For US, China is the financial bogeyman
By Benjamin A Shobert
A casual observer of American culture could be forgiven for the mistaken
conclusion that the country is now in the midst of yet another election year.
Evenly spread across a variety of television programming is a host of new
political advertisements that take up familiar, if tired, arguments primarily
regarding health-care reform.
Their tone, content and frequency make them indiscernible from traditional
electioneering. But one ad in particular, "Defeat the Debt", has a different
objective, to warn against the long-term consequences of America's debt, a debt
China now disproportionately holds for the United States.
Against the backdrop of bracingly large new government expenditures over the
past nine months, Americans are easily
awakened on this matter. As has happened in the past during periods of
coordinated government spending which makes large amounts of public debt
necessary, this awareness has traditionally made its way into popular
consciousness in the form of sporadic, and usually cloyingly bad TV ads, as
some sort of cultural touchstone (recall the Times Square debt clock, born in
1989 amongst the fear of former president Ronald Reagan-era deficits and the
rising national debt). Along with a family of jarringly constructed books
promising insight into the coming debt-fueled American economic apocalypse.
Most of the people behind such assertions share a greater sensitivity to debt
in general, regardless of the social policy behind it. They are convinced that
debt levels are becoming unsustainable, and our ability to function as a
government and society is in peril if we continue in this way. In what is
perhaps an attempt to make the same point, but by taking a different approach,
the new "Defeat the Debt" advertisement now attaches the Chinese government to
the conversation.
Like the 2008 holiday season ad campaign from Wake Up Wal-Mart, "Defeat the
Debt" is well-funded, and has purchased several million dollars worth of time
in national markets on channels ranging from CNBC to Fox News. The ad begins in
a run-of-the-mill American classroom, with the ubiquitous ritual which starts
the day of millions of American children, the Pledge of Allegiance.
The kids, all with hands over hearts, solemnly begin a somewhat modified oath:
"I pledge allegiance to America's debt ... and to the Chinese government that
lends us money ... And to the interest ... for which we pay ... compoundable
... with higher taxes ... and lower pay ... until the day we die."
Towards the end of the commercial, the screen shows the following highly
contrasted words: "America's Debt $500 Million in Interest Daily." The visual
backdrop to this frightening and inhuman statistic is a still globe, the camera
sharply focused on China, as the voice-over reminds viewers that "much of that
debt is owed to foreign governments".
It seems possible, and perhaps even appropriate, to be sensitive to the matter
of America's collective public and private debt, how it is likely to hamper
future generations by making the country unattractive to business, stifling
innovation, and limiting our ability to respond forcefully to future crises,
without agreeing to the not-too-subtle head nod in the direction of the
Chinese, as if they are somehow complicit in our feared future misery.
Admittedly, the organization behind this TV ad - the Employment Policies
Institute (EPI) - seems willing to make use of a variety of jarring graphics,
including an image of the Titanic in its print advertisements,
immediately below the headline "Think America is 'Unsinkable'?", as well as the
libertarian dog-whistle headline from a separate advertisement "Who Is John
Galt?" It might be forgivable to mark these all up to advertising and the use
of jolting mental images as way to get people to pause and think, if one
finished the commercial with less an unpleasant aftertaste that smacked so
directly of China.
The commercial is not absent a quantitative footing, as even the Barack Obama
administration has found it necessary to incorporate references to the debt and
the need to think prudently about paying for future government programs without
expanding its size.
But talking about the American national debt has always been tricky: the
mind-boggling size of government expenditures makes most observers queasy, the
sheer size feels immeasurable while also imparting a strange sense of
permanence, as if the nation's debt somehow can and should be equated to our
way of life. Because the scale of perception problems persist, wrestling with
what causes the national debt can be made easier if one particular point is
found and pushed on; this is, after all, a basic insight from advertising, to
focus the mind's eye on a primary push-point. Over the past two decades,
victims of this tactic have ranged from seemingly frivolous Pentagon purchases,
to welfare queens, and now the Chinese government.
In each case, short-term reactions were predictably snarky, but had very little
bite when measured against what one would think is the primary objective:
meaningful reduction of the nation's debt. The lasting results were less fiscal
prudence and more a hand-slap to whatever policy had been successfully equated
in people's minds with the problem of our collective debt. This may make the
after-effects of the EPI campaign that much more troubling. Rather than
pointing towards internal problems, matters of profligate political spending or
misdirected social priorities, this TV ad very directly brings the Chinese
government into the discussion, and not in a flattering way.
It is almost as if viewers are asked to believe the Chinese government is
somehow complicit in America's debt problem, an idea not without some
contemporary support from economists who believe an excess in savings from
China is part of the supply side problem to this largely misunderstood
liquidity trap from last year. In an advertisement that should crisply advocate
personal responsibility, and at its better moments does just that, the specter
of China is thrown into the mix.
Tactically, this disengages the viewer from a message of accountability and
throws into the mix someone with mixed motives, a government that may have
responsibility to bear. This is unhelpful, as the ad seems designed to stop
short and only hint at a particular question upon which much of the tension
rides: what will the Chinese government ask of America to continue servicing
this debt? As worded, the children's pledge is not only to America and its
debt, but also the "Chinese government that lends us money". Together, these
constitute a powerful choice of words, and one seemingly calculated to fuel a
fire through the use of patriotic symbolism and oaths of allegiance.
This is certainly not China bashing; no, it appears to be something more
subtle, a sincere but misguided attempt to remind people that certain spending
principles and priorities matter, that no one can outrun economic history
forever, and that debt is a matter viewed too casually in American politics.
But if we take the EPI's assertion seriously, as we have every need to, neither
what America must do in the short term nor within the world we seek to
peacefully operate and do business inside of, is made any easier if we
misallocate our frustrations towards those who are not the cause of our
problem.
Amid the very real social upheaval that is taking place in much of the American
Midwest, as manufacturing towns are devastated by plant closures and layoffs,
these sort of ads, which casually link collective economic fears to China, are
likely to have very negative repercussions. They are the foundation to national
economic populism, an outcome which could not be more divergent from the flat
globalized world much lauded over the past two decades.
One can be largely sympathetic to the ideas behind the "Defeat the Debt"
campaign, even hold a shared belief that current levels of public debt are
unsustainable, and that history does provide uncomfortable clarity about what
is likely to happen next, without introducing China to the conversation.
Fixating on China might feel good, but is likely to accomplish very little
meaningful towards debt reduction or fiscal conservatism, and holds the
potential to destabilize too much America needs for its own future and economic
development.
Benjamin A Shobert is the managing director of Teleos Inc
(www.teleos-inc.com), a consulting firm dedicated to helping businesses bring
innovative technologies into the North American market.
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