Amputation is not an option

News we like:

American investors are ditching foreign ventures and bringing their dollars home, entrusting them to the supposed bedrock safety of United States government bonds. And China continues to buy staggering quantities of American debt.

These actions are lifting the value of the dollar and providing the Obama administration with a crucial infusion of financing as it directs trillions of dollars toward rescuing banks and stimulating the economy, enabling the government to pay for these efforts without lifting interest rates.

Trouble is:

... The tilt of money toward the United States appears to be exacerbating the crisis elsewhere.

First we export our financial problems and create mayhem world-wide.  Then our more stable fundamentals bring a rush of investment from abroad.  Then other economies collapse.  Should this matter to us?  Shouldn't we just concentrate on our own survival?  Well, it doesn't work that way.

A dollar invested by foreign central banks and investors in American government bonds is a dollar that is not available to Eastern European countries desperately seeking to refinance debt. It is a dollar that cannot reach Africa, where many countries are struggling with the loss of aid and foreign investment.

“Virtually all of the low-income countries are in very serious trouble,” said Eswar Prasad, a former official at the International Monetary Fund and a senior fellow at the Brookings Institution, the liberal-leaning research organization in Washington.
He went on: “This is the third wave of the financial crisis. Low-income countries are getting hit very hard. The flow of private capital to the emerging market has dried up.”

In other words, we're part of a unified system, a global system, a new reality which bothers a lot of Americans who like to think we're independent of all those laggards, exotics and unknowns.  They're being forced to concede that we're not.  It's a little like the head and neck suddenly discovering they're kept alive by and are responsible for those scarred and unruly arms and legs, that chubby gut.

In reality, economic cooperation is just as crucial to the global stability as is economic competition.  In Afghanistan, for example, we are protecting a Chinese mining operation because it serves our military interests.

In a Taliban stronghold in the mountains south of Kabul, the U.S. Army is providing the security that will enable China to exploit one of the world's largest unexploited deposits of copper, earn tens of billions of dollars and feed its voracious appetite for raw materials. U.S. troops set up bases last month along a dirt track that a Chinese firm is paving as part of a $3 billion project to gain access to the Aynak copper reserves.ls.