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Communist controlled capitalism
By ERNEST F. HOLLINGS, former U. S. senator

OCT. 6, 2010 -- One of the strongest features of democracy is capitalism's open or free market. We have always felt that capitalism worked best under democracy and couldn't work under communism.


But China's communist controlled capitalism is putting the United States' democracy to the test. Fred Hiott questions in The Washington Post (10/4/10): "Will Obama's foreign policy follow his new democracy rhetoric?" And Hiott editorializes: "Obama soon will embark on a trip through Asia resigned in part to put meat on the bones of his new (democracy) rhetoric." As the President's ignoring of the trade war has him in trouble at home, the President's ignoring of the trade war jeopardizes his selling of democracy abroad. China is becoming a superpower in the trade war while the United States is a basket case. China is researching, developing, and producing everything from nuclear, high tech, and vehicles with two trillion dollars in foreign reserves from its trade surpluses as the U. S. suffers six trillion dollars in trade deficits in the last ten years. As the United States' industry and workers idle in unemployment, its economy is on life support from China. It's difficult to see why any emerging nation would opt for democracy.

The tragic thing is that the President and his advisors can't see this. Larry Summers, Tim Geithner and the Council on Foreign Relations think free trade and making wars everywhere is the way to spread democracy. China, in contrast, has adopted Cordell Hull's "Good Neighbor Policy" and gains economic influence in globalization.

The Council on Foreign Relations and the Pentagon wait for China's economic collapse and chaos and worry only of China as a military threat. China's leaders are students of government as well as politicians. The leaders are intent on keeping the Middle Kingdom together as it develops its economy. Its military will be necessary to keep law and order, but it has already learned to use its economic power to take over the world.

In 1989, after the Tiananmen episode, the General Assembly of the United Nations adopted a resolution to investigate human rights in China. China went to its economic friends in Africa and the Pacific Rim, and there has never been a hearing on the resolution. Recently, Japan seized a Chinese ship captain in disputed waters. China demanded his immediate return. Japan refused, and the incident escalated. China then threatened to cut off Japan's supply of "rare earth" materials essential to the production of missiles, batteries and computers. China attained a global monopoly on "rare earth" materials by putting its U. S. competitor out of business through predatory trading. Japan capitulated and released the captain to China.

In globalization, "it's the economy, stupid."

Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of the recently published book, Making Government Work (University of South Carolina Press, 2008).

© 2010, Ernest F. Hollings. All rights reserved. Contact us for republication permission.

About Fritz Hollings

Ernest F. Hollings served the public for 56 years -- 38 years in the United States Senate and as South Carolina's governor, lieutenant governor and a member of the S.C. House of Representatives.

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