US China Relations at a Low: China at the Center of the Global Currency War and a Missed Opportunity

When did China become the enemy of the world?

In august, China became the second largest economy in the world, surpassing Japan to take the #2 spot. Since then it appears every country in the world has marked China as public enemy #1.

The recent controversies in the East China Sea between Japan and China sparked an international dispute between the two nations. While the situation is improving, with Japan’s return of the boat captain arrested in disputed waters, the causes of the dispute are still unresolved. The East China Sea is the wild west, a potential gold rush of oil, minerals, raw materials, and rich fishing grounds, waiting to be harvested and used. The problem with this region is that it is a cluster bomb waiting to explode; Vietnam, Taiwan, Malaysia, Brunei and the Philippines and Japan, each have territorial claims in the East China Sea, while China claims the entire region for itself (The BBC, The Inquirer).

At some point in the near future, these nations will begin to exploit these much-needed resources not just fishing rights. Increasingly, it appears that nations are preparing for confrontation rather than peaceful negotiations. Currently, Japan and India are forming a military defense alliance, and are for the first time beginning bilateral military exercises (India’s National Newspaper). Japan also disdains Chinese economic power considering them a junior nation underdeveloped and on the verge of bubble collapse similar to the Japan situation in the 1990’s, with a huge disparity in GDP per capita (Asian Times).  WWII atrocities always loom over Sino-Japanese relations, resulting in an ever-growing Chinese military to secure their place as a world power to prevent repeated history and to secure resources for growth. With these developments it is very doubtful that these antagonistic nations will become friendly neighbors.

China has also gotten into a row with the world’s largest economy America. The United States Congress has decided that in the interest of manufacturing sector in America, that it is time the Chinese raise the value of their currency to make their goods more expensive or they will begin placing a tariff on imports from China. This scheme hopes to develop US manufacturing domestically and cut exports from China to create jobs and cut China out of US domestic markets. China is becoming the scapegoat of America’s political leaders who have failed to ensure stable growth, jobs, and responsible fiscal governance. The US is risking relations with China to distract the American people from their own political mess, rather than waiting for the Yuan to naturally appreciate (which it is, see My Article); this is terrible Foreign Policy! Now the Europeans are following suite with their own requests for China to raise the Yuan’s value to help raise their own manufacturing base to export their way out of recession.

On top of currency issues, China and the US are at a standstill with current climate and trade agreements. Agreements made at Copenhagen are becoming unacceptable to China and the developing nations as they struggle to survive and sustain growth during the recession. This continues the trend of confrontation between developed and developing countries, pitting China once again against the USA.  The IMF has noted the currency war by the United States, Europe, China, Japan and others to lower their currency are contributing to international unrest and the inability to move forward on international trade and environmental agreements. If we want a peaceful world we cannot compete on who can devalue their money the fastest (The Guardian).

IMF video discussing currency war:

http://www.reuters.com/news/video/story?videoId=163802473&videoChannel=5

Taming the Tiger

While the world watches and shuns the growth of China, we should not ask ourselves how we can we stop that growth; rather, we should be using that growth to benefit America. The rise of China as the factory of the world and its return as a great power is a foregone conclusion, it’s time we accept that fact and move forward, gaining the benefits of that relationship while the friendly hand is still open. A good first start to building friendly relations would be to continue our policy of free trade with China, allowing for cheap goods to flow into the US benefiting our consumer base. Structural changes in our trade should be made such as the development of high-tech industries. China will need these advanced technology to sustain future growth, and the US a developed nation should use their labor capital and developed economy to export these high quality products such as mining equipment and advanced industrial parts to China.

The US should position themselves as a mediator between China and Asian Countries to determine mineral rights in the China Sea before the issue explodes; this is a necessary challenge that must be overcome. If we can help encourage a solution to this territorial dispute to avoid a future conflict when it comes time to harvest these needed resources. This coming conflict is only escalating and we need to diffuse it before diplomacy becomes even more difficult.

While China is a dictatorship, it is a society that is changing. Democratic reforms are slow and brutal gulag prisons await those who openly defy the government. Yet, the development of a capitalist, free enterprise economy in China will only enhance the yearning of the people of China to be free. With the rise of economic freedom comes the rise and desire for political freedom. The rising middle class created by international trade will eventually demand the birthright as free people: Liberty.

If the US shuns their economic relationship with China, these democratic ideals (represented by capitalist democracies) will become in the minds of the Chinese, antithetical to Chinese nationalism. The US will increasingly appear an enemy to the people of China, alienating the free world and requiring greater political crackdown in China due to civil unrest from low employment. Trade sanctions will hurt the Chinese middle class and America consumers: a trade war is the worst solution! If we continue our free trade policies with China (which benefits America anyway) we can increase our relationship with China, gaining leverage over China in political issues such as human rights. Rather than attempting to cut China out of the picture, we can leverage our friendship to encourage political reform, and freedom of information. Only with the leverage of as a trade partner can the US encourage China to progress to a more free society.

A stronger friendship with China will also make internal agreements and foreign policy accomplishments easier. The Doha Trade Negotiations round is an abysmal failure and environmental negotiations made at Copenhagen are at a standstill due to the increasing competition between developed and developing nations. If we used our friendship with China (leader of the developing world) strategically, we could rally support behind trade agreements, and solve international disputes (Associated Press). Greece and Italy have already perused this strategic relationship with China reaffirming their friendship and trade alliance.

The growing trade, reserves of foreign assets, and economic size of China and the US have linked the fates of our nations. Let us use this strategic relationship to our benefit rather than allowing it to become a problem. It is time the United States faces reality and makes a strategic ally out of China rather than a strategic and powerful enemy!

-Daniel Sniffin

Further Learning

Interview with Premier of China Wen Jiabao: http://www.danwei.org/video/wen_jiabao_on_cnn.php

China becomes second largest economy: http://www.csmonitor.com/Commentary/the-monitors-view/2010/0816/China-becomes-world-s-second-largest-economy-but-it-s-far-from-being-a-leader

Brazil gets involved: http://www.theglobeandmail.com/report-on-business/economy/world-is-in-currency-war-brazil/article1728151/

China holds up climate talks: http://www.guardian.co.uk/environment/2010/oct/06/china-climate-talks-us-negotiator

Sources:

The Hindu: http://www.hindu.com/2010/09/29/stories/2010092956252200.htm

Asian Times: http://www.atimes.com/atimes/Japan/LI29Dh01.html

The AP: http://www.google.com/hostednews/ap/article/ALeqM5gON3fOS44QCo6_Gopk2pBjtLd6nwD9IM8QC01?docId=D9IM8QC01

The Inquirer: http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100925-294185/Aquino-Asean-united-vs-China-on-territorial-dispute

The BBC: http://www.bbc.co.uk/news/world-asia-pacific-11473751

The Guardian: http://www.guardian.co.uk/business/2010/oct/06/currency-war-warning-imf-chief

IMF Video: http://www.reuters.com/news/video/story?videoId=163802473&videoChannel=5

Rahm Emanuel Goes To Chicago, Asserting Liberal Nationalism Over Representative Government



Tyranny From Above, Never From Below

While some may view Rahm Immanuel’s attempt to run for mayor of Chicago as simply a classic example of an arrogant politian stretching the law for this own political gain; it displays an even deeper trend in Liberal ideology that is eating way at the fabric of American society. This ideological poison is a belief in nationalism over federalism, and a denial of political representation in favor of bureaucratic governance.

Since the rise of American progressivism, the powers of states and local municipalities have been subverted under federal control. In the 1910’s under Wilson and in the 1930’s under FDR to the present day, the federal government has seized powers that were never granted to it by the US constitution and were meant to be in the control of state governments (see the 10^th amendment to the constitution!!!).  This trend is the reason why the federal government has grown exponentially, seizing powers meant to be run by the states such as education and almost all welfare programs. The push for a national healthcare system is a clear example of Liberal distain for local governance. If one remembers Scott Brown’s victory in Massachusetts it was primarily due to the people of Massachusetts already having their own state run socialized healthcare system and not needing a federal one. The Federal government was seizing the power over healthcare, taking it away from the people of Massachusetts; the people voted in Senator Brown to vote against this federal takeover.

Liberals believe they know better than the direct representatives of the people on the local level and seek to force citizens to accept the Liberal agenda in states where it would never pass state legislatures or popular votes. Liberals believe those who deny their agenda are too “stupid”, “brains washed” or “corrupted” to see the merits of the plan that is the pathway to social liberty and equality for all. Therefore, Liberals seek to impose a tyranny on society by ignoring the constitution and 10^th amendment, forcing everyone to accept nationalist policies. Liberals treat the American people like naughty children to be dealt with and babied. Representative government on the local and state level prevents Liberal reform so it must be destroyed and replaced with nationalism.

Liberals typically use the argument that massive welfare programs would not be possible without the aid of the federal government, because the states do not have the resources to complete welfare goals (ignoring the obvious solution of allowing the states to tax more and lower federals to pay for state programs). This is an unsubstantiated red hearing constructed to justify national tyranny and destruction of the constitution for the sake of progress. Nations throughout Europe have adopted the policies Liberals desire with populations of under 5 million. Most Liberal states easily achieve these population numbers and could implement socialist states similar to European “utopias” whenever they desire. Yet, they choose not to because the people don’t desire it! Instead of believing in bottom up representation, Liberals have forged ahead with imposing their utopian vision on the entire nation. They believe they are smarter than the plebian classes who they must coddle and manipulate for every election to achieve their visionary future.

Spin Doctors

Ron Emanuel personifies this Liberal position. His actions throughout his years as Obama’s chief of staff and campaign advisor show his political stance on The People. He announced in 2008 the strategy and planning for media relations and presidential action would carried out just like it was during the presidential race. Larry King’s interview with Bob Woodward (by no means a conservative) for his new book “Obama’s Wars” gives us a clear glimpse into the Obama Whitehouse as run like a presidential campaign. In the interview , Obama is described as split over every issue between Emanuel with his fellow media advisors, and Obama’s policymaking teams. With policy compromised for political poll numbers. Each action taken and word stated by Obama is carefully crafted to overcome and manipulate the “dumb, stupid, misunderstanding, mislead, fool hearty, backward, crazy and racist” American people, instead of honest, upfront policy decisions.

(See endnotes for Woodward interview)

Emanuel’s position in the White-house as chief of staff and campaign manager as minister of propaganda (not nefarious per say) show a clear trend of the Liberal elite towards disdain for the american people. Rather than being honest and attempting to convince people to adopt their ideas, Liberals feel they must control and manipulate them so that elections are won, and the nanny state agenda can be forced on the people who would not accept it otherwise. IT’S FOR YOUR OWN GOOD!

Emanuel’s attempt to run for mayor in a city where his residency is in question, demonstrates his disdain for representative politics and the belief in a governing class of intellectual elite. By going to Washington Emanuel sacrificed his residency in Chicago for a chance at national politics. Now that a mayoral position has opened up, Emanuel has seized an opportunity to seek office. He no longer is living in the town he calls home and yet he wants to represent the people there? This is a clear disdain for representation of a people coming from among the citizenry of Chicago.

Hillary Clinton, before her election to New York’s senate seat in 2000, bought a house for the specific goal of seeking office there. Clinton and Emanuel’s actions are perfect examples of Liberals who believe in their own social caste of career politicians who can serve the people anywhere, and qualified for any office.  The politics, needs and beliefs of people vary from state to state; America is a diverse country of over 300 million people, yet Liberals believe in a Uniform America. This Uniform America is a place where every city and state should achieve the same goal of a utopian feature run from the capital of Washington. Policies based on geography shouldn’t differ because everywhere should be made to reflect a care-taking government that acts to shield people from themselves, and decisions can be made by any “properly” educated intellectual. The Liberal dream is a nation without these boundaries of states, and national government administering through a bureaucratic system of professional politicos, a just utopia, where equality and socialism is guaranteed! Theirs is a a movement called progressivism and Uniform America is their true goal whether its naive ones know it or not!

It’s time American’s say NO to a political social class whether Democrat or Republican Liberal Progressive, that can bend the rules to their gains, and does not recognize the value of representation from among one’s peers. Vote out your career politician and put in a true representative from among THE PEOPLE!

Endnote: Woodward Interview with Larry King

Sources/Further Reading:

http://larrykinglive.blogs.cnn.com/

http://www.foxnews.com/politics/2010/01/11/obama-going-months-press-conference/

http://www.theblaze.com/stories/define-here-rahms-im-home-chicago-video-taped-in-dc/

http://www.politico.com/news/stories/1010/43080.html

http://www.nationalreview.com/campaign-spot/247973/his-rahm-page-through-washington-comes-end

http://www.nationalreview.com/corner/248536/perspective-yuval-levin

http://www.glennbeck.com/content/blog/stu/?p=1014

The Ideological Drive for Balanced Budgets and Where the Right Splits

Everyone Agrees, Deficits are the Problem, Not the Solution!

With Washington on a “recovery” spending binge and Congress participating in deficit spending for the last 30 years, the country is sitting on a mountain of debt. The American people have decided it time we stop increasing the debt and balance the budget. The massive entitlement program created by Socialist Democrats and Liberal Republicans cannot be sustained at the current tax rate. Deficit spending cannot work as a long-term solution, since the federal debt will eventually grow too large, devaluing the currency and collapsing the economy. There is a choice to be made: either the budget must be balanced through cutting programs (spending) or increasing taxes. Liberals who are supporting spending increases have decided that raising taxes “at some point” in the future is the answer (the alternative being to bankrupting the treasury); Conservatives desire a different path.

In Classical Liberalism (Conservatives and Libertarian ideology), there are many different theories on government methods to regulate spending and pay off national debt. The schools of thought in this ideology all include a core belief in smaller government and fiscal responsibility to create a balance budget but diverge in its execution.  This small government school of though is found among Conservative/Libertarian Republican circles but also exist among fiscally responsible Democrats who also desire balanced budgets but with more active government spending policies.

The Schools of Thought for Balanced Budgets

The diverse opinions within Classical Liberalism are administrative disagreements on the approach lawmakers should take when tackling budget problems. These strategies for fiscal budgeting can be sorted into three groups: Those who believe in balanced budgets with reciprocal tax increases to meet deficits, those who believe in cutting spending to meet current tax levels, and those who believe maintaining deficit spending when times call for it.

Among one school of fiscal Conservatives (and many Liberals who believe in responsible government) the balancing of the budget is the prime mission of government before new spending or tax decreases can be made. Government must have a balanced budget immediately, because the debt it a seeping wound of the nation’s wealth, and must be fixed before it grows too large. This first group of Conservatives believe the best way to balance the budget is to raise taxes to eliminate the deficit. While believing in smaller government in the longterm, these individuals desire a quick solution to debt by balancing budgets in the short-term. Once government spending is determined for a fiscal year, the taxes for that year should be raised to meet that level of spending, otherwise the debt will eventually destroy the nation. In the long-run decreasing taxes and decreasing spending can occur simultaneously, maintaining balance.

The second group of fiscal Conservatives is concerned with out of control spending and wish to prevent tax increases which decrease tax revenues and economic growth. These theorists believe in supply side economics endorsing the concept that government revenues decrease, as taxes are increase and reciprocally, revenue increases and the economy grows when taxes are lowered. Conservatives of this supply side economics school believe in a massive curbing of government expenditure to reduce the deficit. Programs must be cut and waste removed to reach a point where government expenditures meet the current or lowered tax rate.

These first two groups of fiscal hawks share a common goal of reducing the federal deficit to eventually pay off the national debt. One is willing to forgo pushing for smaller government at the start and desire to balance the budget immediately by raising taxes, whiles the other, strives to attack “wasteful spending” and cut federal expenditures to equal current tax levels. These groups both believe strongly in the concept of balanced budgets and have adopted positions and proposals to solve the issue.

The Plans and Where Conservatives Split

Some fiscal hawks endorse changing the House and Senate rules on voting for spending bills and budgets. They support rules requiring Congress to need super majorities to vote on increases in spending and taxes which contribute to the culture of deficit spending in Congress. They also desire a line-item veto that would give the President power to veto specific spending proposals within any bill that could be considered pork, restoring fiscal responsibility. Another solution that has gained steam: is an Amendment to the Constitution requiring Congress to pass balanced budgets.

One such group known as “One More Vote” is petitioning Congress to adopt a previously attempted amendment that failed in 1995 by 1 vote. This Amendment would force Congress to balance the budget each year. A secondary effect of this proposed amendment would require 60% majorities in both houses of Congress to raise taxes or propose any spending increases.

The last group of conservatives that are fiscal hawks agree in principle with the first and second groups, but believe Congress should always maintain the ability to control the budget without structural change. They agree that spending should be cut and taxes should remain low, but after a balance budget is restored, Congress should maintain the ability to conduct deficit spending. This third group argues that there are many situations such as a recession, or infrastructure plans that may arise that will require spending beyond the proposed budget. While this group does not ignore the dangers of national debt, they are cautious to limit Congress’s ability to raise taxes or increase spending when necessary!

While each of these ideologies differs on methods to execute a balance budget and whether Congress can later deviate from this policy, the consensus among conservatives is that the national debt needs to stop its exponential growth before it is too late!