Our So-Called Foreign Policy: More Globalist Fantasies from The Times’ Friedman

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Africa, China, climate change, Cold War, democracy, Europe, global norms, global order, global warming, globalism, human rights, international institutions, Italy, migrants, migration, Our So-Called Foreign Policy, The National Interest, The New York Times, Thomas Friedman, World War II

Thomas Friedman’s New York Times column today shows that the uber-pundit continues to perform a crucial dual public service. He both articulates as clearly as possible the usually unspoken assumptions underlying the globalist foreign policy approach pursued by the establishments of the two major American political parties for decades, and (unwittingly, to be sure) he reveals how childish they are. 

In his discussion of the African migrants crisis faced by Italy and other countries of southern Europe, Friedman once again credits “global cooperation and rule-making” with making “America, Europe and the world as a whole steadily freer, more stable and more prosperous since World War II.”

As I’ve pointed out, these successes owed not to any institutions-based “liberal global order” but to the American power and wealth that underwrote the defense of Western Europe, Japan, and South Korea and the recreation of a functioning international economy (until the Cold War ended, of course, one confined to the bounds of the non-communist world).

But what distinguishes today’s article – and pushes it into the realm of fantasy – is the author’s claim that this order and its institutions and procedures have “managed the key global issues after W.W. II — like trade, migration, environment and human rights….”

How do we know this is fantasy? Because Friedman himself emphasizes here that the migrants crisis remains out of control. Moreover, the world trade system is proving woefully unable to handle the challenge of China’s predatory government-private sector hybrid economy. The management claim, meanwhile, is sure hard to square with Friedman’s own nearly innumerable warnings that climate change is about to destroy the planet unless dramatic steps are taken immediately.

And although the world is unmistakably freer than before World War II, again it’s been American power – not any set of worldwide institutions and rules – that’s been primarily responsible. Further, a major elite commentator meme nowadays of course is that freedom has taken some important hits lately – e.g., because of the rise of allegedly authoritarian populists on both sides of the Atlantic, because Russia’s post-Cold War experiment with genuine democracy proved so short-lived, and because China’s widely anticipated evolution toward greater political (and economic) openness never even got started.

I’m also grateful to Friedman for creating another opportunity for me to explain why dismissing the importance of international institutions and rules does not amount to dismissing the importance of international cooperation in addressing the varied and important worldwide problems that transcend borders.

As I’ve most recently written in my June National Interest article on the superiority of a genuine America First foreign policy, there’s no reasonable question that in order to deal with pollution and disease and climate shifts (whether man-made or not, they can create terrible common problems) countries will need to meet and figure out how to respond jointly.

But since the agreed-on solutions will not affect every country equally, or benefit every country equally, it will be vital for the United States to push for the measures that most effectively promote and preserve its own interests. Further, since Washington will not be able to count on persuasion solely or even largely to accomplish this goal, it will need to make sure that it possesses the only other advantages capable of shaping the outcomes favorably – power and wealth. Accept no substitutes.

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Our So-Called Foreign Policy: The Case for a “Made in America” Approach

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Africa, AIDS, border security, climate change, corruption, diseases, foreign policy, foreign policy establishment, globalism, HIV, human rights, internationalism, Iran, Iran deal, Islamic terrorism, Israel, Jeffrey Goldberg, Joseph S. Nye, Jr., Middle East, missile defense, nuclear proliferation, oil, Our So-Called Foreign Policy, population control, Project-Syndicate.org, shale, terrorism, The New York Times, Thomas Friedman

I’m picking on New York Times uber-pundit Thomas Friedman again today – not because of any personal animus, but because, as noted yesterday, he’s such an effective, influential creator of and propagandist for the conventional wisdom on so many public policy fronts. And just to underscore that it’s nothing personal, I’ll also put in my cross-hairs another, though lower profile, thought leader: Harvard political scientist Joseph S. Nye, Jr. The reason? Both recently have provided us with quintessential illustrations of how lazy – and indeed juvenile – the justifications for American international activism served up by the bipartisan foreign policy establishment have grown.

The analyses I’m talking about aren’t quite as childishly simplistic as the establishment theme I wrote about last month – the assumption that American involvement in alliances and international organizations and regimes is automatically good, and that withdrawal or avoidance is automatically bad. But because it’s a little more sophisticated, it can be even more harmful. It’s the insistence that whenever the United States faces a problem with an international dimension, the remedy is some form of international engagement.

A recent Friedman column revealed one big weakness with this assumption: It often logically leads to the conclusion that a problem is utterly hopeless, at least for the foreseeable future. Just think about the only sensible implications of this October 31 article, which insists that the apparently metastasizing threat of Islamic terrorism in Africa can’t be adequately dealt with through the military tools on which the Trump administration is relying.

Why not? “Because what is destabilizing all of these countries in the Sahel region of Africa and spawning terrorist groups is a cocktail of climate change, desertification — as the Sahara steadily creeps south — population explosions and misgovernance.

“Desertification is the trigger, and climate change and population explosions are the amplifiers. The result is a widening collapse of small-scale farming, the foundation of societies all over Africa.”

I have no doubt that Friedman is right here. And as a result, he has a point to slam the Trump administration “for sending soldiers to fight a problem that is clearly being exacerbated by climate and population trends….” (That’s of course a prime form of American international activism.)

But he veers wildly off course in suggesting that other forms of such activism – “global contraception programs,” “U.S. government climate research” and the like are going to do much good, especially in the foreseeable future. Unless he supposes that, even if American policies turned on a dime five or even ten years ago, Africa would be much less of a mess? The only adult conclusion possible is that nothing any government can do is going to turn the continent into something other than a major spawning ground for extremism and refugees.

And this conclusion looks especially convincing considering the African problem to which Friedman – and so many other supporters of such approaches – gives short shrift: dreadfully corrupt governments. For this is a problem that has afflicted Africa since the countries south of the Sahara began gaining their independence from European colonialists in the late-1950s. (And the colonialists themselves weren’t paragons of good government, either.)

So I’m happy to agree that we shouldn’t pretend that sending American special forces running around Africa helping local dictators will actually keep the terrorists under control (although as I’ve argued in the case of the Middle East, such deployments could helpfully keep them off balance). But let’s not pretend that anything Friedman supports will help, either – at least in the lifetime of anyone reading this.

Nye has held senior government foreign policy posts in Democratic administrations and, in the interests of full disclosure, we have crossed swords in print – mainly about the proper definition of internationalism and about a review of an anthology he edited that he didn’t like (which doesn’t seem to be on-line). But I hope you agree that there’s still a big problem with his November 1 essay for Project-Syndicate.org about the implications of America’s domestic energy production revolution for the nation’s approach to the Middle East.

In Nye’s words: “Skeptics have argued that lower dependence on energy imports will cause the US to disengage from the Middle East. But this misreads the economics of energy. A major disruption such as a war or terrorist attack that stopped the flow of oil and gas through the Strait of Hormuz would drive prices to very high levels in America and among our allies in Europe and Japan. Besides, the US has many interests other than oil in the region, including nonproliferation of nuclear weapons, protection of Israel, human rights, and counterterrorism.”

Two related aspects of this list of reasons for continued American engagement in the region stand out. First, it’s completely indiscriminate. And second, for this reason, it completely overlooks how some of these unmistakably crucial U.S. interests can be much more effectively promoted or defended not through yet more American intervention in this increasingly dysfunctional region, but through changes in American domestic policies.

For instance, we’re (rightly) worried about nuclear proliferation, especially in Iran? How can today’s engagement policy help? Even if the the current Iran nuclear deal works exactly as intended, what happens when it runs out? Should we simply assume that Tehran will be happy to keep its nuclear genie in a bottle for another fifteen years? Will Iran be persuaded to give up the nuclear option permanently if Washington cultivates even closer ties with its age-old Sunni Muslim enemies, like Saudi Arabia?

Although I’m a missile defense skeptic – especially when it comes to the near-term threat from North Korea – isn’t figuring out a more effective way to repel an Iranian strike more likely to protect the American homeland? It’s certainly a response over which the United States will have much more control – and indeed, any control. In addition, if the United States withdraws militarily from the Persian Gulf region, Iran’s reason for launching such an attack in the first place fades away and, as I’ve argued in the case of North Korea, America’s own vastly superior nuclear forces become a supremely credible deterrent for any other contingencies.

Of course the United States faces a big Middle East-related terrorism problem. But as I’ve argued previously, the keys to America’s defense are serious border security measures. They, too, pass the “control test” with flying colors, and consequently seem much more promising than the status quo approach of trying to shape the region’s future in more constructive ways. But as I’ve also written, it would also make sense to keep in the Middle East small-scale American forces whose mission is continually harassing ISIS and Al Qaeda and whatever other groups of vicious nutballs are certain to appear going forward.

Nye’s point about the integration of global energy markets is a valid one. But in the same article, he acknowledges how the U.S. domestic energy revolution’s “combination of entrepreneurship, property rights, and capital markets” has changed the game for America. Why does he suppose that its effects won’t spread significantly beyond our borders?

As for Nye’s other two reasons for continued U.S. Middle East engagement, the notion that Washington can do anything meaningful to promote the cause of human rights simply isn’t serious, and Israel has amply demonstrated that, with enough American military aid, it can take care of itself.

Moreover, as you may recognize, the arguments for mainly focusing on border security to handle the Middle East terrorist threat applies to the African menace that’s preoccupying Friedman.

The main takeaway here isn’t that U.S. international engagement will never be needed to protect national security, safeguard the nation’s independence, or enhance its prosperity. It’s that Made in America approaches will turn out to be vastly superior in many cases – and certainly in many more cases than the bipartisan globalist foreign policy establishment recognizes. How long will it take for President Trump to get fully on board?

By the way, I first began exploring the idea of Made in America solutions to foreign policy problems and international threats when I read this article by current Atlantic Monthly Editor Jeffrey Goldberg. He argued in 1999 that the nation was making a big mistake ignoring Africa in its diplomacy because the continent was likely to become a source of deadly diseases sure to cross oceans and eventually afflict Americans and others; that “H.I.V., of course, is a particularly vicious warning shot”; and that it was high time for Washington to deal with “poverty, poor sanitation and political instability” as well as put “a global system of public health and disease surveillance in place.”

Not that Goldberg presented a stark either-or choice, but my reaction was “If we do need to figure out whether to place more AIDS-fighting emphasis on promoting African economic development, or on finding a cure through medical research, isn’t the latter much likelier to deliver major results much sooner?”

As is clear from the Friedman article, Africa’s array of problems continues unabated. And according to no less than the (devoutly globalist) Obama administration, as of last year, the United States was “on the right track to reach most of its “National HIV/AIDS Strategy” goals for 2020 – which seek an America that’s “a place where new HIV infections are rare” and where “high quality, life-extending care” is available.

Making News: A New USAToday Op-Ed – & More!

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automation, climate change, Germany, Jobs, Lifezette.com, Making News, manufacturing, Paris climate accord, Trade, Trump, USAToday

I’m pleased to announce the publication of my latest op-ed article – a piece that appears in USAToday this morning on President Trump’s criticisms of Germany’s trade policies. Here’s the link.

Incidentally, the article ran as a rejoinder to an unsigned USAToday editorial on the subject that also was published today.  The paper’s editors have been using this “pro-con” format for many years, and I think they deserve great credit for seeking out viewspoints with which they disagree.

In addition, a June 1 post on Lifezette.com included my (skeptical) opinions about claims that Mr. Trump’s withdrawal from the Paris climate change accord will cede global leadership on the issue to China.

Moreover, a May 25 Lifezette article quoted me on a new study finding that trade and offshoring have been responsible for much more manufacturing job loss lately than automation.

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

 

 

Im-Politic: Americans are Far from Bitterly Divided on Everything

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Affordable Care Act, border wall, climate change, criminal illegal immigrants, Democrats, deportations, Gallup, illegal immigration, Im-Politic, infrastructure, Mexico, Obamacare, polls, regulations, Republicans, tariffs, taxes, TPP, Trade, Trans-Pacific Partnership, United Nations

America today is deeply divided on the new Trump presidency and many substantive issues. But the message sent by a new Gallup poll is that there’s considerable consensus when it comes to identifying the nation’s major challenges. And although polls have recently gotten a deserved black eye over their election performance, this fundamental finding tracks intriguingly with that reported (by a different organization) that I wrote about a little over a year ago.

Gallup sought Americans’ views on which of President Trump’s campaign promises they believe that it’s “very important” for him to keep. Here are the top four – which were also the only choices that topped 50 percent:

>”Enact a major spending program to strengthen infrastructure” 69 percent

>”Reduce income taxes for all Americans” 54 percent

>”Establish tariffs on foreign imports” 51 percent

>”Deport the more than 2 million illegal immigrants who have

    committed crimes” 51 percent

At least as interesting, three of these four stated Trump priorities enjoy strong bipartisan support:

>infrastructure: 68 percent of Democrats, 71 percent of Republicans

>tax cuts: 46 percent of Democrats, 62 percent of Republicans

>tariffs: 45 percent of Democrats, 62 percent of Republicans

The exception – interestingly – is

>deport criminal illegal immigrants: 33 percent of Democrats, 70 percent of         Republicans

Now here are the Trump priorities that Gallup found Americans regard as least important (note – which does mean that they oppose them):

>”Cancel billions in payments to UN climate change program” 30 percent

>”Withdraw from the Trans-Pacific Partnership” 26 percent

>”Build a wall along the border with Mexico” 26 percent

>”Require that for each new federal regulation, two must be

    eliminated” 23 percent

Just FYI, the administration has already announced officially that it’s pulling out of the Pacific trade deal.

And guess what? There’s a great deal of bipartisan consensus on the relative unimportance of these matters, too:

>UN climate change payments: 23 percent of Democrats, 38 percent of Republicans

>Trans-Pacific Partnership: 19 percent of Democrats, 32 percent of Republicans

>border wall: 12 percent of Democrats, 38 percent of Republicans

>regulations: 14 percent of Democrats, 31 percent of Republicans

Finally, I couldn’t help but notice that the most divisive Trump priorities, according to Gallup, are the aforementioned deportations of criminal illegal immigrants and…repealing Obamacare. A total of 46 percent of Americans told Gallup this move was “very important,” but although 68 percent of Republicans were on board with scrapping the Affordable Care Act quickly, only 26 percent of Democrats agreed.

I know that the president has his own pollsters – and of course his own opinions. But I wouldn’t be entirely surprised if their list of top White House priorities didn’t wasn’t very similar to those identified by Gallup as the public’s. Nor would I be surprised if achieving these goals – and softpedaling many of the others – made for a great first 100 days.

Our So-Called Foreign Policy: Which Paris Message Will ISIS Hear?

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Bill Gates, carbon emissions, climate change, Congress, counter-terrorism spending, France, ISIS, military spending, Obama, Our So-Called Foreign Policy, Paris attacks, Paris Climate Conference, Security Council, terrorism, United Kingdom, United Nations

President Obama has made a pretty good point in arguing that going ahead with the global climate change conference in Paris this week despite the recent terror attacks on that city is an “act of defiance” against ISIS and other extremist groups – Islamic or not. Unfortunately, he and other major world leaders have missed a message they’re inevitably sending to the terrorists with other recent decisions – which signal the absence of anything close to similar resolve to develop a credible military strategy for defeating them.

No one should have any illusions that the Paris talks themselves will produce meaningful progress toward controlling the carbon emissions widely thought to be dangerously warming the planet. In fact, none of its decisions will be legally binding (although there have been some interesting attempts to parse this concept). But not only has the issue been persistently on the international agenda for decades. More than 170 countries – including the largest sources of the problem – have made specific proposals to reduce emissions. In addition, eight of the biggest emitters have collectively promised to double their supplies of renewable energy.

There also seems to be broad agreement on a specific goal – avoiding an average global temperature increase of 3.6 percent more degrees Fahrenheit. Even the private sector is joining in, led by Microsoft founder Bill Gates’ pledge to spend $2 billion of his own money to foster green innovation. This commitment is conditioned on greater government efforts, but other wealthy individuals reportedly are interested in contributing, too.

Contrast these developments – inadequate and flawed as they are – with global efforts so far against ISIS. In the wake of the Paris attacks, President Obama has declared only that the United States will “intensify” its current strategy – and that no major deployments of American ground troops will be made. The leaders of Britain and France have announced their intent to increase defense spending, but early indications are that at least some of the new counter-terrorism funds will come from other defense accounts – even though Europe faces a more aggressive Russia, too. Moreover, these increases come after years of major defense spending decreases and (at least in retrospect) shockingly inadequate budgeting against terrorism in particular.

And although the United Nations has condemned the Paris attacks and the Security Council has authorized military action against ISIS, no member state (as usual) is required to spend a penny or risk a single life to vanquish this “global and unprecedented threat to international peace and security” and no follow-up actions – or even words – appear in the offing. Moreover, let’s not forget that the U.S. Congress has failed even to pass a new authorization to use military force in the region in response to President Obama’s request.

So although it’s encouraging to see a business-as-usual attitude on climate change issues adopted by world leaders in defiance of terrorists, the lack of comparable resolve on the battlefield seems all too likely to overwhelm its intended effects.

Following Up: Can Climate Change Challenge be Met Without Curbing China’s Trade?

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China, climate change, coal, Following Up, greenhouse gases, Nature Climate Change, Obama, Peterson Institute, The New York Times, Trade, Xi JInPing

Time for a little back-patting – which also has the virtue of presenting a crucial link between issues that’s way too often ignored by policymakers, especially in Washington. It’s the link between U.S. trade policy on  the one hand, and China’s responsibility for mounting world levels of greenhouse gas emissions and widespread concerns about global warming on the other. More specifically, the case has just been strengthened for an argument I made years ago that fending off the global warming challenge didn’t seem possible without major limits on exports of China’s emissions-intensive products.   

For years it’s been evident that China’s jaw-dropping economic development has been a major contributor to global greenhouse emissions in recent decades. That’s not grounds for condemning Chinese practices per se. After all, even though Beijing’s environmental policy record is unmistakably terrible, strong grounds existed for believing that China was simply behaving similarly to the United States and other currently wealthy countries – which had the undeserved good fortune to enjoy their own industrialization takeoffs, and the high living standards they made possible, way before such climate concerns emerged.  As a result, they could emit to their heart’s contents without any apparent costs to the planet’s future.

But there’s been another crucial difference between the U.S. emissions record and the Chinese emissions record, and one that can’t justify continued passivity over the latter: America’s 19^th century industrialization stemmed mainly from the operation of free market forces. China’s ongoing industrialization phase has been planned and carried out overwhelmingly by government, meaning that its course and structure have reflected national policy choices.

The point here isn’t to tout the superiority of markets. Instead, it’s to note that, as a result, China’s modernization is an especially artificial creation, along with the resulting volumes of emissions. They’re not the consequence of the kind of natural economic evolution undergone by earlier generations of developed countries, even when – as has been the case especially in Europe – government was hardly an economic bystander.

I was thinking about these patterns of development several years ago when I came across a research report that documented my instincts. Moreover, this Peterson Institute study emphasized not only the state-directed nature of Chinese industrialization. It showed how the nation’s move into emissions-intensive heavy industries like steel and cement and chemicals clashed violently with how free markets would have shaped China’s economy. For China’s overwhelming natural, competitive advantage – the assets from which early industrial success should have originated – was a huge pool of low-cost labor.

As a result, a freer China both would have started off in labor-intensive industries and stayed largely in those sectors for many years. The kinds of industries China rushed into, however, were capital-intensive industries – where China had major natural disadvantages that Beijing tried to offset with a wide range of trade barriers to fend off foreign competition, and with subsidies aimed at speeding up progress whether much demand existed for Chinese products or not.

In fact, the study found, these heavily emitting industries had grown so enormous that their greenhouse gas-boosting role greatly exceeded even that of China’s breakneck adoption of personal cars, air conditioners, and other signs of growing consumer prosperity.

Most important for U.S. policymakers, because these and other parts of China’s economy were so export-oriented (since like other low-income countries, China lacked the wealth to finance its own development adequately mainly by supplying its own demand), China’s stunning export success had turned into a major engine of global warming. And this engine’s immense scale, and carbon footprint, also owed mainly to Chinese government interventions that flouted not only free market norms but free trade norms – typically at the expense of U.S. and other foreign industries and workers.

So in early 2008, I wrote an article for a syndication service that advocated using trade policy to fight global warming by slowing the Chinese export machine with tariffs on Chinese imports. Seven years later, I’m pleased to report the emergence of new evidence linking China’s emissions growth to its export growth. As this New York Times article summarizes, economists and climatologists now agree that up to a third of China’s total emissions come from its exports. But a September study in the journal Nature Climate Change also found that China’s exports generate eight times the emissions levels of its imports. For the United States, the ratio is 0.5, and even for India, another very low-income country, it’s only 1.3. Therefore, consuming goods from China adds much more to climate change dangers than consuming goods from elsewhere.

China’s outlier status, the Nature Climate Change authors conclude, results overwhelmingly from China’s coal-based energy mix and the very high emissions intensity (emission per unit of economic value) in a few provinces and industry sectors.” Therefore, they’re optimistic that the greenhouse gas dangers created by China’s trade can be reduced with targeted efforts to improve production technologies.

But they also allow that “reducing trade volumes” from these sources may be needed, and one major finding suggests that broader trade curbs may be needed: the fact that “production in China is several times as carbon intensive as the same production in other countries” regardless of product. In fact, although the emissions intensity of Chinese exports from wealthier provinces is much lower than that for products from poorer provinces, even these levels are three, four, and even five times higher than U.S. levels.

President Obama seems to have other ideas. His summit last month with Chinese leader Xi Jinping produced a statement that Beijing would launch a national cap-and-trade system by 2017, saw a reaffirmation of an earlier Chinese promise to stop the rise in its emissions by 2030 at the latest, and elicited a promise by China to spend more than $3 billion helping other developing countries to deal with climate change. Mr. Obama and Xi also offered a “common vision” for progress at an upcoming United Nations meeting to create a framework for a new international climate change agreement. But given China’s penchant for breaking international agreements, it’s still clear to me that if you’re serious about attacking climate change, you need to be serious about dramatic curbs on China’s exports.

Following Up: Trump & Sanders, Obama’s Katrina Moment, Manufacturing Fakeonomics – & an Overdue Thank You

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2016 elections, Bernie Sanders, climate change, cyber-security, Democratic Party, Donald Trump, Following Up, hacking, Hillary Clinton, Immigration, Institute for Supply Management, ISM, Katherine Archuleta, manufacturing, Obama, Office of Personnel Management, Open Borders, OPM, Populism

For some reason, Hillary Clinton’s campaign website isn’t technologically up to speed enough to have posted a transcript of the “economic vision” speech she delivered this morning. So instead of analyzing it, I’ll try something a little different on RealityChek – a “Following Up” offering covering multiple subjects.

The first starts off with an apology. In last week’s piece on how Donald Trump could (but probably won’t) help generate long-term change in American politics, I wrote that his president candidacy nonetheless seemed more likely candidate than Democrat-Socialist Bernie Sanders’ to foster badly needed ideological realignment. My stated reason was that the big obstacle to Trump efforts along these lines is his personality, whereas the big obstacle to the Vermont Senator playing such a role is his ideology.

But then when I discussed in detail Sanders’ prospects as a change agent, I wrote that “he seems to be a more plausible candidate to help create an enduring populist alternative to the two major parties.” And my stated reasons included the ideological flexibility he’s displayed on issues like gun control! So what gives? In a word, I messed up. So let me try to clarify.

I still believe that Trump’s “superstar CEO” nature and consequent unwillingness to take advice from anything but Yes-men will prevent him from trying to turn his presidential campaign into a lasting movement once the former runs its course. Nor do I see any reason to change my mind despite some new comments from him suggesting the possibility of running as an independent in the fall campaign and continuing his political work beyond the current election cycle.

I also remain impressed with Sanders’ pragmatism and willingness to reach across the aisle for both legislative support and also counsel. But I don’t believe that he’ll display the same traits on the immigration and climate change issues I focused on. Re the former, he seems to be too personally invested to moderate much. Re the latter, I don’t believe he’ll want to buck the overwhelming tide I see in the Democratic party for ever more Open Borders.

Hence my conclusion – that a Trump personality change relevant to creating a new, bipartisan American populism is a better bet than a similar Sanders ideological change. But that doesn’t mean I view such a Trump transformation as even close to likely. And I do apologize for the confusion I might have created.

Second, my post on how unqualified Katherine Archuleta was to head the mega-hacked federal Office of Personnel Management left out the strongest evidence for that argument: She wasn’t only a veteran Democratic political operative (with zero background in technology). She was also a senior official in President Obama’s 2012 reelection campaign. In other words, in an age of mounting cyber-threats, the president treated the government’s main personnel agency like a cushy ambassadorship to some Caribbean island mini-state. And he still hasn’t caught much heck from the Mainstream Media for this dangerously cavalier decision.

Third, one of my longtime bugaboos is how seriously economic journalists and even economists themselves take the monthly reports on domestic American manufacturing’s health by the Institute for Supply Management (ISM). In particular, I’ve shown that neither ISM’s headline readings, nor its sub-readings on production and manufacturing orders, correlate well at all with the more reliable output and orders data put out by the federal government.

Imagine, therefore, how pleased I was to discover that, a few years ago, a Commerce Department economist came to pretty much the same conclusions. According to this study, the ISM surveys don’t even do an especially good job at what’s supposed to be their strong suit – not precisely gauging the state of manufacturing in any given month, but presenting evidence of approaching changes in its fortunes and the broader business cycle. As author Daniel Bachman demonstrated exhaustively, “While more information about the state of the economy is always better, analysts of the business cycle should realize that the ISM surveys do not supercede or fully anticipate more comprehensive official data.”

Finally, one house-keeping point: an overdue thank you to the growing ranks of RealityChek followers. Your interest is greatly appreciated – and I hope you’ll spread the word!

Im-Politic: How Bernie Can “Win”

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2016 elections, amnesty, Bernie Sanders, Buy American, carbon tariff, China, climate change, Democrats, Donald Trump, energy, environment, fossil fuels, fracking, greenhouse gases, gun control, Hillary Clinton, Im-Politic, Immigration, Jobs, liberals, multinational corporations, natural gas, offshoring, Open Borders, Populism, progressives, third world, Trade, unions

Like Donald Trump, Bernie Sanders is doing such a good job of influencing the agenda of other 2016 presidential candidates (namely Hillary Clinton) that there’s no useful advice I can offer on that score. Yet the Vermont Senator still has a ways to go if he wants to generate more lasting change in American politics, and the recipe, not too surprisingly, is the inverse of that for Trump.

First, some background. I’ve had the privilege of working with Sanders firsthand on trade and jobs issues, and greatly admire his dedication to getting America’s international economic policies right. He’s not only been a longtime champion of this cause – he’s been a tireless worker as well. Sanders has also kept his focus squarely on the most important victims of offshoring-friendly and otherwise flawed trade policies – the American worker and the productive segments of the U.S. economy. That’s a refreshing change from most others on the leftward end of the political spectrum, who have consistently muddied both the politics and economics of trade issues by (wrongly) emphasizing the harm allegedly inflicted on developing countries by American and American-supported policies.

Even better, it’s already clear that Sanders recognizes the importance of generating crossover appeal. In addition to noting that many of his positions – like Wall Street reform – resemble those of real conservative populists, he has walked this walk on an important social/cultural issue: gun control. But if he genuinely wants to shake up American politics and not simply worry Clinton through next November, the Democratic contender needs to understand the game-changing potential of more realistic immigration and climate change policies.

Earlier in this year’s campaign, Sanders was chided by numerous progressives for being too quiet on immigration issues. Unfortunately, he responded with a June speech to Latino-American elected officials by appearing to pander to this Open Borders crowd. His trade policy position, however, makes clear how substantively mistaken these views are. In particular, as suggested above, he has recognized that failed U.S. trade policies have betrayed America’s “working people” by sending “their jobs…to China and Mexico….” (Although he’s also made some nods to “third world victimhood-mongering.”) Unlike Trump, moreover, he correctly targets multinational companies – not foreign governments – for most of the blame.

But why, in this case, does Sanders (along with most other liberal and Democratic party trade critics) now favor immigration policies that also will take more jobs from Americans, and drive wages down? If trade deals that, among other failures, make many more very low-paid workers in the third world much more available to U.S.-based businesses have these effects, why would immigration policies that literally encourage such workers to come to America produce different results?

In fairness, Sanders and other liberal immigration supporters have an answer: Foreign workers who come to the United States will be much easier to union-ize, and thus will earn higher wages, than their counterparts who remain abroad. But given the labor movement’s major and chronic failure to stem dramatic shrinkage – especially in the private sector – that clearly belongs in the wishful thinking category. Moreover, labor’s recent organizing successes have come almost entirely in service sectors that don’t face any foreign competition. As for parts of the economy that are heavily traded, like manufacturing, continuing new legal or illegal immigration influxes, along with amnesty, will surely intensify the competition for remaining domestic jobs and drive wages even lower.  

Further, as I’ve written, liberals’ claims that mass immigration can produce a new mass middle class overlook that their conception of mass immigration has no logical stopping point – and therefore is likeliest to furnish American businesses with not only huge, wage-killing labor gluts, but with huge, never-ending labor gluts.   

More important, in an election year, populist-minded voters on the Right are bound to reject this reasoning. For any hope of recruiting them to his ranks, Sanders’ immigration approach will need a thorough overhaul. And of course, by extension, this goes for any Democratic candidate.

Sanders has been one of Washington’s leading champion of high priority efforts to fight climate change, which means that re-positioning on this issue to broaden his base will be even more difficult than on immigration. But it could also pay some political dividends, and could be engineered in a way to satisfy at least some environmentally minded Democrats. In three related ways, moreover, the kinds of trade policies Sanders favors are very helpful.

First, Sanders should start emphasizing that one of the best ways to reduce global greenhouse gas emissions is to reduce China’s emissions – and that this objective in turns requires slowing down the Chinese export machine. I’ve long emphasized that, given the huge market for Chinese goods represented by the United States, American trade curbs would be a big environmental plus – whether put in place unilaterally, through sanctions on currency manipulation, or possibly better, through the kind of multilateral carbon tariff that even prominent economists are starting to favor.

Second, Sanders could win some business support for this approach by pointing out that, the less competition American businesses face from countries where environmental (and other) regulations are non-existent or not enforced, the more environmentally friendly regulation they could bear.

Third, as a strong opponent of trade decisions that have gutted the nation’s ability to administer strong Buy American regulations governing government purchases, Sanders will have no problem insisting that federal support for green manufacturing and technology be restricted to operations and facilities in the United States that employ American workers.

At the same time, Sanders will have to take much more seriously the inevitably dominant role fossil fuels will play in the country’s energy future for the foreseeable future, and his energy approach will need to make much more room for greenhouse-friendly natural gas in particular. As a result, he’ll need to view whatever pollution issues are posed by fracking not as an excuse to reject or neglect gas, but as a problem to be solved technologically.

The good news, in contrast to Trump, is that Sanders does seem to take advice from outside his ideological comfort zone and political base – his dealings with me and colleagues, when I worked at a small manufacturers’ organization, represent just one body of evidence. And representing even a small state like Vermont inevitably has exposed Sanders to the kinds of voters and their direct feedback that a one-percenter like Trump probably rarely encounters. For these reasons alone, he seems to be a more plausible candidate to help create an enduring populist alternative to the two major parties.

Just with my treatment of Trump, this analysis of Sanders’ chances doesn’t mean that I view him as an ideal candidate or, similarly, that I’m with him on most or even many issues other than those mentioned here. What it does signal is my belief that these two figures boast the potential to rework American politics by identifying crucial areas of overlap on the core pocketbook issues that are vital both to voters and to the nation’s future. Will they? Leaving aside their personal traits, recent history doesn’t provide many reasons for hope. But of course it’s precisely because meaningful change sometimes happens that we’ve had history in the first place.

Our So-Called Foreign Policy: Why Power Remains Paramount

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Brookings Institution, civil society, climate change, foreign policy, international cooperation, international law, international organizations, internationalism, James Traub, nation-states, non-state actors, Our So-Called Foreign Policy, poverty, power politics, Russia, terrorism, transnational threats

It’s tempting to conclude that nothing could be less important than a Brookings Institution conference on “International Peace and Cooperation in an Age of Global Competition” even if invitees did include “senior foreign policy officials, scholars, and experts from G-20 member states and other pivotal countries.” After all, why would representatives of foreign governments disclose to an audience comprised of representatives of other foreign governments anything of consequence that was previously unknown?

At the same time, what’s learned about such gabfests can usefully remind the rest of us plebeians how completely out to lunch these supposed luminaries tend to be – especially regarding the main questions and choices they think they face. So FOREIGN POLICY magazine contributor James Traub deserves a big shout out for reporting the gist of this off this record session. For his account (unwittingly, to be sure) strongly indicated that those assembled (presumably including some American leaders) have totally forgotten the key enduring truth about international affairs.

It’s a maxim that prevails even in these turbulent times, and indeed especially in these turbulent times: As long as the world contains multiple, independent forces or parties of any kind, their hopes for success (however defined) will depend overwhelmingly on their relative power.

According to Traub, the attendees were all but consumed with the question of whether world affairs are still dominated by the kinds of nation-states that emerged centuries ago, or by the bewildering array of non-state actors and forces that seem to be popping up everywhere nowadays, ranging from terrorists to religious movements to civil society groups to the simple “demand of ordinary people for a better life than their government now affords them.”

The author quite rightly notes the dramatically different sets of policy implications that flow, at least logically, from either answer: the former militating for continuing to seek advantage over rival states, and win and keep allies; the latter pointing to a new, more cooperative agenda of solving or at least ameliorating a series of common problems underlying growing turmoil and transcending national borders (e.g., poverty, autocracy, and climate change).

Of course, anyone with a lick of intelligence (including the conferees) will recognize that life never divides so neatly. Indeed, as I’ve written, the internationalist ideology that’s governed U.S. foreign policy-making since Pearl Harbor has always sought to eliminate the social and economic conditions considered key to the appeal of its communist adversaries. Similarly, Traub reports that many of the conferees arrived at answers essentially amounting to “all of the above.” That is to say, a revival of traditional power politics, epitomized by Russia’s muscle-flexing in its immediate neighborhood, was being accompanied by the rise of transnational threats that are best handled cooperatively. And all the while, nation-states as a whole “are much weaker than they were,” with the United States either unable or unwilling “to reassure allies or scare off adversaries as it once could.”

But what apparently went unrecognized is that national power will remain decisive whether cooperative or conflictive impulses and dynamics wind up on top. The importance of power in a completely rough-and-tumble world should be obvious. Its importance in a world where more positive-sum logic is more widespread is admittedly more difficult to identify, but no less paramount.

The reason is that even within communities that have developed commonly recognized authorities for organizing action, cooperation will always have a structure, and that structure will tend to have significantly different effects on different parts of that community. To the extent that these differences matter (which is often the case), various community members will usually have different preferences for moving ahead. The winners and losers are often determined by the amounts of resources (economic power) they can mobilize on behalf of their causes, by the the bounds of existing law and policy, and by their relative persuasive gifts. Often outcomes result from some combination of all of these.

When no commonly recognized authority exists, as with international politics today, persuasion can sometimes work also. Existing policies rarely count for much, law for even less, but relative power typically plays the biggest role. Consequently, as long as it matters to Americans that their priorities (or something close) prevail in international cooperative ventures or negotiations, their leaders will need to bring as much power as possible, in all of its forms, to bear on the relevant planning or bargaining sessions at the relevant international organizations or other venues  – whether to pressure, to induce, or to threaten credibly or exercise the option of walking away if their course isn’t satisfactory.

A final argument for focusing on cultivating power should be especially compelling for those Brookings invitees – and others – who have had actual policy-making experience. They should know better than anyone else how suddenly unpredictably international challenges and opportunities can arise. Power is no guarantee of coping successfully. But who can doubt that the strong and the wealthy will fare much better, mainly because they enjoy more relatively good options, than the weak and poor?

(What’s Left of) Our Economy: Obama’s Fatally Flawed China Environment and High-Tech Trade Deals

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APEC, Asia, China, climate change, environment, greenhouse gases, Information Technology Agreement, non-tariff barriers, Obama, tariffs, technology, trade enforcement, Xi JInPing, {What's Left of) Our Economy

Boy, it’s been some Asia trip for President Obama so far! On the heels of a major defeat for Democrats in the midterm elections, he jets off to Beijing for meetings with Asian leaders and comes away with sweeping deals on fighting climate change and cutting tariffs on trade in high tech goods!

Trouble is, both of these agreements illustrate both that negotiating successfully with China in particular – the 800-lb gorilla on both of these issues – requires recognizing and overcoming a distinctive set of obstacles, and that, like its predecessors, the Obama administration has displayed absolutely no learning curve. The biggest losers, tragically, are bound to be the productive sectors of the American economy and their employees.

Let’s take the U.S.-China climate change agreement first, since it’s predictably dominated the news coverage. There’s no doubt that Chinese dictator Xi Jinping needs to do something to reduce the pollution choking China’s cities, and especially the massive health problems it’s causing. Or maybe it’s more accurate to say that he needs to appear to be doing something. I know it sounds cynical to dismiss his assent to the deal as an exercise in public relations for Chinese leaders. But optimists face a heavy burden of proof.

After all, this is a Chinese leadership that simply decided simply to shut down most polluting activity – like driving and manufacturing – in order to clear the air around Beijing temporarily for the APEC summit. (For good measure, reportedly, it’s blocking Chinese websites and apps that monitor pollution levels from using U.S. government data on the subject – which are regarded as much more reliable than Chinese government data.)

But it’s also a Chinese leadership presiding over a slowing economy, well aware that its hold on power depends heavily on continuing to deliver the material goods for a critical mass of the Chinese people, and surely recognizing that the price of failure could well be bad for its collective health. If you think Kentucky and West Virginia coal miners are upset about Washington policies they believe are attacking their industry and livelihoods, imagine the reactions to job losses by Chinese workers whose living standards are far more precarious, and who lack orderly, democratic outlets for their anger.

So it’s all too easy to conclude that Xi decided to react like any politician with strong interests of fostering the appearance, not the reality, of action. He inked an agreement that is long on impressively ambitious goals and woefully devoid of any teeth.  None of the targets for reducing greenhouse gas emissions are legally binding, and as a result, there are no concrete consequences China will suffer for failing to achieve them.

Moreover, even these voluntary targets don’t have to be met for at least a decade. Who knows who China’s dictator will be then? Or how seriously he (or she) will take these commitments – largely because no one can know how the Chinese economy will be performing then. It’s difficult enough to bind American politicians to long-term promises. Why would anyone assume that Chinese politicians will be any different in this respect?

As a result, as critics have begun to point out, there’s much more reason to believe that the United States will meet these targets, or at least will come closer, than China. Which means that the regulatory and therefore cost gaps between manufacturing in the United States and manufacturing in China could grow even wider. It’s true that domestic U.S. businesses can maintain or regain competitiveness by becoming more innovative and otherwise more productive (or by cutting wages even further). But manufacturers in China can keep growing more efficient as well, leaving American industry further behind the 8-ball than ever.

If anything, the new Information Technology Agreement looks even more misguided. China’s agreement to expand the number of technology products for which it will reduce tariffs to zero (though the timeframes are still completely up in the air) seems great at first glance – until you realize what everyone who knows anything about doing business in Asia has known for decades: The most important Chinese and other Asian barriers impeding trade in technology products are not tariffs, which are easy to spot and therefore cut or eliminate. They’re non-tariff barriers.

And especially because these measures and practices – which include subsidies, domestic preferences in government purchases, officially sanctioned monopolies and cartels, and discriminatory pseudo health and safety regulations – are often put into effect informally, by secretive bureaucracies in Asia particular, they tend to be excruciatingly difficult even to identify, much less combat.

Consequently, even if the world’s mercantile countries (which are found in Europe, too, complete with opaque bureaucracies) do eliminate tariffs on these technology products, all these non-tariff barriers and other predatory policies will remain in effect. And because they’re so seldom used by Washington, U.S.-based producers of these goods will find themselves more disadvantaged than ever.

President Obama seems to believe that many of these Asian and other non-tariff trade barriers will be taken care of in the Trans-Pacific Partnership (TPP) trade agreement he’s pursuing. But he’s been more interested in repeating vague slogans about mandating high economic and business standards in these talks than in explaining how the agreement will overcome the intrinsic difficulties of monitoring and enforcing these standards.

If the United States could afford to treat trade and other international economic issues as throwaways, mainly useful for scoring propaganda points or winning and keeping allies, Mr. Obama’s approach to these two deals might be defensible. But even during the Cold War, the frequent subordination of economic considerations to diplomatic goals arguably won short term victories at the expense of longer-term interests. Nowadays, there can be no question that approaches like these have become completely unaffordable, if not downright dangerous. Six years into his presidency, Barack Obama acts like he’s further from understanding this reality than ever.