At the Munich Security Conference the U.S. and its allies had no idea of how to handle China, a problem of their greed and stupidity. The West is divided, confused. What to do about Huawei? Really, what to do with China? So when Mike Pompeo…proclaimed…”we are winning,” the largely European audience was silent and worried in what sense “we” existed longer. In the meantime, Europe, including the U.K, finds itself in a mincer between the U.S. and China Unfortunately for us. China has followed the U.S. playbook and has outplayed the West, especially the U.S. Walter Rostow of the Johnson administration, an avid anti-communist, wrote the playbook: How can an undeveloped nation take its place among the leaders of the world. The answer: Industrialize as rapidly as
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At the Munich Security Conference the U.S. and its allies had no idea of how to handle China, a problem of their greed and stupidity. The West is divided, confused. What to do about Huawei? Really, what to do with China?
So when Mike Pompeo…proclaimed…”we are winning,” the largely European audience was silent and worried in what sense “we” existed longer.
In the meantime, Europe, including the U.K, finds itself in a mincer between the U.S. and China
Unfortunately for us. China has followed the U.S. playbook and has outplayed the West, especially the U.S.
Walter Rostow of the Johnson administration, an avid anti-communist, wrote the playbook: How can an undeveloped nation take its place among the leaders of the world.
The answer: Industrialize as rapidly as possible. Do whatever it takes. China did just that.
In its five year plans, China acknowledged its debt to Rostow and started to industrialize. While I have described this process many years ago, I again outline it briefly here.
First: China entered the W.T.O. Bill Clinton and Congress were accommodating and instrumental:
Last fall, as all of you know, the United States signed an agreement to bring China into the W.T.O, on terms that will open its markets to American products and investments.
Bill Clinton speaking before Congress, March 9, 1998
Second: China offered dirt cheap labor, labor that had no effective right to bargain
Third: China did not require a company to obey any environmental regulations.
Fourth: China often offered a ten-year grace period without any taxation. If there were taxes they were less than those on its own indigenous firms.
Fifth: China manipulated its currency, making products cheaper to make but getting higher profits in the West.
The net result: Massive trade imbalance in favor of China. CEOs and their henchmen made enormous profits. Devastated American workers were told to go to school, to work harder, to make themselves invaluable to their companies. A cruel joke.
In droves, Western companies outsourced to China, emptying one factory after another. Anything that could be outsourced was outsourced. China, of course, was not the sole beneficiary of U.S. foolishness. India, Mexico, Vietnam…wherever environmental standards were non-existent, wherever workers had no effective rights…these were the third world countries the U.S. used. The health and safety of third world workers was of no concern. They were many–and they were expendable.
U.S. companies were so profitable that special arrangements were made to repatriate those profits back to the states: pennies on the dollar. Many billionaires should really be thanking China.
Americans were considered only consumers/ The more they consumed, the richer the rich became. Credit was made easy. George Bush’s answer to 911 was: Go out and shop.+
Between The Financial Modernization Act of 1999 and Free trade insanity, the working class of American faced the crash of 2008.
China became the factory of the world, not through automation, but through dirt cheap labor. China poisoned its atmosphere and polluted its water. Face masks were everywhere. Nonetheless, China had become undeniable economic power, challenging the U.S.
At the same time, China educated great numbers of engineers, inventors, and scientists. Huwaii became the problem…really, Huwaii is just an emblem of it.
The U.S. in its greed had became lazy. It poured money into weapons. The U.S. decided to build a space force. U.S. bullied countries with foolish sanctions if those countries did not make their billionaire class more profitable. Sanctions instead of competition became last gasp, the last grasp at profit. Flabby and greedy, the U.S.is no longer competitive. It has become just a bully, a threat to everyone.
Trump, of course, played both sides of the problem. He railed against the outsourcing, but has done little to correct it, giving instead massive tax breaks to the wealthy, gutting environmental regulations…laying waste to everything he touches. Pelosi and Schumer pretend to care, but they have nothing to offer. Like Trump, they worry about China. Like Trump, they have no answer, except for more wars and more sanctions.
Hillary and Bill should take a bow. They began this debacle. Once things were made in the U.S.A. Go to any Walmart store and read the label: Made in China.
Pelosi and the free trade Democrats should take a bow…as should all the Republicans. All of them should hold hands, give each other a quick hug and smile. They and their friends are rich.
To China belongs the future.