Tuesday's market melt-down is exactly the sort of thing the Dobbs-Buchanan-Hillary Clinton-economic-school-of-nationalism loves to complain about. In fact, they just did; as I stepped away from my computer a moment to watch the news, I saw this letter from Hillary Clinton to the Treasury Secretary. China's market crash causes a mini-crash here. Aha, they say, this is what's wrong with globalism.
But I'm not sure they've really thought things through. After all, if a ten percent drop in the SSE, yields a three percent drop in the Dow, what would taking China completely out of the economic picture do? In other words, if the sino-screechers are right that trade with China leaves us vulnerable to downturns such as this week, then doesn't that require them to believe that the run-up was due to the trade to begin with? If trade with China is to blame for the value lost on Tuesday, than it gets the credit for the value that was there before?
Forgive the somewhat culturally insensitive analogy but this is a little bit like being one of a pair of Siamese twins. Yes, if one twin gets the flu, the other may get infected too, but surgical separation could kill them both. A trade war with China would shield us from fluctuations in their market, but it would plunge Asia into depression and the world into recession to boot.
Yes, we are dependent on one another, but that's life. Asia depends on the west, and vice versa. Canada and the US depend on one another. New York and Texas produce different goods and services and trade them. I depend on my local gas station for gas and the police for protection. They depend on my payment and taxes respectively, for their livelihoods. I mow the lawn, my wife cleans the kitchen. We're dependant on one another. If she gets sick, my life gets harder too. This a decision that I thought we made a long time ago. We were forced to choose between self-sufficiency and prosperity. We chose the latter.
Once, the tribe was the biggest thing that most people ever saw in their lives. Life was nasty, poor, brutish and short. Eventually we left the tribe behind and entered the marketplace, the marketplace of ideas, of geopolitical power and of goods. We got richer, a lot richer. We also become more dependant on one another. The principle is the same no matter what the scale, whether it's an attempt to create an utterly self-sufficient Bowyer Tribe (complete with organic farm and guard dogs) or an attempt to create an utterly self-sufficient America Tribe. The result is the same - destruction of wealth, not just America's, but the whole world's.