China & The Sucking Sound of Greed
“The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit.”
These are the infamous words uttered by Gordon Gekko, the crooked wall street tycoon played masterfully by Michael Douglas in Oliver Stone’s 1987 movie, Wall Street. Gekko’s theory was that greed is at the core of what makes our country great, from its founding until today. Of course, Gekko ends up going to jail and his empire dismantled by the Government, but was he right? How does the greed naturally present in a capitalist society affect our decisions as individuals and as a nation?
The evil of unrestrained greed has been with us from the dawn of human history. Indeed, we see in the early pages of Genesis Adam and Eve’s betrayal of God’s trust for Satan’s false promises to satisfy their greed for power and knowledge. Then, after God confronts Adam, he tries to remove his culpability by blaming Eve first and then even blaming God for creating Eve! And on and on we go.
We all have to make choices in life. If you think about it, the ability to choose, given to us by God in the form of “free will”, is the only true God-given right we have. Anything beyond that is determined by our decisions, good or bad, not God’s or anyone else’s. If we obey God’s word, then our lives, while not problem free, will certainly go a lot smoother now and certainly into eternity. If we disobey God’s word, we must suffer the results of our sin in this life and the consequences in the next one. However, like Adam, we often look to blame God and others for the results of these choices. This applies of course not just to individuals but also to organizations and even nations.
The key to making the best decision is first knowing what the choices are, evaluating them, and then moving forward with the best one available with the least amount of cost or inconvenience and most in line with our sense of what is right.
Obviously, picking one choice over the others means those other options are eliminated in favor of the winner. In other words, as the old adage says, you can either have your cake or you can eat it, but you can’t have both.
However, it seems like today there is a prevailing movement of thought which not only says you can have your cake and eat it too, but you can eat all of the pieces of cake, even others’ cake, and still have your cake too!
This line of thinking is the ultimate expression of greed and has revealed itself as a form of national gaslighting and self-delusion. The results are a self-absorbed, short-sighted, and debt-ridden society where living for the moment has become the prevailing philosophy. There are numerous examples of this throughout society at all levels.
On a national level, there is no greater example of this than the love-hate relationship between the American consumer, the politicians who represent them, and China.
What I’m about to say here may be harsh, but it is the truth, and it is a truth that you will never hear from any American politician, either left or right. In fact, if they ever did tell you what I’m about to tell you they would certainly be voted out of office. The fact is that China and the threat it poses to the United States and western democracy has its roots in the greed of the American consumer. This greed is rewarded and weaponized by the politicians we elect. Too harsh? Maybe so but stay with me for just a bit longer.
Our news feeds and social media bombard us with politicians and talking head journalists railing against China for a whole litany of issues ranging from human rights abuses to the economic and military threat posed to our national security by the rising red tide of communism.
As a member of the last cold war generation, I was taught to fear the communist Soviet Union and China who were ready to launch thousands of nuclear missiles at any moment. These were not the gender-swapping CRT-loving folks that are being called “socialists” today, but actual real existential threats to our national survival.
Of course, back then the world was more divided between east and west with little to no trade between the west and the iron curtain countries of eastern Europe and China. The line between good and evil was clearly drawn. It was a cold, mostly economic war that painted a sharp contrast between the riches of the free world and the stark poverty of the nations ruled by the communists, all held together by the threat of mutual destruction.
Then, in 1979 the U.S. and China reestablished diplomatic relations and signed a bilateral trade agreement. This gave a start to the rapid growth of trade between the two nations: from $4 billion (exports and imports) that year to over $756 billion in 2021.
Around this time and into the 80s, there was a big push for “free trade” which ultimately resulted in the North American Free Trade Agreement signed by Mexico, Canada, and the United States in 1992. This concept was based on the economic principle of “comparative advantage” which says that each nation should produce the goods and services they can provide most efficiently based on skill, technology, labor pool, natural resources, etc. The only barriers preventing this economic utopia were artificial ones erected by nations to protect their inefficient industries (and jobs). This would ultimately result in all of the world’s resources being used with the highest efficiency, lifting the economies of all nations. Get rid of these artificial barriers and the world will come together for its best interest.
The free trade push was just heating up in most business schools in the 80s. My international economics professor at LSU who was from France and had recently taught at the famous Sorbonne University in Paris was one of the many free trader professors I had in college. In fact, he was considered one the world’s greatest experts on free trade and, as he constantly reminded us, was often asked to advise the French economic minister on the subject. One day in class, I made the point that the theory of comparative advantage would only work perfectly in a vacuum where the economic and political environments were exactly the same in every country. I pointed out that while it does account for the artificial trade barriers such as import tariffs, it does not account for the many other factors that can provide advantages or disadvantages which contribute to an uneven playing field, especially for the United States.
For instance, it completely ignores the reality that trade cannot be equal when one considers the differences in labor laws, taxation, environmental policies, form of government control, etc. After arguing back and forth for a while, he finally had enough. He called me several unintelligible names in French and then accused me of being the product of a broken and short-sighted American education system!
Of course, as it turned out, he and his fellow free trade buddies were mostly wrong and it has not turned out to be the economic utopia they promised. I can still hear Ross Perot’s squeaky voice at a Presidential debate in 1992 when he said, “You implement that NAFTA, the Mexican trade agreement, where they pay people a dollar an hour, have no health care, no retirement, no pollution controls and you’re going to hear a giant sucking sound of jobs being pulled out of this country.”
After the passing of NAFTA, many of the tariffs protecting American industries like steel were lowered or removed totally. Countries like China also figured out how to manipulate the convoluted NAFTA regulations to get their raw materials and products into the American market through Canada and Mexico.
How did these policies affect China? It catapulted them from their status as a backward, agrarian society into the economic and geopolitical powerhouse they are today. They accomplished this primarily by dumping products at below-market prices which eventually put domestic producers out of business, especially steel manufacturers.
We not only let them steal the golden eggs but also the goose which produces the eggs. Then, they lend the eggs back to us at a steep interest rate by buying treasury bonds. China then used this wealth to grow its own economy and increase its geopolitical power through the growth of the military and using its economic influence to further increase its influence around the globe.
So, the question remains, why did America allow this? Many will say that the cause was simply corporate greed, but what drives corporations? Here is where our good friend “choice” and our not-so-good friend “greed” comes back into the equation.
Corporations, like politicians, are a reflection of our choices as consumers, not the other way around as commonly portrayed. Once the American consumer got hooked on cheap products from China, the demise of the American economy was set. Regardless of the “Buy American” platitudes prevalent today, the American consumer will never support going back to more expensive domestically produced goods. The greed for cheap stuff is insatiable and can only be satisfied by more cheap stuff.
Think I’m wrong about this? Imagine a presidential or congressional candidate tells you that if you vote for him, he will immediately put in place aggressive policies to virtually eliminate all imports across the board. Sound familiar? Yes, we’ve all heard this before but unlike in the past, he then tells you the real truth that to buy everything American, and be truly independent of the world markets, the prices of everything you buy will be 5-10 times higher almost immediately and they will stay this way for many years until the domestic production can meet consumer demand. If he’s really honest, he’ll tell you that prices will always be higher which means you will have to live in a smaller house, drive a smaller car, and basically live a smaller life than you live today to support those industries that are employing your fellow Americans. Still voting for the Buy American candidate now? It seems like platitudes talk and money walks when it comes to the consumer’s wallet.
So, here’s the bottom line. Like our personal health, the key to good economic health is a healthy moderation of what and when we consume. If we continue to consume cheap goods from China at the current rate the result will be a nation bloated with debt, high rates of unemployment, and inflation while contributing to the strengthening of our greatest geopolitical enemy.
What we need are courageous leaders who will ditch the platitudes, tell the American people the truth, and boldly enact policies that will provide us with the healthy balance we need. In the meantime, watch out for those who tell you what you want to hear while running but do something else once elected, both on the left and the right.
“Then he said to them, “Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions”
luke 12 : 15
