Pat Buchanan still spot on after all these years….
You export your manufacturing base and end up dancing to your creditors tune. You have’ no leverage or muscle in any negotiations other than praying for “understanding” or begging them not todon’t pull the plug on their investments. Never mind that everyone in America borrowed themselves into the poor house and destroyed much of the underlying assets that foreigners need to rely on to buy our federal debt.
Now that we have slowed, it’s China’s turn to feel the pinch. They must sell less to us because we are going broke. Their factories are going to close. No income for all that newly created Treasuries that Paulson has drummed up.
China has over 100 million unemployed people as it is. Taking to the streets and smashing things is not unheard of. Try doubling that number and get a whiff of the fear from that little item. Think of a pissed off ant hill loosed on the world.
With her immense trade surpluses, China’s reserves have surged from $200 billion in 2002 to $2 trillion. Awash in dollars, Beijing now waits patiently, writes McMillion, to cherry-pick the crown jewels of America’s industrial empire—“patents, talents, natural resources, brands”—at fire-sale prices in the global crash.
As America plunges into recession and our industry hollows out, while China is still growing at 9 percent, as the 20th century’s greatest creditor nation now borrows from Beijing to pay for booster shots for its sick economy, may we hear once again the Bush-Clinton refrain about how the terrible danger we all face is from “protectionism.”