Henry Liu raised a point that I've been thinking about quite a bit these past four days. U.S. economic hegemony -- and arrogance -- rests on a foundation of a massive and chronic current account deficit. This seems paradoxical. But it makes a kind of "I-owe-you-SO-much-you-can't-afford-not-to-lend-me-more -and-do-whatever-I-say" sense. Debtor's blackmail. At some point in the game, the other players have to ask, "Am I just throwing good money after bad?" The events of May 7, 1999 and after have given the world -- not least, China -- a clear sign of the U.S. lack of good faith. The knee-jerk response of the Clinton administration was to excuse themselves of responsibility. They figured they could short-change China with a glib evasion. The notable thing about the U.S. response was how in character it was -- cynical, evasive, self-serving, narcissistic. It was the smirking reflex of a deadbeat. China/U.S. trade probably won't come to a screeching halt. But that image of the smirking deadbeat won't fade. regards, Tom Walker http://www.vcn.bc.ca/timework/covenant.htm
