From American Gold to Gold Medals, the Chinese Win Twice
By Joel Hirschhorn, published Aug 18, 2008
The majesty, creativity and uniqueness of the Summer Olympics in China cannot be denied. It is an entertainment spectacle that will long be remembered and used as the gold standard that other nations will find difficult to match. Some people praise the Chinese for the gift they have given the world. But the economics of these Olympics merit more serious examination. Americans have paid for the massive, multi-billion dollar spending to create the Olympics venues in China.
First, over many years, American consumers have had little choice but to purchase Chinese products because myriad companies decided to increase their profits by importing goods from China made by low-paid workers made by companies not spending to comply with environmental, health and safety regulations, or setting up manufacturing facilities of their own there. Americans have to work very hard to find almost any product that is NOT made in China. From frozen tilapia fish to shoes to appliances to all clothing, consumers find little else in stores except stuff made in China. This explains an enormous nutty trade imbalance with China. The Chinese have amassed untold billions in US dollars from this one-sided trade disaster. While it is argued that consumers have benefitted from lower prices, millions of American workers have lost good-paying jobs once held in manufacturing industries.
What has the Chinese done with the piles of profits from swollen exports to the US? They became one of the largest sources of money that the US government has borrowed, because of an enormous budget deficit. So, first the Chinese make tons of money selling us products and then take some of those profits and loan the dollars to us, making still more money from the interest we must pay them.
In other words, the Chinese have us under their control. If they decided to abandon us, what would happen? Without them we would have nearly nothing to purchase. We have lost our manufacturing capabilities. Worse yet, our economic house of cards supported by debt would collapse if they stop loaning us money or decided to cash in all the financial instruments they own. The US is no longer an independent nation. China, in so many ways, is our master.
Without having the US as its number one customer for goods and money, the Chinese would never have been able to invest the billions they spent on creating the spectacular Summer Olympics (nor the billions they investing in expanding their military efforts and space program). We, the citizens of America, because of corporate greed and government incompetence, have paid for the Olympics. They are not a gift from the Chinese to the world, but a involuntary gift from Americans to the Chinese. They get all the credit, while we American suckers have paid for all of it.
Instead of so much focus on the "gold" in medals won by China, the US and other nations, much more focus should be given to the transfer of wealth from the US to China. And to add more insult to this mess, the skyrocketing increases in petroleum and other natural resources by the Chinese have increased prices hitting Americans. Again, all those increases from rapid industrialization spring from the lopsided trade between the US and China.
Look at it this way: In China millions of poor people are improving their economic condition and becoming middle class. Meanwhile, in the US millions of middle class people are losing economic ground and joining the working poor. In both countries the wealthy are becoming richer, with millionaires becoming billionaires.
Americans should be more interested in Olympics economics rather than in what country wins the most medals. In so many ways, American athletes are doing much better than their government. And all the talk about China not doing enough to build a stronger democracy misses the bigger point that America has long ago lost its democracy credentials as it became more of a plutocracy serving the rich and corporate classes. In the end, globalization is all about serving elites in all countries and transferring wealth from the middle class in developed countries to the poor in developing ones. No matter how many medals Chinese athletes win, the Chinese government stands as the winner over the US government.
Source: http://www.opednews.com/maxwrite/linkframe.php?linkid=66743