Im-Politic: How I Scooped The Times on Trump and Nationalism 25 Years Ago

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America First, Democrats, elites, environmentalists, foreign policy, globalism, globalization, Im-Politic, Immigration, internationalism, interventionism, middle class, minoriites, nationalism, politics, Populism, Republicans, sovereignty, The National Interest, The New York Times, Thomas Edsall, Trade, Trump, working class

However conceited it sounds, it really is time – again – 🙂 to pat myself on the back. This morning’s New York Times featured a long analysis by contributor Thomas Edsall titled “The End of Left and Right as We Knew Them.” The main thesis (as per a quote from the director of the “International Institutions and Global Governance Program” at the Council on Foreign Relations):

“The most salient political division today is not between conservatives and liberals in the United States or social democrats in the United Kingdom and France, but between nationalists and globalists.”

Edsall himself elaborates:

“By now it has become quite clear that conservative parties in Europe and the United States have been gaining strength from white voters who have been mobilized around issues related to nationalism — resistance to open borders and to third-world immigration. … On the liberal side, the Democratic Party and the center-left European parties have been allied in favor of globalization, if we define globalization as receptivity to open borders, the expansion of local and nationalistic perspectives and support for a less rigid social order and for liberal cultural, immigration and trade policies.”

Moreover, at the heart of these new divisions are class distinctions: The nationalists on both sides of the Atlantic are likeliest to be relatively poor and relatively uneducated – although Edsall does present research findings showing – unconvincingly in my view – that classic “racial resentment, more than economic anxiety, influenced the [U.S.} presidential election.”

Yet the author also unmistakably believes that the left “In recent decades…both in Europe and in the United States [has] begun to include and reflect the views of large numbers of well-educated elites — relatively affluent knowledge or creative class workers….” Indeed, he coins a nice phrase: “The rise of the affluent left.”

So what does this have to do with yours truly? Plenty. Because nearly 25 years ago, I predicted the development of exactly the same trend. My forecast came in an article for the journal The National Interest that was called (wait for it) “Beyond Left and Right” – and it got a fair amount of media attention from both liberals and conservatives. (The National Interest itself is on the right end of the spectrum.) 

Unfortunately, I haven’t been able to find versions on-line that aren’t behind pay walls, but here are a few excerpts from a dog-eared xerox:

“…a new underlying fault line [replacing the old left-right divisions] is already emerging in American foreign policy, dividing what might best be called nationalists and internationalists. In terms of American diplomacy, this new alignment will pit a generic model of foreign policy-making that long predates the Cold War – one based at bottom…on the belief that international activism itself is the key to American security and prosperity – against a rival approach…whose supreme goal is consolidating American military and economic strength, and enhancing America’s freedom of action. In the realm of economic policy, those who argue that the nation-state, as an economic player, is obsolete or dangerous will vie with those convinced of its continuing relevance and legitimacy. In electoral politics, sharp differences in economic interests and cultural outlooks will produce a widening rift between business, professional,and government elites on the one hand, and wage-earners on the other. The issue of class, in other words, is re-emerging in American politics.”

I added that these divisions were arising from “the different impact of world economic trends on different classes” and were producing “a foreign policy debate [that] increasingly pits social and economic classes against each other, focusing on the questions of who pays the costs and who incurs most of the risks involved in competing economic and security policies.

“Polls repeatedly show that the best educated and wealthiest Americans are the staunchest internationalists on both security and economic issues. The surveys also show strong support for internationalist policies to be lacking nearly everywhere else on the social spectrum. “

And there’s more. I wrote that “At the mass public level,” the nationalist faction would be comprised of “blue collar union members, white collar middle managers and small businessmen from the Perotista ranks; family- and community-oriented immigrants; and grassroots environmental activists.”

As for their rivals, “The social base of internationalism would include many big multinational businesses and their upper level managers, financiers, professionals, and retailers. Journalists and the rest of the mass media, as well as academics, also tend to support an idealistic globalism. Other members of a new internationalist coalition might include minorities whose fear of cultural conservative nationalists outweighs their qualms about job-destroying internationalist free-trade economics, and affluent, mainstream environmentalists.”

And there was more on the role of the media: “Much of what they lack in numbers, the internationalists would make up for in money, influence, and the aura of respectability that their media allies will continue to provide.”

What would happen to liberal and conservative internationalists in the process? The former

“may wind up permanently alienating labor, minorities, and the white-collar middle class whether they intend to or not – and lose their identity as champions of the underdog and as agents of progressive change in the process. Internationalists of the Right will face similar problems. Without offering their voters something more than NAFTA, the continuing “creative destruction” of their jobs, endless foreign interventions, and Marilyn Quayle’s definition of family values, it is difficult to see them avoiding George [H.W.] Bush’s political fate.”

For good measure, I added that if they do crystallize, the resulting new coalitions are likely to be “less inclined to compromise than their predecessors….”

Clearly, I didn’t get everything right. But I’m kind of amazed at how many developments I absolutely nailed. Further, we’re only a few months into the Trump era. In other words, the American political realignment I anticipated still probably has a long ways to go.

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(What’s Left of) Our Economy: Trump’s Real China Currency Blunder

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airstrikes, alliances, America First, chemical weapons, China, currency, currency manipulation, dollar, exchange rates, North Korea, nuclear weapons, predatory trade, Syria, Trade, trade barriers, Trump, Xi JInPing, yuan, {What's Left of) Our Economy

What was worst about President Trump’s decision yesterday to let China off the currency manipulator hook (for now) was not the scrapping of a long-time campaign promise it represented. What was worst about the decision was its geopolitical rationale – that is, Mr. Trump’s judgment that major Chinese cooperation in reining in North Korea’s nuclear program could be secured if his administration moderates or delays various efforts to counter Beijing’s trade predation.

Nonetheless, some recent developments also presage reasons for modest optimism that a sounder approach to currency manipulation by China (and other countries), at least, will eventually emerge if it becomes clear Beijing is welshing on this deal.

The president’s new China policy makes least sense from a pure negotiating tactics standpoint. After all, what course of action could now be more tempting than for China to keep stringing America along with promises to get tough on North Korea, and even with token actions suggesting that meat is being put on these bones? Think “Charlie Brown,” “Lucy,” and “football.” And how will the president decide that his gamble has failed?

Moreover, Mr. Trump’s own views of China’s clout with North Korea seem confused, at best. On the one hand, the president must (logically) believe that China can make much more of a difference in resolving the North Korea situation than it’s so far chosen to. Why else would he offer China the valuable benefit of better terms of trade than it would otherwise receive? On the other hand, Mr. Trump said in an interview with The Wall Street Journal “After listening for 10 minutes [to Chinese leader Xi Jinping at their summit a week ago], I realized it’s not so easy. I felt pretty strongly that they had a tremendous power [over] North Korea. … But it’s not what you would think.” So here he’s indicating that Beijing can’t help decisively at all.

Related Trump statements point to another major negotiating No-No: Rewarding interlocutors for steps they would take anyway. The president is now on record as stating that Xi “means well and wants to help” on North Korea. But this confidence raises the question, “Why?” It’s of course possible that Chinese policy has entered a new, more charitable phase. It’s more likely, however, that Beijing is becoming increasingly worried about the situation in its next-door neighbor spinning out of control and triggering a conflict that could go nuclear right on its borders.

Indeed, a recent editorial from its own government-controlled press clearly signals that those dire concerns are China’s main motivator: “China…can no longer stand the continuous escalation of the North Korean nuclear issue at its doorstep. Instead of accepting a situation that continues to worsen, putting an end to this is more in line with the wish of the Chinese public.”

Even more revealing, the same editorial made plain as day that official Chinese nerves have been frayed further by Mr. Trump’s willingness to go-it-alone militarily in Syria (when he ordered airstrikes in the middle of his meetings with Xi), by his threat to take a similar course of action against North Korea, and by his dispatch of a powerful American naval force to Korean coastal waters. In other words, the president’s apparent comfort with using force already has caught China’s attention.

Better yet, some concrete evidence of this success has appeared. China seems to be reducing its imports of coal from North Korea – one of Pyongyang’s few major sources of foreign exchange – and it abstained yesterday from voting on a UN resolution condemning Syria’s government for the chemical weapons use that prompted the U.S. cruise missile attack. Until then, China had vetoed similar UN resolutions. Why, therefore, would Mr. Trump sweeten the supposed deal further with trade breaks?

At the same time, these latest Trump decisions are sending signs about the president’s national security strategy and overall priorities that are equally disturbing. Principally, during his campaign for the White House, Mr. Trump displayed a keen awareness of the burgeoning nuclear risks being run by the United States by maintaining its defense commitments in East Asia. In numerous remarks that were pilloried by an ossified bipartisan American foreign policy establishment, candidate Trump quite sensibly suggested that the United States should transfer much of this risk to the local countries (like China) most directly threatened by the North Korean nuclear program. Yesterday, Mr. Trump endorsed America’s longstanding Asia strategy even though the North can increasingly call the U.S. nuclear bluff on which regional deterrence has been based with forces of its own that can strike American targets.

Even more striking, Mr. Trump’s new quid pro quo has demoted policy options that can deliver major economic benefits to his core voters and the entire U.S. economy (more trade pressure on China) back to their longstanding position subordinate to national security strategies that primarily help other countries (the Asian allies covered by the American nuclear umbrella). Far from the type of America First strategy he touted during his campaign and especially in his Inaugural Address, these new Trump moves add up to an America Last strategy.

All the same, Trump’s new approach could set the stage for improved U.S. anti-currency manipulation strategies should circumstances require them. Although unmistakably disheartening to many trade policy critics, this latest American China currency decision was defensible on its own terms. It’s true that substantial evidence continues indicating that China’s yuan is significantly undervalued versus the U.S. dollar – and still enables producers in China (including those owned by or linked with U.S. and other foreign-headquartered companies) to offer their goods for artificially low prices in markets around the world. Nonetheless, it’s also true that China has permitted its (surely dollar-dominated) foreign currency reserves to drop by about 25 percent since 2011 – largely because it’s been selling those reserves and buying yuan in order to curb worrisome capital flight. In other words, Beijing has been trying to support the yuan versus the dollar, and keep its value higher than it would be were it freely traded.

Yet there’s absolutely no reason for trade policy critics – or the U.S. government – simply to conclude that ambiguous circumstances simply force America to accept the status quo. In fact, such shoulder-shrugging would amount to rewarding China currency cheating that the conventional wisdom now admits lasted for years, and whose cumulative effects continue to undercut the price competitiveness of domestic U.S. manufacturers and other producers.

So what to do? According to at least one press report, the Trump administration is considering revamping currency manipulation policy in ways that would appear to abandon the current, blinkered approach in favor of one that takes these cumulative effects into account. Specifically, a Reuters article last week suggested that one option that’s attracted the administration’s attention would involve lengthening “the time period for reviewing currency market interventions from 12 months to several years, capturing more past interventions by China….” At least logically, this shift would signal recognition that the impacts of these interventions (to suppress the yuan’s value) are dynamic, and long-lasting.

Even better, however, would be to recognize that, important as it’s been because of its effects on prices across the Chinese economy, currency manipulation is only one form of trade predation practiced by China, and that such individual policies can easily frustrate current legalistic countermeasures by virtue of the powerful and secretive Chinese bureaucracy’s ability to turn them on and off at will – often with little more than a phone call. More important, China has successfully used these ploys in the past. And P.S.: Other Asian economies are just as skilled as China’s at pulling off these scams.

In other words, the various mercantile measures used by China and others to distort markets are completely fungible. Dealing with them effectively therefore requires Washington to become much more agile and flexible in response. And the critics need to stop focusing so tightly on currency manipulation and keep the much bigger, more important China and global trade picture in mind.

For the entire U.S. economy has a big stake in the Trump administration putting these changes into effect before Chinese and other countries’ trade predation sucker punches even more of its most productive sectors – whether they interfere with the president’s new North Korea strategy or not. So, in all likelihood, does Mr. Trump’s political future.

Our So-Called Foreign Policy: A Non-Hysterical View of Trump’s Syria Strikes

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air strikes, America First, Bashir Al-Assad, chemical weapons, China, Middle East, Our So-Called Foreign Policy, Russia, summit, Syria, Trump, Vladimir Putin, Xi JInPing

I love the idea of the “procustean bed.” It’s a phrase inspired by Greek mythology that’s come to describe the deceptive practice of depicting every notable event or feature of reality as fitting into a preconceived view of how the world works. It’s become standard operating procedure in our highly balkanized, increasingly fact-challenged, and ever more hysteria-prone political culture, and it nicely explains most of the commentary and analysis that’s followed President Trump’s decision to attack a Syrian air base following chemical weapons use in that country’s tragic civil conflict.

I have absolutely no inside information here, but strongly believe that the likeliest explanation is one that can’t easily be spun to advance any particular agenda, and that focuses on a crucial variable bound to be neglected when the main objective is political.

Not that I’m ruling out any of the sets of talking points being pushed so aggressively by the nation’s chattering class. It’s entirely possible that the Syria decision shows that the president never intended to carry out the kind of broadly stand-aside foreign policy he most often (but not always) touted during his campaign, and that he has cynically betrayed his core, non-interventionist, voters. Or that he simply has a learning curve and is wisely admitting that the dangerous world he’s operating in doesn’t permit an America First approach to be carried out safely.

The Syria strikes could reveal how fundamentally incoherent his worldview and agenda are – and are likely to remain. Or how pragmatic he has become. Or how emotionally and thoughtlessly he reacts to perceived challenge or betrayal (specifically, by a client state of a Russian government he’s supposedly coddled until now). Or how cunningly he’s decided to undercut charges that he’s a puppet of Moscow’s. Or, given Mr. Trump’s utter unpredictability on so many fronts, the Syria attacks could simply underscore how he continues to be just as utterly unpredictable in the Oval Office as he was on the campaign trail – which could mean that the Trump move means absolutely nothing at all.

But although all these takes on Syria could in theory be true, I doubt their veracity mainly because they pay absolutely no attention to considerations that would weigh heavily on the mind of even the least competent chief executive (or presidential aides) – the international circumstances staring him in the face once the chemical weapons news came through.

That’s why there’s such a strong case for the following as the prime determinants of the Trump decision – and as reasons for interpreting its long-term effects with extreme caution. Specifically, when the president ordered the strikes, he was in the middle of a summit with the leader of a foreign power – China – that had rapidly emerged as America’s foremost economic challengers and as at least a potential strategic rival. The day before the summit with Xi Jinping began, North Korea conducted the latest of a series of ballistic missile tests it’s conducted since President Trump’s inauguration, and in defiance of multiple United Nations resolutions. And the day before that came the chemical weapons attack – which itself preceded a meeting in Washington, D.C. between Mr. Trump and King Abdullah of Jordan.

So during a week when the global spotlight shone on President Trump with unprecedented intensity came two apparent provocations. (I’m purposely leaving open the possibility that Syrian dictator Bashir Al-Assad is not to blame for the chemical weapons bombing, though I believe the evidence – particularly the reported flights of fixed-wing aircraft over the site – point to Syria’s guilt.) Further, both provocations came very early during the first Trump term – a period when foreign leaders would naturally feel strongly tempted to test a new president, and when all countries would view him with great uncertainty even were he a more conventional politician.

In my view, all these circumstances combined to convince the president that a forceful response of some kind was needed. And since North Korea can credibly threaten American allies with conventional military and even nuclear attacks, and Syria can’t, Assad was the inevitable target.

In other words, the Trump strikes right now are best seen as a simple message-sending exercise. And the messages itself were simple as well. Not that, “I’ve changed my foreign policy stripes” and not that “I’m ready to plunge much more deeply into the Syria and other Middle East conflicts” but that “I have my limits” and “I have no intrinsic qualms about using the vast military arsenal at my disposal.”

Because the extreme shortage of competent policy analysts with a Trump-ian worldview has left the president little choice but to rely heavily on conventional thinkers for briefings and advice on foreign policy and other matters, it’s entirely possible that his air strikes presage a more activist Middle East or overall international strategy. At the same time, nothing about the strikes makes such a transformation inevitable, and especially far-fetched (as they always have been) are claims that individual uses of military power are pointless (at best) unless carried out as part of a broader plan of action meant to win or acceptably resolve a foreign conflict.

Particularly in the case of the Middle East, where history and recent American experience clearly teach that no constructive solutions are possible (or at least not at acceptable cost and risk), and where due to developments such as the U.S. domestic energy production revolution, the national interests at stake are no longer unquestionably vital, individual military actions that send uncomplicated messages can have significant value in their own right – and all the more so as they inevitably will be heard in many other regions, including those that matter more.

So everyone is best advised to hold their horses as they go about interpreting the Trump Syria strikes and especially about what futures they supposedly guarantee and rule out. Indeed, no one should heed this kind of advice more closely than President Trump.

Making News: Podcast of Last Night’s John Batchelor Show, a White House Plug, & Featured in a National Column

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America First, China, Darrell Delamaide, Gordon Chang, Making News, Marketwatch.com, Thaddeus McCotter, The John Batchelor Show, The New York Times, The White House, Trade, Trump

I’m pleased to present the link to the podcast of my segment last night on John Batchelor’s nationally syndicated radio show on America’s economic relations with China.  To access a lively discussion among John, co-host Gordon Chang, and former Congressman Thaddeus McCotter, and me, click here, look right to the Podcasts section, and scroll down to the entry whose label starts with “China’s rescue plan….”

In addition, it was great to see that last Friday, the White House press office distributed a release spotlighting my new New York Times op-ed endorsing President Trump’s approach to trade, jobs, and manufacturing.  Here’s the link.

Finally, today, Marketwatch.com‘s Darrell Delamaide mentioned the Times op-ed in his own latest column explaining why Mr. Trump’s America First approach to trade is long overdue.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Our So-Called Foreign Policy: Who are the Real “Hot Heads”?

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alliances, allies, America First, Asia, China, Cold War, establishment, Europe, foreign policy, foreign policy establishment, globalism, H.R. McMaster, internationalism, interventionism, Jim Mattis, Jonathan Stevenson, national security adviser, NATO, NATO expansion, North Korea, Obama, Our So-Called Foreign Policy, Populism, Russia, Stephen K. Bannon, The New York Times, Trump, U.S. military, Vietnam

The Mainstream Media remain useful as a mouthpiece for an American political establishment that retains all too much power to frustrate Trump-ian – and other populist – impulses. So it’s vitally important to identify and evaluate emerging narratives they’re trying to propagate. And one that’s been especially prominent – and pernicious – is the habit of dividing the president’s top aides into the voices of reason (my term) and the “hot-heads.” A great example of this habit and the dangers it can foster, is Jonathan Stevenson’s February 21 New York Times column on President Trump’s appointment of Lt. Gen. H.R. McMaster as his new White House national security adviser.

According to Stevenson – a national security veteran of the Obama administration – McMaster is a welcome addition to the voices of reason. In particular, his selection is portrayed as combining with that of former general Jim Mattis as Defense Secretary to strengthen a firewall against the “hot heads” (Stevenson’s term) that also have Mr. Trump’s ear.

Part of the reason Stevenson likes McMaster and Mattis et al is that he believes they will oppose “pointlessly disrupting” strategies and positions that he and many other establishment-arians (on both sides of the aisle) view as successes, or the best possible approaches – like the “One China” policy, the Iran nuclear deal, and immigration initiatives that seek to admit more refugees and other newcomers from the Middle East in hopes of winning hearts and minds in the Islamic world. I personally don’t agree with the Stevensonian/establishment view, but reasonable people can legitimately differ on these matters.

What’s much less reasonable, and genuinely dangerous, is Stevenson’s other reason for liking the world’s McMasters and Mattis’, and disliking its Stephen K. Bannon – the Trump aide who he and so many others view as a quintessential extremist and populist hot head. As the author sees it, McMaster is one of the national security professionals who will help make sure that American diplomacy won’t be unduly influenced by Trump-ists like Bannon. These ostensibly shallow, narrow-minded politicos supposedly see foreign policymaking not as an exercise in advancing and safeguarding the country’s most critical interests, but simply as a means of boosting or protecting a president’s popularity.

Although foreign policy can never be entirely separated from domestic politics – and in a democracy, shouldn’t be so separated – over-politicization can of course produce disaster. But Stevenson’s main historical example (the gradual escalation of the Vietnam War), and his analysis of the Trump administration, get literally everything important wrong. For example, two of his leading Vietnam villains (and those of Gen. McMaster) are then Defense Secretary Robert S. McNamara and then national security adviser McGeorge Bundy. But far from being politicians who had any experience with the electoral process, or any apparent interest, they were quintessential establishment mandarins. In fact, it was their catastrophic advice that (rightly) turned “the best and the brightest” into a term of contempt.

The substance of their advice – chiefly, the championing of gradual escalation – can be faulted, too. But as Stevenson glosses over, this strategy enjoyed wide backing in the military, and not only among a group of military chiefs who McMaster and Stevenson dismiss as “inordinately politicized.”

Much more important, however, the fundamental mistake behind the Vietnam disaster was not the specific set of military tactics chosen, but the strategic decision to intervene militarily in the first place. And this choice reflected the strong internationalist consensus across the foreign policy establishment that, in the face of the Cold War community threat, every square inch of the globe had to be treated as a vital American interest, whether it held any specific geopolitical or economic significance to the United States or not.

Now fast forward to the present. Who’s more likely to embroil the United States into a needless military conflict that could spiral into a complete debacle? Mere “politicos” like Bannon – and his boss – who have complained (most recently in the Inaugural Address) that America has too often “defended other nations’ borders while refusing to defend our own”? Has “spent trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay”?

Is a new Vietnam really what can be expected from a president who has declared, “We will seek friendship and goodwill with the nations of the world – but we do so with the understanding that it is the right of all nations to put their own interests first.

“We do not seek to impose our way of life on anyone, but rather to let it shine as an example for everyone to follow”?

For my money, I’d bet on the genuinely reckless foreign policy moves being advocated by figures from an establishment that, in the wake of Mr. Trump’s election, is doubling down on its support for internationalism – and therefore for the indiscriminate interventionism that logically follows from it. Indeed, lately this allegiance to internationalism has even blinded the establishment to rapidly mounting dangers from the pillars of post-World War II foreign policy – America’s security relationships with Europe and Asia.

In the former region, a completely unnecessary expansion of the North Atlantic Treaty Organization (NATO) to include former Soviet republics and other nearby countries has committed the United States to protect lands that can be defended only by he threat of using nuclear weapons even though they have never been viewed as vital interests. In the process, of course, this NATO expansion has triggered a military and paramilitary reaction by Russia that has all of Europe on edge.

In Asia, America’s two likeliest adversaries – China and North Korea – are rapidly becoming capable of offsetting the nuclear weapons edge that has enabled Washington to protect countries like Japan and South Korea with little risk to the U.S. homeland. Ever more powerful nuclear forces now mean that Beijing and Pyongyang can use the credible threat of destroying American cities to deter U.S. military responses to any aggression they undertake.  (See this post for more detail – and for powerful evidence that Mr. Trump recognizes both problems.)

Indeed, in this respect, erring on the side of caution would involve President Trump siding with the America Firsters like Bannon – whatever short-term disruption their recommendations would bring – against the McMaster portrayed by Stevenson, and other establishmentarians he comfortingly but misleadingly labels as guardians of policy “stability.” That’s the last result that Washington will get from defining or simply wishing away lessons that have stared the nation and its leaders in the face for decades.

Those Stubborn Facts: America’s Far from First Yet in World Trade

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America First, exports, imports, Those Stubborn Facts, Trade

World exports, Nov. 2015-Nov. 2016: +3.77%

U.S. exports, Nov. 2015-Nov. 2016: +1.21%

World imports, Nov. 2015-Nov. 2016: +1.67%

U.S. imports, Nov. 2015-Nov. 2016: +2.84%

*All figures in volume terms

(Source: “CPB World Trade Monitor: November, 2016,” Data, CPB Netherlands Bureau for Economic Policy Analysis, January 25, 2017, https://www.cpb.nl/en/figure/cpb-world-trade-monitor-november-2016. HT to Paul Hannon, The Wall Street Journal)

Im-Politic: Why U.S. Progressives Need to Become Nationalists

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America First, Bernie Sanders, Democrats, Elizabeth Warren, free trade agreements, globalism, Im-Politic, Immigration, labor unions, nationalism, New Balance, offshoring, Populism, progressives, third world, Trade, Trump, white working class, working class

Tiny groups of individuals shouldn’t be mistaken for entire movements, or even significant factions of movements. Therefore, I don’t want to make too much of those Trump haters who burned their New Balance sneakers and/or slammed the company on social media because it stated that the election as president of a strong trade policy critic would be good for manufacturers seeking to make most of their products in the United States, like itself.

At the same time, the backlash against New Balance sheds lots of light on serious problems in the ranks of American progressivism that contributed to Trump’s triumph and that will need to be solved if the Left end of the country’s political spectrum is to win working class loyalties and convincingly claim populist chops.

Let me start with a little story (one of my father’s favorite phrases!). Back in the late-1990s, when President Clinton had requested new trade negotiating authority from Congress, I attended a meeting at AFL-CIO headquarters of activists seeking to block his ambitions. Early at the session, we agreed that we should explain to legislators and the public what kinds of trade policies we favored, not simply what we opposed, and someone (not me) suggested something along these lines as a unifying theme:

“The main purpose of U.S. trade policy should be to promote healthy growth for the American economy and higher living standards for the majority of the American people.”

That didn’t seem terribly controversial to me. But several hands immediately rose in protest. A representative of the Maryknoll Sisters made clear the objection. Why, she asked, were we ignoring the well-being of the rest of the world?

To his credit, the American labor leader who was running the meeting tried to argue that, however much he sympathized with her point, it was axiomatic that the first obligation of the U.S. government was to promote and defend the interests of the American people. But he didn’t make the argument very emphatically, and many of the others around the table – who came from left-of-center organizations – were even more conflicted. I tried to shore up the first speaker, but quickly realized I was in the greatly outnumbered and spent the rest of the session listening.

I don’t remember what the final version said, and doubt it was ever made public, but the phrasing of that opening point was definitely watered down. On my way out, some folks who worked for labor union offices outside the Beltway came over to me and asked, as they were shaking their heads, “What the heck was that all about?” I replied, “You’ve just learned a valuable lesson about American liberals. Many don’t believe that American workers’ interests should come first.”

They’d actually gotten many such lessons throughout the 1990s. As the first Bush administration and especially the Clinton administration turned U.S. trade policy into an exercise in offshoring, not domestic growth, their progressive critics decided that the best way to resist was to spotlight the harm this new strategy would inflict on workers and peasants in the developing world as well as in the United States. In fact, the third world and its grievances turned into a prime focus of those who famously protested the 1999 meeting of the World Trade Organization in Seattle.

This approach made some tactical sense, as many liberals in Congress clearly were not constitutionally inclined to buy an America First trade policy. But although there are any number of ways in which U.S. trade policies could be changed to create more situations of mutual benefit between rich and poor countries (see this recent article for an example), the progressive stance also reflected a refusal to recognize that many hard choices have confronted – and still confront – the nation on trade.

In public policy trying to please everyone tends to wind up pleasing no one. So substantively, this wishful thinking was a formula for confusion at best. Politically, the impact was far worse: The progressives wound up muddying and therefore weakening the message trade critics were trying to send to the public.

Small wonder that even though the critics won some procedural trade fights during the 2000s, even after the financial crisis of 2007 and 2008, President Obama managed to secure Congressional passage of three new free trade agreements. Not until a major politician forthrightly vowed to prioritize American interests in trade policy making did the powerful globalization status quo meet its match – and then some.

Based on their initial post-election statements, it seems that progressive leaders realize that rejecting the option of working with Mr. Trump on trade policy would be the height of folly. That is, it seems that they’re implicitly rejecting the notion that the President-elect is so odious that a company that employs American workers despite powerful pressures to offshore should be condemned not for endorsing the whole of his candidacy, but simply for noting that his election would likely aid those efforts.  Therefore, big changes on the trade front seem inevitable above and beyond the collapse of the Trans-Pacific Partnership (TPP) agreement.

Yet even the progressives’ leaders still face a towering obstacle in their own quest to regain the votes of the millions of working class voters – probably like many of those New Balance workers – who deserted their party’s standard bearer last Tuesday night. They have no chance of succeeding if they continue describing all forms of common sense immigration policies as bigoted. And for those of you who think that I’m just talking about the white working class, keep in mind that the phrase “union household” also describes this constituency.

In other words, during the 2016 elections, progressives in part tried to convince Main Street America that they would gain from a massive increase in the nation’s supply of unskilled labor through both amnesty and the powerful magnet effect it would generate. And at the same time, if these working class voters worried about the resulting downward pressure on wages, along with the effects on the nation’s cohesion of surging bilingualism and its security of newcomers from the culturally medieval Middle East, they were condemned by the Left as nativists, racists, and even worse.

The pointed references to Mr. Trump’s alleged xenophobia by both Senators Bernie Sanders and Elizabeth Warren (earlier in the campaign) show that their faction of American politics has much to learn on this score. Until they understand that real U.S. populists can’t be globalists in this day and age, they’re likely to continue wandering the political wilderness.

(What’s Left of) Our Economy: Progress from Progressives on Trade

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America First, developed countries, developing countries, environmental standards, Financial Crisis, GATT, General Agreement on Tariffs and Trade, George W. Bush, Global Imbalances, Global Trade Watch, globalization, Hillary Clinton, Jared Bernstein, labor standards, Lori Wallach, multinational companies, NAFTA, national treatment, non-discrimination, North American Free Trade Agreement, offshoring, progressives, Public Citizen, The American Prospect, TPP, Trade, Trans-Pacific Partnership, World Trade Organization, WTO, {What's Left of) Our Economy

Ever since the debate over NAFTA (the North American Free Trade Agreement) more than twenty years ago turned trade policy into a nationally contentious issue, the American left has provided the overwhelming share of the political money and muscle aimed at creating urgently needed course corrections. So it’s great to see important signs that progressives have finally started touting two ideas that realistically could make a significant difference.

The evidence can be found in an article coming up in The American Prospect by Jared Bernstein, former top economist to Vice President Biden, and Lori Wallach of Public Citizen’s Global Trade Watch. To be sure, the article does dwell overlong on proposals that left-of-center figures have been making for decades, and that hold little, if any, promise of turning trade agreements and related policy decisions into engines of domestic growth.

For example, there’s the usual call for truly enforceable labor and environmental standards in trade deals – even though adequately inspecting enormous third world national manufacturing complexes is a logistically impossible task. Worse, the offshoring lobby and its minions in Congress and the Executive Branch have already twice used the tactic of making cosmetic changes along these lines in trade agreements to call progressives’ bluff: during the George W. Bush administration in deals with agreements with Panama and Peru; and in President Obama’s Trans-Pacific Partnership (TPP).

Don’t think Democratic presidential candidate Hillary Clinton doesn’t recognize how successful this ploy has been in persuading fence-sitting Congressional Democrats to fall in line behind new trade deals.

Judging from the Bernstein-Wallach piece, moreover, the American left still believes that no hard choices need be made in trade and broader globalization strategy, and that with their proposed reforms, growing international commerce can become a win-win for first and third world workers alike around the world. As I’ve recently written, positive sum outcomes for developed and developing country workforces are possible – if, for instance, NAFTA was turned into a genuine western hemisphere trade bloc, as its leading founders once suggested they intended.

On a global basis, though, the surplus of developing country workers earning pauper wages (both in absolute terms and in relative terms in sectors like advanced manufacturing and high tech services) ensures that for decades the third world will remain much more important as a low-wage and low-regulation production site than as a source of new consumer demand. And as long as that situation holds, astronomical growth-, job-, and wage-killing trade deficits in the United States will be inevitable. Also inevitable will be the buildup of enormous international economic imbalances like those that set the stage for the last financial crisis.

But the most encouraging aspect of the Bernstein-Wallach article was indeed encouraging: The authors argued that not all prospective U.S. trade partners should be treated equally – because they differ in crucial respects. Ever since the current global trading system began taking shape in the immediate aftermath of World War II, one of its biggest weaknesses – and one posing special problems for a relatively open economy like America’s – has been its insistence (largely at Washington’s behest, to be sure) on the principles of non-discrimination and national treatment.

In other words, regardless of how open or closed they are, or how wealthy or impoverished, the United States needed to deal equally with all countries belonging to the old General Agreement on Tariffs and Trade (GATT) and to the newer World Trade Organization (WTO). During the early post-war decades, these requirements legally forced American leaders to open their markets as much, say, to relatively open Britain as to hermetically sealed Japan, and to treat identically in the American market businesses from wildly varying countries.

When the end of the Cold War encouraged third world population giants like China and Mexico to introduce selected free market reforms and join the global economy, the option of mass production offshoring was created for multinational companies. As a result, these GATT and then WTO principles prompted the U.S. leaders influenced by these companies to expand trade whether or not the target countries could become significant net consumers, and thus create reasonably balanced trade flows and their economic benefits.

Bernstein and Wallach don’t favor discrimination on grounds like these. (That’s not surprising, since this practice would undercut their positive-sum first-third world trade optimism.) But they do urge selecting

“trade partners based on their countries’ records of compliance with the terms of past trade agreements, international labor and environmental standards, and human rights and other criteria. [The article makes clear that records of currency manipulation would be among them.] While no country has a perfect track record, there is a well-understood continuum of compliance, and known bad actors should be barred from the negotiating table until they’ve made proven, effective efforts to begin cleaning up their acts.”

That’s a start – and a potential wedge.

It’s also heartening to see Bernstein and Wallach emphasize “rewarding those who play by the rules” by creating and enforcing meaningful rules of origin in trade deals. As they rightly note, without such provisions, countries that have not signed various trade deals can still benefit from them because multinationals and other companies will be free to import into member countries goods largely made outside the new trade zone. That’s great of course for businesses seeking the great possible sourcing flexibility. But these practices inevitably render meaningless most of the rest of the given agreement.

And most encouraging of all – although the authors don’t mention this – an American trade policy (robustly) incorporating these features would be in violation of WTO rules. Free of a straitjacket that mandates policy uniformity in a highly diverse world, Washington would be free to choose another globalization lodestar – one that makes far more sense for a country with incomparable market power, potential for self-sufficiency, and thus unilateral leverage. A lodestar like “America First.”

Making News: Podcast of Latest National Radio Appearance – & More!

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", America First, China, Europe, Lifezette.com, Making News, Republicans, steel, The John Batchelor Show, Trade, World Trade Organization

I’m pleased to announce that the podcast has finally been posted of my appearance last Wednesday on John Batchelor’s nationally syndicated radio show.  Click here for the link to a great discussion of Donald Trump’s quasi-threat to pull the United States out of the World Trade Organization.  My segment starts at the halfway mark.

Also, it’s been great to be quoted in two July 21 Lifezette.com posts on the politics of this election year (or is it the economics of this political year?):

>this post on how Europe is handling (or mishandling) China’s assault on its steel industry (a threat America faces, too); and

>this article on the inroads being made in Republican ranks by Trump’s “America First” trade and foreign policies.

Keep checking back on at RealityChek for more news of recent and upcoming media appearances and other special events!

Im-Politic: Trump Re-Brands “America First”

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2016 election, America First, Brexit, chattering classes, China, Donald Trump, Im-Politic, isolationism, Larry Summers, NAFTA, North American Free Trade Agreement, offshoring, protectionism, Trade, World War II

OK, Donald Trump has just given a long-awaited speech outlining his global trade policy. Not that his overall inclinations haven’t long been clear. And earlier in the campaign, the presumptive Republican presidential nominee put out an impressively detailed China trade position paper.

But since most of his other remarks have consisted of generalities (i.e., he’d make great deals), and have often been expressed in the form of off-the-cuff answers to reporters’ questions (as with his contradictory statements on tariffing Chinese imports), a comprehensive description of a global approach containing at least some specifics was unquestionably needed.  And given the trouble Trump encountered due to his latest bombastic comments about so-called “Mexican judges” and the like, the timing couldn’t have been better for a shot of gravitas.  

Although it wasn’t the speech I would have written for him, it should be clear to any fair-minded observer that Trump passed this test with flying colors. In fact, he just gave by far the best speech on trade more broadly that Americans have heard – at least since the current, offshoring-focused era of U.S. trade policy-making was launched in the early 1990s by adding Mexico to an existing American agreement with Canada and creating the North American Free Trade Agreement (NAFTA).

Granted, the bar for recent trade speeches is rock-bottom low. And the negatives of Trump’s deserve considerable attention – and will receive it tomorrow. But one positive worth pointing out immediately: Trump has gone toward putting a positive stamp on the slogan “America First.”

There’s no doubt that his political opponents in the chattering classes, as well as more even-handed journalists, will mindlessly keep regurgitating the mantra that these were the watchwords of the isolationist movement that they blame in part for the outbreak of World War II. But there’s also no reasonable doubt that Trump provided a re-branding of this motto inspiring enough to resonate powerfully and favorably both in the ranks of his supporters and among undecided voters in the working and middle classes.

As Trump declared, his version of America First entails the American people taking “back control of their economy, politics and borders” and choosing “to believe in America.”

He continued, “We lost our way when we stopped believing in our country. America became the world’s dominant economy by becoming the world’s dominant producer.

“The wealth this created was shared broadly, creating the biggest middle class the world had ever known.”

“But then America changed its policy from promoting development in America, to promoting development in other nations.”

To be sure,Trump blamed foreign countries that engage in predatory trade practices for the devastation suffered by much of America’s manufacturing base and workforce. But he also singled out “a [US] leadership class that worships globalism over Americanism.”

And he closed the address with a veritably Reagan-esque flourish:

“On trade, on immigration, on foreign policy, we are going to put America First again.

“We are going to make America wealthy again.

“We are going to reject Hillary Clinton’s politics of fear, futility, and incompetence.

“We are going to embrace the possibilities of change.

“It is time to believe in the future.

“It is time to believe in each other.

“It is time to Believe In America.

“This Is How We Are Going To Make America Great Again – For All Americans.

“We Are Going To Make America Great Again For Everyone – Greater Than Ever Before.”

In fact, there are signs in the post-Brexit world that even sophisticates are at least approaching this bandwagon. According to one leading establishmentarian, writing as the British vote totals were coming in, “The political challenge in many countries going forward is to develop a ‘responsible nationalism”. It is clear that there is a hunger on the part of electorates, if not the Davos set within countries, for approaches to policy that privilege local interests and local people over more cosmopolitan concerns.”

Translated into plain English: No less than former Clinton Treasury Secretary and top Obama economic adviser Larry Summers is going America First.