It was almost as easy to see that populists would try to blame China for our problems as it was to predict that they would blame illegal immigrants. Neither group of “furriners” is actually responsible for our unemployment or for our financial woes, but it’s easier than blaming the person in the mirror.
When the House took up import duties as a way to force China to devalue its currency, they knew it was all just for show, whether they passed a protectionist bill or not. Fortunately for the strutting Congressmen that appealed to their angry constituents by passing the bill, they won’t have to deal with the consequences of it becoming a law.
I’m reminded of the advice from the Richard Crenna character in First Blood, advice that was ignored by the small town sheriff played by Brian Dennehy. When the House declares war on China over currency imbalances, they know the Senate will give the Chinese an easy path to escape.
Just like the local sheriff, our populist politicians have failed to realize who they’re trying to bend to their will. China has a long memory. China remembers, for example, that Western colonial powers forced them to accept opium importation and western-dominated cities like Macau and Hong Kong where monopoly capitalists could maximize their profits off Chinese trade.
That was the reality of the 19th century, a reality that 21st century China does not need to accept. Today’s China has managed its conversion from agricultural countryside to industrial urban centers better than just about every other nation that went through that change. They haven’t had the extended, wrenching economic recession that England suffered in the late 1800’s, nor the Great Depression the US suffered following its shift early in the 1900’s.
They are building a middle class capable of buying the output of their factories, and they’ve done it in just one generation. Even their recovery from the 2008 financial panic has been quick and robust, with a Keynesian stimulus that was the right size and timing to work (1.5% of GDP, applied quickly, and not wasted on gifts in the form of tax breaks to economic agents who weren’t going to spend a dime of their savings increasing economic activity).
When we try to force China to our view of how they should price their currency, we simply don’t know who we’re dealing with, just like the sheriff in First Blood.
In a way, the politicians who pandered to their home audience by “doing something” about China’s currency were playing a very cynical game, since they knew the Senate would never even consider their bill. The escape route was already assured.
I do wonder whether this instance where the failure of the US Senate to do its job justifies that failure to act on almost everything, however.
The Senate has been scene of a continual strategy of tag-team hostage crises, with various Senators switching turns at making sure that all three branches of our government stop working through pernicious use of the individual “Senatorial hold.”
Each hold can force ANY appointment or any bill into a minimum of 30 hours’ required floor debate time, and the clock starts only after a 60-vote supermajority appears in the Senate chamber and votes to proceed. When Richard Shelby wanted his state to get a particularly juicy chunk of Federal pork last spring (the Northrup Grumman air force tanker contract), his weapon of choice was a hold on every nominee for every department of the Executive branch.
On required Presidential appointments alone, a recalcitrant Senator (or political extortionist, as I prefer to call them) can force the Senate to debate appointments or bills (with quorum present) for more time than there exists in an eight-year double Presidential term.
Adding up the 30 hours’ time on all the Federal Judge, US Marshalls, Ambassadors, and Executive Branch senior administrators, it’s actually possible to delay having people in those essential positions in the Judicial and Executive branches. And the “hold” is a weapon that a single Senator can wield.
With the Senate perennially lagging behind the House in addressing legislation (for that matter anything else, as minority Senators take turns holding America hostage), the House vote was like the local sheriff in Stallone’s Rambo, trying to be in charge even after the state national guard and state police were calling the shots.
Let’s hope that China won’t be like Stallone’s Rambo, who could have simply gone on his way after they thought he was dead, but came back to town to finish the war.