In his republished Forbes.com Op-Ed, China Buys Wall Street, economist and China expert Donald H. Straszheim wrote with poorly guarded optimism about heavy investment in cheap Wall Street stocks by Chinese sovereign funds and firms. Straszheim was once Global Chief Economist at Merrill Lynch and now heads China initiatives at Roth Capital Partners.

Straszheim discussed China Investment Company's investment in Morgan Stanley and Blackstone and how far CITIC Securities was into Bear Stearns. He told of CNOOC's (Chinese state oil and gas) unsuccessful 2005 attempt to buy a controlling stake in Unocal led Chinese firms to a more passive investing strategy that eschews directorships and control. For now.

Straszheim, whose work since 2006 has involved winning over Chinese officials for his firm's initiatives in mainland China, tells us (surprise-surprise) about the bright side of Chinese investment in top US financials. Straszheim does mention Western powers' unease that China's investments will become geopolitical instead of straight investments. He writes:

It is understandable that foreign governments are guarded, given that explicitly stated policy in Beijing is to develop centrally owned state enterprises into positions of global dominance.

Yet his tone echoes that of a therapist helping a child patient come to terms with accepting her single parent's forced marriage to an unfair, authoritarian abuser to whom the therapist owes back rent. Don't worry, he seems to say, it's not that bad. Where is the explicit disclosure of the extent of Straszheim's stake in China? Or his firm's? It would help readers weigh his words.

Straszheim portrays China's plunge into US financials as an opportunity for China's finance sector to learn more about free market financial systems. This is darkly ridiculous given what has just happened to the US financial sector. I can hear Chinese officials now, their yellow-starred epaulets clicking against austere cement floors as they roll around laughing at visions of the Politburo Standing Committee of the PRC leaping from their seats to hear the latest Western financial sector wisdom.

Two more of Straszheim's thoughts bear closer scrutiny for what they imply:

Morgan Stanley's people now can travel China with business cards saying they are partly owned by the prestigious CIC. The way business and government are intertwined in China, few would dare to refuse talking to a Morgan Stanley representative at the door.

Astounding. With the US buying into its own banks and China buying into US financials, Straszheim's words chill anyone with a memory of what the US stood against in the 20th Century. Yet there he is, extolling as virtue the visit of the government agent at the door.

In another eerie piece, Straszheim writes of watching China's censors at work on his Beijing hotel's TV during the Olympics:

As soon as the news report turned to the Tibet demonstrations, the screen went blank, only to turn back to regular programming in two minutes or so when the Tibet news was over. The censors are alert and on the job.

Despite this, he sums up the piece:

It would be a shame if the uproar on these games became so fierce that improving economic relations--where everybody wins--were derailed to everyone's detriment.

I do not think Mr. Straszheim wants to upset the Chinese government, nor does he remember what America is. Chinese officials are the gatekeepers of what his firm wants from China. He confesses and avoids for China's regime, stating its sins softly to blunt public perception of their outrage; he implies that stopping regime tyranny over Tibet, for example, is not worth interrupting the flow of money (between China and his firm?).

Similar to how Wall Street firms bought into bad paper, too many China experts and US officials have bought into China while granting unwarranted political credit to the regime in exchange for lucrative market access. Where are the political results promised from free trade with China? People are still imprisoned and sometimes killed for protesting in China; China strictly censors its press and Internet; China coerces Internet firms into helping it censor its people in exchange for official access to markets; and China has subsidized its surplus-building economy over the years to obtain its current advantage.

China should have to make its money from the US the old fashioned way. Non-level playing fields are not old fashioned.