Super Bowl ads are well known for how much they cost, so it’s very important that the advertisers get their message across. Somewhere between talking babies, beer-fetching dogs, and Adriana Lima waving the checkered flag, one Michigan Senate hopeful thought it would be a good idea to air a smear ad targeting one of his opponent’s foreign policy stances during local ad time. Although Pete Hoekstra’s ad, which depicts a chinese woman in a rice field speaking broken English about how US spending is bolstering the Chinese economy, had mostly gotten the spotlight because of the racist tones throughout the 30 second spot, it has helped uncover one important issue: how globalization fears are affecting political discourse.
According to a poll from the Pew Research Center, around 59% of the American public sees economic competition with China as a direct threat to the well-being of the United States. Globalization has allowed easier access for China to sell their goods across the globe, and primarily with the US, and has helped to boost their economy. While we’ve enjoyed cheap products from China, the United States has racked up trillions of dollars in debt and has put domestic money in foreign hands. As a result, China has been able to buy up a lot of the US’s debt and now has a good deal of leverage over the US. As the single largest holder of government debt, China has the potential to cripple our economy, should they choose to sell off their debt holdings.
So, how does this play into political discourse? Mainly by the way many political candidates are working this issue into their debates and their ad campaigns. Like Hoekstra, many political pundits have argued that wasteful spending has led to more debt, which gives foreign entities, like China, more power over the United States. Although Congressman Hoekstra’s ad has seen a lot of attention lately, most likely due to the fact it aired on local MI stations during the Super Bowl, this topic has been seeping into political ad campaigns more and more. They prey upon the fear of the US economy collapsing at the hands of foreign powers. Some argue that these politicians are using last ditch efforts to capture votes and that US-China relations aren’t in the forefront of voters minds. Other’s demonize these campaigns because it lets China off of the hook and gives voters a reason to put blame on the US instead. Nonetheless, ad campaigns such as these have shown how globalization and fear of global powers has altered the political landscape.
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[…] process will also have ripple effects felt outside of Africa. As Marc mentioned in his post, 59% of Americans think of China as an economic threat. If anyone wants some more extensive […]
I enjoyed reading Marc’s post especially in the context of having done my own post on a related topic. I actually even reference marks 59% statistic in mine. My post was about China’s trend of developing buildings and even stadiums in Africa, which seems to have a lot in common with what Marc is talking about with China’s involvement with American debt. China is clearly extending themselves in creative and lucrative ways across the globe. And even more so, these ways usually result in China having significant sway on governments. As Marc noted, our financial well-being is largely in China’s hands. Old predictions were that China’s economy would overtake that of America’s by 2050, but that prediction has been lowered year after year, now to the point where some say it could be as soon as 2016 (http://www.investorplace.com/2011/04/imf-says-china-will-overtake-us-economy-by-2016/). It’s scary to think about, but I happened to be talking about China with a friend after having read some articles for my own post, and we noted how our generation will probably manage to scrape by, but our children or grandchildren might face significant issues with China on an economic level.
I thought it was interesting to consider how owning American debt might give China leverage over the U.S. I guess I don’t quite understand how this works though. It would seem to me that if I owed a lot of someone’s debt, I would be rooting for them to prosper so that they could pay back the money they owe me. So I probably would have read the fact that China is the largest holder of U.S. to be a good thing (besides the fact that we have so much debt) because it provides an incentive for China to want the U.S. to succeed.
Well, one of the ways the leverage might play part in internatuional politics was seen in the february last year. United States had agenda to increase exports to China and US try to do what it did many times before – influence currency market in China. For example, when value of Yuan is artificially decreased, than american goods look more favorable to import. This tactic worked perfectly in the past and was producing short-term increase in US exports. However, in February 2011, Chinese government decided not to adjust its currency on US request creating minor political tension between two countries. China stated that the reason for such disobidience is that China is now controling significant portion of US debt and will not tolerate “pressures from the west” any more. Jim, I hope this helps explaining why China as the greatest holder of US debt might not be such a good thing.
I liked Marc’s connection between China’s global power and how it was depicted in Pete Hoekstra’s Superbowl ad, it’s especially relevant to consider how politics play into US-China relations with the election coming up. It’s pretty incredible to think that one country can “own” another by holding more than half of its debt, especially considering the fact that a recently “modernized” economy like China has such a large stake in the former-superpower, the US. Although, like Jim, I’m a little unsure of what this translates into. As Marko noted, it’s clear that with China holding a major stake in US debt they are able to exert a larger bargaining power and are able to play more of a deal “maker” role than a deal “taker” (meaning they now have influence to write the terms of US agreements instead of just accepting the terms offered). But beyond that, I don’t see how they can exert that much more control, so long as we continue to make payments. I think the bigger issue is the fact that the US has such a major debt racked up, not necessarily who has stakes in that debt.
To be honest, the concept of China owning part of the US’s debt was kind of confusing to me too. I liked the discussion surrounding the video and it was pretty interesting that it aired during the Super Bowl, so I did the research behind the US-China relations. From what I could gather from my research, China has the potential to sink the dollar, but it would not be in anybody’s interest, including China’s, if they were to do so. By selling part of its debt holdings, the US interest rate would rise. What China could possibly do is slowly sell off parts of its debt holdings causing the demand for the dollar to drop. The whole scenario is a bit complex, but basically, as Marko said, China has bargaining power because the consequences could be potentially much worse for the US than China if they were to sell debt holdings. If you want a nice “US-China Relations for Dummies” article, check out: http://useconomy.about.com/od/worldeconomy/p/What-Is-the-US-Debt-to-China.htm
Good discussion. China could do that. And it might not be in their interest as Jim says. However, nations, like people, don’t always follow their strict economic interests. China has it’s own political priorities and not being seen as cow-towing to the US or the “west” is probably important too.
Here is a totally unconfirmed tidbit from the youtube comments on the ad…
“Update
Lisa Chan, the actress who appeared in a political ad that was widely criticized for furthering negative stereotypes of Asian-Americans, has apologized, calling her participation “a mistake.”
“I am deeply sorry for any pain that the character I portrayed brought to my communities,” Chan wrote on her Facebook page, as first reported by the Angry Asian Man blog.”
Oh yeah, and this fact checker says it is wrong… the website mentioned claims the unemployment rate has gone UP since the stimulus bill and Affordable Care act passed. Two yes votes for his opponent. FWIW, the unemployment rate in the US and Michigan decreased in that time.
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