One reason for the out-of-balance economic, financial, trade, and jobs situation between China and the U.S. can be traced to the Chinese policy of artificially pegging the value of its currency, the Renminbi or Yuan, to the U.S. dollar. No matter what the U.S. does to increase domestic productivity, reduce costs, or innovate, the Chinese can always do it cheaper because they prevent their currency from moving to properly reflect global economic realities.
China continues to play a “me-first” game of global competition using a central command-style mixed mercantilist/capitalist system. The U.S. is not even playing the same global game with any shared rules or goals. The U.S. still seeks to encourage or impose unregulated free markets, little government cooperation with private business, individual freedoms, and full legal respect for patents, copyrights and intellectual property across the globe and in China. We are also severely handicapping ourselves by turning out country into a corrupt crony capitalist system called “corporatism” and an oligarchic marriage between our greedy wealthy and ruling classes.
China is just not buying our economic system because it doesn’t work for them – and the facts show that it is not working for us either. They are effectively kicking our asses on every global playing field that matters to the future: production of high technology equipment, green energy alternatives, and top-notch transportation infrastructure, to name just a few. We think that we can build an economy buying all our consumer goods from overseas suppliers while we principally sell fast food, insurance, and worthless financial instruments to each other. It’s not unlike showing up for a gun fight armed only with an ice cream scooper.
China has been and continues to make comprehensive long-range plans for its country and its place in the world. What it lacks in natural resources and a history of rewarding high individual intelligence, scientific and social innovations, and strong creativity in all fields; it makes up for these shortcomings with a strong collective national goals shared by a huge number of people; strictly maintaining closed domestic markets; cunning, persistence and doggedness towards other nations; continuous outright theft of intellectual property and new technologies; and surreptitiously pursuing unfair global financial, economic and trade practices that promote China to the detriment of all others. The Chinese immovable force has enough flexibility to simply crush the life out of the American irresistible force.
Just as with many sports teams, successful nations win militarily or economically, by using unconventional, surprising and unorthodox tactics to confuse their opponents and gain an advantage from creating chaos that they control. It is time for the U.S. to start acting crazy and unpredictable, and fully embrace the “element of surprise.”
We’ve reached a point in U.S. history that we can’t collectively do anything politically or economically – even incrementally – because there are national and state elections in just 9 months and every 24 months in perpetuity. For too long, we’ve been so preoccupied, self-centered, greedy, arrogant, stupid and narcissistic in thinking that the world only revolves around the U.S. When reality reared its ugly head recently, we’re now in nationwide denial that many parts of the globe are quickly leaving us behind and that we’re not the center of the world.
If we don’t have a functioning national legislature to actually accomplish anything – whether it be controlled by Democrats or Republicans – then our list of options are very limited with respect to dealing with China and other global competitors. However, there are many things that the Administration can do on its own without even consulting Congress – besides waging wars.
Having worked for many years as an attorney in my past, there were times when a legal case was going poorly for one side because the facts, law or both were not favorable. The apparent losers had to find a game-changer as they only have two viable options: (1) Concede and settle, or (2) do something really crazy, outlandish, unpredictable, outrageous and audacious. In many real life cases and in quite a few lawsuits, the second desperate choice often worked as a game-changer and thus pulled victory from the jaws of defeat.
Our nation’s available choices in dealing with China and our quickly-sagging global standing may be limited to the crazy since it would be out of character for the U.S. to surrender. Going back to the artificial pegging of the Chinese currency to our dollar, we could completely freak out the Chinese and most everyone else on the globe by suddenly turning the tables.
The U.S. should immediately set the value of the Dollar on the value of the Renminbi. At that point, nothing between China and the U.S. would have any ascertainable value – goods, services, and the holdings of any other country’s currency. Such a wild and surprise counter-attack might throw everything out of balance around the globe, especially for the Central Committee in Beijing. What a delightful, delicious and delectable mess we would create for the Chinese.
Pegging one’s currency on the value of another makes sense only if the other currency is viewed as stable or at least a benchmark for many other moving currencies. However, if you peg your currency upon a currency that is pegged on yours, then it becomes an absurd circular situation that would resemble a dog chasing its own tail. The Chinese and others around the globe might object to this currency reversal by claiming that “You can’t do that,” to which we could fiendishly reply “Yes, we can.”
This proposed reverse currency pegging would not have to be a permanent solution. It would principally serve as a fair warning to the Chinese and other countries that if their economic, political, social, environmental and other global policies make no sense beyond their own borders, then the rest of the world would forcefully challenge them and respond with equal global insanity.
Some critics would argue that such a wild currency scheme would upset the delicate and mostly illusory systemic global financial balance. After the past few years, do those claims hold any water? What more harm could come to the U.S. and other nations if we went a bit crazy? Is there any predictability, security or sanity left on the planet? If all rational arguments and policies are simply not available to the U.S, what other choices do we have left?
“The audacity of hope” was a meaningless phrase unless it is coupled with really audacious policies. When the going gets tough, the only path to victory is to completely surprise, confuse and bewilder your opponents. To the really crazy and audacious go the spoils of victory.
Submitted by Marc Pascal ranting happily from Phoenix, AZ. Not to brag about legal “war” stories, I helped settle a lousy case in one client’s favor because after 6 months of completely unique, unpredictable and crazy legal maneuvers, the other side, its attorneys, and even the judge were completely confused about what were the issues in the case and what was going to happen next. For those who might use this example of how lawyers only care about winning but not justice, the end result was actually a fair and equitable for both sides. My colleagues and I had to overcome quite a bit of patently “unfair” and complex franchise law and contractual provisions that spread over multiple jurisdictions. After all the dust had settled, even the judge admitted that the final result was a very fair and rational solution to a seemingly intractable mess. I left the legal profession 10 years ago in part because those results were few and far between each other to overcome the massive tedium and frequent inconsequentiality of so much of my work.