BEIJING – US President Joe Biden signed on Thursday a piece of legislation alleged to ban imports from China's Xinjiang and impose so-called sanctions over debunked claims of forced labor, adding another testimony to America's long-lasting and detrimental economic bullying on the rest of the world.
From introducing high tariffs to imposing unilateral sanctions under the pretext of "national security," "democracy" or "human rights," the notorious records of the self-proclaimed free-market economy have not only astounded and agitated the larger world, but also exposed America's own aberrant and maimed economic governance.
UNCONTROLLED ‘INVISIBLE HAND’
Over the past decades, Neoliberalism, an ideology well serves the need for capital expansion, has been popular with US political and business elites, and has been broadly applied to America's economic governance.
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During his inauguration address in 1981, then US President Ronald Reagan, who took a strong belief in Neoliberalism, said, "government is not the solution to our problem, government is the problem." His policies of cuts in taxes and benefits, as well as encouragement of free competition, have posed a risk to the "invisible hand," leaving the US economy uncontrolled with ever-growing budget and trade deficits.
If Washington persists in bullying trading partners, such policy will boomerang on the US economy itself, as well as casting a shadow over the recovery of the world economy
The US real economy has been increasingly hollowed out ever since the 1970s and 1980s, and this trend is going even further in the 21st century. Coupled with the implementation of Neoliberal policies in the United States is a more uneven distribution of the economic globalization dividend among different US industries and groups, which is very much miniatured in the sharp contrast between depressing lives in the Rust Belt region and absolute opulence in Wall Street.
The Economic Well-Being of US Households in 2020, a report published in May by the US Federal Reserve, showed that the wealthiest 1 percent of Americans control about 16 times more wealth than the bottom 50 percent.
Besides, according to an analysis by Oxford Economics, US households accumulated around $1.6 trillion in excess savings in the period between March 2020 and January 2021. But the top 20 percent of earners – and to a lesser extent, the second 20 percent – account for all the current accumulated cash.
"Transforming the US economy requires policymakers to recognize that markets cannot perform the work of government," US economist Heather Boushey wrote in late 2020 in an opinion piece.
INCOMPETENT GOVT REGULATION
In the face of pandemic-caused economic difficulties, policymakers should not only consider distribution justice to avoid social polarization, but also caution against partisan politics that might hijack economic policies.
However, unfortunately, the US has been suffering both social inequality and poor efficiency in policymaking, adding pains to the nation which records the most positive COVID-19 cases.
Influenced by the rules of the capital-favored free-market economic system, the US economic policies have long preferred the interests of the rich.
"Tax policy has favored the wealthy and corporations for decades," an opinion piece posted by The New York Times said, adding that "the Fed controls the flow of money, and it flows to the wealthy."
The top 1 percent of households received 75 percent of taxable long-term capital gains in 2019, and more than half went to the highest-income 0.1 percent of households, according to the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
Different interests of divided constituencies also drag down the efficiency of government regulations.
In Washington, partisan differences have been pronounced as politicians lobby to maximize the interests of their own constituency, which might block major law-making process aimed at benefiting the public.
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On Sunday, Democrats have encountered a major setback as Democratic Senator Joe Manchin publicly stated he would vote "no" on Biden's landmark 2-trillion-dollar social spending bill, which, known as the Build Back Better Act, has witnessed months of negotiations among Democrats.
"There is a vicious cycle in which the market and the rules governing the market – the framework for politics itself – shifts in the direction of the wealthy and big corporations," Robert Reich, who served as Labor Secretary under former US President Bill Clinton, pointed out in an interview with The Sunday Magazine.
In Reich's view, if great wealth of a society is concentrated in the hands of a few, democracy will inevitably be corrupted.
As such a hypothesis becomes reality in US politics, it is unlikely for the government to produce policies in a fair, effective and consistent manner.
ADDICTION TO MEDDLING
While domestically beset by yawning social inequality and belated economical regulations or policies, some ill-minded US politicians have been seeking to shift the burden by interfering with or bullying its trading partners, including China.
In the names of the decoupling plan, the "China Initiative" and "entity list," as well as tariff tools, Washington has been addicted to economic sanctions and overused its financial hegemony, becoming the biggest violator of free trade and market rules.
Over recent years, in contrast to its long-proclaimed rules of free market economy and international trade norms, the White House has abused state power under the pretext of national security to restrain and suppress Chinese enterprises, regardless of their contributions to the US economic growth.
So far, hundreds of Chinese institutions and companies have been added to the US "entity list" of export controls.
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Commenting on Washington's administrative attack upon Chinese companies, Samm Sacks, a senior cybersecurity policy fellow at Yale Law School's Paul Tsai China Center and New America, said it sets a dangerous precedent in which the US government can blacklist companies based on country of origin using blanket national security as justification.
History of economic governance has proved that interfering in trading partners amid adversities is not only helpless to improve one's domestic economic resilience or sustain its development momentum, but also suppresses innovation, undermines global supply chains and disrupts international trade orders.
If Washington persists in bullying trading partners, such policy will boomerang on the US economy itself, as well as casting a shadow over the recovery of the world economy.