Romney is pounding Obama for losing American industry to China. Fact is, while Obama hasn’t done much to remedy the situation, American business interests started bedding down with Chinese commissars long before Obama took office. And among the leaders in this new form of economic treason has been Romney’s own firm Bain Capital. But Romney is hardly alone as the following snippet from Dean Baker demonstrates —
At the top of this list would be retailers such as Wal-Mart, who invested an enormous amount of money in building up low-cost supply chains in China, as well as other countries in the developing world. These low-cost supply chains are a main source of their competitive advantage over other retailers. They will not be anxious to see this advantage eroded by a 20-30 percent rise in the yuan, which will largely be passed along in higher prices.
In the same vein, major manufacturers like General Electric have shifted much of their manufacturing capacity to China and other developing countries. These firms will also not be anxious to see the dollar fall, making the goods they produce overseas relatively more expensive.
If a president were to demand that China raise the value of its currency, they would not only be coming into conflict with the government of China, they would be coming into conflict with the U.S. companies that are profiting from the over-valued dollar. These companies could be expected to use all the political power at their disposal to prevent any steps that will lessen the value of the dollar against the yuan.
In fact, the domestic line-up against a lower-valued dollar is even more formidable than just the retailers and manufacturers who directly benefit from the over-valued dollar. The United States has a long list of economic demands that it makes on China’s government.
Most notably it has been pressing China for increased access to its domestic market for the financial industry. This is very important to companies like J.P. Morgan and Citigroup. It has also been demanding that China have stronger enforcement of patents and copyrights. Stronger patent protection is important for drug companies such as Pfizer and Merck, while stronger copyright protection could mean billions for Disney, Time-Warner and the rest of the entertainment industry.
If a higher-valued yuan was placed at the top of the U.S. list in negotiations with China it would mean that these other goals would get less priority. As a superpower, no one expects China to simply accept a list of demands handed to them by the U.S. president. Inevitably there is a negotiation process and if the U.S. gets concessions on the value of the currency, it will almost certainly come at the expense of progress on other demands.
This means that if Romney or any other president were to crack down on China over its currency, not only would he be forced to first overcome the opposition of the firms that directly profit from the over-valued dollar, he would also have to overcome the objections of many powerful corporations who want their own issues with China to be given priority.
In short, the issue is not really one of finding a president who is prepared to stand up and be tough against a cheating China, the issue is finding a president who is prepared to stand up and be tough with U.S. corporate interests. Romney can certainly blame President Obama for not taking the tough stand against U.S. corporations in his first term. The question is whether there is reason to believe that Romney would be any tougher on his friends and former business partners.
The history of the Second World War reveals that France went under to the advancing Panzers partially due to Fifth Columnists among the nation’s business elite. Likewise, but for Churchill’s deft maneuvering with the support of Britain’s Labour Party, the British elite would have sold out to the Nazis as well. It is not surprising that the traitors to America today, those doing business with Chinese slave labor camp commandants and bloody Saudi-Wahhabi sheiks, are of the same class.