New York, New York: So off he went to the Middle Kingdom, President Bush’s new economic consiglieri, Henry Paulson, Secretary of the Treasury along with five other big chiefs to whip the Chinese into line. Paulson recently came to Washington from the investment bank Goldman Sachs that just reported a 93% growth in revenues in the last quarter of this year and is paying out 16.8 BILLION in compensation to its already super rich masters of the universe.

These are men known for their clout and power. People jump in their presence and this bold China mission just underscores how they work—with maximum force and bully tactics. Yet in this case, they are visiting a country which long ago looked at the bluster of the American empire and pronounced it a “paper tiger.”

They went to Beijing armed with their calculators, power point presentations, policy options talking points and demands. All they wanted was for the Chinese to stop what they call currency manipulations by manipulating their currency in a pro-US direction, ie. let their currency, the Yuan float and raise its value. Believe it or not this would lead to HIGHER prices for American consumers. Yes that’s what our representatives (OUR?) want. At the same time it would make it cheaper for the Chinese to buy our goods. This is called “currency reform.”

To the Chinese, it is unreasonable because it would WEAKEN an export sector that, in textiles alone, supports 90 MILLION people. This little demand could lead to mass unemployment in China. The US also wants China to open itself up to more US investment while blocking Chinese banks in the US. It wants the Chinese to encourage more consumption among its people the way our government encourages consumption here. (Remember President Bush’s post 911 reassurance that it was OK to start shopping again.”)

I don’t know if there is a Chinese word for chutzpah, but this dog ain’t hunting. Negotiating for China is diminutive Vice Prime Minister Wu Yi, known locally as “the Iron Lady.” In her opening remarks she spoke of maintaining a “Socialist market economy system.”

That would “Socialist” no doubt drives the Busheviks beserk even as they preside over a socialist system for the rich in our country.

The US Trade deficit with China has grown 121 percent in less than two decades. This imbalance makes it hard to dictate to Beijing. As Hillary Clinton puts it, “how do you get tough on your banker.” Mostly you don’t. Our economic diplomacy has strengthened the autocrats who are intensifying political repression and media censorship, as Gordan Chang, author of ‘The Coming Collapse of China.” Its not clear if a collapse of America will follow of proceed that collapse.

US public diplomacy carries water for corporate agendas. Significantly, as part of their mission, the Chinese allowed a big sale to China from General Electric of aircraft engines and fire trucks, perhaps to appease us. Let’s see how GE affiliate NBC News plays this story of its parent company’s latest windfall. Home Depot also picked up some stores.

While we want so-called “reforms” in China, the Chinese want reforms here. What bugs them?

First, they say—and they aren’t the only one—that the US reliance on credit, also known as “consumer borrowing,” and our below ZERO savings rate, fuels the demand for the very Chinese imports that the Administration is bitching about.

The New York Times notes that “Mr. Paulson cannot easily deliver on that even if he has a compliant Congress which he will not,” The Times does not point out that it will take tough regulation of banking practices to turn off the easy credit spigot that is plunging us deeper and deeper into debt. As a banker himself, Mr. Paulson is unlikely to want that!

China also wants technology from the US that has been barred to them, and to sell some of the $700 BILLION in US dollars it is holding to buy American assets. The US does not want that either.

So where are we? Despite all the fanfare, the state banquets, the sit down in the huge Great Hall or the People, and the high rhetoric about opening up? Answer: like in Iraq, nowhere. No real progress is possible because Washington still wants to impose its terms but China is now the dominant player. The NY Times sums this up vaguely by saying “Issues of Will and Way Prove Obstacles to Change.”

How do you think the Times’ counterpart in China is characterizing this same no news news? Probably in an opposite way—as another example of American intransigence and pressure.

And what does all this mean for us? Right below the article of Paulson smiling in China, there are two others tucked away back on page C 6 of the Times Business section, where many deeper truths are hidden for the cognoscenti.

The first speaks of a surge in consumer spending with no reference to where the money to pay all these bills will come from or what happens when the credit card bills come due.

The second headline speaks to the economic pain being experienced by those least able to afford it: “BANKERS REPORT MORE MORTGAGES BEING PAID LATE OR NOT AT ALL.”

Mortgage experts say adjustable rates are going up next year with some $1,5 TRILLION dollars eligible for “reset.” That’s a term that translates into many expected to pay more when they can’t afford it, Increasingly as home foreclosures sweep through our inner cities, many find themselves in the street or maybe soon in one of those horrible prison-like FEMA Trailers that still warehouse Katrina refugees.

An economic Katrina seems to be on the way.

These stories are still pushed into the back of the paper or discussed incomprehensibly for most people on TV. They are warning of a crisis that can only grow worse. When will Democratic politicians and social movements start paying attention.

News Dissector Danny Schechter edits MediaChannel.org. He has written a book on China, and directed IN DEBT WE TRUST, a new film on the credit crunch. Comments to dissector@mediachannel.org

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