Alan Tonelson
Bio: Welcome to RealityChek! This is a blog to follow if you're sick and tired of the usually brain-dead left, right, and centrist conventional wisdom filling the media (mainstream and not) on economics, foreign policy, politics, and life in general. Ditto if you're after revealing data on the often confusing state of the national and world economies that's simply not available elsewhere. Alan Tonelson (that's me) is RealityChek's founder and voice. I've just finished more than 30 years of senior positions at leading US think tanks and publications to strike out on my own. I've written and lectured on trade, manufacturing, and their interaction with the rest of the economics world, plus national security issues, for the U.S. Business and Industry Council and the Economic Strategy Institute. And I've served as Associate Editor of FOREIGN POLICY magazine. Perhaps you've heard of or read my book on globalization and the US economy, The Race to Bottom> Published in 2002 by Perseus Books, it's available at all major on-line booksellers. And it's held up awfully well since it first appeared. In addition, my articles and reviews have appeared in Foreign Affairs, The Atlantic, Harper's, The New York Times, The Washington Post, The New Republic, BloombergView, Marketwatch.com, The Hill, FOREIGN POLICY, and many other leading national publications and news sites. If you're a TV news junkie, you may have caught one of my many appearances on CNBC, BloombergTV, and CNN. I'm a quasi-regular on John Batchelor's nationally syndicated radio show, and have provided analysis and commentary for many other leading talk radio programs as well. I've testified before numerous Congressional committees and U.S. government commissions, and lectured in fora ranging from the National Defense Univesity and the State Department's Foreign Service Institute to numerous world affairs councils and labor and business groups in the USA, along with government and academic institutions in the UK, Germany, China, and Japan. I hold a B.A. with highest honors in history from Princeton University and, as you'll see am an avid fan of the NY Yankees, Giants, and Knicks. I love a good, vigorous (but respectful) debate, so I'm always interested in your questions and comments. Feel free to include some snark (I sure do!), but please also leave the profanity and the ad hominem attacks at home.
RealityChek 
You were featured in the latest edition of Last Week Tonight. 14:30-14:50
I did see it, Joe, and wrote yesterday’s post in response. But thanks for taking the time to alert me. And I hope you’ll become a RealityChek regular!
It’s delightful to read a source which does not flog the Company Line about how feeding Chinamen is actually just like feeding your own neighbors and grand-children.
Quoted you today on the blog and indirectly asked a question. If it is true that US tariff policy has actually been Foreign Aid by other means, should we not “follow the money” —or more directly, observe where major Banks and Industrials have made investments prior to US granting favorable tariffs?
Hmmmmm??
Thanks so much for the kind words! Regarding your “follow the money” point, there’s no doubt that the main thrust of U.S. trade policy since the end of the Cold War has been to encourage the supply of the American market from very low-income, lightly or non-regulated countries like Mexico and China. And of course, this strategy has required the offshoring of multinational companies’ jobs and production from the U.S. to those export platforms.
Alan, did you see this article by Jeffrey Sachs? http://www.bostonglobe.com/opinion/2016/10/16/the-truth-about-trade/UWtu8jpAo8LTsTFlffaZ0K/story.html?s_campaign=email_BG_TodaysHeadline&s_campaign. I think it is generally good, but it doesn’t take into account the deindustrialization and loss of manufacturing effects, and the unfair mercantilist policies of our trade partners, in particular, China.
I am tired of hearing about the remedy to globalization and these stupid trade deals like the TPP that decimate manufacturing in the U.S. and blue collar employment being worker retraining so these unfortunate souls can find other work. What other work are they referring to? Burger flippers? In-home assistance? Minimum wage retail? Because that is all our economy is creating these days in large numbers, thanks in large part to the stupid trade deals we have embraced in the first place. And soon much of it will be replaced by automation anyway. Idiot talking head establishment media pushes this drek and it completely fails the test of even the most elementary logic. http://www.nytimes.com/2014/04/28/business/economy/recovery-has-created-far-more-low-wage-jobs-than-better-paid-ones.html
Check out this book Alan. This is precisely why I have left the Democratic party! http://us.macmillan.com/listenliberal/thomasfrank
Look at this one too: http://www.pressherald.com/2016/02/23/commentary-if-elected-president-ill-level-the-playing-field-on-global-trade-clinton-says/. I could totally get behind this. The problem is that Obama said the same thing in 2008 about NAFTA and other trade issues and then proceeded to do absolutely nothing and in fact accelerated the problems with his push for TPP, etc. Why is Hillary publishing this in an obscure newspaper no one reads? Why is she not saying this on the stump like Bernie is? You get the impression she doesn’t really believe in these things and is just saying them to get elected and then will reverse in a bait and switch like Obama did. There is a big trust issue here, especially based on how she previously behaved and voted and her past positions.
Alan, take a look at this article: http://www.nytimes.com/2016/03/11/us/politics/-trade-donald-trump-breaks-200-years-economic-orthodoxy-mercantilism.html?_r=0. I think this is a big misrepresentation of what Trump is saying. He is not saying that we should unilaterally practice mercantilism, but free trade is wonderful if free trade is practiced by all sides, but when we are confronted in trade with nations that do practice mercantilism like China, should we continue to keep our markets wide open to them or cease bending over and taking it and do something about it to reduce our trade deficit and create what would otherwise be a level playing field absent the other side’s unfair and anti-free market trade practices? David Ricardo and Adam Smith did not have to confront currency manipulation and other stealthy unfair practices. Comparative advantage is great in a vacuum of every nation keeping their markets relatively open so the free market can operate with fair competition. In this real world it does not apply and we compete with two hands tied behind our back while China punches us in the face. Trump is, in fact, the only one who sees things the way they really are.
Look at this unbelievably terrible article: http://finance.yahoo.com/news/trump-s-bad-logic-on-%e2%80%9cbad-trade-deals%e2%80%9d-200134642.html#. It’s so awful that on its own terms its logic is inconsistent and half of what he writes doesn’t even make any sense.
Thanks, Gregg – and don’t think I’ll let this stand unchallenged!
You should read and reference this guy. He has some of the most astute analysis I have ever read in my life. http://benjaminstudebaker.com/2016/02/05/why-bernie-vs-hillary-matters-more-than-people-think/; http://benjaminstudebaker.com/2016/02/10/why-bernie-sanders-is-more-electable-than-people-think/
Thanks so much for the reference, Gregg, and I look forward to checking him out!
Did you see this one? http://www.nytimes.com/2016/01/28/upshot/so-what-would-it-mean-to-beat-china-on-trade.html?ref=economy&_r=0
You never commented on this so I will re-post. Curious as to your thoughts. Thanks Alan. Have you read this book? http://press.princeton.edu/titles/9312.html
It is amazing how the debates about the industrial decline of the country, especially relative economic decline (relative to Germany and the USA, both of which erected protective tariffs against British exports, while Britain adhered dogmatically to free trade), is hauntingly familiar to the USA today, faced with unfair competition from Japan, South Korea and China primarily. Joseph Chamberlain was the tariff reform champion. Even brilliant and mainstay figures as Lord Salisbury and Arthur Balfour questioned free trade: “In spite of any formula, in spite of any cry of Free Trade, if I saw by raising the duties on luxuries, or threatening to raise it, I could exercise pressure on a foreign power, inducing it to lower rates and give relief, I should pitch orthodoxy and formulae to the winds and exercise pressure.” –Salisbury. The book sets forth the positions of Chamberlain, the free traders who wanted orthodoxy – status-quo, and Arthur Balfour, the Prime Minister in 1903, who wrote a masterful analysis of the situation in a memorandum entitled “Economic Notes on Insular Free Trade,” which I downloaded and have begun reading. Keynes wrote of the memo: “The Economic Notes on Insular Free Trade is one of the most remarkable scientific deliverances ever made by a Prime Minister in office. It wears well and bears re-reading. I think that economists today would treat Balfour’s doubts, hesitations, vague sensing of trouble to come, polite wonder whether unqualified laissez-faire is quite certainly always for the best, with more respect, even if not with more sympathy, than they did then.”
Chamberlain himself argued things that are so eerily similar to the situation we face today in the USA that it gave me goose bumps reading it, e.g., “whereas at one time England was the greatest manufacturing country, now its people are more and more employed in finance, in distribution, in domestic service… I think it is worthwhile to consider – whatever its immediate effects may be-whether that state of things will not be the destruction ultimately of all that is best in England, all that has made us what we are, all that has given us prestige and power in the world.” He went on to tell London’s bankers that in the short run, the net effect of the changes would be to leave Britain more divided between rich and poor and less self-sufficient, “richer and weaker.” Over the long run the country could not survive as merely a “hoarder of invested securities” if it was not also the “creator of new wealth.” He went on: “…are you entirely beyond anxiety as to the permanence of your great position?… Banking is not the creator of our prosperity, but is the creation of it. It is not the cause of our wealth, but it is the consequence of our wealth; and if the industrial energy and development which has been going on for so many years in this country were to be hindered or relaxed, then finance, and all that finance means, will follow trade to the countries which are more successful than ourselves.”
Ultimately, I think Balfour’s position of raising retaliatory tariffs on protectionist countries in order to negotiate a reduction of theirs for ours to create a fairer playing field was more workable than Chamberlain’s cry for Imperial Preference, since walling off Britain and her colonies from competition, even legitimate competition, could exacerbate a lack of innovation and upgrading of plant and equipment, technique, etc. and lead to possibly even more decay, not to mention the problematic politics involved. Essentially, Chamberlain’s position, while I agree with all of his arguments on the problems with free-trade while others practices mercantilism, would amount today to what might seem a general, across the board raising of tariffs in the USA against all other countries, while Balfour’s position would amount to strategic raising of duties or retaliation in some measure against currency manipulation by China and others and other stealth protectionist practices which give them an unfair advantage at the expense of our manufacturing base, perhaps by taxing their purchase of our treasuries in proportion to the degree of currency manipulation or something like that, i.e., counter-intervention in the currency markets. That Balfour identified the problems, saw the future and prescribed what would seem to the best solution over 100 years ago without any historical precedent (as Britain was THE first industrial power and the first to face these issues), which nowadays we have plenty of, is astounding to me and merely highlights his unmitigated brilliance as a thinker with a genius analytical mind.
Nothing happened though because of the lack of political will to do anything, the opposition of vested multinational business and financial interests and fear of political fallout splitting parliamentarian parties. Indeed, the whole tariff debate split the conservatives and brought in the staunchly free-trade liberals, collapsing Balfour’s government. Again, this is incredibly, eerily familiar today, down to the Democratic Party splitting into pro-TPP and anti-TPP camps. History really repeats itself.
This is an old article, but just terrible. It really hurts to read it… http://economix.blogs.nytimes.com/2013/01/07/the-benefits-of-uncertainty/
Grateful for the comment, Gregg. I had missed this one, but once I read it, was actually surprised at how much credence the author gave to claims of expanded trade with China being responsible for major manufacturing job loss. What specifically about the piece gets under your skin?
Thanks for sharing this, Gregg. But I didn’t think it was especially terrible. What was it that bothered you most?
What troubled me was not the article itself, which was excellent, but the trends it outlined, the refusal to consider tariffs. That is the horrible part!
I guess I’m so used to Big Media journalists being close-minded on trade and especially tariff issues that it didn’t make much of an impression on me. Re The Weary Titan, I haven’t read it yet. I certainly agree that the parallels between the U.S. and British experiences is striking and instructive — and that of course was a major theme of Paul Kennedy’s Rise and Fall of the Great Powers.
Have you read this book? http://press.princeton.edu/titles/9312.html
It is amazing how the debates about the industrial decline of the country, especially relative economic decline (relative to Germany and the USA, both of which erected protective tariffs against British exports, while Britain adhered dogmatically to free trade), is hauntingly familiar to the USA today, faced with unfair competition from Japan, South Korea and China primarily. Joseph Chamberlain was the tariff reform champion. Even brilliant and mainstay figures as Lord Salisbury and Arthur Balfour questioned free trade: “In spite of any formula, in spite of any cry of Free Trade, if I saw by raising the duties on luxuries, or threatening to raise it, I could exercise pressure on a foreign power, inducing it to lower rates and give relief, I should pitch orthodoxy and formulae to the winds and exercise pressure.” –Salisbury. The book sets forth the positions of Chamberlain, the free traders who wanted orthodoxy – status-quo, and Arthur Balfour, the Prime Minister in 1903, who wrote a masterful analysis of the situation in a memorandum entitled “Economic Notes on Insular Free Trade,” which I downloaded and have begun reading. Keynes wrote of the memo: “The Economic Notes on Insular Free Trade is one of the most remarkable scientific deliverances ever made by a Prime Minister in office. It wears well and bears re-reading. I think that economists today would treat Balfour’s doubts, hesitations, vague sensing of trouble to come, polite wonder whether unqualified laissez-faire is quite certainly always for the best, with more respect, even if not with more sympathy, than they did then.”
Chamberlain himself argued things that are so eerily similar to the situation we face today in the USA that it gave me goose bumps reading it, e.g., “whereas at one time England was the greatest manufacturing country, now its people are more and more employed in finance, in distribution, in domestic service… I think it is worthwhile to consider – whatever its immediate effects may be-whether that state of things will not be the destruction ultimately of all that is best in England, all that has made us what we are, all that has given us prestige and power in the world.” He went on to tell London’s bankers that in the short run, the net effect of the changes would be to leave Britain more divided between rich and poor and less self-sufficient, “richer and weaker.” Over the long run the country could not survive as merely a “hoarder of invested securities” if it was not also the “creator of new wealth.” He went on: “…are you entirely beyond anxiety as to the permanence of your great position?… Banking is not the creator of our prosperity, but is the creation of it. It is not the cause of our wealth, but it is the consequence of our wealth; and if the industrial energy and development which has been going on for so many years in this country were to be hindered or relaxed, then finance, and all that finance means, will follow trade to the countries which are more successful than ourselves.”
Ultimately, I think Balfour’s position of raising retaliatory tariffs on protectionist countries in order to negotiate a reduction of theirs for ours to create a fairer playing field was more workable than Chamberlain’s cry for Imperial Preference, since walling off Britain and her colonies from competition, even legitimate competition, could exacerbate a lack of innovation and upgrading of plant and equipment, technique, etc. and lead to possibly even more decay, not to mention the problematic politics involved. Essentially, Chamberlain’s position, while I agree with all of his arguments on the problems with free-trade while others practices mercantilism, would amount today to what might seem a general, across the board raising of tariffs in the USA against all other countries, while Balfour’s position would amount to strategic raising of duties or retaliation in some measure against currency manipulation by China and others and other stealth protectionist practices which give them an unfair advantage at the expense of our manufacturing base, perhaps by taxing their purchase of our treasuries in proportion to the degree of currency manipulation or something like that, i.e., counter-intervention in the currency markets. That Balfour identified the problems, saw the future and prescribed what would seem to the best solution over 100 years ago without any historical precedent (as Britain was THE first industrial power and the first to face these issues), which nowadays we have plenty of, is astounding to me and merely highlights his unmitigated brilliance as a thinker with a genius analytical mind.
Nothing happened though because of the lack of political will to do anything, the opposition of vested multinational business and financial interests and fear of political fallout splitting parliamentarian parties. Indeed, the whole tariff debate split the conservatives and brought in the staunchly free-trade liberals, collapsing Balfour’s government. Again, this is incredibly, eerily familiar today, down to the Democratic Party splitting into pro-TPP and anti-TPP camps. History really repeats itself.
This is amazing: https://www.donaldjtrump.com/positions/us-china-trade-reform. It essentially mirrors almost exactly the position Arthur Balfour reached over 100 years ago after intensive study of the problem. Big Kudos to Trump on this!
Here is the latest and by far, in my opinion, the best argument against the TPP and the last several decades of free trade policies: http://www.huffingtonpost.com/greg-autry/stupid-trade-gets-dangerous-tpp_b_7245966.html. This argument is basically rehashing Paul Kennedy’s thesis in The Rise and Fall of the Great Powers. Productive industrial capacity not only is good for the nation’s economy, but it is also responsible for keeping us safe and winning wars. Squandering it away and relying on a service economy is a fool’s errand. How disappointing that we are led by fools and our enemies by wise men.
Thanks very much for the comment, Gregg, and please accept my apology for the delay in responding. I agree that the national security argument is one of the most powerful that can be raised against current U.S. trade policy – in principle. But this article also exposes one of the obstacles to using it more effectively – it’s very tough to get authoritative data on the situation. That’s why this piece has none. The Pentagon has strong vested bureaucratic interests in maintaining the status quo, and has done an excellent job in using its virtual monopoly on facts and figures to spread misinformation. And unfortunately, if you’re outside the Beltway consensus on an issue and don’t have really solid data, you’re not going to make much headway. BTW, check out this op-ed for one of my own attempts to deal with the issue. It doesn’t focus on military supply chains as such, but on cyberwar capabilities: http://www.bloomberg.com/news/articles/2013-03-28/chinese-hacking-is-made-in-the-u-s-a-
Wow, this is really terrible: http://www.nytimes.com/2015/02/25/business/free-trade-that-american-workers-can-live-with.html?partner=rss&emc=rss&smid=fb-nytimes&bicmst=1409232722000&bicmet=1419773522000&smtyp=aut&bicmp=AD&bicmlukp=WT.mc_id&_r=0. No mention AT ALL about currency manipulation and mercantilist practices. Also, have you heard of this economist? http://en.wikipedia.org/wiki/William_Ashley_(economic_historian). I feel we are sorely lacking someone like Sir William Ashley in this country. There are so many apologists for unfettered free trade and almost no one for defending ourselves against mercantilism!
Gregg – I am so sorry for this long delay in getting back to you. But I certainly appreciate this material – especially the info on William Ashley, who was not known to me. There’s no doubt that economic history is an overlooked stepchild of both economics and history – a great loss for both, and for all of us. Interestingly, I’ve had some twitter exchanges recently with ideologues who claim that free trade is an economic theory enjoying universal support within the profession. Clearly, these folks need to read economists like Ashley – and could profit greatly from it on substance. Re the Porter New York Times piece, I share your views. In fact, I’m hoping to make contact with him soon, since any journalist who writes on trade but thinks labor issues are still top priorities (at least from a U.S. standpoint) has a lot to learn! I’ll keep you posted on these efforts, and thanks again for taking the time to comment.
Did you see this? Terrible! http://www.washingtonpost.com/politics/critical-of-obamas-past-actions-gop-now-wants-to-give-him-more-power-on-trade/2015/01/27/5e4d3156-a596-11e4-a06b-9df2002b86a0_story.html?hpid=z5
Thanks so much, Gregg! So much for Republican populism – at least in the ranks of its Congressional leadership!
There is usually a program installed on every computer that uses Windows called Windows Photo Gallery that will let you view your photos and change them too! 😉
Many thanks, John! I really do mean to take care of that cockeyed photo!
Just saw this. At first I thought the sideways picture was a statement about having an alternative viewpoint. 🙂
I think you can do the following: Rotate the picture using an application on your PC or Mac (if you have a Mac, you can use the Preview app) so it’s facing upright. Then log in to https://en.gravatar.com/emails/ using your wordpress.com credentials and choose “add a new image”. After doing this you might have to then select the new image as your primary.
I think that should do it! Feel free to email me if you run into difficulties.
Bob — This tech dinosaur is extremely grateful! I’m out of pocket most of today, but will try this later tonight or tomorrow. (Unless you think the current version really might be a clever branding device? 🙂 )
Hi Alan, your profile picture does not look right.
Thanks so much for the observation! I’ve been trying to figure out how to rotate it properly – with no success! Any suggestions?