A question arose at Quora that Vince Dhimos has decided first to answer at New Silk Strategies.
Q: ARE US DEMOCRATS AGAINST THE TRADE WAR WITH CHINA?
The trouble with the US political system has always been that the two parties and the candidates within the same party must struggle hard during each election campaign to distinguish themselves from each other. Because they are not fundamentally different in vital aspects of economics, military affairs and foreign policy. They're for an eternal war and an eternal ballooning debt. This is why while some Democrat candidates carp at Trump for his trade war, none of them are offering any specific proposals on how to end it and their ideas are all over the map, as reflected in this Reuters article.
And the trouble with the trade war is that it was something that most ranking Democrats and Republicans have actually desired to some degree or other in recent decades. Because it was a pipedream gone sour. They had hoped the free trade relationship between the US and China would drive a wedge between Russia and China, and just the opposite happened, and they had hoped China would become America’s workshop without costing Americans a dime. In fact, it degraded the US manufacturing base.
It all goes back to the 80s when Congress was debating whether or not to grant Most Favoured Nation status to China. At that time, it was the Democrats who resisted the most. In general terms, most politicians agree they were right. The US has created a monster.
Nixon had floated the idea of free trade with China amidst his project of opening up to China and establishing better relations with the country.
Nixon’s economic policies suggested he wanted an America that could get rich, or stay rich, without doing any of the traditional things that make or keep countries rich. It was also Nixon who initiated talks with Saudi Arabia to persuade that country and its Gulf State partners to use only US dollars in its oil trade and to keep all its reserves in US Treasuries, thereby creating a new currency concept, the petrodollar. He knew that the more a currency is used in world trade settlements, the stronger it gets, and the idea was to have the dollar become the hegemon among currencies, giving the US unlimited economic and political clout. The offer was that if Saudi went along with this, the US would use its military to protect its oil fields and the ruling family, who passed as royalty but in reality were nothing but uncouth glorified dictators. In 1974 Nixon and King Faisal in fact did sign such an agreement, which was kept under wraps and became a taboo topic among economists. Indeed, Nixon was the president who had just taken the US off the gold standard, and not only is there something inherently sleazy about having a currency held afloat with absolutely no real backing but it was clear to keen analysts that this arrangement could lead the US – through blackmail or excessive zeal to please the Saudis – to wage wars purely to please these dictators. So no one wanted to talk or write about the deal and the vast majority of Americans were therefore unaware of it, enabling the US to contrive conflicts with countries like Iraq and Syria that were disliked by the Saudis but posed no actual threat to the US people without having the sheeple suspect skullduggery. And of course, the pressure was twofold, since the countries on the Saudi blacklist were equally hated by Israel, creating a perfect storm for the hapless Shiites in the Middle East.
The idea of getting something for nothing, which underlay the petrodollar deal, was the child of the same brains that cooked up the China trade scheme, which, if properly managed, would allow China to become a colony for the US that would do its dirty labour and allow America to focus on finance instead of the economy. It was therefore akin to the Fed’s currently fashionable idea of just simply printing up dollars out of thin air, and the political class’s idea of using petrodollar hegemony as a bludgeon to beat into line any country daring to oppose US policies, even to the extent of renouncing their own economic interests, as Trump is currently trying to do with Germany.
Americans on both sides of the aisle and in both the grassroots and among the Establishment elite, in thrall to the Exceptional Nation narrative, have never been able to admit that the scheme of making China into a giant sweat shop; of allowing a brutal dictatorship to forge US foreign and military policy, thereby effectively turning the US military into a mercenary force; of simply printing money instead of addressing the real sector of the economy, and of bullying Europe into buying overpriced US LNG instead of the cheap Russian gas delivered by pipeline – in short, all these schemes, are blatantly sleazy and deeply immoral and no respectable nation would ever dream of treating other nations so shabbily. US and Israeli propaganda maintains that the Muslims are to blame for all the conflicts in the Middle East – ignoring the massive Western role therein – while the US political class blames China and Russia for its own economic shortfalls. Yet it is a “Christian” nation that is stealing the sustenance of the rest of the world and threatening their security with its degenerate policies, which lack even an ounce of love and tample the golden rule.
The unconsidered China trade scheme has not worked out to the US’s advantage, and those who promoted free trade with China in the 80s would now like to walk back their mistake.
But unfortunately, China has grown far too strong for any economic measures to work out well in America’s favour.
Bluntly put, it is too late.
Trying to undo the mistake of letting China get fabulously rich by attempting at this late hour to make it poor again is akin to murdering one’s grown child as a birth control method. The child is fully grown and is stronger than anyone could have imagined. And it comes in a package with Russia.
This baby can’t be put back in the womb and then extirpated. It’s grown up. We need to deal with it, and to do that, we also need to grow up. That will be the hard part.