a coherent industrial policy, (except, of course, for the Pentagon).  In the absence of policies that actually try to promote American manufacturing, it’s almost inevitable that your country’s long term economic decline will continue, which in some ways is very unfortunate.

I don’t blame you for being upset about it, but blaming the Chinese for the long term decline of America isn’t very helpful.  Suppose the Chinese government really did massively raise the value of its currency, the way some of you apparently think it should.  What would happen? Wall Street firms that have bet that the Chinese will appreciate would make a lot  of money.  The value of Chinese investments in the US (mostly Treasury Bonds) would decline. Many Chinese workers in export industries would lose their jobs. Chinese economic growth would falter,  and Western media would soon be talking about how the Chinese Communist Party was losing the support of the Chinese people. US military hegemony in East Asia would seem more secure and  Obama might start bragging about the “next American century”.

This would seem very nice to many Americans (and quite unpleasant to most Chinese)  but would any of it help American workers or the American manufacturing industry?  Probably not. There are plenty of other low wage counties in Asia that could in a couple of years position themselves to take advantage of the sudden decline in Chinese competitiveness.

Do you remember how the Obama administration tried to get the G 20 to  go along with their plans to sanction China for “currency manipulation”? It didn’t work, because most of the rest of the world was mad at the US  because the Fed was flooding the world with US dollars under the label of “Quantitative easing”.  Honestly, the way the US has exploited the fact that the US dollar is the world’s reserve currency makes US charges that some other country is engaged in “currency manipulation” seem like a sick joke to many non-Americans.

The US owes vast sums to other countries. Are any of you at all worried about how hard it’s going to be to pay all that money back?  Of course not, and there is absolutely no reason why you should be, because all your debts to foreign countries are in US dollars.  Your government always has the option of printing  all the US dollars it wants. So even though the Chinese government has invested a lot of money in US bonds, do you really think they are ever going to get most of that money back? Or do you expect your government will someday use a little “currency manipulation” to  depreciate your currency,  and by so doing effectively default on its debts?

We’ve all heard the saying,  “Either you are part of the problem or part of the solution” .  China certainly has major flaws, and America has many great qualities, but unfortunately it sometimes seems to me that China is part of the solution, while America is the core of the problem.  The whole world has huge problems. Global climate change could be an absolute disaster. Far, far too many people suffer in horrible poverty. There are solutions to the world’s problems, but the world needs to work together to solve them. At the moment, you are the only country with the resources to lead the world in what needs to be done. But you don’t lead, because your leaders would find it ideologically and financially unprofitable to recognize what the world’s real problems really are. And so they try to distract you, and the rest of the world, by pretending to worry about minor or trivial problems, like a few Islamic radicals hiding in caves in Pakistan, or the Chinese government’s currency policy.  We’d all be better off if we weren’t so easily distracted.

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