Making News: Briefing Congress on Trade, a New Position – & More!


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I’m pleased to announce that I will be speaking next week in Washington, D.C. at a briefing on President Obama’s proposed new trade deals being sponsored by U.S. Representatives Marcy Kaptur of Ohio and John Conyers, Jr. of Michigan.  The briefing will be held Tues., March 3 between noon and 1 in Rm. 2456 of the Rayburn House Office Building.  And it’s open to all media and the general public, as well as Members of Congress and their staffs.  Appearing with me will be economist Robert Scott of the Economic Policy Institute.

Accredited journalists seeking more information can contact Jenny Perrino of Rep. Kaptur’s staff at 202-225-4146 or at

In addition, it’s an honor to have just been elected to the Board of Trustees of the Henry George School of Social Science in New York City.  The School is planning to expand greatly its educational and research programs on domestic and international economics, and I’m grateful for the opportunity to help out. Keep visiting RealityChek for more details on the School’s activities they develop.

Finally, it was great to see my research on America’s dangerously high trade deficits cited on the popular investing website Seeking Alpha.

(What’s Left of) Our Economy: Yellen Showing a Learning Curve on Trade?


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Fed Chair Janet Yellen made some minor trade-related headlines (in the greater scheme of things) when she reportedly told the Senate Banking Committee that she opposed including enforceable disciplines on currency manipulation in trade agreements.

Actually, Yellen said no such thing. In response to a question from Tennessee Republican Senator Bob Corker following her latest semi-annual testimony to Congress on monetary policy, Yellen stated that she would “really be concerned” about such a move, but she by no means told the lawmakers anything like “Don’t do it!”

But what I found at least as interesting as those remarks were others in which she indicated – and not for the first time – that her views on trade and its effects on American labor markets have undergone some real changes since the 1990s – including the period when she served on President Clinton’s Council of Economic Advisors.

Before this government service, Yellen joined many other leading academics in endorsing Congress’ passage of the North American Free Trade Agreement (NAFTA). Their joint 1993 letter predicted, “The agreement will be a net positive for the United States, both in terms of employment creation and overall economic growth. Specifically, the assertions that NAFTA will spur an exodus of U.S. jobs to Mexico are without basis. Mexican trade has resulted in net job creation in the U.S. in the past, and there is no evidence that this trend will not continue when NAFTA is enacted.”

In 1998, as a White House economist, Yellen wrote a journal article displaying similar confidence. Appropriate titled “The continuing importance of trade liberalization,” Yellen’s piece concluded a staunch defense of standard trade theory and its relevance to practice by declaring, “Trade liberalization might adversely affect a small fraction of American workers in their role as producers, but it benefits all workers in their role as consumers. The bottom line is that the benefits of increased openness and increased international trade are wide ranging: more efficient utilization of resources, faster productivity growth, higher quality goods, and lower prices, all of which raise living standards.”

After a decade-and-a-half’s worth of experience with NAFTA-inspired trade deals and related policies, Yellen’s tune sounds different. Last August, speaking to the annual central bankers’ conference in Jackson Hole, Wyoming, the Fed chair attributed sluggish wage growth during the current economic recovery to “changing patterns of production and international trade.” Indeed, she cited a paper commissioned for the conference that emphasized the toll taken on workers by “the offshoring of the labor-intensive component of the U.S. supply chain.”

In yesterday’s appearance before the Senate Banking Committee, Yellen made that latter point herself. (These remarks start a little after the 46-minute mark.) Again explaining the current recovery’s anemic wage inflation, she mentioned as one of the “longer-term structural factors” likely playing a role “the fact that many labor-intensive activities in the global production chain are being increasingly outsourced….” (If only some alert legislator would point out that many higher value links in these supply chains have been offshored as well!) And she expressed no optimism that trade-related developments would ever bring any relief to a trend that’s been at work “over the last decade or so.”

Yellen’s recent pronouncements on prospects for future increases in the federal funds rate makes clear she’s become acutely sensitive to matters of time and how its passage is described. She might consider that describing outsourcing helping to undercut wages over the last decade or so means that this process started right about the time NAFTA ushered in the current phase of U.S. trade liberalization policy.

Im-Politic: Where Bill O’Reilly is Wrong and Right


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The more I think about it, the clearer it is to me that the best way in this hopelessly political era to discuss the Bill O’Reilly war record controversy is to start by pointing out what shouldn’t matter.

But first, a confession – which foreshadows my conclusion. I’ve been a “Factor” fan and something of an admirer of the “King of Cable Talk” for several years. Not that he hasn’t displayed major flaws. Even if I were Christian, I think I’d find the Fox News host’s “War on Christmas” claims way over the top. O’Reilly seems to have little awareness about the special problems – and prejudices – still facing many African Americans. He seems to believe that, because he finds abortion abhorrent, mainstream contemporary feminism lacks any merit. His grasp of economics, whether it’s fiscal and monetary policy, or trade – well, there simply is none. His foreign policy views are unnecessarily moralistic – even given the unmistakably Islamic and evil terrorist threat confronting America.

At the same time, O’Reilly’s conservatism contains praiseworthy populist elements. He gets in his bones the Wall Street’s responsibility for the financial crisis. He supports raising the minimum wage. He spotlighted the pressures squeezing America’s middle class well before it became fashionable on the Right.

O’Reilly’s non-partisan impulses shouldn’t be forgotten, either. He has unsparingly criticized both Democratic and Republican party figures, and praised the former from time to time. He has strongly condemned the loony – and often prejudice-rooted – personal criticisms hurled at President Obama by many extreme conservatives. He has openly admitted being wrong about supporting George W. Bush’s Iraq War (actually, I think he’s gone overboard here) – even though he favors using (limited, he says) ground forces versus ISIS and expresses full and unjustified confidence that they can leave quickly once their mission is accomplished. And he regularly features both regulars and guests with whom he disagrees.

But none of the above really matters in connection with whether O’Reilly has falsely described his experiences as a foreign correspondent. Nor does it matter that the Mother Jones article that first questioned O’Reilly’s veracity really does look like a political hit piece aimed at retaliating against conservatives and conservative journalists following the tall tales-prompted suspension of NBC News anchor Brian Williams. I don’t even care that Mother Jones author David Corn was not renewed as a Fox News contributor a few years ago, or that some of O’Reilly’s former colleagues at CBS News may be contradicting his account of events in Argentina because they’ve been nursing personal grudges. And there’s no reason to take seriously the argument that O’Reilly shouldn’t be held to Williams-like standards because he’s not hosting a straight news program.

All that matters is whether his claims to have experienced “war zone” conditions are credible based on what we can know about the circumstances and what we can’t know. And I genuinely regret to conclude that O’Reilly has engaged in exaggeration that’s unacceptable for someone with a prominent role in America’s national public policy debate – whether they proudly claim to run a “No-Spin Zone” or not.

The best and fairest analysis I’ve seen of the events O’Reilly covered in Buenos Aires following the British-Argentine Falklands War in 1982 comes from Washington Post media blogger Erik Wemple. His research into not only American sources but Argentine sources (including contemporary local newspapers) convinces me that the Fox host was reporting on a chaotic, violent, and dangerous situation. But it was not one that qualified as the “war zone” he calls it.

This isn’t a huge exaggeration. But neither is it the hair-splitting of which O’Reilly has accused his attackers. A few rounds of live ammo were fired by the police, as well as many more rubber bullets and tear gas. Injuries were suffered, and the fatalities cited by O’Reilly can’t be ruled out, although there is no positive evidence. But no heavier weapons – the kind typical of military operations – were used. The tumult O’Reilly covered lasted a single night. He was not embedded in any units of soldiers, and he didn’t accompany combat forces on his own. In short, he experienced nothing like reporters in real combat zones have experienced in genuine armed conflict for decades. (See these links for some brief descriptions of the World War II coverage of figures like Ernie Pyle, Walter Cronkite, and numerous others who spent prolonged periods on the front or in their air and naval equivalents.)

And this difference counts because O’Reilly has used his claims in efforts to distinguish himself from interlocutors who he depicts as unqualified to hold contrary opinions on military-related topics because they haven’t tasted such danger.

All of which means that O’Reilly’s exaggerations as such sound a lot like Brian Williams’ Iraq war stories. Moreover, just as Williams has been criticized for false reporting in other sets of circumstances (Hurricane Katrina in New Orleans and the fall of the Berlin Wall), so has O’Reilly (for his accounts of his reporting of El Salvador’s insurgency in the 1980s). For some reason, though, the critics haven’t concentrated on those characterizations – and O’Reilly hasn’t addressed them.

The only major differences I can detect entail Williams’ contrition versus O’Reilly’s vituperation, and on NBC’s decision to suspend its star and examine his record versus Fox News’ decision to ignore O’Reilly’s. Bottom line: The Williams and O’Reilly misdeeds haven’t been modern journalism’s worst by a long shot. As a result, I’m open to the argument that both deserve a second chance (at least based on what is known so far). But I agree with those who would reserve forgiveness for those who seek it. So O’Reilly has a ways to go before he qualifies.

One final point: Speaking of journalistic misdeeds, something that’s truly garbage, as O’Reilly might put it, is the implication by Mother Jones authors Corn and Daniel Schulman that the “culture of deception within the liberal media” (their words) slammed repeatedly O’Reilly is a myth. If you doubt this, check out this compilation of confessions from mainstream media journalists. Which means that the worst outcome of O’Reilly’s troubles – including his often abusive counterattacks – could well be undercutting criticisms and concerns about a much more important problem.

(What’s Left of) Our Economy: Portman and the Journal Equally Clueless About Ohio and Trade


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Based on her Wall Street Journal article yesterday, it’s hard to know who understands less about Ohio’s economy and its critical stake in smarter U.S. trade policies – reporter Siobhan Hughes or the state’s Republican Senator, Rob Portman.  

According to Portman, Ohio’s experience still validates “the virtues of trade” provided that existing agreements are enforced more effectively. And he insists that “the U.S. can’t give up on new export opportunities while it tries to do a better job ensuring compliance with trade deals.” Hence he hopes that the bill granting fast track negotiating authority for President Obama will contain “tough currency provisions.” (All this phrasing is Hughes’.)

And according to Hughes, “the complex politics of Ohio” (which presumably reflect an equally complex economy) make Portman’s position reasonable. As she dutifully reports, the Senator’s “prime example is soybeans, which as of 2013 were Ohio’s fifth-biggest export, generating some $1.2 billion, after accounting for no share of the export market just three years earlier, according to the Census Bureau.”

But here’s what neither Hughes nor Portman apparently realize: The manufacturing losses suffered by the state under current trade policies are not even remotely offset by “big gains in agricultural exports, which could be enhanced by new trade deals.” Nor can they possibly be in the foreseeable future. And there’s no need to look at the indicator Hughes seems to favor – manufacturing employment – whose relationship to trade is controversial because it is also powerfully affected by developments in areas like productivity. All you need to do is look at the makeup of the state’s economy and trade flows.

The Commerce Department’s last detailed data is for 2012, but it shows that, after inflation, “farms” like those that cultivate soybeans represented 0.48 percent of Ohio’s output. Manufacturing represented 17.31 percent. Ahem.

It’s true that Ohio’s tiny agriculture sector has been a trade winner lately. According to the official data – also from the Commerce Department, between 2009, when the current national recovery began, through last year, it’s increased its exports by nearly 350 percent, to just under $2 billion. Even better its trade surplus skyrocketed by more than 1,400 percent – to $1.745 billion. So agriculture, as per Portman and Hughes, has contributed on net to Ohio’s growth.

But here’s what’s happened to Ohio manufacturing during this period. Its exports increased by more than 50 percent – to $48.57 billion. That’s more than 24 times Ohio agricultural exports. Yet its imports surged by just under 68 percent – to nearly $61 billion. That’s about 35 times more than Ohio farm exports.

As a result, the state manufacturing trade deficit more than tripled, to $12.29 billion. In other words, this shortfall’s increase of $8.37 billion – which subtracts from state growth – was more than five times greater than the $1.63 billion rise of the agricultural trade surplus. Therefore, the recent increase of Ohio’s manufacturing trade deficit has slowed the state’s growth by more than five times more than the increase in its manufacturing surplus. This produces a “complex” economic choice?

And here’s the kicker: Looking up these dispositive statistics – which can be found herehere, and here – and doing the math took about ten minutes. But it seems like that was too difficult for a Big Media reporter assigned to write about trade and Ohio’s economy, and for a state political leader charged with ensuring that trade policy benefits Ohio voters.

Our So-Called Foreign Policy: The Latest Strange Turns in Obama’s Counter-Terrorism Approach


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Although no one seems to know it, the controversy over President Obama’s treatment of Islam’s responsibility for most modern terrorism arguably took a strange turn during the summit he convened recently on “Countering Violent Extremism.” I say “arguably” because one aspect of Mr. Obama’s thinking seems to have become much more realistic – and may have allayed a major operational concern stemming from his reluctance to finger radical Islam as a prime source of such terrorism. At the same time – indeed, in the same speech – the one of the president’s other ideas left a second major operational problem as serious as ever.

The good news concerns the discussion of radical Islam Mr. Obama offered in his speech closing the summit. The president kept making claims like those in the following passage, which grabbed headlines:

Al Qaeda and ISIL and groups like it are desperate for legitimacy. They try to portray themselves as religious leaders — holy warriors in defense of Islam. That’s why ISIL presumes to declare itself the ‘Islamic State.’ And they propagate the notion that America — and the West, generally — is at war with Islam. That’s how they recruit. That’s how they try to radicalize young people. We must never accept the premise that they put forward, because it is a lie. Nor should we grant these terrorists the religious legitimacy that they seek. They are not religious leaders — they’re terrorists.  And we are not at war with Islam. We are at war with people who have perverted Islam.“

But here are some of the other points the president made:

>“[J]ust as those of us outside Muslim communities need to reject the terrorist narrative that the West and Islam are in conflict, or modern life and Islam are in conflict, I also believe that Muslim communities have a responsibility as well. Al Qaeda and ISIL do draw, selectively, from the Islamic texts.”

>[A] broader narrative…does exist in many Muslim communities around the world that suggests the West is at odds with Islam in some fashion.”

> “[T]here’s a strain of thought that doesn’t embrace ISIL’s tactics, doesn’t embrace violence, but does buy into the notion that the Muslim world has suffered historical grievances — sometimes that’s accurate — does buy into the belief that so many of the ills in the Middle East flow from a history of colonialism or conspiracy; does buy into the idea that Islam is incompatible with modernity or tolerance, or that it’s been polluted by Western values.”

>”[T]hose beliefs exist. In some communities around the world they are widespread….We’ve got to be much more clear about how we’re rejecting certain ideas.”

>”[M]uslim leaders need to do more to discredit the notion that our nations are determined to suppress Islam, that there’s an inherent clash in civilizations.”

I don’t know how you can examine these statements and not conclude that the president doesn’t understand that there’s a very grave terrorist problem nowadays that’s, if not unique to Islam, heavily concentrated in Muslim communities. Certainly he didn’t make similar statements about other faiths and their followers. As a result, I’m much less concerned than I had been that Washington would waste precious time and resources fighting extremism in non-Muslim areas.

That’s partly why it’s so discouraging that much of the rest of this same speech gave the terrorists and, perhaps more important, their potential recruits so many valuable talking points. You don’t have to agree with former New York City Mayor Rudolph Giuliani’s downright stupid claim that Mr. Obama doesn’t love America to recognize the kind of propaganda bonanza the president gave to the nation’s enemies and potential enemies with statements like:

>”[W]ith the brutal murders in Chapel Hill of three young Muslim Americans, many Muslim Americans are worried and afraid.”

>”[W]hen millions of people — especially youth — are impoverished and have no hope for the future, when corruption inflicts daily humiliations on people, when there are no outlets by which people can express their concerns, resentments fester. The risk of instability and extremism grow. Where young people have no education, they are more vulnerable to conspiracy theories and radical ideas, because it’s not tested against anything else, they’ve got nothing to weigh.”

>”When governments oppress their people, deny human rights, stifle dissent, or marginalize ethnic and religious groups, or favor certain religious groups over others, it sows the seeds of extremism and violence. It makes those communities more vulnerable to recruitment.  Terrorist groups claim that change can only come through violence. And if peaceful change is impossible, that plays into extremist propaganda.”

>”I know some Muslim Americans have concerns about working with government, particularly law enforcement. And their reluctance is rooted in the objection to certain practices where Muslim Americans feel they’ve been unfairly targeted. So, in our work, we have to make sure that abuses stop, are not repeated, that we do not stigmatize entire communities. Nobody should be profiled or put under a cloud of suspicion simply because of their faith. Engagement with communities can’t be a cover for surveillance. We can’t ‘securitize’ our relationship with Muslim Americans…dealing with them solely through the prism of law enforcement.”

>”If we’re going to solve these issues, then the people who are most targeted and potentially most affected — Muslim Americans — have to have a seat at the table….”

Mr. Obama’s former senior campaign and White House advisor David Axelrod recently touted the president’s “nuance and…ability to see gray, which is really important in the world in which we live. That’s true on foreign policy and national security. It’s also true on domestic policy.” The problem is that these traits can be millstones during war time, and the more ambivalence the president displays about the intertwined radical Islam and terrorism threats, the more Americans are entitled to wonder if he’s got what it takes to defeat them.

(What’s Left of Our Economy) Why Obama’s Trade Policies Need a Leash, not a Fast Track Blank Check


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In his weekly radio address this past Saturday, President Obama finally made his first pitch to the general public since his State of the Union for his planned new trade deals and for new fast track authority to pursue them. Ironically, though, his remarks further weaken the case for Congress granting him sweeping powers to conduct the nation’s trade policy.

As in the State of the Union, Mr. Obama clearly hoped to burnish his trade policy credentials by acknowledging that “past trade deals haven’t always lived up to the hype.” But his insistence that “we’ve successfully gone after countries that break the rules at our workers’ expense” is simply inexcusable hype about the possibilities of the nation’s trade system, and about the World Trade Organization’s potential as an effective trade referee. And the claim that his trade diplomacy would “level the playing field for American workers” by holding “all countries to the same high labor and environmental standards to which we hold ourselves” betrays an alarming ignorance about the prospects of enforcing the most distinctive terms of his proposed agreements.

As I’ve previously documented, the Obama administration’s trade enforcement moves are pathetically dwarfed by the scale of foreign subsidies at which they’re aimed – not to mention other trade-distorting policies, like discriminatory value-added taxes, that are beyond the reach of world trade law and are ignored in the president’s trade initiatives. Trade law actions, however, can also be dismissed as meaningful correctives for poorly negotiated agreements because of their intrinsic limitations.

Like all legalistic measures, they are inevitably reactive and piecemeal. As a result, they are utterly incapable of effectively addressing the challenge of foreign economies that are nothing less than national systems of protection – and especially those run by bureaucracies whose secretiveness makes it painfully difficult even to identify trade transgression conclusively, much less combat them.

Just as fanciful is the idea that provisions in trade deals can produce higher labor and environmental standards abroad. Believers in this contention, for example, still need to explain how many U.S. government bureaucrats will be needed to monitor the industrial complexes of current Trans-Pacific Partnership (TPP) countries like Mexico and Vietnam and Malaysia, much less of likely future signatories like China.

Even sillier is the notion that significant disciplines will be imposed on state-owned enterprises, as the administration is seeking for the TPP. After all, in Asia in particular, the line between public and private sector is typically blurred at very best. And the pervasiveness of deeply mixed economies in the region ensures that any cases against these entities brought by Washington before the TPP’s dispute resolution system will be quickly swatted down – whatever the agreement’s text says.

In fact, this dispute-resolution problem ensures that none of the specifics in the president’s trade agreements has a prayer of defending or promoting America’s interests. For legal systems require broad and deep consensus on acceptable behavior to be effective. They codify realities rather than creating them. Until the president recognizes the fundamental differences on economic policy norms that continue to divide the United States from most of it main trade rivals in Asia and other regions, and their implications for America’s international economic strategy, he needs a leash from Congress on trade policy, not a blank check.

Our So-Called Foreign Policy: Our Crimped Terrorism Debate is Taking a Dangerous Toll


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If you doubt the damage being done by the brain-dead debate over fighting terrorism being conducted by America’s leadership and chattering classes, just look at the newest poll findings on the public’s stated support for using U.S. ground troops against ISIS.

Ever since this radical Islamist group’s stunning military advances began attracting broad attention last year, the Obama administration and its allies and critics in Congress, the think tank world, and the punditocracy have squabbled over alternatives that are equally loony and likely counter-productive. They have ranged from ranging from idolatry of (allegedly antiseptic) strikes to fairy tales about diplomatic solutions and Cold War-style alliances (in a region where few if any genuine nation-states exist) to blather about attacking terrorism’s supposed roots in poverty or historic injustices to full-throated calls for using large-scale American ground forces. Actually, most supposed strategic geniuses nowadays favor some combination of these delusional cure-alls.  (See this recent post for a noteworthy example.)

The latest NBC News/Marist poll shows that months of videos and news reports of ISIS’ atrocities and spreading influence, along with the narrow range of commentary served up in the media, have significantly boosted public backing for using U.S. ground troops – an option that for better or worse has been a third rail of American politics and policy since the previous Iraq War went south.

According to the survey, 26 percent of Americans back sending in “a large number of U.S. ground forces” to “combat ISIS,” and 40 percent favor deploying “a limited number.” Only 26 percent opposing use any ground troops, and seven percent are “unsure.”

We don’t have exact apples-to-apples data revealing trends over time. And foreign policy polls are often incompetently designed. But there seems little doubt that support for the ground option has grown significantly since the fall. A Marist survey released October 2 showed only 47 percent backing sending an unspecified number of ground troops to Syria “to fight ISIS if airstrikes are unsuccessful.” Forty-eight percent opposed this proposal. At that time, a large 6 percent majority approved of those airstrikes, with only 19 percent disapproving.

Readers of RealityChek know that there’s a much more promising option: Using special forces and airstrikes to harass ISIS and keep the group off balance wherever it operates, but not with the idea of defeating or even “degrading” these barbarians. Instead, the aim would be to prevent ISIS from consolidating its power sufficiently to create a terrorist haven and base for planning and launching September 11-style attacks against the United States while Washington devotes most of its anti-terror resources and attention to securing America’s borders.

No anti-terror strategy will be perfect, but the greatest degree of success is surely likelier by focusing most on something the United States can reasonably hope to control (its own borders) than by focusing on something that plainly can’t be controlled (a thoroughly diseased and in fact dysfunctional region like the Middle East). But until the media starts reporting and presenting these options, expect the nation’s strategy to reflect the disastrously false choices that have dominated the terrorism debate so far. And expect the public quite understandably to follow along until another debacle unfolds.

Following Up: Lenovo Superfish Scandal Reveals Even More Holes in Obama Cyber-Security Strategy


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If you haven’t followed the story that’s unfolded this week about hacking software found in personal computers made by China’s Lenovo company, you’ll appreciate this handy-dandy summary. You’ll also be astonished by how clueless the Obama administration’s cyber security strategy remains – despite the cyber-security summit just held at the president’s instigation.

First, some background. Lenovo is not only a Chinese company. It’s a Chinese company that, like most big Chinese companies, is part owned in a formal sense by the Chinese government. Just as important, like every commercial entity in China, it needs to serve the Chinese government’s interests whenever Beijing so desire.

Lenovo is also now the world’s largest producer of PCs and a major force in electronics generally – thanks in part to its purchase in 2005 of IBM’s personal computer arm and last year of the company’s low-end server manufacturing.

China, you may recall, is a country that for years has often acted in ways contrary or downright harmful to American national security interests, and its government has been officially accused by the Obama administration of sponsoring numerous cyber attacks on U.S. government agencies and businesses. So you may be surprised to learn that, despite these publicly stated concerns, and Lenovo’s close relationship with the Chinese government, the U.S. government has been using Lenovo PCs widely for many years.

Thankfully, Washington has been smart enough not to give Lenovo full access to the federal bureaucracy. Since the middle of the last decade, its products have been barred from secret and top secret networks at defense and intelligence agencies, and since mid-2013, other agencies like Justice, Commerce, and NASA have been required to obtain FBI or other law enforcement agency approval to buy any information technology equipment “being produced, manufactured or assembled by one or more entities that are owned, directed or subsidized by the People’s Republic of China.” But other official offices have been perfectly free to buy Lenovo and other goods sold by Chinese firms and, of course, sold by U.S.-owned businesses but made in factories in China, including those whose work may not be classified officially but could be awfully sensitive or otherwise important.

So it was more than a little interesting that, not even a week after the cyber-security summit, Reuters reported that software had been found in Lenovo computers that made them vulnerable to hacking. Lenovo’s initial response was to declare this past Thursday that “We have thoroughly investigated this technology and do not find any evidence to substantiate security concerns,” but also announced that it would no longer pre-install the program, called Superfish, which comes from a U.S. company, albeit one with a shady-sounding background. It was not until Friday that the Department of Homeland Security – which apparently never detected the threat – sent out a warning to all Lenovo customers about the software’s malicious capabilities.

Lenovo now says that it did not know about the security threat until Thursday though a user reportedly filed a complaint on a company forum in late January (and Reuters reports the first concerns were expressed in June). But it also said that Superfish wasn’t designed to be malware, and there was no word on whether it would stop pre-loading into its products other programs by third-party producers. (Apparently the practice of selling this hard-drive space to unaffiliated software companies is common throughout the PC industry.) Lenovo also says that Superfish was installed only on devices shipped between September and December, though it hasn’t said how many computers were compromised. Nor is there any information on how many of these machines were bought by federal customers – as well as their counterparts on the state and local levels. They could still easily contain Superfish unless the owner found out about the problem and applied one of several technical fixes available. (Lenovo also says that it’s looking to work with companies like Microsoft and McAfee to deliver software to remove Superfish and related problems automatically.)

So on the surface, the Lenovo-Superfish threat now looks either contained or soon to be quashed. But the federal, state, and local agencies that bought the vulnerable computers no doubt include offices that are in constant contact, electronic and otherwise, with private businesses – including those that build, supply, and maintain all of the nation’s critical infrastructure systems. These companies themselves also buy Lenovo regularly, of course. Could Superfish have made its way into their networks? And what of other bugs that technology experts either inside or outside the government may not have detected yet?

A government truly serious about cyber-security would immediately require all government agencies at all levels and companies involved in critical infrastructure and national defense to use only computer-related products made outside China down to the component level within a specified time period. Given the massive offshoring of the electronics industry, including nearly the entire supply chain, over the last several decades, that would be a massive undertaking. But without removing equipment from China from official Washington and security-related industries, America will remain dangerously exposed to cyber aggression – no matter how many cyber-security summits presidents hold.

Im-Politic: Republicans Happy to Trust Obama When He Pushes Offshoring


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That’s some stunningly contradictory message leading Republicans have been sending lately regarding President Obama’s negotiating skills. On the one hand, they portray him as a bumbling naif on issues like normalizing ties with Cuba and eliminating the Iran nuclear weapons threat. And on the other hand, they’re happy to grant him sweeping Trade Promotion Authority (TPA) to negotiate history’s biggest trade agreements.

This incoherence was most recently displayed by likely presidential candidate Jeb Bush. The former Florida governor told the Chicago Council on Global Affairs that the Obama Cuba diplomacy that began to reestablish diplomatic and economic relations amounted to “bad negotiations.”

According to Bush, “[W]e got nothing in return. We traded a guy who was held hostage, Alan Gross, an aid worker for no reason. He was allowed in the country, he was held hostage and he was languishing in prison, and, in fact, his wife believed that if he stayed much longer, he was going to die, for spies that were convicted in our American judicial system.

“That was not an equal trade. We opened up additional mounts of travel, so many of you may have gone as — like, I say in quotes, education trips. And now that those have been expanded the president has that authority to do so. And nothing in return.”

Yet in the same speech, Bush endorsed the president’s request for a near-blank check from Congress to negotiate the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and any other agreements he – and possible Democratic successors – might pursue over the next five years.

The disconnect arguably is wider on Iran. House Speaker John Boehner is so worried that President Obama will ultimately cave in and accept an agreement that will enable Iran to develop nuclear weapons that he’s bent Washington protocol and created a firestorm by inviting Israeli Prime Minister Binyamin Netanyahu to address Congress to warn against such appeasement. Moreover, speaking about Mr. Obama’s executive action on immigration, Boehner has declared, “There’s widespread doubt about whether this administration can be trusted to enforce our law.” Yet Boehner’s only criticism of the president’s trade policies is that Mr. Obama hasn’t worked hard enough to win Democrats’ support.

Regarding Iran, Wisconsin’s Paul Ryan emphatically agrees with Boehner. The Ways and Means Chair has insisted that The president’s policies with Iran have bipartisan concern. A huge bipartisan majority in both the House and the Senate are very worried about the handling of these negotiations.” But he’s tried to justify his enthusiasm for “fast tracking” Mr. Obama’s trade deals through Congress by insisting that “I am not saying to enhance our leverage we have to enhance the administration’s power—far from it. What I’m saying is this bill would enhance Congress’s power. TPA empowers Congress.” What Ryan has not explained is why he thinks the president is more likely to follow the law on trade than he’s been on immigration.

But at least Ryan doesn’t descend into the outright schizophrenia displayed by Rep. Darrell Issa. The California Republican, a fierce Obama critic, told the Washington Post, This president has earned our distrust, but having said that, I still support TPA. I still want to have the trade team be able to go forward and make good offers.”

One explanation for these seeming inconsistencies may be these Republicans’ belief that bad trade deals are much less likely to damage important U.S. interests than are bad national security deals – though that will be a tricky argument to make during an economic recovery with which few Americans are happy. Or maybe most Republican leaders think that, although President Obama’s terrible instincts on economics become excellent once matters go international? That’s a contention that looks too clever by half.

Instead, these clashing Republican positions seem best explained by the role of Big Money in politics. America’s offshoring lobby has told these lawmakers to jump. And their only uncertainty is “How high?”

Those Stubborn Facts: Obama’s Short-Lived Inshoring Boast


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[F]or the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.”  –President Barack Obama, January 28, 2014

China overtook the United States to become the top destination for FDI [foreign direct business investment] in 2014….”  –Reuters, February 15, 2014 

(Sources: “President Barack Obama’s State of the Union Address,” Office of the Press Secretary, The White House, Speeches & Remarks, Briefing Room, January 28,, 2014, and “China January FDI grows at strongest pace in Four Years,” by Jenny Su and Kevin Yao, Reuters, February 15, 2015, )


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