Reckless Behavior

The subprime crisis is the result of reckless behavior by U.S. banks and negligent career politicians and bureaucrats in Washington. The U.S. Federal Reserve’s larger-than-expected interest cut in 2007 resulted in a sell-off of U.S. Treasury bills and a drop in their value to help bankrupted American homeowners, hedge funds and investment banks. It was a kick in the face to China and other foreigners who own U.S. bonds because rising inflation weakens the dollar. China, like other foreigners, trusted America and built up their safety net by buying American assets and are now being asked to pay for the burst U.S. property bubble.

To make matters worse, the U.S. announced it would “freeze” some subprime loans to help the beleaguered banks amid news that foreclosures rose to a record high. Why do reckless borrowers and their irresponsible lenders have to be bailed out at the expense of We the Apathetic Maids? People and banks should be punished for their mistakes, not rewarded. Otherwise people and institutions that benefit from such protection tend to allow it to influence future decisions and chances are they will repeat their mistakes ─ again at the expense of We the Maids.

The U.S. in effect decided to rob foreigners, including China, to pay for its lending sins. The U.S. current account deficit has been the primary cause of global financial imbalances. Since 2002, the U.S. has been sucking in more than $2 billion a day from China and other countries’ savings to provide easy credit to U.S. consumers that allowed We the Apathetic Maids to spend more than we earned. Foreigners only way to fight back was to sell U.S treasuries which immediately increased bond yields and depressed the U.S. property market and economy.

Sino-U.S. Interlocalism

Wherever I go these days in the world, I encounter numerous Chinese tour groups and individual backpackers, but no Americans ─ the occasional cowboy or lone ranger being the exception. Most Americans I meet pretend to be Canadian.

It is time for the U.S. and Americans to re-assert their global role and presence peacefully ─ proudly come out and spread out onto the world map with their Chinese brothers and sisters and be welcomed with open arms again wherever they go ─ instead of fleeing the world stage like Californians fleeing the periodic infernos that engulf their homes.

Americans should embrace Chinese in the 21st century the way the citizens of Westwego, Louisiana embraced their longtime Chinese-American Sheriff Harry Lee. Thousands, including Hollywood celebrities and a former president, paid their respects to the larger-than-life populist politician with a no-nonsense approach to Louisiana politics during a five-hour viewing of his flag-draped casket.

While the U.S. economy was being battered by the subprime created recession, China’s no-nonsense economic approach achieved its fastest annual growth rate since 1993 in spite of a raft of government measures to control investment and credit growth ─ it grew by more than 11 percent.

Meanwhile, China’s Zhang Zilin was crowned Miss World. She beat 105 other contestants to become the first Chinese winner and the 57th Miss World. Even the contest itself, one of the most-watched events on the planet with a global television audience of more than two billion, has been outsourced from America to China.

China today is one of the richest nations in the world. It holds the largest amount of foreign exchange reserves in the history of mankind. China’s economy is forecast to surpass America and Japan to become the world’s largest economy by 2025 or earlier.

Any wonder China’s rise has brought with it a more assertive approach in dealing with America? This was reflected in the November 2007 Kitty Hawk incident, when China refused to let the Kitty Hawk and eight accompanying ships to make a port call in Hong Kong, to underline its unhappiness over America’s recognition of the Dalai Lama and advanced arms sales to Taiwan. America can no longer take for granted that its military ships have the right to make port calls on Chinese territory.

The U.S. retort of sending the carrier group through the tense waters between the mainland and Taiwan, the first by a U.S. aircraft carrier since 2002, only further angered and alienated Beijing.

It is time Americans recognize and start seriously thinking and doing something about the real economic cost of the U.S. government’s determination to remain the world’s sole shaky and badly bruised superpower ─ at U.S. taxpayers ever increasing expense. Why not share the burden with a willing and reliable partner?

America’s global standing in world opinion is at an all time low. One does have to ponder why America, a country with the most powerful military and intelligence machines in human history, got it wrong on Iran and Iraq and is unable to restore order and democracy in Iraq after more than four years of occupation. America has lost the trust and global leadership role it coveted so much. Americans have to re-calibrate America if it is to regain its leadership role and support for its views and policies.

If America fails to embrace China as its strategic partner in the 21st century to create a joint dollar-yuan pegged basket of their currencies and also form a Sino-U.S. interlocal geopolitical partnership, America will be booted off the world stage the same way America’s national pastime ─ baseball ─ was booted off the Olympic games.

Saudi Gratitude

The Saudis showed their disrespectful gratitude to America ─ and blindsided the White House ─ when they allowed former Pakistani president Nawaz Sharif, to return to Pakistan to support his party in the National Assembly elections of January 2008. They refused to accommodate America, and Pakistani President Pervez Musharraf, who had also asked the Saudi leadership not to allow him to return. Both Bush and Musharraf wanted him to stay in Saudi Arabia because of his closeness to Islamist political parties that might roll back economic and social changes ─ and the political and military alliance with the U.S.

The Saudis flew Mr. Sharif back to Pakistan in a private Saudi government jet. They then also provided him with a bulletproof limousine to campaign in. The Saudis are clearly trying to dislodge U.S. influence in the region and replace America as the dominant influence.

Americans feel the pinch of rising oil prices on their household budgets daily and voice it, yet the leaders of the Arab oil producing nations that are kept in power and protected by these same Americans tax dollars, don’t give a damn. All take and no give. The tightening gap between supply and demand has shifted political power to the oil producers who are using their new found power as a political weapon to blackmail their U.S. protector at the expense of We the Apathetic Maids.