Superfusion: How China and America Became One Economy

Cross-posted at River Twice Research.

The economic relationship between China and the United States is the defining issue of our day. While debates over health care are vital to American society, and while challenges ranging from Iran to Afghanistan to North Korea are real, nothing will determine the arc of the coming decades - or will shape domestic life and prosperity in the United States - more than the emergence of China as a global economic superpower unrivalled except by America.

The rise of China is hardly a secret, but because it is a complex economic that is constantly evolving, it gets less attention than hot-button issues. Absent a real crisis between the two, the relationship is more about the flow of capital and the nature of global business than it is about heated battles inside the Beltway or on Main Street. And while the rise of China and America's increased dependency on Chinese loans to fund its deficits certainly generates anxiety, it's mostly amorphous barring some specific issue to focus it.

How that relationship came to be is the subject of my new book, Superfusion: How China and America Became One Economy and Why the World's Prosperity Depends On It. While this economic fusion has taken more than two decades to evolve, with the crisis of the past year, it has become both a tighter embrace and one more fraught with tension. It's to the credit of both governments - for now - that those tensions have not boiled over.

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The winds are still blowing east

Cross-posted at River Twice Research.

While Washington is glued to the drama over health care, over the past few days, Russian Prime Minister Vladimir Putin has been in Beijing meeting with Chinese leaders including Premier Wen Jiabao and President Hu Jintao. In a series of communiqués, they celebrated the "strategic partnership" between the two countries and charted a course of future close relations.

Among others things, Putin - Russia's man behind the curtain who has also been spending considerable time in front of the curtain - signed off on six billion dollars worth of trade deals Chinese counterparts, including moving ahead with a natural gas pipeline to open up the vast Chinese market to Russia's equally vast supply of natural gas. The two sides also discussed policies to contain and manage North Korea. Trade between the two countries is approaching $60 billion a year, and while that is a faction of the more than $300 billion a year between China and the United States, it is hardly negligible.

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Sorry Israel, no Iran war & crippling sanctions 4U

I've said a few times in comments recently that I'm pretty optimistic, from my antiwar and similar perspective, on the Iran and sanctions issue. The reasons are various, but centered on the analysis of India career diplomat M K Bhadrakumar, who also believes the sanctions effort will fail. More on those ideas a couple paragraphs down.

As for my perspective, first of all, not that it's stopped the U.S. before but there is pretty much zero justification for U.S. saber-rattling, as indicated by the mundane headlines (i.e., Iran vows to stick with low-level nuclear enrichment) only two days after the three imperials (Obama, Sarkozy, Brown) news conference about a 'secret' low-grade nuclear 'facility' that was neither secret nor a facility, since it won't be a functioning one till construction ends 18 months from now. This is weak soup for crippling sanctions, naval blockades, and worse. Today, even weaker stuff, 'IRAN TESTS (short-range) MISSILES! Oh my gawd y-a-w-n, weak stuff for scaring us up and dealing death.

Secondly, and Bhadrakumar's analysis is critical here, despite Beltway pundits fishing for wish fulfillment, both China (emphatically) and Russia oppose sanctions on Iran. And this time the U.S. needs international cover, imho, or its 'X must prove it doesn't have WMD' campaign (Hillary Clinton) won't have the outcome (severe sanctions and an attack on Iran's nuclear power facilities) desired by the U.S. & Israeli military-industrial complexes.

Bhadrakumar makes three major points in Moscow holds the line on Iran sanctions:

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You can be great at soccer, or globally dominant - you can't be both

Cross-posted at River Twice Research.

So the United States lost to Brazil in the final of the FIFA Confederations cup, in that thrilling but painful tale of two halves, with the U.S. up 2-0 only to see Brazil roar back (or rather dance and prance and glide with balletic ferocity) and win 3-2. All I can say is, thank god.

For the past sixty years, the powerhouses of international soccer (a.k.a. football) either have been empires past their prime and on the decline or countries that dream fruitlessly of empire - England, France, Italy, Germany, Argentina, Brazil, and Spain. To bestride the world as a soccer power is to not bestride it as an economic or military power. In its period of global hegemony, the United States was manifestly not a global powerhouse in soccer. It was mighty in everything but the sport that is played by more people in every corner of the world than any other. And so if the United States had magically defied the odds and the gods and beaten Brazil, it would have been the final sign that American is indeed in decline.

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Execution of gays in Iraq continues unabated- UPDATE: Call for violence to end

The U.N., and now with the U.S. support, has previously tried to address in a non-binding resolution the issue of the criminalization of homosexuality. It was not so long ago that gays where (as of 2003) were subject to jailing. However, these issues are imprisonment and murder continue unabated abroad.

One country of particular concern is Iraq. My concern is that we are involved with the country in many ways yet this issue remains unaddressed.

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Diaries

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