To which Russ Roberts responds:
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.
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.