Dealing with China: Why Laura Ingraham is Wrong

by Sal on March 5, 2007

in Politics

Let me preface this with the fact that I am a huge fan of Laura Ingraham.  I love her show, think that she is one of the most important voices in the spread of conservatism, and find her to be both informative and humorous.  She was a leading force that helped get Harriet Miers to withdraw her nomination and helped get Sam Alito appointed to the Supreme Court.  However, listening to her show on Friday, she discussed her views on China which I feel that she is not only wrong, but is dangerously wrong. 

Laura recommends using our economic influence to help shape China’s policy.  She rightly points out that China is horrific on human rights, is showing signs of military buildup, and is not exactly a friend of the United States.  She seems to be recommending some kind of economic sanctions, and bemoans the fact that manufacturing jobs in Ohio and Pennsylvania are being lost to China.  She agreed with statements by She-who-must-not-be-named and Chuck Schumer.  She claims that they are speaking like “populist conservatives.” 

Laura, we love you, but you are just plain wrong in this case.   Imposing any kind of tariff or trade restriction on China would cause massive ripples and affect the U.S. economy far more than the Chinese economy.  The U.S. economy is so intertwined with the Chinese economy (and the rest of the world economies) that any major economic effort to attempt to change Chinese policy would cause a massive loss of U.S. jobs and a recession in the U.S. economy.  The low cost of labor and goods coming from China have allowed U.S. companies to provide lower-cost goods and services, higher paying jobs, and produce more goods and services for the world economy.  If the U.S. imposed a tariff or some kind of Economic Sanctions (footnote:  Economic sanctions never work.  They are completely useless, have absolutely no teeth, and in this case would be devastating to our economy) the cost of raw goods would rise, and companies would have less money to make goods and services.  Jobs would be lost or salaries cut because companies would not have as much capital to invest.  True, China’s economy would be dented (they do trade with other countries, and they would have to refocus) but ours would be devastated. 

On the loss of Manufacturing jobs, the U.S. economy has gone through cycles before where a certain sector of jobs is lost as the economy goes through a transition.  Economist Walter E. Williams has used the example that in 1980, there were a high number of telephone switchboard operators in the United States.  Due to new technology which automated telephone switchboards, those jobs were lost.  However, today we have record unemployment.  Many people thought that the advent of Computers would cause massive unemployment as computers automated more processes previously done by humans.  However, this was not the case and computers have opened up an entire new sector in our economy.   Losing manufacturing jobs to China hasa short-term negative impact to those whose jobs are affected.  Long-term, however, it is better for our economy because those manufacturing jobs will eventually be replaced by higher paying jobs as our economy continues to expand, change, and move into new directions.  That has been the genius of the U.S. economy since the Industrial Revolution, and it will continue to be in the future unless we hamper it with such “populist” measures as tariffs or economic sanctions.

Finally, Laura is right to point out that China is a threat to us militarily, and needs to be dealt with.  The answer is not economic, however, it is military.  The military needs to be built up again in a cold-war fashion to act as a deterrent to China.  Building a missile shield is one of the best ways to accomplish this, as is a military buildup that would ensure that if China attacked us in any significant way, we would have the capability to instantly wipe them off the map.  It sounds cruel, but their intentions are not noble, and we need to make sure that our military force is so substantial that it would be suicide for them to even attempt an attack.  I do agree that we cannot take our eye off China in the pursuit of the War on Terror, and a military buildup is the best way to accomplish that.  We should also continue to push pro-democracy movements in China, and work on economic reforms through such organizations as the WTO (a much more effective organization than the U.N.).  These are the appropriate measures to push China to change, ensure our national security, and continue the economic expansion that the U.S. has enjoyed for the past 50 years.  

{ 8 comments… read them below or add one }

Ryan March 5, 2007 at 5:25 pm

My belief is that China is an enemy and that we need to treat them as such. I believe that threatening economic retaliation is good though. That’s what they’ll understand. China has NEVER had a middle class until the last fifteen years. Once a serious recession hits that country a new dynamic will take place. Before, the Chinese elites kept power on the backs of the poor–aka everyone else. Now, China has a huge population of people who are not poor, not elites, but still have a stake in the system. If they have a stake, they may demand a say in that system.

Deng Xiaoping realized that if China was to survive, it had to go capitalistic. One thing that history teaches us is that a true capitalist free-market system only maintains itself for the long-haul if economic reforms move with political ones as well. If China wants to progress, they need to change– their people have seen the Internet and they like what’s there!

Yet, I think that fighting another Cold War with China is not necessary. Mutually Assured Destruction is a concept that the Chinese must keep in mind, and our Defense Department MUST always make clear. That’ll keep the peace with occasional reminders.

China and the USA are so economically connected today that a war would ruin us both– and the communists have much more to lose than we do, especially when that new middle class wants to keep what they have. China does not have the guts to kill everyone they need to without risking the massive exit of capital the minute social unrest begins. Tiananmen Square could not happen today without massive international fallout that would sink their markets. That was not the case in 1989.

On another point: you’re right that the WTO is more important than the UN in affecting real change with China. UN sanctions would never work, and Russia, Iran, India and Pakistan will take great offense to us bullying China without serious cause. They are all in the same boat economically– they’re developing– and they may team up against the developed world of Europe, America and Japan. They’re like the “middle class” of my China analogy– they all have something to lose if massive instability takes place. We can’t leave China alone, but we can’t crush them without crushing ourselves too. I believe that slowly prodding them with economic incentives to act like us if they want to trade with us is the key to China behaving.


Ray March 6, 2007 at 2:37 pm

USA doesn’t have the economic leverage to pressure China. Let me remind you it is US that has a massive debt almost $9 trillion dollars, and is dependent on China and Japan for financing. You cannot realistically tariff your banker and expect further cheap financing. The Achilles heel for USA isn’t lack of manufacturing competitiveness, as Laura seem to suggest by using tariffs to level the field and thereby punish China, it is lack of household saving, burden by massive debts, deficits, current account deficits. USA depends on foreign financing from China and Japan, to pay the bills, and keep the government running. You can even say the cost to wage the War on Terror, is financed by foreigners. Laura may be an ideological conservative, but a real conservative should be shock at the level of deficit spending, and the trillions added to our existing debts. That is not fiscal conservatism, but naïve and unrealistic ideology.


Mike March 6, 2007 at 3:40 pm

If you ever listened to Laura, you would know that she does express shock at our unconscionable levels of deficit spending quite regularly.


Ray March 7, 2007 at 1:22 am

No, I have never listened to Laura, or any other radio show host. I don’t feel I need to listen to their opinions, since I’m quite confident I can form my own opinions based on facts, and not blind ideology. I’m not implying that you or anyone else needs to listen to Laura or any other radio show host to form your own opinions.

I’m glad Laura is shocked at our deficit spending. Is she horrified with our massive debts too? That is the USA’s Achilles heel. Unfortunately, it is easier for some Americans to blame others, to find scapegoats, than to take a long honest look in the mirror. We are a nation that do not save enough money, do not finance our own debts, do not practice sound fiscal and monetary policies, do not have a government willing to spend within its revenues to balance the annual budget, and is all to willing to mortgage the future of our child, grandchildren, and great grandchildrens. Tariff our bankers? Get real! Can USA businesses take the reverse tariffs on the goods they are trying to sell and export to others?

Just like USA has very little leverage with the Middle East because it is too dependent on Middle East Oil, USA has very little leverage with China since it needs the foreign financing. Americans can blame themselves for lack of savings, lack of fiscal and monetary constraints, lack of sound financial management, and lack of vision, since the key to the future, is not military prowess, but financial prowess. Any doubts about that, just look to the Iraq debacle for further evidence. The strongest military in the world, is no match for an asymmetric enemy like Al Qaeda et al, because they are not fighting a conventional war, but a guerilla war of attrition.


Sal March 7, 2007 at 8:02 am

The reason why Iraq is not going as it should is not because it is a guerilla war of attrition. It is because the U.S. does not have the stomach to do what is necessary to win the war. We are fighting a politically correct war, where we are more afraid of offending people than we should and we let that guide our tactics.

On that note, I agree in part with you on economics. Ecomomic prowess is a national security issue and needs to be looked at as such. We are spending too much and going into debt, and we need to get that under control, work towards a balanced budget, and start paying down the debt. I don’t think anyone here disagrees with that. However you underestimate as well the dependence that China and Japan and others have on our economy. If China and Japan were to call in our debt and caused a major upset in our economy, the economies of Japan and China would collapse as well. They may be our bankers, but they depend on our economy for their very survival.

That being said, the above situation will not stay that way forever, and we need to get the debt situation under control.

As far as talk shows, I think you do yourself a disservice criticizing a medium that you do not know anything about. Talk show hosts like Laura and Rush are not blind idealogues, but rather conservative thinkers who put forth viewpoints, often disagree with each other, and provide a forum for debate and discussion of issues. I listen to Laura and Rush and others for purposes of challenging my own ideas as well as for entertainment value. This thread is an example. I listen to Laura often, but in this case I strongly disagree with her. Often times I do agree with her, and her take on current issues sometimes adds to my own, but I do not blindly follow her lead, and neither do most of her listeners. There are definately idealogues out there in the world of Talk Radio (I define an idealogue as one who is loyal to party regardless of how the party behaves), but Laura is not one of them.


Ryan March 7, 2007 at 2:10 pm

Buying up our debt was a trick that the Japanese used in the 1980s. Where’d it get them? Twleve years of a deflationary economy, in fact– similar to what happened to us in the early years of the Great Depression. Where’d all this foreign buying of our debts get us with Japan? By 1992 we were on our way to balanced budgets and a roaring economy.

The interest we pay every year on the debt pales in comparison to the national wealth we accumulate as a result of the economic activity that has been spurred by this kind of behavior. We’ve had a national debt since Andrew Jackson– I think we’ll be OK.


Ray March 7, 2007 at 4:46 pm


The enemy knew they couldn’t win a conventional war with USA, so they had to turn it into a guerilla war of attrition. The USA made it easier to turn it into an unconventional war, because prior to the war, the rhetoric was USA was going into Iraq for WMD, to liberate the Iraqis from the tyrant Saddam, and to democratize the region. Notwithstanding whether those were the real motives, the fact is that rhetoric to justify USA actions in Iraq, also created real world limits as to what the US military could do in Iraq. Sure, we have the military capability to nuke Iraq, but that is more a war hawk’s fantasy to show military prowess, than a real world option, since how would that act look to the rest of the world, if we nuked the place or used overwhelming conventional weapons on Iraq, when we said we came to liberate them. Therefore, USA created its own Hopson’s Choice, which the enemy understood all too well, and successfully turned it into a guerilla war of attrition.

There is an estimate that it only took Al Qaeda half a million dollars to execute September 11. Yet the cost to wage this war against this asymmetric enemy is currently in the billions, and the effect on the US economy is in the trillions. Therefore, the enemy understood this is a war of attrition, especially given the very lopsided difference is cost between what Al Qaeda spent, and what USA is spending in response.

China and Japan doesn’t need to call the debts. A simple rebalancing away from US dollar denominated assets, and into something like Euros, can already have a far-reaching effect. Notice the cooling off in the domestic real estate market. In order to continue to attract foreign financing, interest rates had to go up last summer. Long-term mortgage rates also went up in response, and thereby started to cool the real estate sector. The bottom line is this: When you cannot pay your bills with current revenues and you must borrow, you are in no position to tariff your lender.

My point about the talk show host is very simple. I don’t need to listen to some talk show host to form my own opinions. I rather look at the facts to form my opinions. I do agree with your definition of ideologues.


Two major differences: The combine foreign holding is much larger now, than in the 1980’s. Our current account deficit is on the level of a banana republic. Some may be tempted to say, “But our debt to GDP is not that bad”. Our debt ratio was higher during the Reagan years. Problem with that argument is GDP is not measuring revenues and cash flow. Artificially increasing GDP with more government spending and borrowing, doesn’t correct the problem, it only deepens it.

Big difference between China and Japan: China has its own military to defend itself and do not depend on USA for its defense. Japan is dependent on US for its defense, partly because of its Constitution, and that was one reason it had to sign the Plaza Accord, which ended up hurting its economy for most of the 90’s. Bernanke will be lucky if he can keep China from further rebalancing away from US dollar denominated assets. Want cheap financing? Don’t start with tariffs on your lender.

Whether you understand this or not, it is in USA’s best interest to keep China as an allied. Chris Hill admitted that it was China’s leverage that got North Korea back to the table. There are many more things both countries can do as allies, and it need not be a zero sum game.


Frank Zhang April 18, 2008 at 10:43 pm

Laura is talking about the CNN apology to China in her show tonight and I could not describe how disappointed I was what she said. I sent her an email asking her how much she knows about China and when was the last time she visited China. The CNN event is not isolated event. It likes an organized crime. Please check out the for how main stream western media distort information and brain-wash people in western world about China and demonize China. Unfortuanately Laura joined them.

I also told her in the email that this is about Chinese people not about Chinese government. Please check out the to see 101,344 people ask CNN to aplogize. Don’t you think Chinese government should represent the people? Shame on you Laura.


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