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OPINION: Don't blame China for economic inequality at home

Deep economic crises are fodder for demagogues who channel economic fear into a politics of resentment against "them." In the 1930s it was foreign traders (mainly Europeans), immigrants and Jews. Now it's foreign traders (mainly the Chinese), immigrants and Muslims.

Why do you suppose a half-dozen states are considering (or have recently enacted) measures to end multicultural studies or bar children of undocumented workers from public schools? Every survey shows fewer undocumented workers here now than three years ago.

How do you account for the outbreak of Islamophobia - fully nine years after 9/11?

How do you explain the surging animosity toward foreign trade, particularly toward China?

Republicans have a long history of turning fears into resentments that animate voters. Yet Democrats are entering the same terrain when they blame China. According to The New York Times, House Speaker Nancy Pelosi has been encouraging Democratic candidates to go after China, after internal polls showed voters increasingly willing to blame China for our problems and strongly in favor of eliminating tax breaks for companies that do business there.

Democrats must know high unemployment in America has little or nothing to do with China. China's undervalued currency isn't the reason we've lost 15 million jobs since the end of 2007. No, the tax code shouldn't reward companies for relocating jobs there. But this tax break is barely relevant to the situation we're in.

Our jobs crisis is due to the collapse of demand after the housing bubble burst. No longer able to borrow against the rising value of their homes, the vast American middle and working class can no longer spend enough to keep the economy going.

If Democrats (or Republicans, for that matter) want to blame something, blame America's record level of inequality - an almost unprecedented concentration of income and wealth at the top, and a smaller proportion for the vast middle.

It's no mere coincidence that 1928 and 2007 marked high-water points for shares of national income going to the top 1 percent. Today's median wage is 5 percent lower than it was at the start of the decade, taking inflation into account, while top earners are doing better than ever. The core assets of most Americans are their homes, whose values are now 20 percent to 40 percent below what they were three years ago, while the key assets of America's wealthy are shares of stocks and bonds, whose values have declined far less.

I'm not suggesting Democrats blame the rich for their success. Most came by their high earnings and wealth honestly. And surely a vibrant economy requires that entrepreneurs be rewarded for hard work and valuable insight.

But Democrats should admit America's economic structure has become dangerously unbalanced, and that's making it difficult if not impossible to emerge from recession. For these reasons, Democrats should recommit themselves and the nation to redressing that balance.

Are the Democrats so dependent on the campaign contributions from the wealthy they dare not speak of this? Or worried about being labeled "class warriors" by the right? Or convinced that bashing China is so much more effective?

China bashing doesn't educate the public about what's truly at stake and what must be done in the years ahead. Worse: It reinforces the politics of resentment, and further legitimizes other forms of isolationism and xenophobia.

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