Monday, March 13, 2006
Dubai
The whole situation is perfectly shameful. For anyone who doesn't know what has happened, see this. I have never seen a policy that was so blatenly racist and anti-free trade. The unintended consequences are fantastic. First, Arab companies have already begun discussing the withdrawal of investments in the U.S. Arab states, directly and indirectly, finance a large portion of our debt. The withdrawal of such investment could prove disasterous. This sends a signal to all foreign investment. We are already going to suffer long term repercussions for the Patriot Act's impediments to workers and students from abroad. We are tanking our capital structures for the future. This country's strength has long been the presence of both human and financial capital. As India and China continue to rise, students study elsewhere, and innovation takes place outside our borders, our advantage in human capital declines. Losses in investments and constarints on business here in the United States will sap our advantage in financial capital as well.
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4 comments:
Yes, the underlying motive to all this is racist, and lettign Dubai run our ports would probably do very little to compromise out security but the more we mortgage ourselves to foreign governments and the more assets we sell, the less sovereign a nation we become, until it reaches a point where American values are subverted by foreign political pressures and we end up living in a theocratic dictatorship (oh, wait). I'm _hoping_ this port deal sets off a wave of isolationism, so that we can return to beng a country that isn't constantly being fucked by landlords and lenders. I mena seriously, screw Dubai, they don't have equal rights for women, so I say we should boycott them, and boycott China while we're at it, they ignore the basic rights of free speach and press. Economic warfare is a viable option, global, peaceful free trade is a fantasy.
Hasn't history taught us that the most important way to engahe economic warfare is to create economic ties rather than destroy them? Didn't the French realize to prevent Germany from invading they needed to found the ECSC rather than economically isolate them as they did post-WWI, creating the power vaccuum that allowed Hitler to come to power? Did economic sanctions work against anyone? Why is the UN ineffectual? Because economic warfare is its only weapon. Economic isolation from Dubai and China only raises the prices of OUR goods to OUR citizens. They will still produce and sell. As far as American values being subverted, it really works the other way around...
What do you mean "being fucked by landlords and lenders?"
What I mean is that neither China or Saudi Arabia is playing fair right now, so why should we? China doesn't even have a market-valued currency. The more pressure we put on them to float thier currency, the more they threaten to stop buying US treasury bonds, the more they continue to fuck us in global markets with artifically low-proced goods and services. You might like to think we have free trade with China, but how can that really be true with any communist country? There is nothing free about the trade we do with China, and as a result, I have to fully support the tarrifs we impose on thier goods (which aren't nearly high enough I think). One of these days, China will own so much of our debt that they will invade Taiwan. We will not be able to defend Taiwan and retailiate because the Chinese will stop lending to us, and we won't be able to afford to mount a military campagn against China, or any other country, without raising taxes to Veitnam era levels.
How many more assets will the United States have to sell off to afford its military campaigns in the Middle East do you suppose? Its nearly the same situation, but instead of being about Taiwan and China, its about Israel and the OPECs. Sure, Saudi Arabia hasn't used oil as a weapon against us yet, but why make it easier for them when they finally decide to?
The United States is as addicted to artifically low-priced Chinese goods as we are to oil. As Americans, we should despise both Saudi Arabia and China just on thier human rights issues alone, but we conveniently ignore that in order to maintain our oil and cheap goods fix. Sure the oil and cheap goods make us feel good for a while, but do they make us a better country? I think not. The more we sell and borrow, the more vulnerable we become when one of these countries decides to cut us off.
Hows does one reconcile self-destructive addictive behavior with the principles of capitalism? After all, pure capitalism dictates that supply always meets demand, but what if the demand is for something that is ultimately destructive? The bottom line here is that cheap Chinese goods (and attendant lending) as well as cheap Saudi oil (and attendant asset purchases) are _bad_ things, not good things.
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