Liberalism Is Isolationism

NRO's Rich Lowry down-plays the China threat; he's more concerned about Democrat rhetoric:

When other countries buy up our debt, it isn’t nefarious. As David Malpass of Bear Stearns points out, Japan owns so many U.S. bonds because its aging population wants to own safe but relatively high-performing assets. The Chinese, meanwhile, link their currency to the dollar and invest their dollar holdings in U.S. treasuries. This dollar linkage has provided a stable environment for robust Chinese economic growth. Democrats who complain about cheap Chinese labor should welcome this, since sustained growth is the only way to boost a country’s wages. . .

In any case, foreign ownership of U.S. assets (representing about $2.6 trillion of $80 trillion total U.S. assets, according to one estimate) works to everyone’s benefit. Japan and China own higher-performing assets than they would otherwise. If they found, say, French assets more attractive, it would be truly worrisome. And more capital is invested in our growing economy. . .

The Democrats are dabbling with a peculiar multilateralist isolationism. They are reflexively in favor of international institutions, but oppose free-trade deals, suggest we cocoon ourselves from foreign capital, complain about the cost of America’s engagement in the world, and blanch at the ambition and idealism of President Bush’s foreign policy.