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America and China: Joined at the Hip

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By Dave Lindorff

With the government now having spent over $800 billion in less than
a year shoring up tottering financial companies that had become little
more than casinos (and rigged ones at that), America is looking
increasingly like China, a country where the state has been gradually
getting out of the business of directly owning companies.

At this point, with the US government owning 80 percent of the
world’s largest insurance company, AIG, and essentially owning mortgage
firms Freddie Mac and Fannie Mae as well as bankrupt Lehman Brothers,
and with the nation’s two largest automakers in line asking for $25
billion in government loans, one would be hard-pressed to spot the
difference between the two systems.

The essential point of commonality is that big
enterprises—especially banking enterprises—are being allowed to operate
as fail-proof yet operationally opaque adjuncts of the state. Their
business decisions—whom to lend to, what risks to take, etc.—are made
with the goal of enriching the key managers and shareholders, and
probably also key government officials and bureaucrats—with no thought
to the impact on the larger economy or the larger population of the
respective countries.

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I saw this system in operation in China once when, as a reporter
for Business Week magazine based in Hong Kong, I visited the
neo-capitalist boomtown of Shenzhen, just across the LoWu creek from
Hong Kong. There I met a friend who introduced me to a former Nanjing
Law School classmate who was now a top officer in the Armed Police, an
800,000-man paramilitary unit used for putting down strikes,
demonstrations and “unrest” that essentially runs Shenzhen like a mob
family. The guy took us to a downtown skyscraper that housed a private
real estate company that, it turned out, was owned by the Armed Police
(all the company vehicles in the parking lot had the characters “Wu
Jing,” or “Armed Police” on their plates). In the lobby was a model of
a huge housing development planned and under construction, that would
become a bedroom community for Hong Kong office workers who would
commute to Hong Kong from Shenzhen. At the time, Chinese Finance Czar
Zhu Rongji had ordered a clampdown on lending to tamp down a Chinese
economy that was in danger of overheating. I asked this
soldier-entrepreneur how his company was planning on borrowing the
money it needed for this mega project, and he just laughed, saying, “We
can borrow all the money we need.” Later, my friend, wise in the ways
of the Chinese system, whispered, “When he goes into the bank to ask
for a loan, he’ll of course wear his army uniform, and what banker
would turn him down?”

How different is this, in the end, from the system that is evolving
here, where GM or Ford executives walk into the Federal Reserve, or the
Treasury Department, and demand $25 billion in loan guarantees, saying,
“Give us the money or we go under.” In China, an executive implicitly
puts a gun to the head of his government banker. In the US the
executive expressly puts an economic gun to the government banker’s

So much for the free market, which now only applies to small
businesses. In America, as in China, individuals are left to sink or
swim, and private property is only private as long as the government,
or some well-connected developer, doesn’t want it. In China, if the
state decides it wants some land for a mega commercial development, it
just ejects the current residents, offers them a token sum for
resettlement, and moves in with the bulldozers. In the US, the
government does the same thing. Just ask the residents of New London,
ousted from their riverfront property on orders of the US Supreme Court
to make way for the “higher use” of a luxury hotel and commercial
development. As for that so-called “American Dream,” the family home,
as foreclosures rise to Depression Era levels, the government stands
idly by, but leaps to the aid of giant corporations that, having made
wildly risky gambles and lost, are about to go under. (In a
particularly ugly slap at the battered homeowner, the McCain campaign
in economically depressed Michigan has been gathering lists of
foreclosed properties to run against voter lists, intending to
challenge on Election Day the right to vote of anyone who offers an
address that is in foreclosure. Lose your home, in other words, and the
McCain will also try to make sure you lose your right to vote, too.)

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The convergence of Chinese and US political-economic systems is
going on in other ways too. Both governments are using massive computer
systems (made in America) to monitor the Internet, with China making
use of equipment and techniques developed for them by US companies like
Google, Yahoo and Cisco Systems, and with the National Security Agency
then drawing on those techniques for use back here in America.

As we saw at the two national party conventions last month, the US
is also learning and applying the crowd-control techniques of the
Chinese government to the US where the default tactic wherever public
protest is planned is now to have police adopt a paramilitary approach
that features aggressive use of tear gas, concussion bombs, assault
rifles, house raids and preventive detention.

Another point of convergence is the concentration of power in a
secretive executive body. China, of course, has a national congress. It
meets once a year and passes carefully vetted resolutions. In recent
years, its members have occasionally raised a controversial issue, like
concerns about the environmental and human consequences of the Three
Gorges Dam, or about the role of shoddy construction in the deaths of
so many school children in the last earthquake. But it has no power and
plays no role in controlling the decisions of the true leaders of the

Likewise in the US, there is a Congress, but over the last eight
years, it has ceded virtually all oversight power to the executive
branch, which treats any effort by its members to investigate or to
constrain its action with utter contempt.

Both countries promote widespread, worshipful display of the
national flag, and ritual oath-taking, as well as unquestioning
patriotism and worship of militarism.

In media too there is convergence. China has since 1949 had a
state-run media model, where all media organizations—newspapers, radio
and TV stations—are owned by the state, and function as propaganda
arms. In the US, while nearly all media organizations are privately
owned, by controlling the licensing of all electronic media, and thus
having the final say on any and all acquisition strategies, the
government has over the last 20 years or so, degraded the media to the
status of compliant servant. It is getting difficult to discern the
difference between the two models. In fact, Chinese citizens may
actually be better informed, having lived for decades under a
propaganda model, since they know that they are being lied to by their
newsmedia, whereas few Americans realize the extent to which their own
media are controlled and acting as government mouthpieces.

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Fascism has perhaps been best defined as a system in which the
government and corporations merge, and in which militarism becomes a
dominant value. I have long argued that this is an apt description of
modern China. It is increasingly also an apt description of modern
DAVE LINDORFF is a Philadelphia-based journalist and columnist. His
latest book is "The Case for Impeachment" (St. Martin's Press, 2006 and
now available in paperback edition). His work is available at www.thiscantbehappening.net


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Dave Lindorff is a founding member of the collectively-owned, journalist-run online newspaper www.thiscantbehappening.net. He is a columnist for Counterpunch, is author of several recent books ("This Can't Be Happening! Resisting the (more...)

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