Bill Clinton: Oof!

This has to take the prize for best foot in mouth moment of the day. But will the press point it out, or simply Hsu it along?

The reason the nation can't enforce tough trade regulations with the Chinese is because they are now America's banker, Bill Clinton said.

"When was the last time you got tough on your banker?" he asked the crowd.

Comments

[scarshapedstar]

If a politician were to take money from Wal-Mart, wouldn't that be taking money from the Chinese by proxy?

(And then what if they were to take money from a mercenary outfit incorporated in Dubai?)

[Rand Simberg]

He thinks that the American electorate is stupid. Unfortunately, based on the two times he won national election, he's probably right about much of it. Though, happily, he never got a majority of the vote...

[Jason McClain]

Not sure how this is a foot in mouth comment.

The Chinese have been buying up much of our debt. That does, in fact, make them our banker [along with the Japanese] to some degree--and a proxy funder of the world's security that America largely provides.

While it may be uncomfortable to hear, it is hardly a gaff.

[Mark]

The point is that Bill took plenty of Chinese money during his campaigns, and takes quite a bit now for his library.

[Ron Coleman]

I'm with Jason. Clinton's telling it like it is, although he knows as well as anyone that this is an oversimplification.

[ATM]

Of course the fact that this came to be is Bill Clinton's fault. When China sharply devalued their currency in 1994 during his first term, he didn't do anything. He was more than happy to let the US slowly dissolve in an endless stream of nondurable merchandise from China if it helped to delude the US consumer-voter that the 90s were hunky dory and all so great. The consequences of China's devaluation are many: the Asian financial crisis where many of our actual allies became noncompetitive because they couldn't compete with cheap goods from China, which led to further devaluations of their currencies against the dollar. This has led to our current predicament of a huge trade gap with many Asian countries, not just China.

[comatus]

If memory serves, that would have been on or about 18 April, 1775.

[BobInStamford]

I see that the flat-earthers are still blaming Clinton... Shame that you can't reappoint your stuttering leader to another term.

[sean]

The Chinese are in no way our bankers. We are their customers. They sell us goods and intervene in the fx market to support thier currency peg. The accumulation of dollar financial assets is a result of their intervention and policy decision to peg their currency to the dollar. We are giving them dollars. We do not borrow from them.
If we had no current account defecit and I buy a chiese made product for $50.00. The $50.00 goes to China and they hold it in a dollar denominated asset. The resultant current account deficit isn't "financed" as many would hvae you believe. They can choos not to hold dollar assets and let their currency appreciate or peg it to soemthing else. Either way they would be no more our "banker" than they are now.
Its a rediculous statement.

[Yoda]

Infrastructure repo, difficult it is.

[Dave]

So what is Bill Clinton's excuse for relaxing export controls on key military and commercial technology to China during his presidency?

[alan]

If you owe the bank a thousand dollars, you have a problem; if you owe the bank a trillion dollars the bank has a problem.

[steve o.]

Despite what you believe, the Chinese do NOT own most of our debt. The good ole USA does. See the skepticaloptimist.com

[Dave Wangen]

"When was the last time you got tough with your banker?"

Well, that explains why Bill was so nice to them, given who bankrolled his campaign...

[Gene Hoffman]

The Chinese don't even hold the most or half the debt held by Foreigners. Japan owns the largest amount of any foreign holder. China further only holds 18% of the debt held by foreigners:

http://www.treas.gov/tic/mfh.txt

Sorry to let the facts intrude on a meme...

-Gene

[Fat Man]

Bill's aphorism ignores the the old maxim that: if you owe your bank a thousand dollars, and you cannot pay it back, you have a problem, but, if you owe your bank a million dollars, and you cannot pay it back, your bank has a problem.

I like to think of the $700 Billion of T-notes the Chinese own as a bond for their good behavior. The securities are represented solely by book entries on the books of the Federal Reserve. If China gets nasty about something, a Federal Reserve clerk can spill a pot of coffee on their ledger sheet (actually they are computer entries, but you get the idea).

Don't worry. Be happy. Millions of people in China have worked very hard in sweatshops and nastier places to make plastic crap for you. All they have to show for it is some blips on a computer located half a world away. We are having our party, they are just going to have to trust us, if they want to have theirs.

[Kip Watson]

Exactly, imagine the USA is the Hapsburg Emperor and China is one of his Jewish bankers. The Hapsburgs ruined the Fuggers, after all, not vice versa.

You only pay the money back if you feel like paying it back. The powerful borrower has all the advantage.

If the US Gov't decided to default on its loans, who would the Chinese complain to? The Pope?

[Ken Hahn]

The Chinese have several problems that we can ease or make worse. The trade between us is convenient to us, but vital to them. A US embargo for "safety reasons" would lead to some higher prices here and economic disaster there. China also needs imported oil even worse than we do. A few quiet economic, or if necessary military, moves could easily disrupt that supply. And we can play tough to an extent that they can't match. Sure they haven't been helpful with North Korea and they can play footsie with Iran, but we can match with South Korea, raise ya Japan, then Taiwan. If you think the Mullahs with the bomb gives us a headache, try the effect of Taipei having it on them.

China is less our banker than the guy next door who lent us his lawnmower. But Bill likes them, they certainly have more economic clout with his interests than with ours.

[seekeronos]

"--- A few quiet economic, or if necessary military, moves could easily disrupt that supply. ---"

Now that all depends on how deeply compromised we are/have been compromised vis-a-vis our military capabilities and how much of our "top secret" technology the Red Chinese catalogued and/or improved upon.

I'm kind of hoping that they differ from our once-adversaries the Japanese in that the Japanese proved themselves to be experts in micronizing and certainly improving on our technology (just compare any Japanese automobile to anything *cough* made *cough* by the "Big Three" in Detroit).

Hopefully, the Red Chinese can only manage at the level of cheap trinketry and brand label ripoffs they've flooded the markets with; of course, Japanese/Korean/European/American manufacturing plants *in* Red China don't help in that regard either.

[seekeronos]

"--- imagine the USA is the Hapsburg Emperor... ---"

Hmmm. The Hapsburgs had a decent run, I expect... but not too long after they DX'ed their bankers, the Austro-Hungarian Empire came unraveled by an unexpected war a generation or so later.

And the Mexican Empire under its Hapsburg scion didn't last very long at all, but that was more due to the instability and patronism inherent in Mexican politics.

[Joe]

Lead poisoning? Tainted pet food? Computer viruses? As Ken Hahn said above our relationship with China is convenient and works to our benefit. Once it stops being beneficial then China is toast. They need us, we tolerate them. All the money they've got? Remember, it's just paper. It's worthless if we tell them to fark off. What're they going to do? Invade? Heh.