Tuesday, August 26, 2008

China, Obama, and Rich vs. Roberts

Frank Rich writes (after mentioning Michael Phelps success):

This was a rare feel-good moment for a depressed country. But the unsettling subtext of the Olympics has been as resonant for Americans as the Phelps triumph. You couldn’t watch NBC’s weeks of coverage without feeling bombarded by an ascendant China whose superior cache of gold medals and dazzling management of the Games became a proxy for its spectacular commercial and cultural prowess in the new century. Even before the Olympics began, a July CNN poll found that 70 percent of Americans fear China’s economic might — about as many as find America on the wrong track. Americans watching the Olympics could not escape the reality that China in particular and Asia in general will continue to outpace our country in growth while we remain mired in stagnancy and debt (much of it held by China).

How we dig out of this quagmire is the American story that Obama must tell. It is not a story of endless conflicts abroad but a potentially inspiring tale of serious economic, educational, energy and health-care mobilization at home. We don’t have the time or resources to go off on more quixotic military missions or to indulge in culture wars. (In China, they’re too busy exploiting scientific advances for competitive advantage to reopen settled debates about Darwin.) Americans must band together for change before the new century leaves us completely behind. The Obama campaign actually has plans, however imperfect or provisional, to set us on that path; the McCain campaign offers only disposable Band-Aids typified by the “drill now” mantra that even McCain says will only have a “psychological” effect on gas prices.

To which Russ Roberts responds:

Yes, China is growing quickly. Yes, they have mobilized a lot of resources to win gold medals in gymnastics and diving.

But they are a desperately poor country that represses their people too often, has filthy air, and has a massive problem dealing with an exploding urban population. Their mobilization of resources to win medals in gymnastics and diving is a scandal for such a poor country, not a triumph. Meanwhile, in the United States, we are suffering through a mild something, maybe a recession with unemployment at 5.7%. Our debt problem is minor. The fact that a lot of US debt has been purchased by the Chinese government that will be repaid in dollars that buy a lot less than they used to is tough on the Chinese not us.

The idea that Obama will have a plan to reverse matters and set us on the right track is simply a fantasy. We will continue to run trade deficits whether Obama or McCain is elected. We will almost certainly run Federal budget deficits under either man as well.

Finally, Chinese growth is good for the United States. The economic race is not like the Olympic race. It is not zero-sum. In the Olympics, if you win the gold medal, I can't. In economics, both countries can grow together.


thinking said...

I disagree with Russ Roberts that our debt problem is minor.

And yes, the Chinese are not be envied or copied, but that does not mean they will not or cannot cause some problems for us.

And contrary to Russ Roberts, Obama does not claim to have one grand "plan." Like Frank Rich notes, Obama does have plans, however imperfect, that do address many of the major problems and that are better than nothing and better than what we have now.

That is far better than McCain's nebulous collection of snake oil ideas. McCain has been so disappointing in the substance of his ideas. No wonder why his campaign is 90% smear tactics against Obama.

If McCain were elected he would go down as one of the worst in history, just like Bush will.

Let's face reality: the McCain of 2000 would not vote or recognize the McCain of 2008. McCain, like Bush, is dumb...plain dumb.

I never thought I'd say this, but I would rather have either Clinton over McCain, and of course, Obama is vastly preferable to all of them.

thinking said...

The more I think about that line about how the "debt problem is minor" the more I realize just how out of touch Roberts is.

What a joke of a line...I'm glad he can just put that out there with such a casual stance.

I guess Russ Roberts doesn't understand that the lender has power over the borrower. And his line about how repaying the Chinese with devalued dollars is somehow good for America is another joke.

So in Roberts' worldview massive debt and a devalued currency is no big deal. I don't suppose that he's not biased by his political preferences, is he?

I bet if this happened under a Democratic president that Roberts would be blasting away at this.