China: Our Sugar Daddy

There has been much buzz this past week over China's president, Hu Jintao visit to the States. Much of the complaints levied against China are its human rights violations and its intention devaluing of its currency, leading to a sustainable trade deficit between our two countries. However, if one were to look deeper at the United State's relationship with China, these are very minor issues. Perhaps the greatest issue facing us is China's continued violation of intellectual property rights. China is the number one purchaser of computer hardware, but only eighth in software purchases. It is no wonder that President Hu made a visit to Microsoft headquarters before arriving in Washington. Major companies are becoming increasingly worried about access to China's markets. China is a master at copying and duplicating technology that many fear that they will soon be downgraded. However, it must also be noted that there has been a notable divergence between American corporate interests and the public sector. American corporations are beholden to their stockholders, and not necessarily the public-at-large. Therefore, it can be argued that violation of intellectual property rights does not affect the average American.

With respect to China's devaluing its currency, this simply is an empty argument. The reasoning goes that since China devalues its currency, its exports becomes more attractive to consumer nations like the USA. Since China can produce more goods at a cheaper price than most, it damages and takes away jobs from American businesses. After all, Americans naturally make better quality goods than any other people in the world by virtue of being American (whatever). What most people don't acknowledge is the fact that if China regulates its currency to the levels we think are fair, businesses and corporations will simply move jobs to places like India and Indonesia. There is no shortage of countries that can cheaply produce goods to circulate in the world market. Again, China's currency does not affect the average American nor is it as disastrous to our job market as many would have the public believe. It is always handy to have a boogieman to blame for our peril. China is merely doing what it must to provide for its 1.3 billion people.

Another thing that America berates China for is its human rights violations. As President Hu makes his way around the country, people carrying Tibetan and Taiwanese flags can be seen everywhere. I must agree that it is lamentable where human abuses exist and I am not excusing China's approach to this issue. Having said that, one must understand that there is a fundamental difference between Eastern and Western philosophy. The West juxtaposes economic freedom with human freedom. For the Chinese, one does not necessitate the other; they are concerned, not with ideology, but with pragmatism. I believe that one of the elements that handicap America's continued emergence as a world power is the predominance of ideological constraints. China recognizes a situation, and then formulates the best way to effectively meet it. Just because a country allows for economic freedom and flexibility, does not mean that human rights is the foundational impetus for this decision. China is driven by results, not ideology. You will not see the Chinese government enter into empty debates about repealing health care or cutting vital funding to education. Our arguments tend to be philosophical, whereas China's focus is more on practical solutions. Sometimes it would be nice to have only one party it seems. That would eliminate much political wrangling and stagnation throughout both political and economic sectors. China's governance is reminiscent of the Roman Empire in many ways. The main concern for both empires is, "Will this be able to work."

The United States must be very careful in how it deals and interacts with China. I find it disappointing the cold reception that President Hu received from many in Washington over these past view days. It is easy to pass judgment on China for this thing or that, but the fact remains that China is extremely vital to the health of our country. It is destined to eclipse the US economy in the upcoming years and it would be wise to adopt more practical policies towards China in the future instead of stand on our own laurels pretending that we are better than they. The fact remains that the Chinese will be here long after our time as a nation is finished. There are many reasons for this. They lead the world in education (2.4 million college graduates in 2006), green technology, federal exchange reserves (1.5 trillion dollars), economic growth, etc. The very things that America is cutting-such as education and green technology research- China is heavily investing in. We may have many differences with the Chinese, but we would do well to emulate them instead of being so judgmental.

Fiddling While Rome Burns

Tomorrow, Republicans will start their "showboating" in the House of Reps by reading the Constitution allowed. The whole process while take approximately 30 minutes and then it is off to the races to dismantle Obama's health care plan and slash entitlement spending (Social Security and Medicare). The Republicans are faced with two options: 1) create jobs 2) reduce the deficit. Of these two choices, it appears that the most important one is the latter. What many refuse to believe is that running short term deficits to create jobs and stabilize the economy is far better than doing the draconian practice of cutting the very programs needed to drive the economy anywhere but a ditch. I would like to focus primarily on Social Security. With the exception of defense spending, everything is "on the table" according to the Republicans- chief among which is Social Security. However, what a little reading and researching will reveal is that Social Security does not contribute one cent to the national deficit; it is self-funding. Another misconception is that Social Security is going broke. This is the first year since 1980 that Social Security will pay out more than it takes in. During those intervening years, it has accumulated a $2.5 trillion surplus according to the Congressional Budget Office. The government has borrowed this revenue to pay and fund other projects during that time and now is having trouble paying it back. If anything, having Social Security has been very beneficial for the government in times of revenue restrictions. Ergo, Social Security is not the problem.

Any cuts to Social Security will further weaken an already volatile and susceptible economy. According to the Christian Science Monitor, the Retirement Income Deficit is approximately $6.6 trillion- five times the size of the national. What this estimate means is that Social Security is going to be half the income for 2 out of 3 retirees and the only income for 1 in 5 retirees. Today, only half of workers in the private sector have retirement plans. Cuts in Social Security would result in many more millions of Americans dropping below the poverty level, thus putting more strain on our government and economy. Why reduce benefits on a program that does not even add to the deficit. It is clear that the Republicans, especially the Tea Partiers, are either oblivious to the ramifications of their stances or just don't give a damn. Either way, those who advocate reducing much needed social programs (programs that allow people to buy food and much needed medicine) are not fit to serve as the people's representatives and champions.

Much of the philosophy behind many of these proposed reductions is the belief that government needs to be made smaller and that regulatory approaches are of the devil. This idea makes for very good politics and campaigning does it not? People love to blame the government for a multitude of woes. So the government as the "Boogie Man" is a very appealing label. What if these people got their wish? What are some implications for everyday Americans? Let's do what most Americans do not, take their ideas to their finial conclusions. Don't worry about regulating airline safety, food and drug safety, carbon emissions, vehicle safety guidelines, Wall Street (remember the housing crisis), or a variety of other things that improve the quality of American lives. There may be many people who are in favor of the abolishment of the government's ability to regulate, UNTIL it affects them.