Over at Calculated Risk on the "Mug's Game Challenge: Pick the Start of the Next Recession" thread, we had an animated discussion about China and America and whether anyone should even talk about the startling changes in economic relative values vis a vis both nations. There seems to be this stubborn belief which is carefully nurtured by the news media in America that China loves us and wants to pour all their material goods into our country because they admire and want us to be loaded with loot.
This childish notion is fatal.
In the article, Energy Wars Loom, I speculate about a military clash between China and Japan, two countries that trade very heavily with each other, the trade level being the same as both countries individually have with America. So today, in the London Times, we see this: Naval clash looms in row with China.
A ROW between Japan and China intensified yesterday as Tokyo took steps towards granting Japanese companies the right to test-drill for oil and gas in a disputed area of the East China Sea.
China protested furiously. “Japan has come up with a provocation to China’s rights and the norm of international relations,” Qin Gang, a Chinese Foreign Ministry spokesman, said. “China has already made a protest to Japan, and reserves the right to take further reaction,” he added.
Japanese energy companies have waited nearly 40 years for the controversial decision. The move signals Tokyo’s defiance of violent anti-Japanese protests across China last weekend and its determination to defend what it claims are its rights to precious resources.
The decision, initiated by Japan’s Economy, Trade and Industry Ministry, was taken after Beijing ignored an ultimatum last week demanding a stop to Chinese exploration in the disputed area.
Condi goes to Japan and China and the American propaganda machine chews out the usual crazy stuff:
Sometimes the hardest thing about being Secretary of State is managing relations with 191 other countries across the globe. And sometimes it's just making nice with three or four of your colleagues in the Cabinet.
Colin Powell once told his British counterpart, Jack Straw, that intramural squabbling in Washington kept him from traveling. Every time he stepped onto an airplane to fly overseas, Powell said, someone in Washington stuck a knife in his back.
A shiv in the ribs is one worry Condoleezza Rice doesn't have. As she flew across Asia last week in her latest overseas trip, holding private meetings with leaders of six nations and appearing almost everywhere on TV, it was clear that in two months in office, Rice has consolidated her power as the chief exponent of the Administration's foreign policy, a perch bolstered by her exceptionally tight relationship with George W. Bush.
The article doesn't note that her trip was all about dealing with the startling ASEAN meeting the week before which was kept secret and was talked about heavily only in the Asian newspapers, but when the financial equivelent of Alan Greenspan in Japan blurted out the idea that buying American debts was going to be useless because the looming bankruptcy of America, you can bet, Condi pulled on her high heeled military style boots and stomped off to Asia pronto!
Since her visit, Japan made a joint announcement with America about military matters. They are going to beef up their military more and they will not allow China to menace Taiwan. This forced China it pass the law making invading Taiwan legal. They cited the USA's decisions on Iraq as precedent. Naturally. We are the authors of WWIII, the war for oil.
Japan then provoked the Chinese and the Koreans into anti Japanese demonstrations. This was a deliberate move done at a time when the Japanese and the Chinese already had a confrontation with subs and ships over disputed territory. Citing the anti Japanese riots as an excuse to further inflame things, Japan, our military ally, with the full backing of Bush and the Pentagon, deliberately decided unilaterally to annex disputed territory. This is a stunning move that is extremely provocative and is happening with the blessings of America.
So why is the USA fanning the flames of war in Asia?
Several reasons: alarm at the increasing debt charges vis a vis China and Japan has sparked great interest in the idea, if China goes to war, we can repudiate all our debts there and cut off trade. Japan will be forced to prop up our government because they are at war as our proxies. The Republicans figure, we can run deficits forever if we can push Japan and China into a war. This is why they cut taxes yet again, yesterday. If you can run up charges, why not go all the way? This is the only logic I can see for further tax cutting and Bush musing about SS IOUs being "only pieces of paper" and other destabilizing actions.
This is very dangerous. The topic this week in America should be, "Are we going into WWIII?"
It seems to be verboten, though. Do not ask.
Reading the great classic, "The Rise and Fall of Great Powers" by professor Kennedy is a must if one wishes to understand what is happening today. He details in his book how all previous empires ended up in bankruptcy due to relying too much on military power to extend their influence. Again and again, he details economic factors that clearly delineate how these empires went bankrupt and how their rivals would rise by not spending on military but backing insurgencies and piracy and strengthening domestic production through trade and capitalist investments coupled with running a balanced budget rather than wild spending on huge imperial pretentions. He details how cronyism destroys the power of empires as the palace gad abouts suck up financial resources so they can live in palaces and play elaborate sports.
This pattern is pretty stubborn. Based on his charts, one can project who the winner of a struggle for power will be. When Spain ruled half of the planet and lorded over Europe in the 1600s, the empire rapidly went down in flames because of these forces. Little Netherlands came out on top! Amazing. As soon as they won this gargantuan battle, they decided to go crazy with the famous Tulip Madness and lost a great deal of wealth thereby, fatally weakening their nascent empire, clearing the decks for the rise of the mighty British Empire.
The book is, like "Only Yesterday", a must read.