Beijing’s Marshall Plan for the United States

Posted by – November 3, 2013

So, I’ve been considering the real causes of “red state” radicalism, and wrote an entire post on my attempts to grok the rapidly changing political landscape.

I learned a great deal from my investigation, which you can read here.  But I want to go deeper on the economic roots of the situation, so I’m writing this post.  Aside from the “gender damage”¹ that’s occurring when, for example, men grow up with cultural expectations to be provider and protector but find themselves never able to meet those gender expectations, which I think is the source of so many of our societal and political problems at present, there are even deeper dysfunctions.  The deeper issues are all tied to an economic system that’s fundamentally skewed to serve the big fish at the very top of the food chain while laying off a huge chunk of the pyramid of smaller fish the big guys used to depend on.  And if you’re among the rural and suburban whites typical of Tea Partier demographics, you’re seeing an economic system stacked against you so badly, rage and radicalism is almost inevitable.

The pacemaker sustaining the heart of our unfair economic system is Beijing’s “Marshall Plan” for the United States… meaning they loan us cash that is really meant to buy their exports.

The Marshall Plan of 1948-1951 (also known as the European Recovery Program) was a humanitarian project to ratchet down the desperation in post-war Europe, prime the pump of international trade, and bring back broad-based prosperity to rescue free-market economies in Western Europe (the subtext being that the whole continent would “go red” unless the economies of the war-torn Allied nations started to work for the average European again).  The Marshall Plan was a great success, as evidenced by the relative stability and unity of Europe since its implementation, instead of poverty, radicalism and war.  But in addition to its humanitarian aims, Marshall‘s plan had a major impact “priming” the American economy.

As the Library of Congress’ “Fiftieth Anniversary of the Marshall Plan” online exhibit explains, “…increasing prosperity in the U.S. was one goal of the Marshall Plan. As a way of boosting exports, the plan had wide appeal to American business people, bankers, workers, and farmers. … During the years of the Marshall Plan, when much of the money European participants received was spent on U.S.-produced food and manufactured goods, the American economy flourished.”  In many cases, Marshall Plan loan money quickly found its way to Maxwell House coffee or U.S. Steel to export out to Hamburg, Paris, Liverpool and the like.  In rarer cases, instead of fronting Europeans the money, goods were granted outright, so Bethlehem Steel or the Iowa grain elevator guys or whoever got paid, direct from the federal government, to create and send their stuff out.  There are a lot of interesting details about the Marshall Plan.  If you’re nerdy like me, the Library of Congress exhibit has an excellent contemporary source, from Kiplinger Magazine, their guide for American businessmen on the Marshall Plan, how it works and how to participate in it, to get “your product on the list” [to be exported]. This magazine is also an interesting example of the bubbly, happy sort of graphical style—Will Eisner epitomized this—that dominated ’40s design, even in trade journals like Kiplinger’s, evidently.

Beijing’s loaning policies, and by “Beijing” I mean the PRC regime headquartered in Beijing, are similar to the Marshall Plan mainly in that we’re being fronted cash that’ll boomerang back to buy their exports.  Beijing’s seemingly endless ability to buy U.S. debt, buy U.S. debt, buy U.S. debt, keeps the government and the American economy from collapsing, keeps the unhealthy trade deficit² going, which acts as a stimulus program for China’s economy as cheap clothes, toys, games and electronics dominate our markets (but undermine our economy).  Unlike the Marshall Plan though, there’s no humanitarian intent; it’s done out of self-interest full stop, and even, arguably, part and parcel of the aggressively capitalistic culture that has gripped China from the back alley tinkerers to the backroom dealers.  And while this capitalist transformation of China has lifted hundreds and hundreds of millions of Chinese out of poverty, it certainly has a dark side, often enabling the worst types of crony capitalism, and the exploitation of Chinese laborers, infamously

Renminbi, “people’s currency.” Since 1999, all banknotes in all denominations have Chairman Mao on front

symbolized by so many workers trying to commit suicide off the Foxconn iPhone factory roof when denied pay, they put up “suicide nets.” [January 16, 2012 Daily Show segment on Foxconn and the “jumper nets”]

There are so many complexities to U.S.-China trade and weird economic relationship, including the undervaluation of the renminbi, and the issues have filled so many books, and will continue to…

In terms of the political implications, the bottom line is: this economic system of heavy reliance on Chinese consumer goods and large-scale Chinese-financed U.S. debt never was voted on, never was approved by the American people, and is now deeply despised throughout the U.S.

The lack of democracy in our financial decision-making, our complete powerlessness to change the most fundamental economics undergirding American life, is driving both the Tea Party and Occupy Wall Street to push for change.  Both hate what I refer to as “the invisible fist,” the government force that punishes smaller competitors and favors cronies; unlike the invisible hand, supposedly the mechanism of free markets, the invisible fist is the overtly violent mechanism behind Orwellian unfreedom.  You might even see the invisible fist at work in the ways trade rules are rigged to favor Chinese consumer goods flooding U.S. markets.  Both Occupy and the Tea Party are angry that the majority is left with fewer and fewer economic opportunities, and both want the trade imbalance with China to stop and our debt-selling to Beijing to dramatically change.  Occupy wants a return to the income tax brackets we had when major federal projects—like the Apollo Program, the interstate highway system, etc.—were possible, more financial independence, more paying-down the national debt, through more revenue.  Occupy understands that we need a real Marshall Plan for the American economy, to upgrade our infrastructure into something befitting a world leader and bring back the kind of broad-based prosperity stimulated by the 1948 Marshall Plan, along with more human rights and environmental conditions on foreign trade to ratchet down our trade deficit and weird co-dependent relationship with China.

Tea Partiers would have us stop borrowing from China entirely, even if it meant shutting down most federal departments, and would steer us into a default that would force a total from-scratch-rebuild of an American economy that would be self-sufficient instead of interdependent.  So many out there in right-wing talk radio land are saying “default is patriotic” or things along those lines, that it’s best to “get the pain over with sooner rather than later” and so on, so a ground-up rebuilding, without the federal government in its current form or size, or without the federal government at all, can begin.  It’s a much more radical vision than Occupy’s, and completely unmoored from anything that could be called “conservative.”  Since they believe that a central government will always be tyrannical and inherently parasitic, their call for renewal makes “slaying the government hydra” almost a prerequisite for rebirth; and I’m not sure how much the anti-federalist fervor will dissipate with the rise of a Republican president this time.  There’s this spirit of goddess of destruction and rebirth, alongside some straight up nihilism, shut it down, burn it down, shut it down. 

Redstate.com editor Erick Erickson put it this way:

…the real fight within the Republican Party now is between those who believe we actually are at the moment of crisis — existential or otherwise — and thereby must fight as we’ve never fought before and those who think the GOP can bide its time and make things right.

Washington Post‘s Ezra Klein says Republicans have lost their “raison d’etre” since the deficit has fallen with historic rapidity—the newest data shows a record 37 percent reduction in the deficit for FY 2013 ending September 30th— and that the deficit is on track to “[stabilize] in the (totally manageable) two-to-three percent range through the next decade.”  As is often the case, Ezra Klein missed the bus, because pretty much zero Tea Partiers care that the deficit is headed to 2-3% of GDP.  These are not the Wall Street Republicans that follow budget numbers, nor are they like the evangelical Christian right of the ’80s and ’90s talking about social issues; the Tea Party is first and foremost a rebellion on economic issues.  Tea Partiers want no more borrowing and no more spending beyond annual revenues.  They have a deep philosophical beef with the current size and scope of the federal government, which they see as a failed, unconstitutional project that has already brought us to the “moment of crisis” economically, existentially, etc.   The consensus is that the current economic system is so disastrous for them, the entire system needs radical restructuring if not outright demolition.

The government shutdown and playing drag race chicken with sovereign default was meant to force a rethink of borrowing from China, in fact I think that scaring-off Chinese creditors was meant as a feature not a bug of the “strategy.”

I vehemently oppose the repeal of a century of social programs being pushed for at present; these programs keep me and so many going despite the hate-filled political climate.  I also am in favor of paying our debts, of being a responsible country.  That default has even entered the discussion is indicative that many in the demos see their home-country of the United States as less like a superpower and more like post-war recovery zones in need of a Marshall Plan.  We’ve gotta WAKE UP!  Looking at urban disaster areas like Camden and Detroit, portions of Los Angeles, Stockton, etc., it seems there really was a war lost, somehow.

Whether you are a Tea Partier, support Occupy like me, or don’t want any of it, I think most Americans have a nascent, not-articulated, inchoate sense that the New World being in debt to the Old World is fundamentally not right.  The urge for perceived self-reliance is powerful.  Very few Americans would vote to continue this weird economic relationship unchanged if our financial system was democratic and major economic choices were on the ballot.  If for no other reason, China’s very Old World values about right to life, about women’s rights, human rights, rights for labor…that are very different from our own values in ways that create unease, to say the least, about the co-dependent relationship.

Our weird economic relationship with Beijing will continue to matter, continue to be up-front in the context of the ongoing debate over trade, budget deficits, government shutdowns, and so forth, though the news media is fairly terrible at bringing you that underpinning context.  So keep reading Nick’s Crusade blog.

 

I’ll end on an internet meme, a really old one, pre-2000, maybe one of the first such memes; it’s about goofin’ on Chairman Mao

 

 

Nick

 

Footnotes

1. this concept of “gender damage” was developed not by me but by Mary Louise Roberts, historian and French studies expert at UW-Madison, to describe what happened to French men following their devastating defeat in World War II, in her book What Soldiers Do: Sex and the American GI in World War II France.  I’ll elaborate on this more in a future post.

2. “The U.S. trade deficit with China topped $30 billion for the first time [breaking the record in July 2013]” – China drives uptick in U.S. trade deficit – Eric Bradner – POLITICO.com