THE CHINESE COME CALLING...Creditors get to make that kind of call
I have included the comments posted so far as additional thinking contributed by American citizens...
========================================
Published on Wednesday, July 29, 2009 by TruthDig.com
The Chinese Come Calling
by Robert Scheer
What a hoot. The Chinese Communists invaded Washington on Monday demanding not that we sacrifice our freedoms but rather that we balance our budget. Creditors get to make that kind of call.
And the Marxists of Beijing, who have turned out to be the world’s most prudent bankers, are worried about their assets invested in our banana republic.
“China has a huge amount of investment in the United States, mainly in the form of Treasury bonds. We are concerned about the security of our financial assets” was the way China’s assistant finance minister put it.
Briefing reporters at the U.S.-China Strategic and Economic Dialogue, he added, “We sincerely hope the U.S. fiscal deficit will be reduced, year after year.” Quite sincerely, one suspects, given a U.S. budget shortfall this year that is slated to reach $1.85 trillion.
Suddenly, it was U.S. officials who were promising deep reform to their disgraced economic system rather than demanding it from incompetent foreigners. President Barack Obama’s economic team of Clinton-era holdovers, who a decade ago had hectored China on the virtues of fiscal responsibility, now were falling over themselves to reassure the Chinese that their $1.5 trillion stake in U.S. government-issued securities is safe, and that they should buy more at this week’s $200 billion Treasury auction.
If they don’t, we’re in big trouble.
U.S. Treasury Secretary Timothy Geithner promised to behave, saying the U.S. is “committed to taking the necessary measures to bring our fiscal deficits down to a more sustainable level once recovery is firmly established.” Now let’s hope that the Chinese Communists and their natural allies among congressional deficit hawks will be able to keep him to his word.
And don’t blame any of this on peacenik liberals. The new conciliatory—nay, deferential—tone toward China precedes the Obama administration, having begun in bilateral talks during the last years of the Bush administration as the U.S. economy began its ignominious downfall.
It was George W. Bush’s treasury secretary, Henry Paulson, who set the course when the former Goldman Sachs chairman realized how dependent were his Wall Street buddies on Chinese goodwill.
But from all of this adversity may come something good: recognition that the United States is not the repository of all wisdom. Maybe the Chinese have found a model different from ours that also works? Might there not be an Arab, Latin or Indian one that also qualifies and need not be overthrown?
The tone of this week’s talks, ironically held at the Reagan Building and co-chaired by Geithner and Secretary of State Hillary Clinton, finally signaled the end of the Cold War assumption that regimes with labels like communist and capitalist could not form profitable partnerships.
On the contrary, as Secretary Clinton noted, it is time to move from “a multipolar world to a multipartner world.” And President Obama in opening the conference made clear that the partnership between China and the U.S. is decisive: “The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world.”
Mark it as a historic Rip van Winkle moment. For those who recall the rhetoric of the Cold War, the idea that we would someday be cooperating with Chinese Communists because they had humbled us economically rather than militarily is a startling turnabout. How did they get to be better capitalists than us,
and being that they are good capitalists,
why are we still spending hundreds of billions a year on high-tech military weapons to counter a potential Chinese military threat when the weapons they are using are all market-driven deployments?
A recognition that our tension with China is not military in nature came at this week’s conference in an announcement by Adm. Timothy Keating, commander of the U.S. Pacific Command, that agreement had been reached with his Chinese counterparts on improving relations: “A statement was made by a Chinese delegation official yesterday [Monday] that no country can develop sound policy if they try and do so in isolation. And I think that’s a great way of addressing the sense that all of us feel, the desire, to get back together again and discuss exercises, discuss personnel exchanges, discuss responses to humanitarian assistance crises and the provision of disaster relief.”
Not bad for a start, and maybe we can help solve our economic problems by selling our latest high-tech weapons to China as we do to the rest of the world.
Or better yet, we could do some serious damage to our deficits, and our dependence on the Chinese, by sharply cutting expensive weapons programs now that the Cold War is finally over.
© 2009 TruthDig.com
Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.
=======================================
8 Comments so far
ezeflyer July 29th, 2009 2:19 pm
"The owners of the country ought to run it"
Maybe the Chinese should run our country.
Gail July 29th, 2009 12:54 pm
"U.S. Treasury Secretary Timothy Geithner promised to behave, saying the U.S. is “committed to taking the necessary measures to bring our fiscal deficits down to a more sustainable level once recovery is firmly established."
I can't wait to hear how Geightner plans on doing this when the government is taking on $Trillions of the toxic assets that the banks don't want on their balance sheets.
Is he Harry Houdini or an Alchemist?
Siouxrose July 29th, 2009 2:01 pm
Sioux Rose
GAIL: He suffers from a truth deficit, and the acquired, "Excessive Greed Disorder." Both corrupt judgment and distort conversation.
ClassAct July 29th, 2009 12:29 pm
The recovery that Geithner makes conditional for US compliance is reliant upon two factors:
an increase in consumer spending, which has been funded by means of credit since the US no longer creates consumer goods in any close proportion to its demand;
and an increase in defense spending, also funded by credit, to turn high cost military technology against China and others, which are the goods the US continues to produce in excess of its own prodigious demand.
Both of these require the increase in the US fiscal deficit, and both of these function as direct intravenous feeding into America's morbidly obese corporations – institutions that have just been given a trillion dollar glucose injection that would have killed a healthy economy.
There is no way out of this crisis that does not involve pain that must be kept from the public, who bears no responsibility for the matter.
Progressive income tax rates must be restored to 1950s levels, tax loopholes must be closed, and unions must be revitalized with government protection.
Only then can we hope to pass muster in the long term for our Chinese creditors.
ringo3khan July 29th, 2009 1:03 pm
Actually I think you're quite correct.
And then we would have to ask ourselves what will happen when the buffoons in DC can't achieve the income tax changes necessary to accomplish this? Essentially, the US has offshored it's currency and in exchange for a devaluing dollar what will the Chinese demand in repayment? As the economy continues to crumble and less is purchased from abroad where is the "repayment" mechanism?
US based Corporations are slowly starting to leave the US and the youthful talent pool is looking overseas for job opportunities. The US will slowly come to resemble the Lower Ninth Ward after Katrina. The only thing left for the US to exchange for the debt is land or an equity share in GM?
Alex Szczech July 29th, 2009 11:34 am
“We sincerely hope the U.S. fiscal deficit will be reduced, year after year.”
Like that's going to happen! LOL
Saturnalia July 29th, 2009 2:23 pm
Oh, it's going to happen.
No, you're not going to like it much at all either. The slap you recieved from the Chinese is very much like the slap you delivered to the Brits and French during the Suez Crisis; you can't pay for your wars so stop fighting them.
No, I daresay that yanks will not react positively to this situation (should they understand it...).
Jethro Tullamore July 29th, 2009 11:29 am
From the article:
"Maybe the Chinese have found a model different from ours that also works? Might there not be an Arab, Latin or Indian one that also qualifies and need not be overthrown?"
Two thoughts:
First, what works for the Chinese is what the bondholding class here wants---a Stalinist state apparatus and a crony-capitalist economy. Mission (almost) accomplished. Also note that China has studiously avoided any attempt at empire building and the inevitable military/financial quagmires that follow.
Second, there's a model that works all too well, in the eyes of those same bondholders---the Cuban one, which is portrayed in the corporate media as a disaster, but which has improved the lot of the Cuban citizenry despite the US's vicious and unrelenting attacks against it for more than a half-century.
====================
Link: http://www.commondreams.org/view/2009/07/29-4
========================================
Published on Wednesday, July 29, 2009 by TruthDig.com
The Chinese Come Calling
by Robert Scheer
What a hoot. The Chinese Communists invaded Washington on Monday demanding not that we sacrifice our freedoms but rather that we balance our budget. Creditors get to make that kind of call.
And the Marxists of Beijing, who have turned out to be the world’s most prudent bankers, are worried about their assets invested in our banana republic.
“China has a huge amount of investment in the United States, mainly in the form of Treasury bonds. We are concerned about the security of our financial assets” was the way China’s assistant finance minister put it.
Briefing reporters at the U.S.-China Strategic and Economic Dialogue, he added, “We sincerely hope the U.S. fiscal deficit will be reduced, year after year.” Quite sincerely, one suspects, given a U.S. budget shortfall this year that is slated to reach $1.85 trillion.
Suddenly, it was U.S. officials who were promising deep reform to their disgraced economic system rather than demanding it from incompetent foreigners. President Barack Obama’s economic team of Clinton-era holdovers, who a decade ago had hectored China on the virtues of fiscal responsibility, now were falling over themselves to reassure the Chinese that their $1.5 trillion stake in U.S. government-issued securities is safe, and that they should buy more at this week’s $200 billion Treasury auction.
If they don’t, we’re in big trouble.
U.S. Treasury Secretary Timothy Geithner promised to behave, saying the U.S. is “committed to taking the necessary measures to bring our fiscal deficits down to a more sustainable level once recovery is firmly established.” Now let’s hope that the Chinese Communists and their natural allies among congressional deficit hawks will be able to keep him to his word.
And don’t blame any of this on peacenik liberals. The new conciliatory—nay, deferential—tone toward China precedes the Obama administration, having begun in bilateral talks during the last years of the Bush administration as the U.S. economy began its ignominious downfall.
It was George W. Bush’s treasury secretary, Henry Paulson, who set the course when the former Goldman Sachs chairman realized how dependent were his Wall Street buddies on Chinese goodwill.
But from all of this adversity may come something good: recognition that the United States is not the repository of all wisdom. Maybe the Chinese have found a model different from ours that also works? Might there not be an Arab, Latin or Indian one that also qualifies and need not be overthrown?
The tone of this week’s talks, ironically held at the Reagan Building and co-chaired by Geithner and Secretary of State Hillary Clinton, finally signaled the end of the Cold War assumption that regimes with labels like communist and capitalist could not form profitable partnerships.
On the contrary, as Secretary Clinton noted, it is time to move from “a multipolar world to a multipartner world.” And President Obama in opening the conference made clear that the partnership between China and the U.S. is decisive: “The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world.”
Mark it as a historic Rip van Winkle moment. For those who recall the rhetoric of the Cold War, the idea that we would someday be cooperating with Chinese Communists because they had humbled us economically rather than militarily is a startling turnabout. How did they get to be better capitalists than us,
and being that they are good capitalists,
why are we still spending hundreds of billions a year on high-tech military weapons to counter a potential Chinese military threat when the weapons they are using are all market-driven deployments?
A recognition that our tension with China is not military in nature came at this week’s conference in an announcement by Adm. Timothy Keating, commander of the U.S. Pacific Command, that agreement had been reached with his Chinese counterparts on improving relations: “A statement was made by a Chinese delegation official yesterday [Monday] that no country can develop sound policy if they try and do so in isolation. And I think that’s a great way of addressing the sense that all of us feel, the desire, to get back together again and discuss exercises, discuss personnel exchanges, discuss responses to humanitarian assistance crises and the provision of disaster relief.”
Not bad for a start, and maybe we can help solve our economic problems by selling our latest high-tech weapons to China as we do to the rest of the world.
Or better yet, we could do some serious damage to our deficits, and our dependence on the Chinese, by sharply cutting expensive weapons programs now that the Cold War is finally over.
© 2009 TruthDig.com
Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.
=======================================
8 Comments so far
ezeflyer July 29th, 2009 2:19 pm
"The owners of the country ought to run it"
Maybe the Chinese should run our country.
Gail July 29th, 2009 12:54 pm
"U.S. Treasury Secretary Timothy Geithner promised to behave, saying the U.S. is “committed to taking the necessary measures to bring our fiscal deficits down to a more sustainable level once recovery is firmly established."
I can't wait to hear how Geightner plans on doing this when the government is taking on $Trillions of the toxic assets that the banks don't want on their balance sheets.
Is he Harry Houdini or an Alchemist?
Siouxrose July 29th, 2009 2:01 pm
Sioux Rose
GAIL: He suffers from a truth deficit, and the acquired, "Excessive Greed Disorder." Both corrupt judgment and distort conversation.
ClassAct July 29th, 2009 12:29 pm
The recovery that Geithner makes conditional for US compliance is reliant upon two factors:
an increase in consumer spending, which has been funded by means of credit since the US no longer creates consumer goods in any close proportion to its demand;
and an increase in defense spending, also funded by credit, to turn high cost military technology against China and others, which are the goods the US continues to produce in excess of its own prodigious demand.
Both of these require the increase in the US fiscal deficit, and both of these function as direct intravenous feeding into America's morbidly obese corporations – institutions that have just been given a trillion dollar glucose injection that would have killed a healthy economy.
There is no way out of this crisis that does not involve pain that must be kept from the public, who bears no responsibility for the matter.
Progressive income tax rates must be restored to 1950s levels, tax loopholes must be closed, and unions must be revitalized with government protection.
Only then can we hope to pass muster in the long term for our Chinese creditors.
ringo3khan July 29th, 2009 1:03 pm
Actually I think you're quite correct.
And then we would have to ask ourselves what will happen when the buffoons in DC can't achieve the income tax changes necessary to accomplish this? Essentially, the US has offshored it's currency and in exchange for a devaluing dollar what will the Chinese demand in repayment? As the economy continues to crumble and less is purchased from abroad where is the "repayment" mechanism?
US based Corporations are slowly starting to leave the US and the youthful talent pool is looking overseas for job opportunities. The US will slowly come to resemble the Lower Ninth Ward after Katrina. The only thing left for the US to exchange for the debt is land or an equity share in GM?
Alex Szczech July 29th, 2009 11:34 am
“We sincerely hope the U.S. fiscal deficit will be reduced, year after year.”
Like that's going to happen! LOL
Saturnalia July 29th, 2009 2:23 pm
Oh, it's going to happen.
No, you're not going to like it much at all either. The slap you recieved from the Chinese is very much like the slap you delivered to the Brits and French during the Suez Crisis; you can't pay for your wars so stop fighting them.
No, I daresay that yanks will not react positively to this situation (should they understand it...).
Jethro Tullamore July 29th, 2009 11:29 am
From the article:
"Maybe the Chinese have found a model different from ours that also works? Might there not be an Arab, Latin or Indian one that also qualifies and need not be overthrown?"
Two thoughts:
First, what works for the Chinese is what the bondholding class here wants---a Stalinist state apparatus and a crony-capitalist economy. Mission (almost) accomplished. Also note that China has studiously avoided any attempt at empire building and the inevitable military/financial quagmires that follow.
Second, there's a model that works all too well, in the eyes of those same bondholders---the Cuban one, which is portrayed in the corporate media as a disaster, but which has improved the lot of the Cuban citizenry despite the US's vicious and unrelenting attacks against it for more than a half-century.
====================
Link: http://www.commondreams.org/view/2009/07/29-4
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