Following Up: The Cheap Labor Lobby Looks Ever Shadier

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Aman Kapoor, Biden administration, Cato Institute, Cecelia Rouse, Chronicles, conflict of interest, David Bier, economics, economists, Following Up, FWD.us, George J. Borjas, idea laundering, Immigration, Immigration Voice, Jeremy Beck, Koch Brothers, NumbersUSA, Open Borders, Pedro Gonzalez, think tanks, wages

In late September, I posted on evidence that one of the supposedly most authoritative studies on the effects of large-scale immigration on the wages of the existing U.S. workforce came up with an answer (in a phrase, “no big deal”) based on no hard evidence whatever.

Since then, I’ve come across material indicating that the intellectual fraud committed by the Biden administration economists and National Academies of Sciences, Engineering, and Medicine (NAS) “experts” team involve was much worse – along with documentation apparently showing that a leading U.S. private sector think tank whose research has armed much of the corporate Cheap Labor Lobby agitation for Open Borders-like policies is literally shilling for that powerful interest group.

As I wrote in that previous post, a mid-September blog item lead-authored by President Biden’s chief White House economic adviser Cecelia Rouse attempted to calm fears that the kinds of juiced up immigration inflows sought by the administration wouldn’t significantly harm already hard-pressed low-income and low-skill U.S. workers. But its case boiled down to nothing more than the kind of appeal to authority that typically seeks to cover up for a paucity of facts and figures – and indeed, an appeal to (NAS) authorities who the White House blog admitted themselves can’t cite much concrete evidence for their conclusions themselves.

But a month later, a post by Jeremy Beck of the immigration realist organization NumbersUSA spotlighted a much more serious problem with the NAS’ immigration analysis. It relied on mathematical models that didn’t actually find or conclude that Americans today holding or seeking poorly paying jobs have nothing important to worry about from big immigrant inflows. Instead, these models proceeded from this assumption.

Beck’s post was based on a conference presentation made by Harvard University labor economist George J. Borjas, who’s not only one of the world’s top specialists on immigration economics, but one of the very few noted economists critical of any aspect of what might be called pre-Trump U.S. immigration policies. So maybe his word shouldn’t be taken as gospel? Maybe not, but it’s noteworthy that the conference panelist he was paired with (another prominent labor and immigration economist) uttered not a word of objection. Nor did the moderator of the session, a Cato Institute analyst who could not be more enthusiastic about mass immigration. (Beck conveniently supplies the full video of the event.)

And speaking of the Cato Institute, that’s the think tank accused of hiring itself out to U.S. corporate interests anxious to pump up the supply of workers available them, and therefore drive down the wages they can command.

The charges appear on the website of the journal Chronicles. The publication and its contributors, like NumbersUSA, are definitely on the restrictionist side of the immigration policy debate. But the post, by Chronicles Associate Editor Pedro Gonzalez presents what it purports to be emails from an organization called Immigration Voice complaining that Cato immigration analyst David Bier has been writing less on the issues it paid him to focus on (boosting the numbers of foreign tech workers that can be employed by firms in the United States) and more on subjects of concern to another group seeking to increase immigration inflows that began paying him more.

According to a bitter message allegedly sent by Immigration Voice president Aman Kapoor, “this guy is like mercenaries, working to push the agenda of the highest bidder. We have [sic] him money when no one knew him and he was fresh out of Congress as a staffer, and no one was willing to support him. Now he has become an influencer because of the papers we suggested him to write any [sic] gave him money to do that….” And because the other Cheap Labor Lobby group, FWD.us, “is giving them money,” Bier is “only pushing” its favored topics.

In other words, there’s no honor among hired gun employers.

It’s not as if the Cato Institute wouldn’t be supporting Open Borders-like policies without Cheap Labor Lobby funding. It’s a libertarian outfit, and its platform strongly opposes pretty much any government interference in any aspect of the economy. But as Gonzalez observes (making points that, as I’ve written, apply to pretty much all of America’s major think tanks to varying extents), “Cato presents itself as providing independent policy research. Kapoor’s allegations raise concerns about the integrity, independence, and transparency of this research, which can have an outsized influence on policy debates.”

In other words, these financial ties create exactly the kind of appearance of conflict of interest that every organization with any integrity seeks either to avoid or to deal with by making crystal clear which of its products are literally made-to-order – and need above all to please the client rather than seek the truth.

And the two main reasons that think tanks like Cato that engage in these practices are so influential directly distort and therefore corrupt national policy debates and the decisions they produce. First, the big bucks provided by donors like Immigration Voice and FWD.us give it the wherewithal to spread the word about its work with some of the best public relations that money can buy. Second, the lack of donor transparency enables the funders to take advantage of what I’ve called idea-laundering: using think tanks to issue materials that push their particular agendas while garbing them in quasi-academic raiment to create the impressions of objectivity and intellectual respectability.

At this point I need to acknowledge that I myself have spoken at Cato conferences and written chapters for Cato books. They’ve concerned foreign policy, a field in which the Institute’s non-interventionist positions would be difficult to match with any corporate or other selfish private ends. In fact, I’ve heard that in at least one instance, Cato’s opposition to the first Persian Gulf War, they’ve cost the organization contributions. And in 2012, the Institute resisted for a time what some staff and board members viewed as an attempt by billionaire industrialist brothers Charles and the late David Koch to politicize the organization excessively.

I’ll also give Cato credit for hosting the aforementioned Borjas presentation. But Cato’s immigration work in general now looks a good deal less than principled – and about as reliable as that of the academic specialists who seem determined to deal with some of the biggest problems caused by supercharging immigration inflows by simply defining them out of existence.

P.S. Thanks to U.S. Tech Workers, an organization pressing to reform U.S. immigration laws to promote the hiring of Americans in specialty positions, for alerting me to the Chronicles post. 

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Making News: Back on National Radio on the Supply Chain Mess — & More!

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Cato Institute, decoupling, economists, globalization, Gordon G. Chang, Immigration, IndustryToday.com, Jeremy Beck, manufacturing, Mark A. Milley, Market Wrap with Moe Ansari, NumbersUSA, supply chain, Ted Galen Carpenter, TheHill.com, Trade, wages

I’m pleased to announce several new recent media appearances.

Yesterday, I returned to the nationally syndicated “Market Wrap with Moe” to talk about those supply chain snags that are roiling the entire economy and pushing up prices, and about whether we’ve seen peak U.S. domestic manufacturing at least for now. Visit this link and click on the play button under “Current Market Wrap” to listen to the podcast.  My segment starts at about the 21:30 mark.  

In his Tuesday op-ed for TheHill.com, Gordon G. Chang quoted my views on whether or not the world economy is going to resume globalizing and generally coming together economically, or keep de-globalizing. You can read the article here.

Also on Tuesday, IndustryToday.com re-posted (with permission!) my RealityChek report on how the new Federal Reserve industrial production figures indicate that, at least for the time being, domestic manufacturers have succumbed to recent CCP Virus-related and other obstacles to growth. Here’s the link.

On September 30, Jeremy Beck of the immigration realist organization NumbersUSA posted an item on the group’s website that took off from a prior offering of mine to spotlight the intellectual fakery of many mainsteam economists on the subject of mass immigration’s impact on the wages of U.S. workers. Click here to see that the situation is even worse than I thought.

Finally, on September 28, a post by the Cato Institute’s Ted Galen Carpenter (full disclosure: a close personal friend) used some of my arguments on China phone calls made by U.S. Army General Mark A. Milley, President Biden’s top uniformed military adviser, to explain why they should worry the heck out of all Americans. Click here to read.

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

(What’s Left of) Our Economy: Is More Immigration Really the Key to America’s Tech Future?

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Cato Institute, China, education, entrepreneurs, Germany, H-1B visa, immigrants, Immigration, India, innovation, Israel, Japan, skills, South Korea, start-ups, Taiwan, technology, Washington Post, Worldometers.info, {What's Left of) Our Economy

One of the most compelling – and most often made – arguments in favor of higher U.S. legal immigration levels has to do with innovation. Supposedly, without encouraging ever more foreign workers to move to America, the nation will never be able to maintain its global technology leadership, and ultimately an acceptable, much less improved, degree of prosperity. (See, e.g., here and here.)

Part of the rationale for a welcoming posture, as indicated above, has to do with policies toward highly skilled and educated immigrants in particular (like those admitted under the H-1B program), and the special visa quotas allotted to them. But as the Washington Post editorial board recently made clear, there’s a more general view that immigration is especially good at providing America with “a steady supply of working-age strivers” and that “This nation’s prosperity, pluck, ambition and effervescent character are the products of more than 100 million immigrants who have sought better lives in the United States since its founding.” In other words, immigrants are far more likely than the native-born population to possess the risk-taking and general entrepreneurial traits that lead to so much technological progress.

I’ve already debunked one aspect of these claims here, but because they keep popping up, I keep thinking more about them, and have come across more data that not only casts further doubt on the technology-related need for more immigrants, but that indicate that the immigration cheerleaders are putting the cart before the horse.

For instance, it’s widely agreed that the U.S. tech sector is considerably healthier than Germany’s. In this vein, a widely followed global innovation index issued each year by a United Nations agency ranks the former third in the world and the latter ninth. Ninth isn’t so bad, but it’s at the least curious in this regard that for decades at least, Germany has admitted many more immigrants as a share of total population than has the United States.

Indeed, in 1990 (a good starting point, since current Germany came into being with the reunification that year of the former Federal Republic that comprised the nation’s western part and the former Communist run east), Germany’s immigrant inflow of 1.256 million represented 1.59 percent of the new country’s 79.054 million inhabitants. The 1.536 million green cards awarded by the United States that year accounted for only 0.60 percent of its 252.120 million people. (My official sources for German and U.S. annual immigration totals are here and here, respectively. For population, I used the reliable Worldometers.info website.)

But maybe Germany has made up some ground on the United States during this nearly three-decade period? Not according to this study last year from the Cato Institute – one of America’s foremost supporters of much more lenient U.S. immigration policies. If you look at Figure 2, you see that in 2018, Germany was lagging the United States just about as badly in the number of patents it received in the United States (still the world’s most important market for technology) as it was in 1990.

There doesn’t seem to be much evidence that its relatively large immigration inflows have given Germany much of an edge in entrepreneurship, either. As of 2019, according to this source, Germany’s business start-up rate was less than half that of the United States.

This chart, moreover, makes clear that it’s not just the U.S.-Germany comparison that mucks up the ostensible relationship between tech prowess and entrepreneurship on the one hand, and immigration levels on the other. After all, in 2019, India’s start-up rate was also much higher than Germany’s – even though India is much better known for sending folks abroad than for attracting them. Foreigners aren’t exactly flocking to live in China, either, yet its start-up rate matches Germany’s.

That Cato Institute study provides more complicating international comparisons. That Figure 2 shows that as of 2018, Israel has forged into the lead as the country receiving the largest number of U.S. patents. And its performance started taking off in the mid-1990s. Yet in 1995, when Germany and Israel were roughly on a par in their ability to receive American patents, the 76,361 immigrants Israel admitted in 1995 equalled 1.36 percent of its population of 5.619 million – not far from relatively un-innovative Germany’s figures. By the time it became the international leader, Israel’s immigration rate had fallen to 0.32 percent of its 8.972 million population – much lower than that of Germany, which had become a clear als-ran on the U.S. patent scene – and roughly the same as the recent U.S. rate which has been decried as so woefully inadequate.

And look at the other top performers in Figure 2 other than the United States and Israel. Taiwan hasn’t been anything close to an immigration magnet, either, and ditto for South Korea. As for Japan, it’s long been known as one of the most xenophobic countries in the world (as noted in that Washington Post editorial).

What do the non-U.S. “patent tigers” identified by Cato have in common? As author Jonathan M. Barnett puts it:

“Short on consumers, resources, and labor (and saddled with geographic separation from key consumer markets), the patent tigers (especially Israel and Taiwan) were compelled to specialize in innovation-intensive segments of the global supply chain in which ingenuity, rather than labor or natural resources, conferred a competitive advantage.”

As a result, as widely agreed, they’ve worked hard to create top-notch educational systems for their own populations. German education is highly regarded, too, but it’s often observed that its history and culture in particular have discouraged self-starters.

The lessons for the United States seem pretty clear here.  On the one hand, it’s got lots of the overall population, raw materials and domestic markets that the patent tigers lack.  On the other, unlike Germany, it still enjoys an entrepreneur- and innovation-friendly culture.  If Americans did a much better job of educating their own people, especially in the math, science, and technology fields, they should be able to keep its global technology edge even while controlling immigration more tightly. 

If, however, the nation continues to coddle underperforming school systems, especially at the primary and secondary levels, the argument for relying on immigration to fill the tech gap will look all the stronger.  And in a supreme irony, the ready availability of highly skilled and educated immigrants will keep reducing national incentives to get the national education act together.      

Making News: Trump “Requiem” Post Re-Published in The National Interest…& More!

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allies, Capitol riots, Cato Institute, China, Ciaran McGrath, conservatism, Croatia, Daily Express, Dnevno, economic nationalism, EU, European Union, Geopolitika, globalism, GOP, impeachment, Joe Biden, Making News, Populism, Republicans, Ted Galen Carpenter, The National Interest, Trump

I’m pleased to announce that The National Interest has re-posted (with permission!) my offering from last Wednesday that could be my last comprehensive look-back at President Trump and his impact on politics and policy (at least until the next utterly crazy development along these lines). Click here if you’d like to read in case you missed it, or if you’d like to see it in a more aesthetically pleasing form than provided here on RealityChek.

One small correction still needs to be made: The last sentence of the paragraph beginning with “Wouldn’t impeachment still achieve….” should end with the phrase “both laughable and dangerously anti-democratic.” I take the blame here, because my failure to keep track of the several versions that went back and forth.

In addition, it’s been great to see my post on the first sign of failure for President-Elect Joe Biden’s quintessentially globalist allies’-centric China strategy (also re-published by The National Interest) has been cited in new and commentary on both sides of the Atlantic.

Two of the latest came from Zagreb, Croatia. (And yes, I needed to look up which former region of the former Yugoslavia contained Zagreb – though I did know it was some place in the former Yugoslavia!) They’re found on the news sites Geopolitika and Dnevno.  (These sites must be related somehow because since it’s the same author, it must be the same article.)

On January 14, Ciaran McGrath of the London newpaper Daily Express used my analysis to sum up a column analyzing the Europe-China investment agreement that prompted my post in the first place.

And on January 5, the Cato Institute’s Ted Galen Carpenter (full disclosure: a close personal friend) cited my piece in a post of his expressing general agreement.

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

Making News: Quoted on a Navarro Hit Piece and China Political Meddling

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Breitbart.com, Cato Institute, China, election 2020, elections, Mainstream Media, Making News, Peter Navarro, Ted Galen Carpenter, The American Conservative, The National Interest, The Washington Post, Trump

I’m pleased to announce that my views were cited in two major media articles last week.

The first was a Breitbart.com article examining a Washington Post piece on Trump trade and manufacturing adviser Peter Navarro that I dismissed as a by-now-standard Mainstream Media hatchet job.  Here’s the link.

The second was a post in The National Interest by the Cato Institute’s Ted Galen Carpenter (full disclosure – a close personal friend).  It mentions my American Conservative article on China’s widespread and thoroughly under-reported efforts to interfere in U.S. elections and broader politics. Click here to read.

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

 

Our So-Called Foreign Policy: Trusting Asian Allies to Help Contain China is Risky Business

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alliances, allies, Asia-Pacific, Aspen Institute, Cato Institute, China, East Asia-Pacific, Hong Kong, India, Japan, Jim Risch, Our So-Called Foreign Policy, Republicans, South Korea, Taiwan, Ted Galen Carpenter, Trade, Trump

Some leading Republican Senators are slated to introduce legislation today intending to fill what they see as a big and dangerous gap in U.S. globalization and national security policy: the alleged lack of a comprehensive strategy to push China to conform with international norms on trade and related business policies and practices, and to make sure that the People’s Republic doesn’t replace the United States as the kingpin of the East Asia-Pacific region.

I haven’t seen the bill yet, but this Financial Times report gives what looks like a pretty complete summary – which comes from the horse’s mouth (Idaho Republican Senator Jim Risch, the lead sponsor and the Chairman of the Senate Foreign Relations Committee). Some of the economic proposals seem promising – although their focus seems to be China’s appalling human rights violations (about which the United States sadly can do little) as opposed to China’s economic predation (which Washington has considerable power to fight effectively).

As for the national security stuff – I really wish that Risch and his colleagues had consulted with Ted Galen Carpenter of the Cato Institute, one of America’s most trenchant foreign policy critics (and, full disclosure, a valued friend).

For in a new survey just posted by the Aspen Institute, Carpenter has made depressingly clear that one of the conditions most vitally needed nowadays for containing China’s growing military power and political influence in its back yard – reliable allies – simply doesn’t exist and isn’t likely to anytime soon.

Risch and Carpenter certainly agree on the importance of reliable allies, and apparently on their absence – although the former evidently and bizarrely believes that President Trump deserves at least part of the blame for the current unsatisfactory state of America’s regional security relationships. That take on the U.S. approach is bizarre because America (a) keeps running a growing risk of nuclear attack on the American homeland by stationing “tripwire” forces in South Korea largely because that wealthy country continues to skimp on its own defense; and (b) last I checked, America’s immense (and expensive) naval, air, and land deployments in the region were still fully intact.

And don’t just take my word for it: Carpenter lays out in painstaking detail how under President Trump the United States has actually clarified its rhetorical opposition to China’s territorial ambitions, stepped up its military operations in the Asia-Pacific region, and boosted military aid to Taiwan – which of course China views as nothing but a renegade province that it has every right to take back by force.

Regardless of what the United States is or isn’t doing, though, if U.S. alliances are going to be strengthened and oriented more explicitly against China, the allies themselves need to be at least as concerned about Beijing’s aims as Americans. That’s mainly, as Risch and his Senate colleagues note (along with yours truly over the years, as in the above linked 2014 RealityChek post), because China’s military buildup and modernization drive have eroded U.S. military superiority, and because if there’s anything worse than going to war without needed allies, it’s going to war with allies unlikely to help out once the shooting starts. And Carpenter revealed exactly how real that latter danger is by detailing just the latest instance of allied timidity:

“Washington is seeking backing from both its European and East Asian allies for a more hardline policy regarding China. The Trump administration exerted pressure for a strong, united response to Beijing’s imposition of a new national security law on Hong Kong. US officials wanted a joint statement condemning that measure and an agreement from the allies to impose some economic sanctions. However, the European Union collectively, and its leading members individually, flatly refused Washington’s request. With the exception of Australia, the reaction of the East Asian allies was no better. Japan declined to join the United States, Britain, Australia, and Canada in issuing a statement condemning the PRC’s [People’s Republic of China’s] actions in Hong Kong. South Korea seemed even more determined than Japan to avoid taking sides on the Hong Kong issue.”

And as the author rightly emphasizes, “Given the dearth of even diplomatic support from the allies for Washington’s Hong Kong proposal, there is even less chance that those countries will back a military containment policy against the PRC.”

A principal reason is money. Since the 1990s, America’s Asian allies (in particular, Japan, South Korea, and Taiwan) have profited hugely from setting up electronics assembly operations in China and selling the final products (made largely of their own parts, components, and materials, and put together with their production equipment) to the United States. Why on earth would they want to break up this highly lucrative marriage of their technology on the one hand, and China’s low labor costs and lavish subsidies on the other?

To be sure, as noted repeatedly on RealityChek, China has been moving up the technology ladder, and replacing Made-Elsewhere-in-Asia inputs with its own manufactures. But it’s a long way from totally supplanting its neighbors’ products.

It’s true that American multinational companies also are guilty of feeding and profiting handsomely from the Chinese beast. And it’s equally true that pre-Trump U.S. Presidents have helped create the problem by coddling allied fence-sitting. But at least the Trump administration’s trade policies are striving to disrupt these U.S. corporate supply chains, and its tariffs are threatening the profitability of foreign-owned multinationals’ export-focused China operations.  Japan has followed suit on decoupling to a limited extent, and India – which has moved closer to the United States lately for fear of China – is increasingly wary of its own, much less profitable, entanglement with the People’s Republic. But even Taiwan keeps eagerly investing in China and thereby increasing both its wealth and its military power.

Neither Carpenter nor I support the goal of beefing up U.S. military China containment efforts in the Asia-Pacific region (though not for the exactly the same reasons). In fact, we both favor major pullbacks. But we both agree that if containment is to be pursued, Washington needs to do a much better job of lining up its local ducks. Otherwise, it could find itself either losing another war in Asia, or winning a victory that’s pyrrhic at best.

P.S. One of Risch’s co-sponsors, Utah Republican Mitt Romney, has just revealed that he’s especially clueless on the potential of rallying the allies. 

Our So-Called Foreign Policy: A Big Hint that America Finally Needs to Leave NATO

Tags

alliances, allies, Article V, Cato Institute, defense spending, Europe, free-riding, globalism, NATO, North Atlantic treaty Organization, nuclear war, Our So-Called Foreign Policy, Pew Research Center, tripwire, Trump

Whenever I’ve written about America’s security alliances lately, I’ve emphasized the unacceptable dangers they pose to the nation’s safety because they commit the United States to risk nuclear attack to defend countries that clearly now don’t belong on the list of U.S. vital interests – that is, countries so important to America that their independence literally is worth the complete destruction of major individual cities and even genuine armageddon.

Earlier this week, however, a reminder has appeared about another crucial reason to ditch the granddaddy of these alliances – the North Atlantic Treaty Organization (NATO). Revealingly, it also strongly bears out President Trump’s charges that U.S. allies in the region where they’re concentrated (Europe) have been shamelessly free-riding on the United States. Indeed, the new information also underscores how the allied defense deadbeats are not only ripping America off economically (which seems to be Mr. Trump’s main concern), but how their cheapskate defense budgets are fueling the nuclear risk faced by the United States.

The evidence comes in the form of a new survey of the populations of NATO member countries (including the United States) released by the Pew Research Center, and if you stopped with the headline (“NATO Seen Favorably Across Member States”) you’d understandably think that everything is just dandy in alliance-land. But check out the chart below, which for some reason doesn’t appear until the middle of the Pew report. Its central message should outrage the entire nation.

 

For it shows that although NATO populations are confident that the United States “would defend them from Russian attack,” they’re decidedly unenthusiastic about their own countries participating in the defense of another NATO member. Specifically, a median of 60 percent of residents of NATO Europe (along with Canada) countries express such confidence in America’s military (including nuclear) guarantee (versus 29 percent who are not so convinced). But by a 50-38 percent margin, they oppose their own country joining in.

Of the fourteen NATO members surveyed, populations in only four (the United Kingdom, Canada, Lithuania, and the Netherlands) favored using military force to defend a fellow NATO ally. Yet in only four (Turkey, Poland, Hungary, Czech Republic) did majorities not expect the United States would use force to defend them.

The gap was widest in Italy (where only 25 percent favored helping defend another ally versus 75 percent believing that the United States would ride to its own rescue) and narrowest in the Netherlands (where the numbers were 64 percent and 68 percent respectively). The Italians also were the most confident in the United States in absolute terms, and tied with the Greeks for the least willing to help out. The only NATO members in which majorities supported both propositions were the Netherlands, the United Kingdom, Canada, and Lithuania.

Americans should be infuriated by these results for several intertwined reasons. First, the obligation to come to the defense of a fellow NATO member is at the heart of the alliance (and indeed of any alliance) and is spelled out in Article V of the NATO treaty. Although it’s true that members can always ignore legal obligations when push comes to shove, that’s long been much more difficult for the United States – because of its policy of stationing its own forces in many NATO countries (as well as in South Korea) to serve as “tripwires.” The idea has been that once they’re bloodied by attackers, and indeed about to be overwhelmed (because of their relatively small size) American Presidents will have no real choice but to respond with the U.S.’ equalizer – nuclear weapons.

This prospect was supposed to deter attack in the first place, and the (very) good news is that this strategy worked to keep the peace in Europe throughout the Cold War, and is still working. The bad news is that during the Cold War, the main European beneficiaries were countries whose independence was arguably vital to America – like the United Kingdom, (West) Germany, and France. Nowadays, the main beneficiaries are countries whose independence was never even during the Cold War viewed as vital to the United States – principally, the former Soviet bloc countries.

Yet although the stakes have shrunken dramatically, Washington continues to brandish the nuclear sword. And this risky American strategy remains in place – as it always has – because the European allies’ military forces have remained far too small and weak to repel a Soviet/Russian attack on their own, or with the help of modest U.S. non-nuclear forces. Worse, the Pew results also strongly suggest that if war did break out, American leaders could not for long even count on the help of allied forces even if it was provided initially. That’s an unparalleled recipe for disaster on the actual battlefield.

The Pew findings make the reason for this alarming situation glaringly obvious – the allies have skimped on their military spending out of confidence that the Americans would always answer their call. So why shouldn’t they save the big bucks that would be needed for genuine self-defense and use them for other purposes – like generous welfare states? Even better, the Americans would be left holding the nuclear risk bag, since once any conflict on the conflict escalated to that level, the nuclear conflict would be fought over their heads.

In addition, the Pew survey reinforces the results of a poll released last fall and alertly reported by my good friend Ted Galen Carpenter of the Cato Institute (who’s also just come out with an important new book on the subject).

Let’s be totally clear: This European approach has always made perfect sense from a European standpoint. But it not only makes no sense for the United States – it’s a strategy that creates the danger of national suicide because of decisions that still yoke the country’s fate to manifestly unreliable foreign publics.

Weirder yet: Avowedly America First champion President Trump has been steadily increasing the U.S. military presence in NATO’s most vulnerable – eastern European – members without having secured military spending increases from the other NATO countries that are remotely game changing.

It’s tough, therefore, to avoid the conclusion that America’s NATO allies are now giving Washington the broadest possible hint that it’s time for the United States to leave – because they’ve become utterly unreliable on top of their defense free-riding.  Why is the President acting as reluctant as any globalist to take it?

Our So-Called Foreign Policy: Why a Real America First European Security Policy is More Urgent than Ever

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alliances, America First, Article Five, Cato Institute, China, Cold War, coupling, EU, Europe, European Council on Foreign Relations, European Union, extended deterrence, globalism, NATO. North Atlantic Treaty Organization, nuclear weapons, Our So-Called Foreign Policy, Pew Research Center, Russia, Ted Galen Carpenter, tripwires, Trump

Even if the Cato Institute’s Ted Galen Carpenter wasn’t one of my closest friends, I’d still be writing this post highlighting his op-ed piece earlier this week for the Washington Post. Because it absolutely decimates the claim that all that ails the North Atlantic Treaty Organization (NATO), America’s oldest national security alliance, is recklessly mindless norms-buster Donald Trump.

Instead, Carpenter reports on overwhelming evidence that the arrangement, which since 1949 has committed the United States to the defense of first Western Europe and now most of Europe (and at considerable risk of nuclear attack on the U.S. homeland), is critically ill mainly because, in the decades since the end of the Cold War, U.S. and European interests have been steadily – and inevitably – diverging. And these findings add powerfully to the case that America’s globalist military commitment to Europe has become dangerously outdated.

The evidence consists of polling data showing unmistakably that European publics no longer believe that their governments should side with the United States in its disputes and conflicts with Russia (whose perceived threat Western Europe’s independence during its post-World War II decades as the Soviet Union sparked NATO’s creation in the first place), or that they should even rally to each other’s defense.

The Russia-focused results come from a September survey conducted by the European Council on Foreign Relations, and are based on the views of no less than 60,000 individuals from fourteen countries belonging to the European Union (EU) – an economic organization not officially related to NATO but many of whose member countries are U.S. NATO allies as well.

The bottom line – which Carpenter rightly describes as “startling”? “When asked ‘Whose side should your country take in a conflict between the United States and Russia?’ the majority of respondents in all 14 E.U. countries said ‘neither’.”

Some of the country-specific results?

“In France, only 18 percent would back the United States, while 63 percent opt for neutrality; in Italy, it’s 17 percent vs. 65 percent, and in Germany, 12 percent to 70 percent.

“The results were similar even in NATO’s newer East European members, despite their greater exposure to Russian pressure and potential aggression. Hungarian respondents selected neutrality over supporting the United States 71 percent to 13 percent, while Romanians did so 65 percent to 17 percent. Even in Poland, a country whose history with Moscow during both the Czarist and Soviet periods was especially frosty, neutralist sentiment had the edge, 45 percent to 33 percent.”

What’s especially disturbing, and indeed outrageous, from an American standpoint is that since NATO’s founding, European governments have insisted that U.S. troops be stationed on the continent to serve (as in South Korea) in a trip-wire role – which RealityChek regulars knows means units deployed close enough to invasion routes and vulnerable enough to the superior conventional militaries of aggressors practically to force American Presidents to use nuclear weapons to save them if conflict breaks out.

This policy of “extended deterrence,” or “coupling,” has been intended to prevent such conflicts from breaking out in the first place. What’s dangerous for the United States of course – and needlessly so – is that if deterrence fails, nuclear weapons use could expose American territory to a retaliatory nuclear strike, even though the United States itself may not be at risk.

Even worse: Throughout the Cold War, NATO non-nuclear forces were inferior to their Soviet and Soviet satellite counterparts because the European allies preferred to free-ride on the U.S. military guarantee instead of spending funds they all could have afforded for armed forces capable of self-defense.

For good measure, moreover, this European Council on Foreign Relations poll showed that Europeans are just about as ambivalent in joining with the United States if a conflict with China broke out.

Of course, even though the lopsided nature of the results indicates that these European views have been long in the making, it’s not entirely crazy to believe that Mr. Trump’s election has been so alarming to these populations that the shift did actually begin with his 2016 victory. But as Carpenter points out, a survey from the Pew Research Center conducted in 2015 demonstrates that NATO’s core principles were in deep trouble in Europe well before the President even declared his candidacy for the Oval Office.

Pew sampled opinion in eight NATO members and found that 49 percent of respondents opposed their country coming to the defense of other allies. And majorities in key alliance members France, Italy, and Germany alike rejected “fulfilling their country’s obligation to fulfill the Article 5 treaty pledge to consider an attack on any NATO member as an attack on all.” Crucially, Article 5 of the NATO treaty embodies the notion of collective security. In other words, it literally makes NATO NATO.

Carpenter rightly concludes that “the concept of transatlantic solidarity, even on collective defense, is now largely confined to out-of-touch political elites on both sides of the Atlantic.” Just as important, he notes that “it will be hard to sustain policies that increasingly run counter to the wishes of popular majorities.”

Ironically, however, despite his harsh criticisms of NATO allies’ free-riding and periodic swipes at the alliance as possibly obsolete, President Trump is increasingly acting like one of those out-of-touch globalist mainstays who urgently needs to see these poll results. For despite the warnings sounded by these polls that the United States won’t be able to rely on the European governments and their militaries even if shooting breaks out in Europe, he’s actually strengthened American forces on the continent – including in Poland, right on the Russian border.

In other words, an avowedly America First President is binding his country’s fate to that of Europe at the very moment when disengagement is more important than ever.

(What’s Left of) Our Economy: Trade Derangement Syndrome, Libertarian Style

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Apple, Cato Institute, China, Colin Grabow, corporate cash, corporate debt, India, liberatarians, manufacturing, reshoring, supply chains, tariffs, Trade, Trump, {What's Left of) Our Economy

Not that libertarians are wielding much influence over U.S. trade policy these days, or are likely to in the foreseeable future. After all, how many politicians in either party, much less voters, have much interest in analysts that urge the United States to practice one-way free trade – dropping its trade barriers even though competitor economies keep theirs towering?

But it’s always useful to be reminded about the lengths to which these trade extremists will go to make their case, and a great example of such “trade derangement syndrome” has just been provided by Colin Grabow of the Cato Institute.

In a recent op-ed, Grabow asked “what would happen if, due to rising tariffs, Apple decided to end the production of iPhones in China and move production in the United States.” His answer?

“True enough, jobs would be created, but at substantial cost. Before a single iPhone could be made, billions would have to be devoted to building new factories. Further billions would have to be spent attracting workers in a low-unemployment economy with much higher wages than those found in China. Time would be needed to train these workers as well as develop the associated ecosystem of suppliers.”

In other words, lots of new jobs and factories in the United States. The horror! And – even worse? – major efforts would be needed to teach valuable new skills to many American workers.

Since free lunches are indeed difficult to find in economic theory and reality, Grabow then rightly proceeds to ask how the necessary expenses could be financed. All the answers he provides make a reasonable case that, at least in the short term, the costs would exceed the benefits. But his list of Apple’s funding options – which features raising prices, which would decrease sales and productivity for an entire economy deprived of many of the company’s miraculous devices; cutting R&D spending, which would threaten the firm’s competitiveness and ultimately its ability to generate any of its high-pay American jobs; and absorbing the costs of the tariffs, which would lower investable profits and dividends, and hurt shareholders by cutting the stock price – is missing one stratagem that should be glaringly obvious today.

That funding option? Borrow the money. And P.S. – it’s an approach that Apple (and many other businesses) have been using a lot lately because interest rates have been so low for so long. According to this recent report, the company has “become one of the largest bond issuers in the market, with dozens of bond offerings. These large bond issues and other short-term debt offerings have brought Apple’s total debt to almost $100 billion as of the end of 2017.”

And although no outsiders should pretend that they know exactly how much cash a company should hold at any given time, it’s noteworthy that Apple’s current stash isn’t exactly negligible. As of mid-year, it topped $240 billion.

Grabow is correct in pointing to the difficulties of moving big supply chains in the first place. But the challenge is hardly impossible, especially when important national governments say “Jump!” In fact, in response to India’s demands, Apple itself has promised to start helping the country set up just an iPhone manufacturing complex in return for permission to establish Apple retail stores in the country and access its (potentially) huge market in the most profitable way. The United States, of course, has a large market, too, and the skill levels and other pieces of industrial infrastructure are much greater than those current in India.

In fact, this Cato analyst’s arguments against tariffs on Apple are so transparently flimsy that they indicate that he and his Institute aren’t mainly concerned that such trade curbs won’t help strengthen the American economy. They’re mainly concerned that they will.

Im-Politic: Enough with the Neocons Already

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American Enterprise Institute, Cato Institute, chattering class, Eric Levitz, Im-Politic, journalism, libertarians, media, neoconservatives, New York magazine, think tanks, Trump

Boy, am I glad I read Eric Levitz’ recent piece in New York magazine all the way through! Not that the author sprung any pleasant surprises on me. Based on the headline, I was expecting just another example of arrogant, intolerant liberalism, and Levitz’ certainly didn’t disappoint in this respect. His main argument: that major liberally oriented opinion publications and op-ed pages should no longer seek left-right ideological and political balance nowadays because the only American conservatism in the age of Donald Trump that has any influence is yahoo-ism in various forms. Instead, these liberal referees of the national political debate generally should keep their forums open almost exclusively to voices from more responsible and rational the left of center.

But within this laughably tendentious claim is a point that’s entirely valid, and that in fact has been bugging me for many years. It concerns the – long-time – practice of either liberal or even nominally neutral opinion forums (i.e., most of the national media) for publishing viewpoints, from whatever perspective, that obviously have no notable constituencies outside the bounds of the interlocking and increasingly hidebound ranks of America’s chattering class elites.

And in my mind, the viewpoint that sticks out more than any other in this respect is neoconservatism. This branch of conservatism began as an interesting hybrid of (a) the kind of Big Government-oriented liberalism that since the New Deal era has dominated the views of Democrats on domestic issues, and (b) the kind of aggressive anti-communism and, more recently, broader global activism that many Democrats have rejected since the Vietnam War began going bad. In addition, much neoconservatism was animated by what its pioneers considered the Democrats’ abandonment of the goal of racial integration in favor of various programs of racial preferences and forms of racial pandering.

As documented in this insightful article by Michael J. Lind of the New America Foundation, the neoconservatives steadily became more conventionally conservative on domestic issues – including a strong enthusiasm for standard free trade policies and mass immigration. But something that still hasn’t changed has been their stunning talent for attracting media attention – a record that genuinely qualifies as stunning because there’s never been a shred of evidence that neoconservatives have any significant following among the general public.

Of course there are many Americans who support the low-tax, small-government positions now taken by neoconservatives these days. There are many fewer who support their brand of foreign policy activism, but at least this position hasn’t completely disappeared from the electorate. Yet have you encountered many friends, neighbors, and relatives who believe in slashing federal spending and shrinking the national tax base on the one hand; sending American troops to the furthest, least important corners of the world to nation-build, spread democracy, fight extremism etc on the other; and opening the national doors wide open to imports from places like China and immigrants the world over? In fact, have you ever met anyone fitting this description?

Just as important (and not unrelated), can you identify many national politicians or office-seekers who embody this set of views? After Republican Senators John McCain and Jeff Flake of Arizona (the former of course afflicted with aggressive brain cancer and the latter deciding to leave office before suffering certain defeat in his state’s Republican primary), and their South Carolina GOP colleague Lindsey Graham?

Until recently, you could have added Florida Republican Senator Marco Rubio to this short list, but in recent months, he’s definitely been reading the handwriting on the wall. Just look at his new stances on confronting China both militarily and economically, and complaining about important aspects of the latest tax cuts passed by Congress.

All the same, however, the neoconservative presence in the national media remains impressive. Writers from neoconservative publications like The Wall Street Journal, The Weekly Standard, and Commentary appear constantly on the nation’s talk shows, and they’re frequently joined by neoconservative colleagues from less doctrinaire publications and from think tanks like the American Enterprise Institute. Maybe most revealing, when the proudly mainstream liberal New York Times chose the latest columnist to add to its roster of regulars, it picked card-carrying neoconservative Bret Stephens – a Wall Street Journal alum.

Now it’s true that President Trump, who generally is loathed by neoconservatives, has chosen two of their leading lights as major foreign policy aides – John R. Bolton to serve as his White House national security adviser, and former Kansas Republican Congressman Mike Pompeo to serve as his Secretary of States (after a year of running the CIA). And some important Trump foreign policies look awfully neocon-y, most prominently his approach to countering the influence of ISIS-like terrorists and the Iranian government in the Middle East (combined so far with a loudly stated aversion to massive American boots on the ground). But Trump as a neoconservative-in-the-making? Talk about a wildly premature judgment at best.

So why is the mainstream media still so enamored with neoconservatives? Four main reasons. First, many are still strongly anti-Trump, so featuring them on the air, on-line, and in print enables Trump-hating news organizations to pretend that most opposition to the President remains bipartisan. Second, the United States was governed by a largely neoconservative administration as recently as 2008. And since former this-es and that-s are so skilled at finding post-government careers in Washington, neoconservatives make up an abundant supply of voices with governing experience on which journalists can rely for right-of-center analyses. Third, neoconservatives are still so easy to find in Washington (and secondarily in New York City) largely because although this faction has almost no grassroots, it’s generously funded. So think tank perches and related jobs (including a wide variety of non-tenure university appointments) in the two cities tend to be readily available for individual neoconservatives, and their publications tend to be at least adequately funded.

Fourth, precisely because neoconservatives have been so numerous in the nation’s two main media centers for so long, they’ve become thoroughly familiar to the media. In addition to their widespread and easy availability to newsmen and women as sources of information and analysis, neoconservatives can socialize routinely with their journalistic counterparts. Not only is there no shortage of conferences and receptions at which these segments of the chattering class can socialize (many of which are sponsored by neoconservative or neoconservative-leaning organizations). But neoconservatives (along with other think tankers and the like) and journalists tend to live in the same small group of affluent neighborhoods and send their children to the same first-rate public schools and exclusive private academies.

And as is common with people who hang out a lot together, neoconservatives (and other think tankers) and journalists often become very chummy. The more so if they’re college buddies, or went to the same school, and took the same kinds of courses from the same kinds of professors. The latter of course increases the odds of media types finding themselves in broad agreement with the neoconservatives, and thus regarding these figures as doubly appealing.

New York‘s Levitz argues that conservatives generally shouldn’t be shut out of the news media entirely – and decidedly deserve to appear if they have something new and/or especially interesting to say. I believe the same about neoconservatives. But no doubt largely because these thinkers have had such easy access to the mainstream media, and enjoyed all the associated glistening economic and status prizes, they’ve had little incentive to change their fundamental tune, and surmount this hurdle. So given their predictability and lack of influence, maybe news organizations could at least dial down the overexposure?

Incidentally, for the same reasons, I’d favor treating libertarians the same way. Their funding is impressive, indeed lavish. (Doubt me? Check out the Cato Institute‘s Washington, D.C. headquarters sometime, along with its wide-ranging agenda of conference and similar events). But where are their grassroots? In particular, which noteworthy portions of the electorate share their enthusiasm for unilaterally opening America’s markets no matter how protectionist trade rivals remain, erasing U.S. borders and requiring American workers to compete against an immense new influx of very low-wage foreign counterparts even for high-skill jobs, trusting the private sector (including Wall Street) to regulate itself, and eliminating the major entitlement programs? Even individually, these stances command precious little popular support. Taken together, they comprise a modest minority. That’s surely why Americans have elected exactly zero libertarians as President, and why even Republicans have resoundingly rejected them in presidential primaries even well before the Trump phenomenon appeared. Moreover, read libertarian writings on any of the above issues from decades ago, and you won’t see much difference in terms of their analytic framework with libertarian writings today.

Of course, simply ostracizing neoconservatives, or neoconservatives plus libertarians, from major opinion forums, or at least sharply limiting their presence, would leave the national political debate nearly as narrow, and phony, as following a Levitz-type approach. So what the media referees need to do is work much harder to find contributors who represent not only reasonably coherent emerging schools of thought (like populism’s conservative and liberal variants) but who are trying to turn American politics less rigidly formulaic and exploring various combinations of positions that have never, or not recently, been combined before, along with those who are seeking wholly new answers to pressing national questions.  Moreover, it should go without saying, important new factual findings should always be welcome, no matter how they cut politically.

The op-ed editors and talk show hosts will face a formidable challenge in achieving this goal. After all, success would require exercising judgment, rather than flipping through their familiar (electronic rolodexes). But success is urgently needed – for it would mean a national opinion universe that looks much less like the tiny, inbred communities in which they’re embedded, and much more like America.