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China’s Retaliation against Obama’s Protectionism

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Several years ago, neocon supporters of the Iraq and Afghanistan invasions didn’t pay much heed to how their adventures were placing our nation in a very precarious financial condition. Ironically, a liberal president, through his devotion to labor unions, might now be making that risk much greater and more likely to materialize.

You’ll recall that after 9/11, neocons were thirsting for vengeance, which ultimately manifested itself with invasions and occupations of two countries, Afghanistan and Iraq.

Here at The Future of Freedom Foundation, we fervently opposed both interventions, primarily on moral grounds.

We argued that an invasion of Afghanistan would result in the killing and maiming of countless innocent people and that it would be better to treat the 9/11 attacks in the same manner that the 1993 terrorist attack on the World Trade Center was treated — as a criminal justice matter.

We also fervently opposed the invasion of Iraq, a country that had absolutely nothing to do with the 9/11 attacks, on the same ground — that countless Iraqis would be killed and maimed for no good reason.

Our opposition to the invasions was drowned out with the neocon calls for “patriotism,” which meant blind support of whatever the federal government was doing with its troops. Since then, it is impossible to know precisely how many Afghanis and Iraqis have been killed and maimed at the hands of U.S. forces but the number surely exceeds a million. Meanwhile, Osama bin Laden, remains on the loose, continuing to make threatening videotapes.

Behind the moral argument against invading and occupying these two countries, however, was the financial or monetary argument — that these imperial adventures would be extremely costly in terms of military expenditures.

Again, however, we were drowned out by the neocons. “The federal government is rich,” they cried. “It can afford to do anything — and without raising taxes.”

And as long as taxes weren’t being raised, Americans didn’t much care to know how the federal government was paying the exorbitant costs of these invasions and occupations.

Thus, what people failed to notice was that U.S. officials were borrowing the money to pay for these military escapades, running up mountains of debt for which U.S. taxpayers are ultimately liable.

Even worse was where they were borrowing much of the money: from the communist regime in China, one of the most brutal, anti-democratic regimes in the world. That’s how China has turned out to be one of the U.S. government’s principal creditors.

Today federal spending continues to soar out of control, both for socialist and regulatory programs at home, and interventionist and imperial programs abroad. The hope among U.S. officials is that China will continue not only to lend new sums of money to the U.S. Empire but also that it will continue to roll over the debt it has accumulated.

So, what does all this have to do with Obama’s devotion to labor unions?

Even though it was a Republican, George W. Bush, who racked up the enormous debt, we now have a Democrat, Barack Obama, in office who continues to do the same.

To compound the problem, however, Obama has decided to instigate a trade war with the Chinese government. To show his loyalty to American labor unions, Obama has imposed a 35% protective tariff on tires imported from China.

Not surprisingly, China isn’t taking the measure lightly. It is retaliating by imposing protective tariffs on U.S. poultry and automobile imports.

Of course, this type of trade war is not good for the American people. But the real question is whether the Chinese government will limit its reaction to retaliatory tariffs. According to the New York Times, Chinese websites have been filled with “nationalistic vitriol” against the United States, with one blogger calling on the Chinese government to sell its entire holdings of U.S. treasury bonds.

Would the Chinese regime ever get so angry that it would do such a thing? Some people say no because they say it would be too costly to them.

Don’t be too sure though. When regimes get angry with each other, there is no telling what they’re capable of, no matter how irrational. If China decides to raise the stakes to a higher level by suddenly dumping its holdings of U.S. bonds on the market, Americans are likely to finally get a first-hand, direct look at the financial cost of U.S. socialism at home and imperialism abroad, beginning with an unfathomable plunge in the value of the dollar.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.