(What’s Left of) Our Economy: The Rules-Based Global Order – & Other Fairy Tales

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alliances, America First, burden sharing, China, currency, Federal Reserve, Financial Crisis, globalists, Great Recession, hegemony, NAFTA, North American Free Trade Agreement, offshoring, public goods, recovery, Robert Triffin, tariffs, Trade, Trade Deficits, Triffin dilemma, Trump, World Trade Organization, WTO, {What's Left of) Our Economy

Can the foreign and domestic critics of President Trump’s latest trade policy moves finally get real – and start talking and acting like adults? I’m not referring to politicians and analysts who have pointed out problems with individual aspects of the President’s recent announcements of tariffs on various trade competitors. I’ve been one of these myself.

Instead, I’m talking about those who keep whining that Mr. Trump’s tariffs and his overall – inconsistently to be sure – emerging “transactional” approach to alliances and other international arrangements are endangering a rules- and institutions-based global order that has served both America and the rest of the world unmistakably well. No description of the post-World War II world could be less accurate and indeed more childish – not to mention more self-serving for the supposed U.S. allies and multinational business interests (and their Washington, D.C. hired guns) that have pushed this canards so insistently.

For the institutions and rules so touted by President Trump’s globalist critics were simply window-dressing created to obscure a much less aesthetically pleasing reality: The postwar (non-communist) world’s success has been based fundamentally on America’s power and wealth, and the  consequent U.S. ability to provide what political scientists call “public goods” for those aligned with it. Specifically, it almost single-handedly created the conditions on which success decisively depended: the military protection that countries recovering from war-time devastation could not provide for themselves, and the credit and export markets that were similarly beyond the capacities of their crippled economies. Just as important, during the early post-war decades, the United States could play this role for the most part without excessive security risks and economic costs.

Unfortunately, even the biggest, best-run public goods-providing country will find these arrangements unsustainable, especially on the economic front, and especially if its government is substantially accountable to its people. The essential dilemma was first identified by the Yale University economist Robert Triffin back in 1960, when American power was at or near its zenith.

Triffin’s warning was narrowly economic. He argued that the very free lending and especially spending by which such a country (which political scientists call a “hegemon”) fueled growth around the world would eventually massive international deficits and a global glut of its currency – which was serving as the world’s money – and erode global confidence that currency’s value. Either the hegemon could tighten up – and likely throw the entire world economy into a major downturn. Or it could keep over-lending and especially spending. In this case, its currency would lose enough of its perceived value to end its world-money role, and the world economy would degenerate into chaos. Or the rest of the world could keep stockpiling these excess dollars – which as the French in particular noted would result in the inflation caused by the greenback’s declining value being exported around the world.

Yet in America’s case, the ultimate engines of the paradox – at least in post-World War II America’s case – were foreign policy and domestic politics-related. The over-spending, and consequent deficits stemmed from the United States’ determination simultaneously to incur the expenses of maintaining huge military forces at home and abroad (along with dispensing considerable foreign aid), and of satisfying the American public’s growing demand for social services, without increasing taxes enough to finance these programs responsibly. At the same time, the dilemma was greatly intensified by the refusal of the foreign beneficiaries of these U.S.-provided public goods to pay many more of the costs of their own defense, or to open their markets wider to American exports.

The breakdown of these arrangements in 1971 bore out Triffin’s warnings, but although major adjustments were made globally, the rest of the world continued relying heavily on American security guarantees and markets. And in fairness, a bipartisan American foreign policy establishment addicted to intangibles like “global leadership” and genuinely worried that its European and East Asian allies could not manage their own security affairs in particular responsibly, staunchly resisted any fundamental changes to the status quo.

Fast forward to the mid-2000s, and the exact same fundamental problem reemerged. Further, a Triffin-like situation was greatly worsened by two new developments. First, the Federal Reserve decided to enable reckless over-spending by American consumers by keeping interest rates at peacetime lows not seen for many decades.

Second, American trade policy swelled the international deficits by taking a new, offshoring-focused turn starting with the North American Free Trade Agreement (NAFTA) in the early 1990s, and culminating with multinational companies’ decisions to focus tightly on supplying more and more American business and consumer demand from China, not from the United States.

Not so coincidentally, this trade policy shift was accompanied by the creation of an international organization – the World Trade Organization (WTO) – that was the first such body ever authorized to create both binding rules for any international policy sphere, and to utilize enforcement mechanisms in which the United States enjoys no special standing (as opposed, for example, to the United Nations Security Council, where the United States and other permanent members possess an individual veto over decisions).

A better recipe could not be created for empowering China (and the rest of the world’s major export-dependent economies) to view the United States as an even more attractive dumping ground for surplus production; for undermining America’s internationally recognized right to respond unilaterally; and for consequently enabling footloose multinational companies to supercharge the trade deficits by sending an astonishing amount of the nation’s production capacity to China and other super-low cost countries that could not or would not import remotely as much as they could or would export.

The end result: Rather than the United States winding up exporting inflation and (along with free-riding allies and trade competitors) bringing down a global monetary order, America exported financial instability, triggering the worst worldwide financial crisis, the deepest international economic downturn since the Great Recession, and the weakest U.S. economic recovery on record. And revealingly, to the cheers of the bipartisan American foreign policy and economic policy establishments, the first post-financial crisis president, Barack Obama, kept America’s grand strategy firmly on course.

Although it’s still unclear whether Mr. Trump is choosing an effective combination of trade and alliance policy tactics, his initiatives so far raise even more important questions. Chiefly, is he simply trying to achieve greater security and economic burden-sharing? And even if his aims at present are restricted to securing better deals, is he prepared to scrap American participation in current alliances and other international institutions altogether if U.S. tariffs and other America First-type threats don’t seem to be working?

Nonetheless, the President has opened the door to elevating America’s thinking about its global environment toward the adult levels that ultimately will be needed to prevent today’s lopsided unsustainable international arrangements from disastrous crackups. If his critics want to increase the odds that the best choices will be made, they’ll need to grow up, too.

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Our So-Called Foreign Policy: Why America’s Alliance Strategy Can’t Have it All

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alliances, allies, burden sharing, China, defense spending, Financial Times, Germany, James Mattis, Japan, NATO, North Atlantic treaty Organization, North Korea, nuclear war, Our So-Called Foreign Policy, Russia, smothering, South Korea, Trump

Decades ago (literally!) I came up with an insight that’s stood the test of time pretty well. When my main professional focus was American foreign policy, I began realizing that the best way to describe the U.S. approach to its major security alliances with East Asian and European countries was to call it a “smothering strategy.” That is, American leaders were trying not only to protect Japan and Western Europe specifically from communist aggression. They were also trying to make sure that those critical regions never exploded into major war again – and principally, that Germany and Japan never resumed their roles as aggressors.

The characteristic U.S. solution? Washington would try to smother these German and Japanese impulses by removing their need to conduct any kind of independent foreign policies of their own in the first place. That’s why the United States pledged to take care of both their national security interests (with dangerous nuclear defense commitments) and their economic interests (by opening its economy much wider to their exports than vice versa). As a result, for decades, Germans (and other Europeans) and Japanese could avoid the expenses of maintaining big military establishments and concentrate tightly on the peacetime pursuits of life, liberty, the pursuit of happiness – not to mention building great wealth.

How good was this insight? To me, the proof of the pudding was America’s determination to preserve these alliances almost unchanged even after the Cold War ended, the Soviet Union disappeared, and China had not yet launched a drive to boost its influence in East Asia. To put it bluntly, U.S. leaders were still terrified that, if they were forced to face the world on their own once more, the Germans and Japanese would go bonkers again.

But this past week came some evidence that the smothering strategy is still firmly in place – despite the election of an American President who has complained loudly as a candidate as well as in office about how these arrangements are inexcusable rip-offs of the American public and especially taxpayers. At a big national security conference held each year in Germany, Trump administration officials expressed alarm at the prospect that some European initiatives to boost military spending that have barely advanced past the talking stage could might result in European forces at least sometime operating independently of their alliance with the United States – the North Atlantic Treaty Organization (NATO) – and even excluding America.

According to a Financial Times account of the meeting, U.S. Defense Secretary James Mattis reacted by insisting that these European Union “defence plans…enhance Nato’s common defence rather than detract from it. And he put down an important marker: there was, he said, a clear understanding that common defence is a Nato mission that belongs to Nato ‘alone’.”

In other words, the Trump administration has now fallen into both of the traps that ensnared U.S. alliance policy during the Cold War. It has assured the allies that its commitment to their defense is absolute – including the risk of fighting a nuclear war on their behalf – thereby gutting any incentives for them to stop “free riding” on the United States militarily and bearing a greater share of the defense burden. And it has made clear that, although it wants the allies to assume more responsibilities for their own defense, it opposes the allies gaining any more control over their own defense. Instead, the United States must remain firmly in charge.

As a foreign policy realist, who believes that national interests are much more important than particular alliances, and can clash with the preservation of these alliances, I don’t blame the Trump-ers for wanting to have their cake and eat it, too on this score – i.e., more allied resources to use as Washington wishes. Nor do I blame the Europeans for wanting as much defense assistance from Americans as they can get while continuing to skimp on their military budgets.

But as an American, I wish the administration would recognize two fatal flaws in this alliance strategy status quo. The first is the un-realism of straining to freeze alliance structures in place when the common enemy that represented their raison d’etre has been gone for nearly thirty years. The second entails the needless dangers created by continuing to provide nuclear guarantees – and the tripwire forces needed to draw it into Armageddon – for these allies when not even the partial revival of Russian and Chinese threats (along with North Korea’s development of ever more advanced nuclear weapons) has fostered consensus in how to handle them.

Of course, dissolving these alliances will entail risks. But the risks of trying to square these circles look far greater. And when considering the nuclear threats they now pose (from those North Korean as well as Chinese forces that are much more capable of credibly threatening the United States with nuclear attack, along with Russia’s Cold War holdover arsenal), they look harder to justify than ever.

Making News: Back on Nationally Syndicated Radio on Trump Tariffs — & More!

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alliances, allies, burden sharing, defense, Gordon G. Chang, IndustryToday, John Batchelor Show, Making News, manufacturing, tariffs, Trade, Trump, wages

I’m pleased to announce a return engagement on John Batchelor’s nationally syndicated radio show tonight. The segment, slated to start at 10 PM EST, will deal with the new tariffs President Trump has imposed on imported solar panels and washing machines, and whether these steps will usher in a new era of U.S. trade policymaking.

You can listen live at this link to what’s sure to be a great discussion involving John, co-host Gordon G. Chang, and me. And as usual, I’ll post a podcast of the interview as soon as one’s available.

In addition, IndustryToday.com just posted my recent RealityChek item on wage stagnation in U.S. manufacturing. Click here to see it.

Moreover, that article referred to in yesterday’s Making News item about alliance defense burden-sharing can be accessed for free after all. Just click here.

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

Making News: New Marketwatch Column on the Trump Solar Tariffs — & More!

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alliances, Apple, Brendan Kirby, burden sharing, Joe Guzzardi, Lifezette.com, Making News, Marketwatch.com, Progressives for Immigration Reform, solar panels, tariffs, Ted Galen Carpenter, The American Conservative, Trade, Trump, wages

I’m pleased to announce the publication of my latest op-ed piece – a column for Marketwatch.com explaining why President Trump was right in slapping tariffs on imported solar energy panels.  Here’s the link.

In addition, Joe Guzzardi of Progressives for Immigration Reform, recently wrote a column based on some of my findings on wage stagnation in the United States.  Through the Cagle Syndicate, it ran in several smaller newspapers around the country – e.g., here and here.

In the January-February issue of The American Conservative, Ted Galen Carpenter of the Cato Institute quoted my views on defense burden-sharing in America’s security alliances in a piece he did on the threats created by these arrangements.  The article, alas, is behind a pay wall.

Finally, in a January 19 post, Brendan Kirby of Lifezette.com featured my views on Apple’s announcement of new investments in U.S. domestic manufacturing.  Here’s the link.

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

Our So-Called Foreign Policy: The Real Message Sent by the Trump Security Strategy Blueprint

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alliances, allies, America First, Asia-Pacific, borders, burden sharing, China, Cold War, deterrence, Eastern Europe, Europe, free-riding, Germany, globalism, international institutions, internationalism, Japan, Middle East, nation-building, National Security Strategy, NATO, North Atlantic treaty Organization, North Korea, nuclear weapons, Our So-Called Foreign Policy, Russia, South Korea, sovereignty, Soviet Union, terrorism

The Blob – a wonderful nickname for the Washington, D.C.-centered complex of establishmentarian foreign policy bureaucrats, former officials, think tanks, lobbyists, and journalists – has actually come up with a useful insight in noting some important contradictions between the Trump administration’s new National Security Strategy (NSS) document, and the president’s speech announcing the document’s release.

It’s hardly new to observe that big differences on crucial issues seem to divide President Trump from his top advisers, though it’s always valuable to note, since this gap can’t possibly make American diplomacy more effective, and could cause real problems. My chief NSS-related concern, however, could be even more important: Mr. Trump’s speech once again demonstrates that he himself remains pretty confused about his foreign policy priorities – and not entirely convinced that priority-setting is particularly important at all.

Not that presidents are often perfectly consistent about America’s approach to international challenges and opportunities. And given the diversity of these challenges and opportunities, consistency itself can be a vastly overrated virtue – at best. But these days, much more clarity is urgently needed – especially since President Trump has touted himself as such a disrupter; especially since the America First-style disruption he touts is badly needed on many fronts, in my opinion; and especially since disruption is badly needed because some genuinely dangerous situations are nearing crisis territory, and some existing crises keep worsening.

With that backdrop in my mind, two of these clashing ideas – maybe described more accurately as sets of impulses? – stand out. The first has to do with America’s major security alliances. Mr. Trump has consistently, and in my view, understandably, complained about defense free-riding by countries in Europe and the Asia-Pacific region in particular that for decades have enjoyed protection by U.S. conventional and nuclear forces. And his December 18 NSS speech continued in this vein, scolding his White House predecessors for failing “to insist that our often very wealthy allies pay their fair share for defense, putting a massive and unfair burden on the U.S. taxpayer and our great U.S. military.”

He’s absolutely right that major economies like like Germany, Japan, and South Korea should pay far more, and not only because they can afford to do so – and free up American resources for major domestic needs in the process. They need to pay more because they face far greater threats from potential aggressors like Russia and China and North Korea than does the United States.

If President Trump would start highlighting the discrepancy – firmly based in geography – between the security challenges faced by the United States and those faced by its allies, he might actually achieve greater defense burden-sharing. But he makes a fatal mistake when boasts that his administration’s “new” strategy “emphasizes strengthening alliances to cope with these threats.  It recognizes that our strength is magnified by allies who share principles — and our principles — and shoulder their fair share of responsibility for our common security.”

For whenever the allies have heard phrases like “common security,” they have concluded that the United States can’t afford to put any meaningful pressure on them to boost defense budgets – because its own vital interests will always persuade it to fill any gaps. History could not teach more clearly the lesson that America’s failure to stress that its alliances are helpful assets, not vital necessities, and that its support for these arrangements is not unconditional, has been the kiss of death for any efforts to eliminate or reduce free-riding. And the Trump administration’s burden-sharing campaign will surely founder on exactly these shoals.

If we were living in another (past) decade, this shortcoming might be No Big Deal. After all, as I’ve previously written, America’s major alliance commitments, including their nuclear dimension, involved either pledges to protect arguably vital or potentially vital regions, or to deter adversaries, like North Korea, that couldn’t retaliate in kind against the American homeland. So it’s anything but entirely surprising that, for decades during the Cold War and after, these alliances achieved their overseas goals and kept the United States itself safe.

But the likeliest alliance-related potential flashpoints nowadays are totally different. Russia, which still has plenty of nuclear weapons, is seriously threatening only Baltic and other East European countries that were recklessly invited to join the North Atlantic Treat Organization (NATO) even though their fates have never been considered vital interests by American leaders. Even during the Cold War, America’s European allies were never entirely convinced that Washington would risk DC, or New York, to save Paris or London. It’s that much less credible to suppose that U.S. leader would risk a major American city to save Riga.

Frighteningly, however, that’s precisely a catastrophe that the United States today could suffer because it remains American strategy to deny a president any real choice but to act. And the means to this perilous end? A growing U.S. military presence in Eastern Europe not remotely strong enough to repel a Russian attack, but large enough to put irresistible political pressure on Washington to go nuclear to save it from annihilation, or to retaliate for its loss.

Such American tripwire forces remain on the Korean peninsula, too, and their tripwire mission also remains exactly the same – even though North Korea can now, or will shortly be able to, respond to American nuclear weapons use by destroying U.S. cities.

In other words, greater alliance burden-sharing – and probably much greater changes – now need to be squarely on President Trump’s table not simply to achieve greater economic equity and to finance domestic policies more responsibly. They’re needed to reduce as dramatically as possible the chances that nuclear weapons will land on American soil. But as Mr. Trump’s speech indicates, there’s no reason to suppose that he’s even considering this type of disruption.

The second set of clashing ideas or impulses has to do with the overall purpose of American foreign policy. I’ve been writing for decades that the main flaw in the internationalist approach dominating the country’s diplomacy for decades has been its insistence that the United States can be no more secure, prosperous, or free than the world at large. Therefore, internationalism (which Mr. Trump and many of his supporters tend to call “globalism”), whether in its conservative or liberal forms, has pursued a worldwide reformist and policing agenda even in areas where the United States had no tangible stakes whatever, or where the benefits never remotely approached the costs and risks.

In his NSS speech, Trump (again) rightly lambasted the archetypical post-Cold War version of this internationalism: “nation-building.” He emphasized that “We do not seek to impose our way of life on anyone” and repeated an important (potentially and constructively) disruptive in marker laid down in previous addresses:

“We will pursue the vision we have carried around the world over this past year — a vision of strong, sovereign, and independent nations that respect their citizens and respect their neighbors; nations that thrive in commerce and cooperation, rooted in their histories and branching out toward their destinies.”

The point about a world of “strong, sovereign, and independent nations” represents long overdue pushback against the globalist objective of a world increasingly governed by ever more powerful international rules and institutions that can only undermine national self-rule – and are likeliest to focus on restraining U.S. freedom of action.

But the business about respecting citizens and neighbors (along with his concern about “vigorous military, economic, and political contests…now playing out all around the world”), and thriving in commerce and cooperation, too strongly resembles the standard internationalist boilerplate that has launched the nation on so many, often disastrously, misguided Americanizing missions.

And although an explicit Trump-ian return to nation-building etc seems wildly improbable, first consider the president’s description of his anti-terrorism goals in the Middle East, and then try to figure out how they can be reached without transforming this dysfunctional region into something light years from where it is now, and that it has never been: “confronting, discrediting, and defeating radical Islamic terrorism and ideology” and preventing “terrorists such as ISIS to gain control of vast parts of territory all across the Middle East.”

Far better for him to focus like the proverbial laser beam on “not letting them into the United States” – a goal that, however difficult, is far more practicable than curing what ails a remote, often hostile part of the world with which the United States has almost nothing in common.

The conventional wisdom about documents like the National Security Strategy is that they’re overwhelmingly for show, have virtually nothing to do with an administration’s day in and day out decisions, and lack any meaningful predictive power. Ditto for sweeping presidential speeches on grandiose subjects. And again, the conventional wisdom isn’t entirely wrong.

But as even cynics tend to concede, just as NSS-like reports result from the work of numerous government agencies and therefore hundreds of junior and senior officials (including political appointees), prepared presidential remarks (even in this administration) usually represent the combined efforts of many White House officials and also incorporate input from a wide range of government agencies. As a result, it’s far-fetched to suppose that they’re completely devoid of meaning. For me, they can reveal two important insights about a chief executive’s foreign policy outlook and potential.

First, as suggested above, they can yoke presidents to ill-considered and even dangerous commitments. Consequently, they can create equally ill-considered and even dangerous public expectations, too. Of course, circumstances force politicians to execute U-turns all the time, but the more obvious they are (because they reverse positions prominently staked out), the more (needlessly) damaging they can be.

Second, and more important, they speak can volumes about how well presidents can handle the challenge of making hard foreign policy choices, their related willingness to acknowledge in the first place that not all good things are possible simultaneously, or even close, and their consequent ability to establish sustainable priorities. In these respects, the president’s remarks about his administration’s first NSS display too many of the shortcomings that produced globalism’s major failures.

Our So-Called Foreign Policy: Desperately Seeking Adult Polling on NATO

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allies, burden sharing, defense spending, foreign policy, NATO, North Atlantic treaty Organization, nuclear war, Our So-Called Foreign Policy, Pew Research Center, polls, Russia, Trump, vital interests

There’s not much doubt that the main purpose of this recent Pew Research Center poll was to show the unpopularity in America of President Trump’s skeptical views of the North Atlantic Treaty Organization (NATO). Published just before this past week’s summit of the U.S. defense alliance with many European countries, the survey finds that “Today, roughly six-in-ten Americans hold a favorable opinion of the security alliance….”

So that seems to be quite the rebuke to a president who has faulted NATO as “obsolete,” accused many members of being defense free-riders, and during the meeting declined to promise unconditionally that the United States would help militarily any alliance member that came under armed attack.

Actually, the survey once again shows that polls on foreign policy issues tend to be among the most incompetently and misleadingly crafted polls of all. I say this because the Pew researchers failed to raise in any of their questions any of the most important issues Americans need to think about as they assess the value of NATO. Maybe the best way to make the point is to present question possibilities that would make these issues clear.

First: Would you favor the United States militarily defending a NATO ally if embroiled in an armed conflict with Russia if this aid might result in a Russian nuclear attack on the United States?

Second, Would you favor the United States militarily defending a NATO ally if embroiled in an armed conflict with Russia, and running that risk of nuclear war, if the ally in question had never been considered by any U.S. president going back to Franklin D. Roosevelt to be a vital or even significant security interest of the United States?

Third, Would you favor the United States militarily defending a NATO ally if embroiled in an armed conflict with Russia, and running that risk of nuclear war, if the nuclear war risk existed largely because NATO’s European members collectively refuse to pay for militaries that could repel the Russians on their own?

In other words, a poll that measured Americans’ true beliefs about and support for NATO would be one that reminded them that, as with most of what’s important about life, different positions and decisions have important potential downsides as well as important potential upsides. And until pollsters begin informing Americans about the real choices they face on important questions of both domestic and foreign policy, it will be painfully obvious that theirs is yet another portion of the chattering classes in desperate need of some adult thinking.

Our So-Called Foreign Policy: Why Establishment Thinking About Containing China Remains Far from Serious

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allies, American Enterprise Institute, Asia, burden sharing, China, Daniel Blumenthal, defense budget, East Asia, entitlements, foreign policy establishment, free-riding, Japan, Our So-Called Foreign Policy, RealClearPolitics.com, South Korea, taxes, tech transfer, Trade

Congratulations to the American Enterprise Institute’s Daniel Blumenthal for coming up with some genuinely new insights into the U.S.-China balance of power and especially its relationship with the evolving economies of the two countries. Unfortunately, Blumenthal’s new essay for RealClearPolitics.com also shows that gaping blind spots remain in establishment thinking about the China challenge its members claim to be analyzing seriously.

For the purposes of this post, let’s grant Blumenthal’s mainstream assumption that it matters greatly to the United States which great power dominates East Asia politically. I disagree, but the point here is that if America does want to fend off a China challenge, greater policy changes will be needed than Blumenthal and other conventional wisdom-mongers seem ready to contemplate.

The author’s main theme is that the United States has no legitimate reason to doubt its economic capacity to prevent China from becoming Asia’s kingpin, and his new wrinkle involves measuring economic power by looking more at national wealth, and less at national economic growth. Since the U.S. wealth levels are both much greater than China’s, and since the gap has just resumed growing according to statistics he cites, America can easily afford the military forces needed to put China back in its place. And he blames China’s recent and impressive catch-up on this score on Americans’ recent (Blumenthal doesn’t specify the time frame) political decision to skimp on military spending while continue to devote exorbitant sums to entitlement spending – which has indeed long dominated the budget outlays (along with, as he’s noted, interest payments on the resulting ballooning national debt).

According to Blumenthal, Americans and their leaders as a result have chosen to elevate “the intergenerational transfer of wealth” over national security. Strictly speaking, he’s right. But other interpretations of national priorities seem just as legitimate.

For example, as the author briefly notes, the U.S. population is aging. So a major national retirement funding challenge will face even the most defense-minded politicians. That doesn’t let American leaders or the recipients of these entitlements off the hook in terms of making sacrifices needed to safeguard national security. But it’s bound to raise the question of whether the burden of sacrifice should be limited to middle class Americans. The great increase in national wealth mentioned by Blumenthal makes clear that the nation has many other resources on which it can draw to fund a bigger military – especially since the private economy’s wealth has led the surge. In other words, why not tax the rich or corporations more heavily to pay for new personnel and weapons?

One obvious rejoinder is that modest levels of taxes on wealthy Americans and on American companies are needed to ensure the economic growth needed to keep national wealth levels robust. But even accepting the doctrinaire trickle-down economics underlying this assumption, should upper-level individual incomes and business profits be completely exempted from any responsibility to pay for the military? If so, why? And wouldn’t that policy greatly loosen the relationship between national wealth and military capability emphasized by Blumenthal?

The author also neglects another big pool of resources that can be brought to bear on countering China: the wealth of America’s regional allies. Stunningly, after decades of American pleading for greater burden-sharing, countries with a far greater stake than the United States in resisting Chinese regional domination continue free-riding on U.S. defense guarantees. Why should American entitlements recipients see any reduction in benefits before Japanese and South Koreans pay at least as much for their own security (relatively speaking) as the much more geographically distant United States does? And their contributions could be immense. Japan alone, for example, is the world’s third largest national economy (behind the United States and China, respectively). 

Finally, as with nearly all the rest of the establishment, Blumenthal completely neglects the opposite side of the U.S.-China defense resources equation: The decisive extent to which American economic policy continues enriching China, and therefore continuing to enable it to afford lots of both “guns and butter” (as economists and political scientists have dubbed military and social spending). Thanks in part to literally trillions of dollars of earnings from the trade surpluses it’s long run with the United States, the Chinese pie keeps expanding strongly (that’s the economic growth whose importance Blumenthal softpedals). As a result, more new resources are generated for whatever priorities or combination of priorities the Chinese government chooses.

Even worse, as I’ve long noted, recklessly lax tech transfer policies on America’s part have for decades given the Chinese much of the knowhow needed to turn out increasingly advanced weapons and other military systems. Some signs of official concerns about this outflow have appeared in Washington lately, but U.S. leaders (and the rest of the establishment) remain woefully behind the curve.

When America’s East Asia security strategy stops bolstering the Chinese threat it depicts as such a huge concern, when it insists that local countries act like they have at least as great a stake in remaining independent of China as does the United States, when the wealthiest Americans are required to devote more of their recent immense windfalls to the common defense, and if all of those changes still leave China closing fast on the combined forces of the United States and its neighbors, it would become legitimate to ask Main Street Americans to start shouldering greater burdens. Until then, the U.S. working and middle classes will be entirely justified in demanding that the nation’s Asia strategy pass a minimal seriousness test first.

Our So-Called Foreign Policy: What Obama Gets Right and Wrong About America’s Allies

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alliances, allies, Asia, Bret Stephens, burden sharing, Cato Institute, David Cameron, David Ignatius, deterrence, Eli Lake, Europe, foreign policy establishment, France, free-riding, geography, Japan, Jeffrey Goldberg, Korea, LIbya, Middle East, Nikolas Sarkozy, Obama, Our So-Called Foreign Policy, Saudi Arabia, self-sufficiency, The Atlantic, United Kingdom, Wall Street Journal, Washington Post

As I said over the weekend, that Atlantic article on President Obama’s foreign policy based on a series of lengthy interviews is an unusually rich vein of material. So let’s keep mining! Since its most newsworthy aspects so far have been judged to be Mr. Obama’s views on America’s allies, let’s focus on them.

The quick and dirty: The bipartisan foreign policy establishment (including its journalistic wing) is just aghast that the president has derided many of the nation’s main treaty and less formal allies – including the United Kingdom – as “free riders.” And on this matter, Obama could not be more on target. At the same time, just as with his pessimism on the Middle East, he hasn’t even begun to follow up policy-wise in ways that are not only logical, but vital for avoiding major future troubles.

As the article by Jeffrey Goldberg reminds, the president has dressed down London for skimping on defense spending while the United States has borne an outsized share of the Western security burden. The British responded by – minimally – meeting a spending goal long endorsed by Washington, but Mr. Obama still complained bitterly about the history of many allies’ “holding our coats while we did all the fighting.’”

Indeed, he largely blamed his failed intervention in Libya on “Europe and a number of Gulf countries who despise Qaddafi, or are concerned on a humanitarian basis, who are calling for action. But what has been a habit over the last several decades in these circumstances is people pushing us to act but then showing an unwillingness to put any skin in the game.” And he fingered both current British Prime Minister David Cameron and his then French counterpart, Nikolas Sarkozy, by name.

Also harshly criticized by the president: Saudi Arabia and other arch-conservative Persian Gulf monarchies, which he has accused of “intensifying” (Goldberg’s language) the outburst of “Muslim fury” seen in recent years by “heavily” funding the spread of Islamic fundamentalism.

Wall Street Journal columnist Bret Stephens spoke for many in the nation’s professional foreign policy community when he wrote that Mr. Obama’s remarks to Goldberg “are so gratuitously damaging to long-standing U.S. alliances, international security and Mr. Obama’s reputation as a serious steward of the American interest that the words could not possibly have sprung from the lips of the president himself.”

But as shown by this essay by the Washington Post‘s David Ignatius, criticism has hardly been confined to neoconservatives. Indeed, Bloomberg View columnist Eli Lake delivered probably the ultimate slap at this facet of the “Obama Doctrine” – at least in the eyes of the nation’s chattering classes. He called it Trump-like.

The president certainly can be faulted for indiscretion while still serving in office. As Ignatius notes, candor can indeed be destabilizing. But such judgment questions aside what’s most important to know is that the president is unquestionably right on the merits. Unless you doubt that the Gulf Arab monarchies are funding the spread of one of Islam’s harshest, most medieval strains? Or believe that America’s allies in Europe and Japan have ever shouldered a remotely appropriate share of the load for what is after all their own defense?

As documented in this 2000 journal article of mine, since early in the Cold War, American administrations have struggled to convince or pressure leaders in London, Paris, Bonn (and then Berlin), and Tokyo alike to increase their military budgets both in absolute terms and as a percentage of overall alliance defense spending. All of these efforts have failed, even though Washington consistently used the most indulgent, and least sensible, criterion for success imaginable – raising allied spending to equal U.S. efforts.

If national security policy was a game, such an outcome would of course be “fair.” But when it comes to promoting and defending American interests, this approach has created a false equivalence in stakes, and led the United States to expend greater-than-necessary amounts on the military, and face greater-than-necessary risks. For however important America’s interests in securing Europe or Japan and the rest of East Asia from Soviet, Russian, and Chinese threats, the allies’ interests in defending themselves are infinitely more important – and indeed, vital.

But U.S. burden-sharing efforts also failed for the same reason that has frustrated President Obama’s own ambitions: a stubborn unwillingness to recognize the inescapable dynamics of free-riding. For just like his Cold War and post-Cold War predecessors, Mr. Obama has continually sabotaged his burden-sharing strategies by endlessly declaring not only that allies and their regions are vital American security interests, but that their security and America’s are indivisible. So naturally, allies for decades have concluded that they have no need for much military exertion given Washington’s conviction that their downfall would be completely unacceptable. Ditto for coalition warfare in third countries, like Libya. Whether for moral or strategic reasons, the Obama administration never indicated that it could take the situation or leave it. So countries like the United Kingdom and France understandably – and entirely predictably – chose to take the easy way out.

The bad news – not for the nation as a whole, but for the often grandiose ambitions of its leaders – is that without reliable allies, many of their foreign policy objectives do, as they fear, become impossible to achieve. So just to pick through President Obama’s remarks to Goldberg, say goodbye (at least often) to “establishing norms that benefit everyone, and even to “doing good at a bearable cost,” to “promoting values, like democracy and human rights,” to “making the world a better place,” to “bending the world toward justice,” and especially to “leading the world.”

The good news – not for America’s professional foreign policy community, nearly the whole of which believes deeply in the urgency of these goals, but for the nation as a whole – is that neither U.S. security nor prosperity requires achieving any of them. As I’ve explained repeatedly, America is geopolitically secure enough and economically self sufficient enough to achieve adequate levels of security and prosperity even in a badly failing world.

Better yet, both this security and prosperity can be further enhanced without more overseas engagement.  And even if strengthening the U.S. capacity for self-reliance in all dimensions wasn’t eminently feasible, assigning it a much higher priority would be essential precisely because America’s allies have proven themselves so utterly feckless for so many decades.

Moreover, there’s an even more compelling argument for disengaging from America’s current security commitments and pursuing a more independent course than recognizing their major limits as multipliers for American power. In this increasingly dangerous, unstable world, these ties are entirely too likely to embroil the United States in conflicts it’s better off avoiding. As analysts at the Cato Institute in particular have warned, when their deterrence power fails, they tend to become “transmission belts of war.”

And these belts remain in place throughout the world – albeit on scales smaller than during the Cold War. On the one hand, it’s true that international tensions in places like Europe and much of Asia are considerably lower than between 1945 and 1990 (with the Korean peninsula a notable exception). On the other hand, the threat to the United States from an ideologically hostile superpower with global ambitions is greatly reduced as well.

Fortunately for President Obama and the nation, the United States hasn’t yet been trapped into defending alliances and regions that, however important, don’t justify exposing the American homeland to the risk of major war. But because for all his frustrations with the allies, he hasn’t thought through the consequences of clinging to these outmoded arrangements, his successor is less likely to be so lucky.

 

Following Up: On the Middle East, the “Serious” Candidates are Less Serious Than Ever

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2016 elections, air strikes, allies, burden sharing, coalition, Defense Department, Following Up, free-riding, Iran, Iraq, ISIS, Kurds, Middle East, Pentagon, Saudi Arabia, Sunnis, Syria, terrorism

A recent RealityChek post explained why the label “serious” shouldn’t be used for presidential candidates (in either party) who claim that the United States can create a meaningful anti-ISIS military coalition. More recently, a report from the Pentagon itself further mocks the idea that office-seekers – or anyone else – believing that America’s allies will share much of the burden of defeating the terrorist group have any significant knowledge of the Middle East or world affairs generally. As my post noted, most of the presidential hopefuls in both parties fall into this category – including all of the “mainstream” or “establishment” figures, along with President Obama .

The Defense Department report tallied by country the number of air strikes carried out against ISIS as of January 19, and here are the findings. Overall, of the 9,782 such attacks conducted on targets in Syria and Iraq, the United States has been responsible for 7,551, or more than 77 percent. By target countries, U.S. war planes have carried out nearly 69 percent of the anti-ISIS strikes in Iraq, and just under 94 percent of these operations in Syria. (These counts don’t include Russian activity, or the more than 65,000 “sorties in support of operations” in the two countries, like reconnaissance and targeting missions.)

DoD doesn’t break down the non-U.S. figures by country; according to CNN, one reason is that these various governments define and count “air strike” in many different ways. But given the focus in the United States on local Middle East countries, and the expectation that their own gut level self-interest in will motivate them to practically lead the fight against a group they say is a literally mortal threat, it seems reasonable to surmise that Saudi Arabia et al are dropping the ball.

It’s important to point out that one reason that the United States has dominated the air war against ISIS is that the United States is the world’s dominant military power. At the same time, the U.S. air power is deployed all around the world in order to handle threats in nearly every region. America’s Middle East allies have no military responsibilities beyond their neighborhood.

Moreover, if these countries aren’t all-in for the air war, how realistic is it to expect them to charge into a major ground war against ISIS? The answer: It’s the height of inanity – and ignorance. And the reason is pretty simple: As has repeatedly been the case since the end of World War II, the United States needlessly has made itself vulnerable to the free-rider phenomenon. Under Democratic and Republican presidents alike, Washington has been so infatuated with exercising “global leadership,” and has so loudly advertised its conclusion that America’s own security depends on the security of every corner of the globe, that its European NATO allies, Japan, and South Korea have understandably assumed that the United States would protect them no matter how modest their own efforts.

In the impossibly byzantine Middle East, the free-rider syndrome has been exacerbated by all the other items on the security agendas of countries ranging from Saudi Arabia (like countering Iranian ambitions in the region, and supporting lots of Islamic radicalism itself) to Turkey (like preventing Iraq’s anti-ISIS Kurds from becoming strong enough to create an independent state that would attract Turkey’s own Kurdish minority).

The failure of the “serious” presidential candidates to recognize the coalition delusion shows that accumulating “experience” in making national security policy in Washington by no means proves that they’ve accumulated wisdom or even developed simple common sense. The same of course holds for the establishment media, which keeps clinging to and parroting the same off-the-mark convictions.

Following Up: Early Responses to Paris Look Discouraging

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Al Qaeda, border security, burden sharing, defense spending, Following Up, France, Francois Hollande, G20, Germany, ISIS, Middle East, migrants, NATO, Obama, Paris attacks, refugees, Schengen Zone, September 11, Syria, terrorism

Yesterday on Twitter, I asked folks whether they thought that last week’s Paris terrorist attacks would represent a turning point in global politics as big as September 11. I wasn’t too sure about the answer at that point; today I feel much more confident that Paris’ impact should – at least – be even greater, but that its impact will fade much sooner than it should.

There’s no question that the September 11 attacks were more spectacular, and killed many more people, than the Paris operation. But the latter worries me precisely because it was so low-tech, so un-spectacular – and therefore so much more easily repeatable. Clearly, there are many reasons that the use of hijacked civilian airliners as bombs hasn’t been repeated in the last 14 years. Air travel security has been greatly tightened all over the world – although the recent ISIS-claimed destruction of a Russian plane reminds us that gaps remain at various air nodes. But security – and intelligence – responses undeniably have been stepped up, and partly as a result, it’s likely that terrorists are much less interested in fighting “the last war.”

It’s also possible, however, that terrorists have concluded that the airliner bomb approach is simply too difficult, and that the risk-reward ratio is inadequate. First, think about the planning and equipment required for the Paris attacks: It’s not even close. Now think about the “reward”: The September 11 strikes were over in minutes. The handful of Paris attackers turned a major Western capital into a battlefield for hours. This tells me that repeats are much better bets.

Which brings up the likely effect on Western and global responses. It’s true that it’s been less than three days since Paris. But the early indications don’t point even to major shifts, much less wholesale changes. I don’t have the transcript yet, but I watched President Obama’s just-concluded press conference following the G20 summit in Turkey, and nothing could have been clearer than his conviction that he’s pursuing the right strategy, and that nothing more than a moderate escalation of anti-ISIS military operations is in store right now.

Certainly there was no mention of stepped up border security measures, which I have written are the keys to protecting the American homeland more effectively. In fact, Mr. Obama became most emotional when condemning (admittedly stupid) proposals to restrict admissions of Middle East refugees to Christians – despite his (reluctant) acknowledgment that security screening is required.

Not surprisingly, France’s reaction has been more substantial. French President Francois Hollande has just addressed a rare joint session of the country’s Parliament (itself a major departure from domestic political practice), is seeking to extend the state of emergency initially declared to three months, and has requested significantly new constitutional powers to deal with individuals deemed dangerous.

On Saturday, of course, Hollande had described the Paris attacks as an “act of war,” in contrast to President Obama’s continued tendency to view terrorism mainly as a law enforcement challenge. The French president also authorized a round of air strikes versus ISIS targets in the Middle East, and promised more resources for the country’s security forces. In addition, he’s urged the members of Europe’s visa-free travel zone – the so-called Schengen area – to tighten up their internal controls. (At the same time, the president of the European Commission has stated that he sees “no need for an overall review of the European policy on refugees.”)

But a New York Times op-ed this morning made clear how lax and paltry French – and other European – counter-terrorism efforts have been, and therefore how far they need to go to deserve the adjective “serious.” As reported by former senior Obama administration foreign policy aides Steven Simon and Daniel Benjamin, French and German spending on intelligence and counter-terrorism operations are the merest fractions of America’s. And these countries are located much closer to the Middle East breeding grounds of ISIS and similar groups.

Moreover, Hollande’s apparent decision to escalate French military efforts to defeat ISIS in the Middle East is reasonable, and budget figures are never perfect measures of military strength. But even though the Paris attacks have hardly been the first by the region’s extremists against European targets, the only European members of the North Atlantic Treaty Organization (NATO) to have met the alliance’s defense spending goals have been the United Kingdom, Greece, Poland, and Estonia. France and particularly Germany are among the foot-draggers. Will the Paris attacks spur much more energetic efforts? In the face of continued European economic weakness? Or will these countries ultimately continue their decades-long policies of relying mainly on the United States for protection?

Past isn’t always prologue. (If it was, we’d still be living in caves.) But the power of inertia and the temptations of free-riding should never be under-estimated. Nor should the determination of politicians – on either side of the Atlantic – to stick to failed policies. So the odds remain way too high that the Paris attacks will leave the United States and other major countries with the worst of both possible worlds – facing game-changing circumstances and more attached to the status quo than ever.