Biting The Hand That Feeds You.

With a poor economy and a sour electorate, many candidates have decided to try and redirect voter ire towards China. Candidates around the country have begun to run ads portraying their opponents as being soft on trade and selling the U.S. out to China. Many of the ads have been harsh. One run by democrat Jack Space of Ohio shows a giant dragon thanking his republican opponent for the help he has provided to China. Others show ominous pictures of Chinese factory workers, presumably laboring to undermine the U.S. Not a few show pictures of abandoned factories, implying that they are shuttered due to Chinese subterfuge and capitalist greed. Some ads have even found room for pictures of Chairman Mao. China is an easy target for politicians. If nothing else, it makes Americans feel better by absolving us, (and our leaders of course), of blame for our predicament. Besides, the Chinese cannot vote in the U.S.

The U.S. is indeed in a precarious position in regard to China, but there is plenty of blame to go around. Much of the blame that does not belong to corporations seeking to maximize profits falls on American consumers. After all, they are the engine driving the demand for cheap goods. Unless you are a carpenter or a true patriot, there is no reason to buy a $50 hammer made in the U.S. at the hardware store if you can buy a $15 Chinese hammer at Wal-Mart. The Chinese are simply doing what the U.S. used to do best, meeting demand at as low a cost possible. If there was no demand for cheap goods or services, there would be no need to import them. Even though China has engaged in practices and maneuvers designed to give them an advantage in trade, those maneuvers and practices are not the cause of the issue. Blame the economy or blame the consumer. Blame business or blame labor. Blame Washington or blame Wall Street. Just don't blame the Chinese. They are simply doing business. 19th century business perhaps, but business nevertheless.

Worse still, the U.S. is not simply importing hammers and concrete from China. It is importing money. There is serious concern in many quarters regarding the growing reliance of the U.S. on China to manage its debt and meet its budget. Campaign rhetoric about jobs and trade to the side, the issue of U.S. borrowing is a grave one. Many fret that it is giving China too much leverage over the U.S. There is also the concern that we are contributing to the rise of a wealthy, sophisticated new opponent on the world stage.

One result of this apprehension is the visceral attacks on China becoming popular in many political races. There are even hints by some that, if necessary, the U.S. can retaliate by reneging on its debt. The costs of doing that would most likely be more severe than continuing to carry the debt. Perhaps if the U.S. were truly self sufficient it might be a credible option. But the U.S. is not self sufficient. It needs trade or it will collapse. Trying to replace China as a trading partner, to say nothing of being a creditor, would be near impossible.

China has been instrumental in keeping the U.S. afloat for some time now. But its help has come at a great price. It is estimated that the U.S. is in China's debt to the tune of $1.7 trillion. Because the burden of the debt has not yet truly been felt, the U.S. has been content to go on about its business, so to speak. The trade deficit and mounting debt often comes down to the issue of who needs who more. Many argue that China needs the U.S. as a market for its exports. The idea that China needs America is of comfort to many. It is believed that China would never act against us because of it. Others note that the U.S. needs China to finance our economy. They are both right. But the harsh rhetoric emerging from politicians regarding China is dangerous. Not only does it distort a complex issue by reducing it to brief images and slogans, it amounts to biting the hand that feeds you. Until the U.S. can feed itself, it should refrain from biting that hand. Cheap hammers we can get anywhere. A trillion dollars is another matter.

China is a proud country. They will not react well to sustained abuse by U.S. politicians. To antagonize China for political gain is short sighted. But someone has to be blamed for the dismal economy. If all else fails, blame China and their Fifth Column in Washington. There will be time to make it up to them after the election.

If the U.S. was really serious about addressing the economic challenge China represents to the U.S., it should reconsider relying upon China to balance our checkbook. But, like hunger, no one suffers from future privation. Neither does one lose elections on future suffering.