Friday, February 5, 2010

Pique in (and at) Peiping

Too Big To Boss

A small debt produces a debtor, a large one an enemy
--Publilius Syrus, 1st century Roman aphorist

It’s good, I guess, that one place where the free market is still thriving is the deadbeat sector of our economy. Tune into commercial radio and you’ll be hosed by an infinite assortment of boiler room bandits promising to relieve your debt load. Whether you owe ten large to the IRS or your viscera to Visa, they promise to use their “special” and “secret” programs to lift you out of the hole and make you whole. Just dial the 800 number and you’ll soon be sauntering down Solvency street.
Our government, the biggest deadbeat of all, doesn’t have an 800 number it can call to escape penury. All it can do is to keep borrowing more bucks to cover the vig on those it already owes. This means importuning yet another handout from the Han.
Among ordinary mortals, debtors are afraid of sharks. They worry about being able to walk again after missing a payment. Certainly, they avoid antagonizing their creditors. Things are different at the highest reaches of power. While our treasury department is busy mooching from China, our Pentagon is using that money to muscle it. It’s as if I borrowed bucks from you to buy a gun to stick in your face.
The Chinese are ticked about Obama selling $6 billion in arms to Taiwan, the anomalous island entity that Washington recognizes as a de jure but not de facto province of China. Back in the Cold War, the U.S assumed a security role there analogous to, say, China protecting Hawaii from us.
Pundits see this gun-running to Taiwan as payback by Barack for Peiping’s “unhelpfulness” and “recalcitrance” on issues from Iran to trade and climate change. (Washington uses such terms, along with several others, including the always evocative “anti-American,” as euphemisms for disobedience. In other words, the Chinese are not doing as they’re told.)
The question is what the U.S can do about a willful China--apart from engorging its own military contractors? The answers range from nothing much to nothing at all.
It became obvious from early in George II’s reign that our empire was looking as enfeebled as Dracula confronted with a crucifix. The imperium’s great power was based on the three M’s of manufacturing, money and the military. But its glory days have long passed. Manufacturing has shrunk to 11 percent of the economy as foreign producers expand and domestic companies ship factories and jobs overseas. The mighty U.S. dollar plummets (but not this week) as Americans go into hock to buy stuff no longer made in the States. More concerned with contracts than combat, our bloated military is debilitated by corruption. Its incompetence has left Iraq a bloody mess. After nearly a decade it has yet to best a bunch of feudal cave dwellers in Afghanistan.
All of this is quite obvious to our Cathay creditors. So is the belt of military bases that the Pentagon is endeavoring to wrap around China’s girth. You’ve got to wonder if the Forbidden City honchos are amused or irked at their money being used to intimidate them? Are they’re anticipating the day when Chinese bases will encircle the U.S?
The sliver of the American media that pays attention to events beyond Tiger Woods’ libido has apparently received guidance from on high and has begun covering the new coolness between the colossi. They are discomfited by China’s insolence. They fear a trade war. A few even foresee eventual military confrontation. Others say it’s a teapot tempest that has to calm down because both sides have too much to lose.
The smarter ones, of course, are studying Mandarin.