Pelosi’s visit exposed six inside stories of the United States!

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Oral: Zhai Dongsheng, professor and vice president of School of international relations, Renmin University of China

Editor: Yu Xinfeng

Source: Zhenghe Island (ID: zhenghedao)


The essence of American Empire is “lever”

Today, I would like to share with you the content of “illustrating the political economy of the United States”. Through 30 or 40 charts, I will systematically sort out some important aspects of the United States.


The first picture shows the distribution of US allies and military bases. The United States has a large number of military bases around the world, and even has various military operations and combat operations in 14 countries around the world.

Among them, some countries have a clear alliance treaty with the United States, while some countries have not signed a formal alliance treaty with the United States, but in fact they have a deep tacit understanding and deep cooperation in security, strategy and intelligence.

For example, Israel and the United States have a symbiotic relationship. There is a saying that Israel and Jewish capital groups control the United States.

I have asked some Israeli elites engaged in politics, security and strategy what they think of this statement. They said that on the contrary, the Americans are controlling us, treating us as a chess piece of geostrategy, and our security is controlled by the United States.

For example, since 2019, the United States has provided $37 billion in military assistance to Israel every year. In exchange, Israel must give up its independent defense and military industry system and integrate into the entire military industry supply chain of the United States. As a result, the relationship between the two sides has been further closely bound, and each side has greater influence on the other’s internal affairs.

The United States controls an alliance system. When they put pressure on China and Russia, they are not fighting alone, but they are always pulling in a group of people. To a large extent, the foreign policies of these imperious countries have been outsourced to the United States.

At present, China has become the largest trading partner of more than 130 economies in the world. Many countries rely more on China in economic interests than on the United States.

Therefore, we can see the tearing of the two forces on many countries – many countries rely more on China economically than the United States, and more on the United States for security than China.

China and the United States respectively represent two types of forces: one is violence, and the United States can harm them and protect them in terms of security; The other is the economic benefits brought by trade and investment. We can make them richer or make them poorer through economic sanctions.

When these two forces act on the same group, especially on US allies and so-called strategic partners, which force is stronger and more effective?

Whether we look back on the relations between China and Europe, China and Japan over the past 20 years, or examine the interaction between China and some US partners such as ASEAN, the Middle East and North Africa, we can find a very clear trend – I would have liked the moon, but the moon shines on the ditch.

In the past, many strategists tried to pull Europe, Japan and other countries out of the United States’ alliance system.

For example, Professor Shi Yinhong, a famous strategic thinker from the school of international relations of Renmin University, is a counselor of the State Council, but he is often criticized and spread rumors on the Internet.

He once advocated a new diplomatic thinking toward Japan. More than 20 years ago, he proposed to pull Japan out of the alliance system of the United States through diplomatic and economic means, thereby disintegrating the dominant position of the United States in Asia.

Looking back now, it is obvious that such a proposition was not very successful and could not be pushed forward in the end. Why? Not only is the United States opposed, but also mainstream political forces in Japan do not cooperate.

Through quantitative statistics, we find that the attitude of US allies towards China is basically irrelevant to whether our attitude towards them is good or bad; China’s smiling or glaring at them will not have any substantive impact on their attitude toward China.

They have a very clear sense of “alignment”. To whom? To the United States. The attitude of the United States towards China is the same as that of these countries.

Moreover, we are surprised to find that even the various withdrawal operations in the trump era have not changed its allies and strategic partners’ sense of alignment and alignment. This is quite different from what we thought before.

Therefore, our preliminary conclusion is that for US allies or strategic partners, economic and trade interests are far less important than political and security interests.

This is a basic fact in the world today.


On the other hand, we look at the picture “US current account balance of payments”. In the past five or six years, the US trade deficit has continued to expand. What does this mean? The United States makes the world earn a lot of dollars from it.

If there is a person in the global village who is especially generous, scattering money everywhere, and taking money to buy various products of others, we will make more and more money from him. In this case, we will be particularly dependent on him.

The United States is the world’s largest importer, with a huge import volume and trade deficit. Therefore, it is particularly generous, and others are willing to make friends with this generous and generous local magnate.

But the question is, whose generosity is it giving?

To answer this question, we must talk about the continued expansion of the Fed’s balance sheet after the abolition of the gold standard. Let’s take a look at the figure below. The growth of global reserves is mainly caused by the trade deficit of the United States.


From the end of World War II to the 1970s, the United States had a large trade surplus; But since the 1970s, it has gradually become a deficit country.

Why did the country with the largest surplus begin to become the country with the largest deficit? Why did the cheapest and greediest guy in the global village suddenly become extremely generous today and let others earn his money? The reason behind this is that yesterday’s money and today’s money are two different things.

This is related to the collapse of the Bretton Woods system and the reform of the monetary system in 1971. Before 1971, if you had a deficit, it meant that you would have to pay back other people’s money in the future, even the principal and interest were real gold and silver. Because the whole monetary system is based on gold (exchange).

However, after 1971, the entire global monetary system has become an anchor free monetary system, which is based on US Treasury bonds. In other words, the money owed by the United States does not need to be repaid in essence. As long as it keeps “borrowing new debt to repay old debt”, printing money to repay debt, its treasury bonds have replaced gold and become the value benchmark behind money.

Therefore, since the 1970s, due to the change of the monetary system, the behavior of the United States has also changed – it has changed from a person who spent all day thinking about making other people’s money to a particularly generous guy, but the problem is that it is actually generous to others.

The United States accounts for 5% of the world’s population, but the other 95% of the world’s population are trying to obtain their own surplus from the trade deficit released by the United States, and everyone is trying to grab the money from it.

However, since 1971, what the United States has scattered is no longer real gold and silver, but green paper. As a result, the whole world has accumulated more and more foreign exchange reserves, mainly the trade deficit of the United States. With this piece of paper, the United States can obtain the resources, talents and labor achievements of the world.

Now there are some public opinions on the Internet, and they feel that the United States is not good enough; There is another view that the United States is too strong. In fact, when we seriously look at the internal problems of the United States, these two views are correct.

What we are challenging is not only a United States with internal decline and serious problems, although its internal problems are indeed large; But when we really fight against it, we will find that its power is still very strong.

China’s rise now challenges not only the 320 million people of the United States, but also a system of global capitalism, global politics, economy, culture and talents shaped by the once great United States, which can mobilize global human, material, wisdom and resources.

The political economy of empire is essentially a lever. What is “lever”? In addition to using their own resources, they also use credit to obtain resources owned by others for their own use. This is called adding leverage.

The strength of the US empire is precisely the result of a great deal of leverage. In the future, the imperial system we are facing in the process of rising is essentially a “lever” system. Therefore, in this regard, we must fully assess the challenges we face.


The United States opposes the United States

Next, let’s talk about the division of domestic politics in the United States, including the differences between the two parties and between the elite and the people.

First, let’s take a look at the “elephant curve”, which was proposed by a friend of mine, Branko Milanovic, who was formerly the chief economist of the world bank.


What does elephant curve mean? From the perspective of the whole world, the bottom is the percentile, the poorest 5% in the world is near the origin, and the richest 5% in the world is near the top. Take every 5% as a unit.

It describes the proportion of wealth growth of all groups from the poorest to the richest in this round of globalization. (this round of Neo liberal globalization in a narrow sense began from 1980 to 2008, including trade globalization, capital flow globalization, etc.)

We can see that it is like an elephant’s body. That is to say, the growth rate of this group with medium wealth in the world is very high.

The most typical countries, such as China, India and the Middle East, have gained higher benefits through joining globalization, and their per capita GDP and per capita income have increased significantly.

In addition, the 5% of the richest people in the world also have a high growth rate of their wealth. The most typical are Wall Street, the rich Americans and the rich Europeans.

However, there are also some groups, that is, those who are better off than 80% of the people in the world and worse off than more than 10% of the people – the middle class and white groups in the United States and Europe, who think they have lost.

They used to be the masters of the United States. In the past three or four hundred years, they seized the land of North America. Then, through the so-called “westward movement”, they seized more and more land and built their new homeland, the United States, on the land originally belonging to the Indians.

In the process of globalization, the income of the white groups in the United States and Europe has not increased much after deducting inflation, but at the same time, many things have increased, such as the unemployment rate, the divorce rate, the bankruptcy rate, the suicide rate, the drug abuse rate, and the crime rate.

Therefore, this group believes that they have been deceived by capital, especially by financial capital. From the perspective of the elephant curve, this is indeed true. This group of people have suffered relatively great losses in the process of globalization.

Therefore, after 2008, there was a political white rebellion. The political rebellion in the United Kingdom was manifested as brexit, and the political rebellion in the United States was manifested as the election of trump.

This group was originally a blue collar class, and many of them voted for the Democratic Party, but they jumped into the Republican camp with trump. This group is the “make America great again”, and they took advantage of the victory in the 2016 election to control and reorganize the Republican Party.

America used to be an olive shaped society. However, in this round of globalization, we can see that the United States is no longer an olive shaped society, and the proportion of the middle class has dropped below 50%.

In other words, the economic growth of the United States in the new century has not benefited the middle class. Let’s look at the following figure. One is the data of per capita GDP. After entering the new century, it continues to maintain an upward trend, but the median household income is going down.


From 1975 to 2018, the wealth shared by the top 10% of the population in the United States was the same as that of the remaining 90%. It was no longer the “20-80” rule, but the “10-90” rule.

There is also one point to be noted – the income share of the top 1%. Historically, 1870-1914 was the last round of globalization. It was the British led trade liberalization and gold standard system. At that time, the polarization between the rich and the poor in the whole world was also very serious. By 1914, the whole world could not bear it, and then war began.

It was not until the end of World War II that the new system of the whole world was established. Since then, the proportion of wealth occupied by the top 1% of the people in the United States has continued to decline, because a relatively good redistribution was carried out in the 1970s. Through the high progressive tax rate and other institutional arrangements, the wealth occupied by the richest 1% of the people was reduced to 11%.

However, it was a historical low point. In the 40 years since then, the proportion has continued to rise, and now it has reached the highest level of World War I and World War II.

The polarization between the rich and the poor has brought about a wave of populism.

What is populism? One definition or expression is that a large number of ordinary people think that the elite are bad.

“You elites who have received higher education and hold political resources, financial resources, capital resources, power, knowledge and contacts in your hands are all bad guys, thinking about how to calculate us and bully us all day long.”.

Once this kind of cognition spreads, it will form a general social suspicion, which is manifested in various conspiracy theories. It is believed that this is the conspiracy of one group of elites and that is the conspiracy of another group of elites. These elites do nothing good.

If it continues to ferment, people will think that all kinds of official political preaching can not be believed, and they are all aimed at deceiving the people, brainwashing the people, and robbing the people; Further development, people feel that the mainstream media is not credible and that it is full of false news and false news.


So let’s look at the above data. In the past 20 years, the attitude of the Democratic Party and the Republican Party towards the mainstream media has not been much different.

However, now we can see an obvious trend – the Democrats still have a high degree of trust in the mainstream media, especially after 2016, they retaliate that the mainstream media is more credible than before.

However, the Republicans began to be cynical, thinking that the mainstream media was unreliable, full of false news, and manipulated by capital or interest groups. The ideology and various news disseminated were screened and only reported what the capital and elites wanted to report. As a result, Republicans’ trust in the mass media is getting lower and lower.

Therefore, we say that on the surface, the United States is very powerful and can mobilize the power of the whole world. There are many allies outside, and many are willing to give them a lift and make a fuss; But internally, the United States is “schizophrenic.”.

Let’s look at the figure below. In 1994, a questionnaire asked whether you thought you were a Democrat. If so, you were blue; If you vote Republican, it’s red.


We can see that at that time, on the surface, there seemed to be differences between the two parties, but in fact there was a great deal of ideological consensus; Since 2004, there has been differentiation between the two; In 2017, it will be like this.


The serious tearing of American society and the wave of populism stem from the polarization between the rich and the poor in the United States. What we are facing is actually a “schizophrenic” United States.

By the way, now we are discussing what happened to the United States, China US relations, and US Russian relations. We should pay attention to: “who is the United States?” In fact, there is no subject called the United States.

If you shout “America”, there may be several different voices answering you “yes”, and they all think each other is the spy of the enemy country.

This kind of schizophrenia is not only manifested in the split between the two parties, but also in the split between the elites and the people at the bottom of the two parties.

The elites in the Democratic Party represent the interests of capital, the financial capital of Wall Street, and the technological capital of the west coast of the United States. The most typical ones are Hillary Clinton, Mrs. Clinton, Mr. Obama, and President Biden, who is now in power. They all represent the interests of capital.

Among the Democratic Party, those who represent the interests of the people and the interests of people of color are the “Four Golden Flowers”, such as Elizabeth Warren and Sanders. These people are called “extreme leftists” in the political spectrum. They have begun to criticize American capitalism, and their political propositions even have a little socialist color.

The remaining groups support capitalism, whether it is the elite of the Democratic Party of the United States, the elite of the Republican Party, or the extreme right-wing “Maga” of the Republican Party of the United States, all support capitalism; Only the far left of the Democratic Party may have begun to take a critical attitude towards capitalism.

What about the right wing of the US Republican party? This establishment faction also represents capital interests, such as Cheney’s daughter, oil capital on the west coast of the United States, the Bush family, and so on.

There is also a situation that the “Maga faction” led by trump has begun to transform the entire right wing to the extreme right. They are also cynical and think that capital, especially financial capital, is bad. This group has obvious racist color, religious conservatism with fundamentalism, and Christian spirit with certain fundamentalism.

These four groups think that others are mentally ill and only they are sober. Therefore, in a sense, we are facing at least four Americans.

For example, on the issue of the conflict between Russia and Ukraine, what we are seeing at this moment is the forces of the Democratic Party of the United States who want to use Ukraine to bleed Russia. However, we will find that if after the mid-term elections, when the strength of the US Republican party occupies the majority of the US Congress, the US attitude towards Russia may change.

Especially in the US general election in 2024, if trump of the Maga faction comes back to power, it will be interesting. By then, US Russian relations may be very different from what we see now.

Therefore, China must pay attention to this point when weighing the timing and direction

There is no unified interest subject called “the United States”.


Where did all the money printed in the United States go?

In the third part, we will talk about the expenditure structure and revenue and expenditure structure of the United States, that is, where the money is collected, where it is spent, and for whom the profit is made and the power is used.

To put it simply, it is a question of who to cut wool from and who to make sweaters for.


Let’s take a look at the figure above. On the whole, the tax revenue of the federal government of the United States has increased significantly. Why? This is because the more money is printed, the more the economy and technology are developed.

Among them, the personal income tax accounts for about 45% of the federal government’s tax revenue, which is the most important part of the US fiscal revenue structure.

What is the continuous growth? Social security and pensions. This is a very important sum of money received by the US federal government. Of course, the money it collects cannot be arbitrarily appropriated. It has a special purpose.

What is very interesting here? After the end of World War II, the proportion of consumption tax and enterprise income tax in the United States continued to decline.

In the past, the United States earned a lot of income from corporate income tax in the industrial era. However, after the end of World War II, the American business community had a great influence on American politics, so that it could continuously avoid and reduce taxes, and the proportion of taxes paid to the federal government of the United States continued to decline.

As a result, American society has changed from an export-oriented and production-oriented economy to a consumption-oriented economy.

Although its consumption is particularly strong, the proportion of consumption tax paid by it in the federal government tax is getting lower and lower. For example, if you order a cup of $3 coffee in the United States, there may be an additional consumption tax in addition to several percent of the price, and the majority of the consumption tax is often obtained by the local government.


The above figure shows “the effective tax rate and progressivity of the United States”.

What is progressivity? The more money you earn, the more taxes you pay. For example, in China, you need to pay personal income tax for a few thousand yuan, but if you earn more than a certain amount each year, you will not pay 20% income tax, which may be 25%, 30%, 35% and 40%.

I have always advocated that under the market economy, how to measure the life value of a citizen (outside the system)? I don’t think it depends on how much you earn or how much you spend, but on how much tax you have paid to the country in your life, especially the personal income tax.

Let’s look at the actual tax rate of the United States. During the Second World War, the difference was particularly huge. The tax rate paid by the poor was very low, and the highest income tax rate of the rich was very high.

Later, the trend was that the rich continued to reduce taxes, and the tax rate of the poor was generally rising, resulting in its progressiveness becoming lower and lower.

I have read a data before. At that time, Trump’s parents wanted to leave their money to the next generation. The inheritance tax rate was as high as 90%. That is to say, if you save $100 million in your life, 90% of it will be handed over to the state when you want to give it to your children.

And if you leave a large manor or a large amount of fixed assets, if you want to pass them on to the next generation, I’m sorry, you have to sell it first. As a result, the wealth can not be passed on for three generations.

So it gave birth to a very huge industry – donation. I donated money and manor to a fund. Theoretically speaking, I have not passed it on to my children, but my children and grandchildren benefit from this fund and earn a little more from it.


Let’s look at the picture “growth and inequality in the United States from 1870 to 2020”.

Generally speaking, before the 1990s, the economic growth rate of the United States was upward and inequality was downward; However, since the so-called “Post Cold War Era”, the economic growth rate of the United States has continued to fall and inequality has continued to rise.

What lies behind this is a basic economic proposition and basic economic concept of Marxism, that is, what is the core contradiction of capitalism? It is the continuously expanding production capacity and shrinking demand.

Due to the polarization between the rich and the poor, the distribution proportion that workers or ordinary families can get is getting smaller and smaller, which leads to the inability to expand the total demand and the limited growth rate of demand, but the expansion of supply capacity is very large. At this time, two phenomena will occur: the first is the decline of economic growth and the second is the rise of inequality. There is an inherent correlation between the two.

In terms of economic growth and progressive taxation, we see a similar relationship.

We often hear such a saying in liberal economics that the more taxes collected, the more entrepreneurship will be hit. Or when the taxes paid by entrepreneurs and rich people are too high, they are unwilling to earn money and work hard. When they do not work hard, the poor will not earn money.

Therefore, we should not levy high taxes, support enterprises, raise lazy people, and give welfare to the poor, because “welfare is a trap”.

Especially after the 1980s, these ideas of liberal economics have been widely spread all over the world. Everyone is following the United States and learning a lot about the so-called mainstream economics in the United States.

But the above two figures tell us that this logic is wrong. What restricts economic growth is actually insufficient demand. The higher the progressive tax rate is, the more balanced the distribution of wealth will be, and the economic development will benefit more people. Therefore, the better the economic growth will be.

Next, let’s look at the fiscal expenditure of the United States. There are three major items – social security expenditure, medical insurance expenditure and national defense expenditure. The total proportion of these three items in the total federal fiscal expenditure of the United States is relatively stable on the whole.

It is very interesting that the proportion of defense expenditure to federal expenditure is actually shrinking. In the past, there was a common saying in public opinion: why can’t the United States? Because it is militaristic.

However, this statement is not based on facts. We can see that it fights everywhere, but in fact, the US empire has never dared to meet a hard nail. For example, even though its national strength is declining, the United States has never dared to meet a hard nail.

It does not dare to fight big tigers. It only fights small squirrels. Moreover, it is often the middle-sized countries in a certain region, such as Iraq and Iran. Moreover, it does not fight them immediately. Instead, it starves them for ten years and sanctions them for more than ten years. When they are exhausted in all aspects, they can enter the market by themselves.

Many people think that the decline of the US empire is due to militarism. However, if this is the case, the national strength of the US empire will be restored soon. As long as the strategic contraction is enough, its physical strength will slow down.

However, we can see that the United States has a problem now. The federal finance of the United States often has no money. In order to make money, we need to do all kinds of tricks, such as trade war and thinking about confiscating foreign exchange reserves of other countries.

Moreover, there is a characteristic of American politics. When the White House and Congress are controlled by the same political party, it can continuously raise the debt ceiling, that is, issue bonds. In addition to allies to buy, its own central bank also comes out to buy. In other words, the central bank prints money and gives it to the White House to “spend it”.

The premise of this is that the Congress is controlled by the party to which the president belongs, and then he can do it; Once the president becomes a “lame duck president”, that is, when the Congress is in the hands of the other party, for example, when the president is democratic, but the Congress is in the hands of the Republican Party, I’m sorry, I have no money, and I may not be able to approve spending billions of dollars or tens of billions of dollars.


In the above figure, what causes the federal finance of the United States Empire to be increasingly short of money? What is continuously expanding and devouring financial resources? The answer is health care expenditure.

Its scale is even larger than military expenditure. A large proportion of the US government’s fiscal expenditure, nearly 30%, that is, more than $1 trillion, is health care expenditure, exceeding social security expenditure and military expenditure.

Therefore, the leaders of the White House and successive administrations of the US empire will find ways to carry out health care reform, because they actually know what disease they have.

In my opinion, they are not out of breath because of militarism and fighting everywhere. Why do they start to become weak and have no strength periodically? In fact, it was because of liver disease.

I think it is “liver cancer”. What is cancer? In fact, some cancer cells grow on one of your important organs, which constantly divide and occupy more and more energy and space. They only grow and do not destroy, and eventually become seriously unbalanced.


The green line (medical insurance expenditure) shown in the above figure just now shows that the vitality of the US empire is being squeezed by this curve. Its “malignant tumor” continues to grow.

There are obvious problems in the US medical system, which is manifested in the fact that the whole country spends a lot on medical care, but the life expectancy is not long.


The horizontal axis of the above figure is the proportion of medical expenses in GDP of each country, that is, what percentage of the country spends on the medical expenses of the people; The vertical axis is the life expectancy of each country.

In principle, the more money you spend, the longer your people will live. In practice, the two are indeed positively related, with one exception.

The percentage of its medical expenditure in GDP is much higher than that of other OECD countries and other normal countries. However, its life expectancy is at the same level as that of those countries that are “stingy”. That is to say, it has wasted a lot of money, which is interesting.

It is reasonable to say that if you continue to spend unjust money for many years, the president of your country should be able to realize where the problem is and should repair the loophole. However, we can see that all previous presidents of the United States have carried out health care reform, but they all ended in failure.

Why? namely

Both the public and private sectors in the United States have been sucked by the medical and medical insurance departments.


The blue part of the above figure is the money spent by the public sector, that is, the federal finance; The green part is the money paid by its family department for medical care.

On the whole, the US medical expenditure has continued to expand, but the life expectancy is not particularly ideal and has not been effectively improved. There must be a reason behind this.

Those who have studied and lived in the United States may know that the medical level in the United States is high, but the problem is that the bill is really expensive.

There is a story about an American who fainted in the street. A passer-by called an ambulance for him. At the moment when he was carried into the ambulance, once the patient woke up, he would be shocked and run away from the ambulance.

Therefore, on the whole, because a large amount of money is wasted on many issues, the federal deficit rate of the United States continues to expand.


Finally, to sum up, the federal revenue of the United States is mainly the personal income tax and the expanding fiscal deficit. In a sense, the fiscal deficit has become its revenue.

Where does it come from if it wants to spend money? By borrowing money. This is also a kind of income. Because looking back, the United States is constantly “borrowing new debt to repay old debt”, and it will not repay the money.

Second, the project that occupies the largest financial space of the United States is the health care system, not the military militarism. Therefore, the decline of the American Empire is not due to expansion, but due to internal friction.


American political system is easy to be kidnapped by interest groups

In the fourth part, we will talk about the interest groups and lobbying groups in the United States.


The above figure is the “ranking of the largest lobbying groups in the United States”. In 2019, the first place was the American Chamber of Commerce, which spent more than 77 million US dollars to lobby; The second place is the open society foundation, which is a political donation organization run by Soros. Many of the rest are related to the medical industry.

Just now, I talked about the entire medical industry and related upstream and downstream industries. Why can we obtain so much wealth from the public and private sectors in the United States, but it does not really help the American people to increase their life expectancy, or the performance is not very good? The reason is that they are the most important lobbyists.

Next, I will focus on Soros and the Koch brothers. George Soros is a Hungarian Jewish who studied international political economics at the London School of political science and economics. However, he thought that this major was too vulgar, so he skipped classes all day and went to the next department to listen to lectures. Whose class are you listening to? Karl Popper. Soros is a little fan of Popper, and his ideal in life is to be a philosopher.

After graduating from college, Soros found a job in a securities firm of his classmate’s father. Later, he was assigned to work in an organization called “first Eagle” in the wall street of the United States, which was founded by a famous Jewish financial family for hundreds of years.

He fished and rowed in the company during the day, and did not know what he was doing; In the evening, he came back to his own small attic, where he wrote hard and wrote his philosophical thinking.

It’s equivalent to mixing rice during the day and doing research at night. He worked like this for three years. One day, he suddenly realized that he was not a philosopher.

Because once, he wrote a lot the night before, but the next morning he got up to read the materials he had written the night before, and found that he could not understand what he had written. At that moment, he realized that he was not the material, and that he had no heart unless he was wise.

He was very disappointed with himself and could not be a philosopher. What should he do? I’ve abandoned myself in this life. I’d better be a stock speculator. So he really began to speculate in the stock market.

When he applied his previous study of international political economy and his philosophical thinking to the capital market, he was surprised to find how stupid these peers were, how simple they were to think about problems and how they could not think through such interesting things. He found that he could easily “kill” other players in the market.

We should note that we should not vulgarize the brother Soros. He is actually a so-called compassionate person. On the one hand, he is a financial tycoon who manipulates a large number of financial markets around the world, especially in the foreign exchange market, bond market and stock market. He has fought many battles and earned tens of billions of dollars.

On the other hand, Soros is the biggest money maker behind the Democratic Party. He has a famous saying that it is harder to spend money than to earn money. Why? Because he has a demand for spending money, and he wants to realize Karl Popper’s theory and his life ideal – to transform the so-called closed society into an open society.

So he established the open society foundation, named after his teacher’s “open society theory”. He used a large part of the money he earned to fund non-governmental organizations around the world.

I have read a biography of him. The author described Soros as follows: if you are a young man from a developing country, you are lucky to meet Soros on the tennis court. When you have a rest together, you tell him that you come from a closed society, and your ideal is to transform your country from a closed society to an open society.

Then he would say, tell me, how much do you need? You said that I hope you can subsidize 1 million yuan every year for 20 years, and then I can realize the goal of “transforming” our country and our society by engaging in non-governmental organizations, media and education.

Soros will interrupt you and say, “it’s too slow. In this way, I’ll give you 30 million dollars now and finish it in two years.”.

What are his characteristics? They have so-called feelings, but they are extremely arrogant and arrogant. Because of his money, he wanted to take the half pull theory he had learned to other countries for experiments, including his own country, Hungary.

Then, he is now the Democratic Party’s biggest financier. Around 2003, he once spent tens of millions of dollars to publicly challenge George W. Bush and wanted to keep him on.


The two on the right above may not be as famous as Soros. One is David Koch and the other is Charles Koch. They are four brothers.

How did father Koch get up? Before the beginning of World War II, the elder Koch helped the Soviet Communist Party to establish a modern oil department and earned 500000 US dollars from it. Then he returned to the United States and started his own Koch family business.

Charles Koch is the second, and David Koch is the third. The second and third inherited their father’s Political Philosophy – extreme liberalism.

Therefore, David Koch once founded the American Liberal Party with several of his friends and set up a third party. He wanted to burn money to become a politician, but the result was not good at all. In the political game rule of “winner takes all” in the United States, he can not take the lead at all, and his vote rate is particularly low.

Therefore, later, the brothers, first of all, had a family civil war, and bought out the shares of the eldest and the fourth. Charles Koch and David Koch controlled the entire Koch family, and their companies would never be listed.

What industry are they engaged in? It is related to oil and traditional manufacturing industries, so the industries they engage in are often polluting to a certain extent. In the process of operation, they are fined by the environmental protection regulatory authority of the United States.

They did not choose to comply, but did the opposite, believing that the public sector should listen to politicians and politicians should listen to the American people. Then why should the American people vote for you? Isn’t it because I advertised your donation?

Therefore, the two of them are “overlords” and no longer form a political party by themselves. Instead, they start to set up bureaus. First, they use their own money to donate and support politicians, but after all, their family’s money is very limited.

A better way is to set up a bureau to be a bookmaker, and then invite many rich people who are inclined to the Republican Party to join their club. Everyone will pay money and bet together to see which politicians in the Republican camp are worth investing and supporting.

Not only that, they also donated money to universities, but not to promote normal academic research, but to carry out political propaganda in the name of so-called university scientific research and expert institutions.

They also “support the media” and let these media carry cameras to dig out the news and scandals they need, not to attack the Democrats, but to attack the Republican politicians who do not listen to them within the Republican Party.

So far, we have seen that the Democratic Party is more and more influenced by Soros, while the Republican Party is more and more influenced by the Koch brothers, because the Koch brothers have gathered the most important Pro Republican rich people in the United States to integrate and screen politicians in the Republican Party.

For example, vice president burns of the last trump administration, who later had a bad relationship with trump, took the Koch brothers’ money.

However, he is not yet a true confidant of Koch. Who are your trusted followers? Prior to this, Pompeo, the “pawn” of the trump administration, was originally from the West Point Military Academy and deep state. Later, he was selected by the Koch brothers to focus on training.

What is his relationship with the Koch brothers? Before entering politics, Pompeo was the boss of a branch of Koch group. Someone once told me that, except trump himself, who was not raised by the Koch brothers, other leading figures of various factions of the US Republican party basically had direct or indirect contact with the Koch brothers.


We look at the “lobbying expenditure” in the picture above.

There is a famous K Street in the United States. There are a large number of publicly registered lobbying organizations on K Street. I know several lobbyists. One of them is the boss of a powerful lobbying company. I received him in Beijing in 2005. At the dinner party, I asked him how he did lobbying?

He said that it was very simple. The main job was to communicate with the congressman’s assistant. After making an appointment, the congressman might spare 10 minutes in the morning before the meeting. We would find a chair in the corridor of the parliament building to sit and chat. I would tell him what the appeal of my client is and why you should vote like this, while talking and writing a check.

I asked, to whom? He said that it was not written to the congressman, but to his campaign fund. I said, isn’t that bribery and corruption? He said: legally speaking, corruption is not considered. This is stipulated and allowed by our laws.

In my impression, what he said seems to be that it is illegal to donate more than 2000 US dollars. Then, we will donate 2000 US dollars this time and send our colleagues to donate another 2000 US dollars next time. A little makes a lot.

Therefore, as a result, the more people donate, the more their political will and demands can be supported by the White House and Congress, and a complex interest relationship is formed here.

American politicians are mainly concerned with raising money. As for what kind of vote they should cast on this issue and what kind of vote they should cast on that issue in consideration of the voters or their social image, it is mainly up to their assistants — young people in their twenties who have graduated from famous schools.


The above figure is our detailed statistics. How many of the 30 top posts in the White House after World War II, such as vice president, Secretary of finance, Secretary of state, Secretary of defense, Secretary of Commerce, and President’s trade representative, are from Wall Street.

On the whole, it is an upward trend. The most exaggerated thing is that in the second term of the Clinton administration, 60% of the top officials came from Wall Street.

Just think about it. There are only 500000 people on Wall Street who are serious about financial investment, while there are 320 million people in the United States. However, 60% of the top 30 senior officials in the United States actually come from such a small special department with 500000 people.

Therefore, we can see that this incident is a very important change in the political changes in the United States. It is closely related to lobbying and political donations.

Back to the above, why is there a big problem with the market-based health care governance system in the United States? A lot of money has been spent, but people’s lives have not been effectively and correspondingly increased?

The following figure is the research on the American medical insurance system conducted by my doctoral students. Its market regulatory agencies regulate hospitals, medical insurance companies, pharmacies, pharmaceutical manufacturers and PBM.


What is PBM? That is, insurance companies pay PBM and hire it to help them manage the cost of drugs; However, PBM collects money from both sides, not only from the insurance company, but also from the pharmaceutical manufacturer. Because PBM can help the pharmaceutical manufacturer arrange the drugs into the recommended list, there is such a relationship of interest.

Theoretically, from doctors, hospitals, insurance companies and pharmacies to pharmaceutical manufacturers and PBM, they should have achieved some internal checks and balances, but in fact, we find that they have achieved a kind of collusion.

Not only that, they also “capture” the government through political lobbying and donations, especially those functional market regulators, which makes the regulation ineffective, and eventually leads to the increasingly expensive drug, treatment and insurance fees, and then everyone “shares the spoils” upstream and downstream.

Who’s damaged?

First, consumers are damaged; Second, the state’s finances were damaged.


When we distinguish and calculate their political contributions by industry, we will find that from 1998 to 2020, the donation amount of the medical care industry actually exceeded the total donation amount of the financial and real estate industries.

So to sum up, the lobbying and political donation system in the United States is a kind of legalized institutional corruption.

First of all, it is legally stipulated, and it is possible to do so. Therefore, there have emerged such as Soros and Koch brothers who can legally and large-scale subsidize or oppose certain political leaders.

When did this happen? About 20 years ago, the United States passed a law allowing the establishment of a political action committee to openly oppose someone.

For example, Soros spent tens of millions of dollars to set up a political action committee to advertise, expose and criticize George W. Bush everywhere.

For example, when two politicians are running for a parliamentary seat, you need to mobilize your voters and ask them to donate money and vote for you before you can win.

Later, it was different. We no longer need to follow the people’s mass line. We just need to find a few big financiers, set up a political action committee, and let them donate a large amount of money to themselves. Then, they use the money to advertise everywhere, and attack the image of their opponents in an all-out way to help themselves in the election.

Therefore, through step-by-step reform of the legal system, this has become a kind of institutional corruption. In fact, it has made the political system of the United States more and more vulnerable to kidnapping and capture by some interest groups.

That is why trump said: make America great again.

What is the subtext? America is no longer great.

Why is it no longer great?

Why is there a serious polarization between the rich and the poor? Why are there political extremes? Including why the policy changes back and forth? For example, the “ABC policy” of George W. Bush after he took office – anything but Clinton, as long as it was done by Clinton, I would drop it all and turn over the pancakes; Another example is the TPP carefully designed by Hillary Clinton and others. After Trump came up, he resolutely abolished the TPP.

Why is that?

In fact, it is related to the qualitative change of the US system mentioned earlier.


What is the “abacus” of carbon neutralization in 2060?

The fifth part is about the changes of American capitalism.

It is an important feature of American capitalism to transform from manufacturing to finance, and then to consumption to drive the financial and economic growth of the United States and the world, while its consumption is driven by the leverage cycle.

Since the late 1970s, or after entering the era of globalization, the absolute value of American manufacturing employment has declined, from about 40 million to more than 20 million.

Now there is a tendency in our domestic public opinion that the United States has been completely “hollowed out”. This is actually not objective.

Its manufacturing output value still ranks second in the world, and it controls the most important core parts and technologies in the world. Because it has an innovation system, can attract the world’s top talents, and has the world’s most abundant capital, it can punish us in the scientific and technological war, but we can hardly punish it in turn. The principle is here.


We can see the yellowish brown line “the percentage of manufacturing employment in non-agricultural employment”. At the end of World War II, it reached 35%, but today, it has dropped to about 8%.

Neither Obama’s “manufacturing industry returns to the United States” nor Trump’s “make America great again” nor the trade tariff war can make the proportion of manufacturing employment in the United States rebound.

On the contrary, the proportion of the profits of the financial industry in the profits of American enterprises has continued to rise.


In addition, there is a very important feature. Many manufacturing enterprises are quietly turning into enterprises with the color of the financial industry. For example, General Motors originally made money by producing and selling cars. Now its main profit comes from automobile credit.

In this process, the balance sheet of the Federal Reserve continued to expand significantly, reaching a scale of $9 trillion.

Under the previous financial crisis, the Federal Reserve had to print large amounts of money to buy treasury bonds. We can simply understand it as printing paper into US dollars and then giving it to the US federal government, which uses the money to rescue financial institutions.

Who has been hurt by this quantitative easing policy? Who has been subsidized?


Its biggest subsidy target is actually Wall Street financial institutions.

After the subprime mortgage crisis in 2007 and the financial crisis in 2008, financial institutions, including Lehman and Goldman Sachs, have the same asset and liability structure and are already insolvent; However, the fate of Lehman and Goldman Sachs is quite different. Lehman went bankrupt, and Goldman Sachs did not go bankrupt, but later made a lot of money.


It’s simple. At that time, the person who made the decision of which financial institution to rescue was Henry Paulson, the then Treasury secretary. Before becoming Treasury Secretary, Paulson’s last job was president of Goldman Sachs. So he decided to save Goldman Sachs instead of Lehman, Goldman’s competitor. This is the actual governance process in the United States.

So, what should Goldman Sachs do when it was insolvent? In the last round of rescue of the financial crisis, the Federal Reserve sharply expanded the central bank’s balance sheet from US $900 billion to US $4.5 trillion, a five fold expansion. By buying the assets of the financial market to support the market, the US financial institutions recovered from bankruptcy as soon as possible.

In this process, the United States did not fall into high inflation, because the money did not enter the pockets of the people.

But this time, in order to cope with the COVID-19 epidemic, the Federal Reserve directly expanded from 4.2 trillion yuan to 9 trillion yuan. This time, some of the money went to the people, which led to a surge in inflation in the short term. Of course, American financial institutions have also been compensated, because they also spend money to subsidize the market.

Next, let’s take a look at American consumption.

What criteria should be used to measure consumption? If you think about it carefully, a large part of consumption is energy conversion. For example, when you travel by plane or train, do you all consume energy? Is it also energy conversion to eat and wear clothes?


Therefore, let’s take a look at the above figure “consumption: comparison between China and the United States and Europe on the per capita energy use level”, which is probably such a proportional relationship.

China used to be an agricultural society. I remember that when I was a child, the rural areas of Jiangsu were relatively rich, but the voltage of the electric lamps at home was still very unstable; In the 1980s, after my family first bought a TV set, the voltage could not support the TV set at night. It was full of “zizizi” sound.

Therefore, the Chinese people have formed a habit. For example, when we leave the meeting room after class today, we must turn off the lights.

But I found in the United States that many buildings are still brightly lit after work at night, and then their air conditioning is turned on to 16 degrees in summer. I was very impressed by this, because one summer when I visited their office building, I wore a shirt, and I was too cold to bear it after entering the building.

The per capita energy consumption in Europe is less than half of that in the United States. The energy consumption in central and Eastern Europe is relatively low and that in Western Europe is relatively high. I remember when I was working in Brussels, Belgium, in the summer of 2006, it rained a little one day and the temperature was below 20 degrees. When I returned to my apartment, I found that the person in charge of the apartment actually set the heating on fire.

So far, China’s per capita energy consumption is rapidly approaching the European average. What does this mean? The success of industrialization.

Of course, the United States, Japan, Europe and other developed countries are now emphasizing energy conservation and emission reduction. For example, Japan and Europe promise to achieve carbon neutrality by 2050.

However, it should be noted that their international commitments often do not count, and what commitments they make to support developing countries, and so on. Why? Because their governments are constantly changing, future generations do not recognize what their predecessors have promised, and new officials do not pay attention to old scores.

However, once our government makes a public commitment internationally, it will always implement it to the letter because it attaches great importance to credit. For example, we have publicly committed to achieving carbon neutrality by 2060.

The per capita energy consumption is highly positively related to the per capita living standard, which is one of them; Second, the process of using new energy instead of carbon will bring great challenges.

When I was working in Europe around 2006, I always thought that Europe’s promotion of energy conservation and emission reduction was a conspiracy, or an overt conspiracy.

Why? At that time, politically, they held high the green flag, which made them have a bargaining chip and a unique value “green peace integration” when negotiating with American politicians.

In addition, in terms of economy and industry, Europe is in a relatively leading position in solar energy, wind energy and other technologies and industries related to energy conservation and emission reduction. Therefore, they have promoted the political agenda of global energy conservation and emission reduction, carbon peak and carbon neutrality, which is beneficial to their politics and economy. This is what I knew at that time.

Now there is a new trend. China has great advantages in these industries, such as solar energy equipment, power cells, energy storage and nuclear energy.

Therefore, trump actually openly said that carbon peak and carbon neutralization are China’s conspiracy. The Democratic Party of the United States advocates energy conservation and emission reduction, but the Republican Party is firmly opposed to it. Therefore, they are repeatedly wavering on this issue.

Originally, energy has the attribute of resource endowment, that is, whether your country has energy depends on whether God rewards it. For example, our country’s coal supply is OK, but natural gas and oil depend on large-scale imports. After all, God does not give so much.

When we enter the energy production mode dominated by solar energy, wind energy and nuclear energy in the future, for example, in many places such as the west, it is very suitable for the development of these green industries.

Therefore, with the progress of technology and the substantial increase of manufacturing scale, China’s solar photovoltaic power generation and wind energy industries have become a manufacturing industry, no longer a resource endowment.

That is to say, as the largest manufacturing country in the world, we can use our manufacturing advantages to manufacture solar panels on a large scale, and use the vast western territory to obtain the supply of green and clean energy; And the supply of green and clean energy will make our energy use cost lower and lower, forming a virtuous circle.

In the past, many people said that China, a big manufacturing country, is trying to promote carbon peak in 2030 and carbon neutrality in 2060. Is it a bit self injurious?

However, from the above perspective and from the perspective of global agenda setting, this will enable us to get rid of other people’s agendas and advantages and lead the world to play a new game beneficial to me.

What games are played in the traditional fossil energy era? For example, the Middle East has power, Russia has power, and the shale oil and shale gas industries in the United States have also developed, so they hold a big brand in their hands.

Now we are equivalent to breaking the original card game. We used to play Soha game, but now we turn it into mahjong game.

Therefore, we have an advantage. When the world’s major economies start to play carbon peaking and carbon neutralization, our new energy may have stronger competitiveness.


The United States is falling into further social division

Finally, let’s talk about the population structure of the United States.

As mentioned above, the democratic and Republican parties in the United States have become increasingly antagonistic politically and ideologically, and are constantly split internally. In addition, a new trend has emerged:

The supporters of the Democratic Party are increasingly disproportionately colored; And Republican supporters are increasingly disproportionately non Hispanic and non Latino whites.

I think that in the long run, there may be further serious divisions within American society, because this ideological antagonism is linked to a very troublesome thing, that is, racial conflicts.


Some people say that within a few years, American society will collapse; But I think it may take longer, because judging from its current population structure, it is the black people who are making a lot of noise.

Black people are the “original sin” of the United States, because they were part of the British Empire, the colonial empire. The colonists from Britain and Germany robbed the land of the Indians and bought African slaves to help them cultivate the land.

This is what they did before and after the founding of the United States. As a result, more than 10% of the American population is black. To some extent, these contradictions in today’s American society are that Americans are paying debts for the original sins of their ancestors.

However, I think it is not the black people who may ultimately cause major problems in the United States.

I think the most powerful people are Latinos, that is, a large number of people in central and South America. Some come from land and bridges, some come from the sea, climb over the wall and make holes to the United States, and continue to have children.

And they have their own religious, linguistic and ethnic characteristics. For example, they have a common language – Latin, of which Spanish is the main language; There is a common religion – Catholicism; There are also similar ethnic characteristics, with a common identity in culture and identity.

When I was a visiting scholar in the United States, the most astonishing thing was that you would find that in daily life, some people do not speak English. As long as they can speak Spanish, they can still live and work very conveniently. For example, there are two kinds of characters used in American subway, one is English and the other is Spanish.

Once a society becomes a bilingual society, I think the applicability of this kind of democratic election will be greatly reduced, or the society will face more and more troubles.

Some political science scholars have pointed out that in a bilingual or multilingual society, it is not impossible to play with the democratic system, but we must make major adjustments. We must establish a proportional representation system instead of a winner take all election system. Because once the winner takes all approach is adopted, the democratic system will not continue to play.

So far, the set of rules of the game stipulated by the US Constitution is incompatible with the reality that the United States has become a bilingual society.


The racial structure of the United States is changing. As shown in the above figure, in 2016, the total white population in the United States accounted for more than 60%, but the proportion of white newborns fell below 50%.

According to the current changes, this trend is likely to accelerate. Unless trump or the Maga faction is in power for a long time, it is difficult to reverse this trend.

If this development continues, by 2060, only 44% of the population will be white, 27.5% Hispanic, 15% black and 9.1% Asian. On the whole, white people have become a “minority”.

As Huntington said, the question of “who is the United States” will be a big one.

The “Barbarization” of the Empire has always been a big problem. Historically, the “Barbarization” of the Empire often occurred in the process of the collapse of the Empire, or a very significant change occurred before the collapse. For example, there was a historical trend behind the end of the Roman Empire, the end of the Han Empire, the late Tang Dynasty and the Late Jin Dynasty.

The total fertility rate of the United States – the number of children a woman of childbearing age can have in her lifetime – is one of the healthiest in all industrialized economies, reaching 1.8%.

But what if we look at it by race? It will be found that Hispanic Americans have the highest fertility rate, reaching nearly 2%, followed by black people’s 1.8%, followed by white people’s 1.6%. The fertility rate of white families is actually very low.




Finally, to summarize:

First, we say that the United States is not a normal country, not an ordinary country. It is an empire. Its strength comes not only from the 320 million people in the United States, but also from the participants who integrate into its system, align with it, and strive to earn its dollars.

In fact, in a broad sense, more than 7 billion people of the whole world are in its system, because the resources it can use are those of more than 7 billion people. The cost of the US dollar system is to support its Asian competitors through outsourcing and deficit.

Second, for the sake of “common prosperity”, the world’s population is flocking to the United States. For example, the elite population in Asia and Europe are studying there. After studying abroad, some people with higher levels and who can find good jobs often stay.

Because there is an open, pluralistic, innovative and capital rich place, it is able to pay high salaries and take risks for outstanding talents to innovate.

But there are also many ordinary people, especially Latinos, who go to earn money through the low-end service industry. This has buried a potential crisis, that is, so many people have gone to the United States to become rich and powerful, and its original employment structure, ethnic structure, political foundation, and stability of the political system have all appeared problems.

Third, there have been problems in the American system. For example, the proliferation of lobbying and donations has made capital overwhelm the middle class. Moreover, its tax system and various regulatory systems are more and more unfavorable to the working class and the middle class, but more and more favorable to capital, which makes the financial, medical and other related industries make a lot of money.

The US federal budget deficit has increased from 5 trillion yuan at the beginning of this century to 30 trillion yuan now, which has expanded six times in one generation. First, during the subprime mortgage crisis in 2007 and the financial crisis in 2008, they borrowed a lot of debts in order to rescue those financial institutions that committed crimes; Second, I borrowed a lot of money during the COVID-19 epidemic.

Behind the US deficit, in addition to the role of financial interests and monetary privileges, there are also big internal loopholes.

There is a very large tumor in its financial expenditure that consumes its energy, that is, the blood loss point formed by the “three medical” of medical care, medicine and medical insurance, which makes a large amount of federal funds spent in this field. Therefore, its national strength is increasingly damaged, and its vitality is no longer so healthy and powerful compared with that of the 1980s-1990s.

Moreover, the polarization between the rich and the poor has also led to the intensification of populism, various conspiracy theories, political confrontation, and so on. It also includes the capture and theft of its relevant regulatory policies and wealth by interest groups. Many people, such as the Koch brothers and Soros, have “bet” with them.

The long-term existence of such interest groups and big moths makes the United States today, in Trump’s own words, not so great.

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