China and Unocal

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In the midst of trying to sift through the hysteria about China’s bid for Unocal, I stumbled across this Sebastian Mallaby column that explains very clearly why this deal is nothing to fear:

What if there were a real oil crisis? A simulation conducted last week in Washington suggested that a couple of middling terrorist attacks in Saudi Arabia and Alaska would be enough to cause a global oil shortage, sending prices above $100 a barrel. Yet Chinese ownership of Unocal wouldn’t affect this picture. China could respond to the crisis by routing Unocal’s energy to its own industries. But again, oil is fungible, so this wouldn’t matter.

That’s right, and I’m a bit puzzled why economists like Paul Krugman seem to have suddenly forgotten everything they know about international markets and free trade on this subject. See also this old Tyler Cowen post on a very similar point. Now we already have Bill Gertz of the Washington Times running around screaming and over-hyping the Chinese military threat; we certainly don’t need confusion and alarm about an oil deal that, in the end, really isn’t going to affect the United States very much. To paraphrase Robert Farley, why should oil scarcity be any more a source of conflict between China and the US than it will between, say, Europe and the US? I haven’t seen any of the China hawks address this point yet. What could hurt the United States very much, however, is a mercantilist war between the two countries, fueled by misconceptions and heated rhetoric on both sides. It’s enough to make you think that Congress wants a war with China.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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