Saturday, October 30, 2010

China, Toomey, and Wall Street

Something interesting showed up in a New Yorker article this week (11/01). The article itself, "The Online Threat," by Seymour Hersch, is on cyber warfare. This passage caught my eye:

James Lewis, a senior fellow at the Center for Strategic and International Studies, who worked for the Departments of State and Commerce in the Clinton Administration, has written extensively on the huge economic costs due to cyber espionage from China and other countries, like Russia, whose hackers are closely linked to organized crime. Lewis, too, made a distinction between this and cyber war: “Current Chinese officials have told me that we’re not going to attack Wall Street, because we basically own it”—a reference to China’s holdings of nearly a trillion dollars in American securities—“and a cyber-war attack would do as much economic harm to us as to you.”

What does this have to do with Pennsylvania politics? One of the candidates for Senate, Republican Pat Toomey agrees with the Chinese. From his book, The Road to Prosperity (p. 105):
Trade skeptics worry about the risks Americans take when we borrow heavily from the Chinese. They argue that the Chinese government might quickly sell off our bonds some day, driving down bond prices and raising the corresponding interest rate the United States would have to pay on new debt. But the Chinese have no incentive to do such a thing -- at least not for now.

Neither of these passages makes me very comfortable. I'd rather we weren't so heavily indebted to another county. I also plan to vote for Joe Sestak.

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