Blinded by Faith: The Case Against Globalization

The United States of America (which has a per capita gross domestic product of $46,000) is ensnared in a perverse symbiosis with China (which has a per capita GDP of $2,400). The richest nation on earth borrows--massively, every year--from this very poor country so Americans can sustain a fabulous standard of living. It is an embarrassment, especially for advocates of globalization, but America's depleted condition makes it necessary. The burgeoning U.S. indebtedness to foreign nations contradicts the familiar claims that free trade among nations is a winning proposition for America. Unlike the typically symbiotic relations between species in nature--think of honeybees pollinating apple tree-the cooperative relationship between China and the United States does not deliver mutual rewards. The Chinese are willing to freely lend hundreds of billions of dollars to America because we need the money to keep buying China's exported goods. Companies producing in the United States sold some $79 billion in exports of goods and services to China in 2007, but Americans bought more than four times that from China in return, about $330 billion. The lopsided trade enables China to accumulate vast reserves of new wealth and lend much of it back to its U.S. customers. China, along with other major foreign creditors like Japan and the oil-rich Arab states, is America's national credit card.