As the US stock market was dropping 1,000 points on Monday morning, US commentators were pinning the blame on China. The Chinese economy, they said, was slowing down: what had been the “engine” of worldwide economic expansion was running out of fuel. The clear implication was that China’s rulers were somehow responsible for the sudden evaporation of over $2 trillion in assets over three days of the market plunge.
This focus on China as the foreign culprit behind America’s economic woes is being broadcast far and wide by Donald Trump, the mercurial demagogue who has put foreigner-bashing at the center of the political discourse. China’s rulers are “smart,” he says, while ours are “dumb.” Chinese leader Xi Jinping is slated to visit the United States and The Donald doesn’t want him to be feted at a fancy White House dinner: instead, he wants to feed him a Big Mac from McDonald’s because China has “sucked all of our jobs.”
Our jobs. Our inflated stock market prices. An American politician can’t lose by appealing to our sense of entitlement, and Trump certainly knows how to play that tune. Americans are never to blame for the consequences of their own folly: it’s always somebody else’s fault. That’s why the need for a scapegoat is a staple of American politics: today it’s the Mexicans and the Chinese, during the cold war era it was the Russians and the Japanese. Remember when it was cheap Japanese goods that were “stealing” our markets?
The portrayal of China as this sleeping giant that is now awakening to take over the world – and take our jobs – is, like most such conceptions, a total delusion. The Peoples Republic of China is weak in almost every sense: politically, economically, and militarily, the PRC is a paper tiger – as Mao Tse-tung liked to characterize the US – and its rulers are sitting atop a volcano.
Yes, China has made great strides since the dark days of the Cultural Revolution and the Mao era: having abandoned communism and gone in for a form of state capitalism, the leaders of the no-longer-Communist Party of China have unleashed the natural entrepreneurial spirit of their people. In doing so, however, they have also unleashed the “creative destruction” that comes with capitalism – and, perhaps, they have also ensured their own destruction.
Of course the Chinese commies haven’t instituted laissez-faire: their “capitalism” resembles our own times ten, i.e., it is what we call crony-capitalism. It is driven, in short, by politics, not by the spontaneous order of the market: it is monopolistic, not competitive. The big industries are controlled by China’s version of the One Percent: the “princelings,” the children of the Communist Party elite who are flaunting their wealth and privileges in a society still officially committed to the egalitarianism of the Mao era. This is a surefire recipe for social unrest, and in spite of the Communist Party’s tight rein on the media we are beginning to see evidence of social turmoil boiling up to the surface. Although China is regularly characterized as a “totalitarian” state by human rights activists, there are an estimated 90,000 “mass incidents” – raucous protests that often turn into riots – each year.
The reasons for this are as multitudinous as the local issues that have been vexing China’s lower and middle classes – housing, land issues, official corruption, rising crime rates – but all are related to the system China’s rulers have constructed in the years after the fall of the “Gang of Four” and the discrediting of Maoist ultra-leftism. It is the same system that exists in our own country magnified a hundred times: state-privileged politically-driven capitalism.
Under this system, the Communist Party elite has “privatized” a large percentage of the means of production and turned it over to … themselves. Utilizing the Party’s control of the economy, these state-controlled (and some ostensibly “private”) companies dominate the commanding heights of the Chinese economy. As a corollary development, economic liberalization has created burgeoning upper and middle class sectors with buying power far beyond the reach of China’s rural peasant masses.
In short, economic inequality has skyrocketed, and, in the context of China’s history, this represents a dire threat to the political class: after all, Maoism is still the official ideology of the Chinese Communist Party, albeit greatly modified in the years since Mao’s death. The distance between official ideals and everyday reality grows ever greater, and this is a major problem for China’s rulers as protests become more frequent and more violent.
While China’s ruling elite presents a unified face to the world, the Communist Party – like all parties everywhere – is rife with factionalism, and the effects of behind-the-scenes maneuvering is exacerbated by the country’s legendary opacity. One never knows who or what is on top in the upper reaches of the Chinese elite, and the result is uncertainty and instability.
This inherent instability is enhanced by a systemic problem. In imitating Western-style capitalism, the Chinese have combined Keynesian pump-priming – flooding the country with freshly-printed money – with Maoist-style central planning. It is Krugmanism combined with the old Soviet-type Five Year Plan. Certain favored industries are targeted for growth, with quotas set and inevitably fulfilled, and this has resulted in the creation of a series of bubbles – in real estate, investment, and credit – that are fated to pop.
The portrayal of China as a giant – either as a benign one, in the form of an economic powerhouse that will provide a ready market for Western exports, or as an economic and military threat that is taking “our jobs” and potentially replacing the US as the dominant military power – is in itself a bubble, a myth on the brink of exploding. In reality, the Peoples Republic is a makeshift construction with a very fragile foundation, one that could give way at any time. And there is plenty of seismic movement beneath the surface of Chinese society: a rising middle class whose expectations cannot be met, a volatile peasant mass, corruption on such a scale that it has become the norm, and a rising nationalism that the Communist Party elite fears even as it tries to manipulate it for its own purposes.
Too big to control, too volatile to be predictable, and too full of contradictions to achieve stability, China is a society that is on the edge of coming completely unglued. So the Donald Trumps of this world are wrong, as usual, in conjuring a vision of the Yellow Peril. China isn’t eating our lunch: indeed, their own “iron rice bowl” – the old Maoist guarantee of full employment and state support for the masses – is in the process of being melted down. Which means we might expect a demagogue to arise out of the ensuing chaos, one who attacks “foreign devils,” appeals to populist prejudices, and aspires to “Make China Great Again” – a Chinese version of Donald Trump.
Trump’s bombastic anti-Chinese rhetoric – China “will bring us down,” be bloviates – is ironic to the nth degree. Appealing to the typical American conceit that nothing that ever happens to us is our own fault, Trump’s scapegoating is a reflection of widespread economic ignorance. For the reality is that the policies of our own rulers limn those of the Chinese: pump-priming the currency, flooding the US economy with money, and creating massive bubbles is something they learned from us. And those policies are having the same effect here as they are having in China.
This piles irony on top of irony, for it provides more grist for the Trumpian mill of scapegoating, economic protectionism, and nonsensical denunciations of the “Yellow Peril.” Yes, the wheel turns around and around, a veritable perpetual motion machine of prejudice, ignorance, and malice.
The program of Trumpismo – trade barriers, foreigner-bashing, and the myth of a Lost Greatness – is a recipe for war. If goods – and people – don’t cross borders, then armies soon will. If “foreigners” are blamed for America’s problems, then it won’t be long before we’re taking up arms against them. As the “Make America Great Again” crowd grows in strength, a country that measures “greatness” in terms of military strength is bound to turn to war as a panacea for all its ills.
currency war aka game of chicken
The first rule of Imperial Empire is never asking for permission nor forgiveness.
"The program of Trumpismo – trade barriers, foreigner-bashing, and the myth of a Lost Greatness – is a recipe for war."
Well said - if you want to be elected, blame others for the fuck up's in your own coutry. Eventually the Chinese and the Russians will have to blame the Americans (which makes a lot more sense).
No tickie, no MSG, Bitchez.
Try for one day to live without Chinese products or ingredients.
Nope. Good luck and good night
But what the fuck, gotta blame some straw-man for the ills, so that the scam can be perpetuated. Time once again for the Yellow Peril. Done enough with the A-rabs, Jooos, Muzzies and FSA.
So true Knucks but cut off the Chinese trinkets completely and watch how fast the manufacturing sector picks up the pieces here in the US.
#3. Identification of Enemies/Scapegoats as a Unifying Cause (from the 14 Points of Fascism)
scapegoating, economic protectionism, and nonsensical denunciations
How to become president of the USA 2016
1. Find someone or multiple someones to blame. - It does not matter if they are to blame or not. Someone must be blamed.
2. Promote the funding of barriers. - It does not matter if barriers are an effective deterrent or not, they must be built for numerous other reasons including jobs.
3. Denounce those who are to blame. Those who are to blame must be denounced to keep a focus on things that do not matter.
TY for excellent article which prints a pattern for winning.
The Empire needs bogeymen like terrorist Osama bin Laden (died twice), killer Assad, insane mass-murderer Putin and others. And it needs enemy states like N Korea, Syria and Iran. Now China is being added to list of antagonistic state as it draws closer to Russia and Iran.
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
H. L. Mencken
Scapegoats only work if you blame them for a "bad" thing.
Dropping Dow is a good thing.
hitler and germany, 1939, was a fine and recent
example of a "nation" that equated militarism
with "greatness"; ironic that the "world"
simultaneously forgets and recalls those
events nightly, learning nothing from the obvious
conclusions. sheesh, at least the money system
survived, eh.
We ain't buying shit.
Therefore, China will stop producing shit.
...and that's it...in a nutshell.
You can delve into any underlying reasons WHY we ain't buyin' shit. It doesn't matter. Just know that we're tapped out with debt......inflation on FOOD and FUEL is insane.... so we won't be buyin' shit for some time now.
This means that China won't be producing shit that we might buy... for some time now.
and that's all there is to the globull economic sloooooodown.
So what happened to the report on MH-17?
What a bunch of puerile nonsense written by a guy who obviously thinks he is entitled to his own "facts".
Trump hasn't criticized the Chinese, whom he has said are looking after their own country (which he expects the leaders of any country to do). He has criticized the supposed US leaders in Washington for not doing the same and giving away the farm.
Does Raimondo actually not understand China has been following a mercantilist policy, as did Japan, and as did the US long ago. Mercantilist policies build local industry while exporting unemployment. They produce local benefits while causing harm elsewhere. Clearly this loon thinks Trump should not be pointing out something that is obvious to most of what once was the US middle class and non-government workers.
He argues in slogans like "If goods – and people – don’t cross borders, then armies soon will". Where is the actual evidence for the first. International trade reached a high point before WWI and people congratulated themselves on the fact that this had eliminated the prospect of war. That belief turned out to be ill founded.
And his claim that if people don't cross borders then armies soon will. Does he seriously believe the US will be invaded by the Mexican military if it stops the invasion by illegals? Does he seriously believe China will be invading the US or vice versa if the US reduces the influx of Chinese or anchor babies for Chinese?
It's like the usual tripe rolled out about self-harm from tariffs based on US experience following introduction of Taft-Hartley. All that spurious "learning" ignores the fact that before that occurred, the US was a NET exporter (same as China today) and in the tit-for-tat reaction, countries that were previously net importers did better than countries that were net exporters and many of the former came out of the depression faster than the US.
Raimondo is scapegoating Trump in a way that Trump has not scapegoated others -- unless you actually think those in Washington have been doing a good job and bear no responsibility for the state of the country. Pointing out the truth is not "scapegoating".
Up + 100---dead on.Justin is caught in his own time warp...what he says was true decades ago..Trump like Jim Rogers has highest respect for yhe Chinese. He never called them stupid..but he did call our henchmen stupid. That is one point of disagreement I have with him..our policy makers are not naively dong deals, they know exactly what they were doing, which wws to make China the manufacturing floor for new order, while bringing us down to level of Mexico or Brazil. Not to blame China, or Russia..they are into self preservation. Our plutocrats do not give a shit if we maintain prosperous middle class or not. Justin blew it this time. Like reading a piece in some old leftist rag from late 1800s.
Make no false assumptions. Chinese will take USA down. The manner of how and when is the only question. Only thing USA can do about it is an all out nuclear holocaust (I don't think Russians would stay idle if China was bombed). They have 1.3 billion to US 0.3 billion people. Let's say China goes belly up in a revolution. How long before they get back on their feet, 5, 10, 20 years. People will still be there and Russia's resources nearby. They WILL have the largest economy and they WILL be politicaly "one indispensable nation" (depenced by someone else down the road, whether India, United states of Africa or people of the world). Hell even if half a Chinese population "disapeared" there would be more than twice US. US already lost a huge amount of power. What the author does not get is that Chinese are not acustomed to freedom and luxury like the USA. If China crashes, they have an army, media and police force ready to deal with this. USA has these as well + the front show of democracy, but any significant downturn in USA will for the reasons already stated be detrimental to USA. You saw occupy wall street and Baltimore. If Joe six pack can't refuel his car for cheap, can't buy cheap stuff at Walmart, can't carry a gun, has to drive a 5 year old car, there will be blood. Russians for example lived of buckwheat poridge for some 10 years as a diet staple. Chinese can eat bamboo and rice. When Ruble went down Putin went to TV and said this is the new reality and everyone accepted. Chinese will too. Will the Americans?
Nice photo faggot. Americans, being only 300 million strong will rise upa and kick ass you stupid butt fucker. We fight for for our own individual rights and freedom, russians and chinese fight because a gun is put to their heads. This is why we win every time. We win because we have something to fight FOR,p. I will take our small population against the entire populationa of russia and china combined. We kcik ass. Period. Cant export that. Fag.
I don't blame anybody for anything. I blame banksters for everything.
"... the myth of a Lost Greatness..."
Note to this Raimondo asshole:
In 1969, I sat there on my Sting Ray bike looking up at the moon, saying "Wow--guys are actually walking around up there."
That was greatness, dickweed.
Today, we have a secretary of state carefully deleting e-mails and hiding the rest, including top state secrets, on an unguarded fucking bathroom mom-and-pop server. And her fucking lawyer has them on a thumb drive.
Today, we have your El Salvadoran illegal alien convicted felon gang members pals getting free food, housing, and medical care courtesy of the American taxpayer--and they would kill us for pocket change.
That is lost greatness, dickweed.
Some fucktard, supporting the status quo politicians. Do you support Hillary, or Jeb?
First of all Justin, your are obviously one of those anti war nuts under the age of 30, since Justin is right up there with Austin for top toddler names of the 90's, you are wrong about the liquidation of our jobs being outsourced to India, China, Mexico, etc etc. our tax policy as well as cronyism has destroyed our economic engine of growth. The only reason China even considered any form of capitalism is due to the flood of American businesses into their country due to cheap labor and easily bribeable govt officials. The trinkets you speak of really exposes your stupidity. Go into WalMart and find me something manufactured in the US. It will take you awhile. Tools, tires, beds, tvs, computers, clothing, toys, and on and on. The old meme that it is our own fault for where we are here in the US is a bunch of shit. And you anti war faggots who hide under the freedom our military power has given us makes me want to puke. When you were watching Barney and the Power Rangers, your future was being sold off to the lhighest bidder. Manufacturing is where the money is. Our political class is to blame and not us so called stupid voters. I have never heard a politician say he was going to sell us out to china, to vote to make our tax laws unnavigable, not once. They are liars. We are in the process of fixing that. Meanwhile, go fuck yourself.
As fo chna becomng a consumer driven country, the people have jefer trusted their govt enough to spend 5heir savings and take on credit, until now and we see how that is going. It will be decades before ths ever happens again. The regime needs to ve worried as they are about to dissappear.
There is no hope for America in 2016. Trump is an outspoken demagogue asshole, Hillary is corrupt to the core, Rand is not a Ron, Sanders wants to expand the welfare state.....its over America. Over.