Freeman and Hainan Accident II

It's surprising and not that surprising that Ambassador Freeman was finally withdrawing from his candidacy to the Chair of National Intelligence Council. In a political environment like this, no real impartial person could be put into the right place. The Israeli lobbying group was proved invincible again and the Anti-China choir played a minor role in this as well. Just like what's happening in recent history, here nobody cares what you are capable of, only whether you are politically correct. Speaking of ideology and propaganda, what an irony! Robert Pape the other day wrote on the Chicago tribune and talked about the decline of American economic power which led to the inescapable decline of American global hegemony, but for me, the real decline is not in economics, it's the lost of consensus! What and where is American national interest? How to achieve it? Maybe a democracy is needed to get the best idea out of a debate, but what if the debate is unending and confusing the right direction of the country?
I guess in order to prove that the $600B is really what the military needs, American navy is taking a dangerous course of getting close to China again. What a coincidence! Remember the last Hainan Accident in the first Bush year? To justify the necessity of keeping the Chinese in check, you'd have to give evidence of a wild, unlawful and reckless existence. Here it is, as if the trouble in Iraq and Afghanistan wasn't enough, U.S. navy ship has to come close to 75miles south of Hainan and still claim that China is the one who violated international laws! Is there a logic behind this? Maybe there is, that is giving more money to the military will never be wrong, cause the enemy is always out there when you sting it.
So who's gonna control U.S.-China relations? Hope building a mutual benefit base of energy and climate change isn't wishful thinking. Apparently, Secretary Clinton isn't ready for anything yet and forget about Geithner who's lost in the financial jungle, Freeman is gone, so Bates is gonna take over? What a mess.
Right now, the Congress is the most active actor on the scene. And nobody in that body thinks good about China. Particularly that ambitious Pelosi who's acting like the crazy actor Gere. But if the world were to recover from the "fall off the cliff", China and the U.S. had to work together.
That's why I am worried.

Protectionism: a real threat or a perceived threat

According to the EU Central Bank: "to date there is no major evidence that actual protectionist measures are increasing, but at the same time there are clear signs that protectionist pressures are on the rise in certain regions of the world (although support for globalisation remains strong in emerging market economies). Given the large welfare loss that a rise in protectionism would entail, this calls for additional vigilance in resisting protectionist pressures worldwide."
Maybe from the EU perspective, the threat of protectionism is just some pressures, exist only in some certain parts of the world, U.S. in particular, from the Chinese perspective, the threat is not only perceived long time ago, but real based on recent development around the world.
EU is cutting imports of bolts and nuts from China; India is closing doors for Chinese toys; America is building walls against Chinese poultry and steel, etc. Perhaps these are just marginal cases, or signs of pressure, but putting together in a non-stoppable way is pointing to a very dangerous water.
As emphasized before, economic stress is turing the view of political landscape. When Europe and the U.S. failed to bailout their economy, the public would grow more anger and animosity against foreign product and worker, come up with more excuses to increase protectionism. The possibility of trade wars is creeping up everyday. It's hypicritical for the EU and U.S. to say one thing and do another inconspicuously, like in the 2009 U.S. federal budget. And hopefully, leaders of the G20 will figure out a compromising way to deal with current trend or pressure towards protectionism, soon...

Return of the State

The world in the age of globalization is interconnected. When economic crisis spreads, it travels faster and wider than ever. First the U.S., then Japan, E.U., then BRIC and other developing countries, no one can escape from the perfect storm of the global crisis. The shockwave sent by the U.S. is revibrated back by the crisis in Eastern European countries. And crises in different countries and regions are mutually reinforcing. 

In the 1990s and earlier this century, theorists always talk about the fading of the state power and the growing influence of super-state, non-state actors on the world stage. At that time, the state sounds more and more irrelevant in the future course of the global development and the transfer of power to a higher or lower rule is not only desirable, but unavoidable. But now, that trend is brutally interrupted by the economic crisis and the state return as powerful as ever. The key is simple: the state is the only power center that welds the fiscal, monetary, and regulatory policy. Neither super structure like EU or IMF nor under structure like regional or municipal government has such a comprehensive power and independence. That's why EU is one step closer to monetary disintegration as the crisis deepens each day. 

Looking at the exchange rate right now and you'd realize how market value today's state power. The more powerful the state is and swift on action, the more value will be assigned to its currency, regardless how much deficit is attached in the short run. Interestingly, in the time of once-in-a-lifetime crisis, the market observers are all looking at the state and measure the possibility of recovery on the stimulus plan or rescue plan. As long as the crisis persists, the expansion of state emergency power and the dominance of state power in the international relations will unquestionably materialize. 

However, the irony lies in the return of the strong state. The state follows "save myself first" principle and acts upon it. Lack of international cooperation and more powerful international regime to correct the hole created by unfettered flow of capital, single states can hardly save  themselves without the revival of the others. Politically difficult, maybe impossible, choices are exactly what we need now. The rising of the state power generates a situation in which protectionism, populism and other danger of repeating world conflict are more plausible.

A leadership is badly needed, not just from the U.S., but from China. Successful coordination between the two countries' recovery plans could contribute to a quicker cure for the economy. The world will follow if such engine could be re-jump started. 

Grave danger lies ahead. If no sweeping action taken by the leading states in the world, more and more economic problem will dive into political and social problem. Unstable political conditions compounded with worsening economic conditions will make solutions ever more elusive and difficult than today. symptoms are already emerging around the world and things will certainly get worse before the end of the first decade of 21st century.