America and China
Joined at the Hip
By DAVE LINDORFF
18/9/08 "Counterpunch"
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With the government now having spent over $800 billion in less
than a year shoring up tottering financial companies that had
become little more than casinos (and rigged ones at that),
America is looking increasingly like China, a country where the
state has been gradually getting out of the business of directly
owning companies.
At this point, with the US government owning 80 percent of the
world’s largest insurance company, AIG, and essentially owning
mortgage firms Freddie Mac and Fannie Mae as well as bankrupt
Lehman Brothers, and with the nation’s two largest automakers in
line asking for $25 billion in government loans, one would be
hard-pressed to spot the difference between the two systems.
The essential point of commonality is that big
enterprises—especially banking enterprises—are being allowed to
operate as fail-proof yet operationally opaque adjuncts of the
state. Their business decisions—whom to lend to, what risks to
take, etc.—are made with the goal of enriching the key managers
and shareholders, and probably also key government officials and
bureaucrats—with no thought to the impact on the larger economy
or the larger population of the respective countries.
I saw this system in operation in China once when, as a reporter
for Business Week magazine based in Hong Kong, I visited the
neo-capitalist boomtown of Shenzhen, just across the LoWu creek
from Hong Kong. There I met a friend who introduced me to a
former Nanjing Law School classmate who was now a top officer in
the Armed Police, an 800,000-man paramilitary unit used for
putting down strikes, demonstrations and “unrest” that
essentially runs Shenzhen like a mob family. The guy took us to
a downtown skyscraper that housed a private real estate company
that, it turned out, was owned by the Armed Police (all the
company vehicles in the parking lot had the characters “Wu Jing,”
or “Armed Police” on their plates). In the lobby was a model of
a huge housing development planned and under construction, that
would become a bedroom community for Hong Kong office workers
who would commute to Hong Kong from Shenzhen. At the time,
Chinese Finance Czar Zhu Rongji had ordered a clampdown on
lending to tamp down a Chinese economy that was in danger of
overheating. I asked this soldier-entrepreneur how his company
was planning on borrowing the money it needed for this mega
project, and he just laughed, saying, “We can borrow all the
money we need.” Later, my friend, wise in the ways of the
Chinese system, whispered, “When he goes into the bank to ask
for a loan, he’ll of course wear his army uniform, and what
banker would turn him down?”
How different is this, in the end, from the system that is
evolving here, where GM or Ford executives walk into the Federal
Reserve, or the Treasury Department, and demand $25 billion in
loan guarantees, saying, “Give us the money or we go under.” In
China, an executive implicitly puts a gun to the head of his
government banker. In the US the executive expressly puts an
economic gun to the government banker’s head.
So much for the free market, which now only applies to small
businesses. In America, as in China, individuals are left to
sink or swim, and private property is only private as long as
the government, or some well-connected developer, doesn’t want
it. In China, if the state decides it wants some land for a mega
commercial development, it just ejects the current residents,
offers them a token sum for resettlement, and moves in with the
bulldozers. In the US, the government does the same thing. Just
ask the residents of New London, ousted from their riverfront
property on orders of the US Supreme Court to make way for the
“higher use” of a luxury hotel and commercial development. As
for that so-called “American Dream,” the family home, as
foreclosures rise to Depression Era levels, the government
stands idly by, but leaps to the aid of giant corporations that,
having made wildly risky gambles and lost, are about to go
under. (In a particularly ugly slap at the battered homeowner,
the McCain campaign in economically depressed Michigan has been
gathering lists of foreclosed properties to run against voter
lists, intending to challenge on Election Day the right to vote
of anyone who offers an address that is in foreclosure. Lose
your home, in other words, and the McCain will also try to make
sure you lose your right to vote, too.)
The convergence of Chinese and US political-economic systems is
going on in other ways too. Both governments are using massive
computer systems (made in America) to monitor the Internet, with
China making use of equipment and techniques developed for them
by US companies like Google, Yahoo and Cisco Systems, and with
the National Security Agency then drawing on those techniques
for use back here in America.
As we saw at the two national party conventions last month, the
US is also learning and applying the crowd-control techniques of
the Chinese government to the US where the default tactic
wherever public protest is planned is now to have police adopt a
paramilitary approach that features aggressive use of tear gas,
concussion bombs, assault rifles, house raids and preventive
detention.
Another point of convergence is the concentration of power in a
secretive executive body. China, of course, has a national
congress. It meets once a year and passes carefully vetted
resolutions. In recent years, its members have occasionally
raised a controversial issue, like concerns about the
environmental and human consequences of the Three Gorges Dam, or
about the role of shoddy construction in the deaths of so many
school children in the last earthquake. But it has no power and
plays no role in controlling the decisions of the true leaders
of the country.
Likewise in the US, there is a Congress, but over the last eight
years, it has ceded virtually all oversight power to the
executive branch, which treats any effort by its members to
investigate or to constrain its action with utter contempt.
Both countries promote widespread, worshipful display of the
national flag, and ritual oath-taking, as well as unquestioning
patriotism and worship of militarism.
In media too there is convergence. China has since 1949 had a
state-run media model, where all media organizations—newspapers,
radio and TV stations—are owned by the state, and function as
propaganda arms. In the US, while nearly all media organizations
are privately owned, by controlling the licensing of all
electronic media, and thus having the final say on any and all
acquisition strategies, the government has over the last 20
years or so, degraded the media to the status of compliant
servant. It is getting difficult to discern the difference
between the two models. In fact, Chinese citizens may actually
be better informed, having lived for decades under a propaganda
model, since they know that they are being lied to by their
newsmedia, whereas few Americans realize the extent to which
their own media are controlled and acting as government
mouthpieces.
Fascism has perhaps been best defined as a system in which the
government and corporations merge, and in which militarism
becomes a dominant value. I have long argued that this is an apt
description of modern China. It is increasingly also an apt
description of modern America.
DAVE LINDORFF is a Philadelphia-based journalist and columnist.
His latest book is “The Case for Impeachment” (St. Martin’s
Press, 2006 and now available in paperback edition). His work is
available at
www.thiscantbehappening.net
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