There are some of us who thought that after our victory in the Cold War we’d get a bit of a respite. And we did, for a mere ten years.
From the Christmas 1991 lowering of the Soviet flag over the Kremlin to 9-11 was a frivolous profitable decade run by the Republicans mostly, with a chief executive who resembled, in hobbies, Charles II. Today not only are the Taliban back in Afghanistan, but former raging capitalists the Chinese are starting to show a decidedly non Smithian attitude. Combine that with their regional hegemonic pretensions and we have a new Cold War of bonds, not bullets. Economist Stephen Moore explains.
Moore: With each passing week, it looks like World War III — between America and China — is coming sooner than we think. It’s not going to be fought with bullets or aircraft carriers, although the Chinese are building up their military in an aggressive and threatening way.
This will more likely be an all-out economic war for global supremacy. The yuan versus the dollar. The Nasdaq versus the Shanghai Stock Exchange. Meanwhile, America is asleep at the switch — at least, the Biden administration is. This is the worst possible time to be raising tax rates on American companies (Our business tax rates would be higher than China’s under President Joe Biden’s plan!), dismantling American energy (at a time when China is running 1,000 dirty coal plants with dozens more in construction), and running up the national debt (with China a major purchaser of the bonds).
Love Donald Trump or hate him, he was a president who put America first and recognized the predatory nature of the Chinese regime. He got tough with President Xi Jinping and overturned one-sided trade deals. His strategy was to do what former President Ronald Reagan did to win the Cold War: Make America tremendously prosperous by building up our strategic industries in a way that the Soviet Union or China couldn’t compete with.
The danger is that we now have a president in Biden who thinks that climate change is a bigger threat to the world than the Maoists in Beijing. And make no mistake about it; the communists are back in charge in China. Jinping has basically announced himself to be president for life, as democracy and free elections fly out the window. China is also sprinting back to command and control fascist government and industry “cooperation.” That’s a model that will eventually implode, but as we learned from the Soviet menace, they can do a lot of damage to peace and prosperity in the meantime.
It’s no accident that China’s economy and stock market are faltering. In the last year, as the U.S. stock market has risen by about 20% (thanks to Operation Warp Speed), China’s Shanghai stock market went down 15%. They are sprinting toward socialism faster than we are… for now.