Im-Politic: A Billionaire Candidate’s Massive Climate Change Blind Spot

Tags

China, climate change, Democratic debate, Democrats, election 2020, Im-Politic, tariffs, Tom Steyer, Trump

It’s now been five days since I first heard it, but I still can hardly believe my ears because this utterance might have been the single dumbest and/or most ignorant combination of positions I’ve ever heard a leading political figure make. It came from Tom Steyer during the Democratic presidential debate last Tuesday night, and even though the California billionaire’s campaign seems to be going nowhere fast as the 2020 campaign nears its primary phase, it deserves to be spotlighted.

The first of the two statements in question? Steyer’s declaration that “On the first day [of his presidency], I would undo Mr. Trump’s [China] tariffs.” The second? “…I would declare a state of emergency on day one on climate.”

Why is this so mind-boggingly idiotic? Because as should be known by anyone who thinks he or she is qualified to be President, not only has China become by far the world’s largest emitter of the greenhouse gases held to be responsible for climate change, but as shown in the left-hand chart below, it started becoming an emitter in a class by itself at the turn of the century – i.e., right about the time when it was admitted into the World Trade Organization (WTO). And the most important effect of WTO admission was greatly complicating the challenge faced by all the world’s economies – including America’s – in using tariffs to curb the growth of China’s subsidy-fueled carbon-belching export-heavy industries. 

We don’t yet have data for 2019, but the chart also shows that the growth of China’s emissions began to slow (though they’re still growing faster than anyone else’s except India’s) as China’s economic growth (which has always been export-heavy) began slowing. Moreover, over the last year, as literally hundreds of billions of dollars worth of Chinese goods intended for U.S. markets have been hit by President Trump with stiff tariffs, China’s growth hit a 29-year low. Think that’s a coincidence? Think again, as between 2018 and 2019, China’s annual export growth crash dove from 9.9 percent to 0.5 percent in U.S. dollar terms. (The right-hand chart, which measures emissions on a per capital basis, displays similar trends.) 

There’s nothing of course intrinsically wrong with Steyer’s passionate belief in the need to combat climate change. But his utter failure to recognize China’s immense contribution to the danger he sees makes embarrassingly clear – to put the kindest interpretation on the matter – that his knowledge base lags far behind his emotions. To the extent that other high profile climate activists repeatedly let China off the hook as well, they deserve the same criticism. And if this massive blind spot (or delusion) casts big-time doubt on Steyer’s qualifications to be President (which it should), it should have the same effect on all the other climate change resisters who display this shortcoming, too.

Our So-Called Foreign Policy: How Post-Soleimani, Trump Schooled the Globalists Again

Tags

America First, Bill Clinton, Bosnia, Colin L. Powell, Democrats, deterrence, globalism, Iran, Madeleine Albright, Our So-Called Foreign Policy, Soleimani, Trump

I’d hardly call President Trump a foreign policy mastermind. But since his 2016 presidential campaign started gaining strength, it’s been clear to me that his instincts in the field are exactly what a country like the United States needs, and this conviction has been strengthened considerably by a little remarked-on point he made in his announcement last week of the killing of Iranian military and terrorist commander Qassem Soleimani.

Here’s the remark:

“The fact that we have this great military and equipment…does not mean we have to use it.  We do not want to use it.  American strength, both military and economic, is the best deterrent.”

Sounds pretty obvious, right? But it’s been anything but obvious to America’s globalist foreign policy establishment, and especially to many in its liberal wing – which could very well regain the White House if a Democratic candidate like former Vice President Joe Biden or Indianapolis Mayor Pete Buttigieg wins November’s election. And that would be terrible news, as these establishment globalist liberals’ failure to agree indicates that they might return the nation to the days when it plunged into all sorts of foreign crises that had no potential to bolster American security, and much potential to become costly, bloody quagmires.

My evidence? An absolutely seminal exchange from the early 1990s between then U.S. Ambassador to the United Nations Madeleine Albright (who went on to become Secretary of State) and Colin L. Powell – then Chairman of the Joint Chiefs of Staff who would also go on to run Foggy Bottom.

During former President Bill Clinton’s first terms, Albright and Powell disagreed sharply on the merits of the United States intervening militarily in the Bosnia war – one of many civil conflicts in the Balkans triggered by the post-Cold War breakup of Yugoslavia. Albright was a leader of the hawks and Powell had long championed a view that the United States should use its armed forces only when genuinely vital national interests were at stake.

During one of their debates, Albright asked Powell a question that was shockingly moronic even by the dismal standards of globalists generally: “What’s the point of having this superb military you’re always talking about if we can’t use it?”

In his memoirs, Powell wrote that Albright’s question almost gave him “an aneurysm.” And it should be screamingly obvious why. Albright, who has studied international affairs her entire adult life, had apparently never heard of, or forgot, the concept of “deterrence.”

Thank goodness she wasn’t in power during one of the Cold War nuclear crises, like that over Cuba in 1962. Can you imagine any of former President John F. Kennedy’s advisers asking “What’s the point of having these superb nuclear weapons if we can’t use them?” And most worrisomely Albright – who remains influential in top Democratic political circles – has been proudly unrepentant.

Even more important, Albright’s position shows that she’s clueless about a fundamental intellectual key to U.S. foreign policy success – understanding that a superpower is defined first and foremost by what it is (i.e, by the assets it can bring to bear regarding overseas challenges and opportunities) not by what it does (how and how energetically it uses those assets). 

That is, for a country as geopolitically secure and economically self-sufficient as the United States, what matters most is focusing on building the strength (in all dimensions, including the power to deter any aggressors) needed to enable it to survive and prosper in a world certain to remain dangerous, rather than working overtime figuring out ways to keep using that strength – especially when there’s no obvious need.   

Now Powell’s a globalist, too – but he clearly comes from the wing that’s at least recognized that national interests (though he and his ilk invariably define them way too broadly) should be driving the use of foreign policy tools, not the availability of those tools (let alone list of uses of American arms and resources that may be desirable to some extent, to some Americans, but are hardly essential – like the Bosnia mess and other humanitarian tragedies in which the Clinton-ites initially engaged the nation).

Trump’s Iran remarks unmistakably associate him with that far wiser Powell approach – including in situations unlikely to go nuclear. They also signal that he gets it on the real nature of a superpower.

So don’t doubt for a minute that the President’s quasi-America First-type foreign policies will continue to be much less coherent and efficiently implemented than is desirable. But don’t doubt for a minute that his (sort of) Powell-like instincts boost the odds that the United States won’t get bogged down in debilitating and unnecessary quagmires.

In other words, everyone hoping for an American foreign policy displaying some kind of post-Iraq War learning curve should remember that, for all Mr. Trump’s faults, the United States can always do much worse in its presidential choices, in fact has done much worse – and could well again.

Im-Politic: An Impeachment Red Herring from House Judiciary

Tags

Constitution, Democrats, executive privilege, House Judiciary Committee, Im-Politic, impeachment, Jerrold Nadler, Mueller Report, Nancy Pelosi, Robert Mueller, Special Counsel, Trump

You know the Shakespearian expression, “The lady doth protest too much, methinks”? A wonderful way of describing someone who makes an argument that’s so over-the-top that it undercuts credibility?

I couldn’t help but think of it while reading the new report from the House Judiciary Committee’s Democratic staff on “Constitutional Grounds for Presidential Impeachment.”

I’m not talking about the substantive credibility of the case for President Trump’s impeachment (and/or removal from office). Instead, I’m talking about the case’s political credibility. Because this new study makes nothing so clear as the belief of the Committee’s majority Democratic members that they haven’t yet convinced enough of the American people that their efforts to oust the President are justified. And no doubt this conclusion applies to numerous others in the party’s House majority and in the Senate.

No one can have any legitimate issue with the Committee releasing such a report. As Chairman Jerrold Nadler of New York notes, the full committee staffs put out similar studies in connection with the 1974 impeachment proceedings against President Richard Nixon, and those against President Bill Clinton in 1998. (One important difference: Unlike the previous reports, this new study was the product only of one party’s staff.) And scholarship has of course advanced since then.

But in the process of “Addressing Fallacies About Impeachment,” the Democratic staff created some itself – that impeachment proponents are maintaining that impeachment “is not part of democratic constitutional governance”; that because a presidential election is coming up, a chief executive “is entitled to persist in office after committing ‘high Crimes and Misdemeanors’”; and that such a President’s voters consider themselves “entitled to expect that their preferred candidate will do so.”

These arguments are transparently fallacious because none of the President’s backers has questioned the legitimacy of impeachment per se, and none believes that, whatever the political calendar, any office holder deserves to keep on serving after committing impeachable offenses.

To use an obvious but instructive example, just ask yourself: If Mr. Trump had committed a crime in public view – e.g., stood “in the middle of Fifth Avenue and [shot] somebody,” as he once suggested during his campaign, in a (typically) hyperbolic efofrt to describe his popularity with his base – does anyone seriously think that even the staunchest Trump-er would respond (if there were no extenuating circumstances, like self-defense) “Nope, nothing impeachable here. Let’s just let him serve out his term.)

(Interestingly, outside the impeachment context, the President’s lawyers have argued that Mr. Trump, or any President, couldn’t be criminally indicted for such an act while in office, but that’s a separate issue from impeachment.)

What Trump supporters are saying is that, after literally years of investigations – by Congress and by a Special Counsel (Robert Mueller) whose integrity no Trump opponent questioned – no conclusive evidence of impeachable transgressions has emerged. And that given the approach of a new election that would give the public a chance to decide the President’s fitness for office (an opportunity that was not available for second-term Presidents Nixon and Clinton), the best course for the country’s sake is moving on from the current proceedings. In other words, they’re making a political and policy argument, not a Constitutional argument.

For example, the Mueller report specifically concluded that “the evidence was not sufficient to charge that any member of the Trump Campaign conspired with representatives of the Russian government to interfere in the 2016 election” and, more controversially, regarding obstruction of justice allegations:

“[I]f we had confidence after a thorough investigation of the facts that the President clearly did not commit obstruction of justice, we would so state. Based on the facts and the applicable legal standards, however, we are unable to reach that judgment. The evidence we obtained about the President’s actions and intent presents difficult issues that prevent us from conclusively determining that no criminal conduct occurred. Accordingly, while this report does not conclude that the President committed a crime, it also does not exonerate him.”

As numerous impeachment backers have pointed out, in his post-report press conference, Mueller did note, in the course of explaining the substantive and Constitutional obstacles to accusing a sitting President of criminal behavior, that “the Constitution requires a process other than the criminal justice system to formally accuse a sitting President of wrongdoing.” And of course that was a reference to impeachment.

But neither Mueller nor his report has stated that Mr. Trump actually has committed an impeachable defense, or explicitly said that enough evidence exists to warrant an impeachment inquiry. The Special Counsel simply observed that, if Congress has enough further problems with the President’s actions, it has a Constitutionally permitted avenue for pursuing these concerns.

It’s true that Congress has not yet had the chance to question under oath current and former administration officials who might be able to provide first-hand evidence of impeachable Presidential wrongdoing, and that the initial obstacle has been Mr. Trump’s refusal to permit them to testify.

That opposition could well stem from the President’s fear of what these figures might say. But it could also stem from legitimate concerns about executive privilege – a President’s recognized right, originating in the separation of powers created by the Constitution, to keep under wraps, including from Congress, internal deliberations of his or her administration.

This privilege is by no means absolute, and such Executive-Legislative branch disputes can be refereed by the courts. But Congress’ Democrats have declined to go this route either to compel such testimony, or free up impeachment-relevant records. In this regard, therefore, they so far have no one to blame for the absence of a “smoking gun” but themselves.

So why are the Judiciary Democrats serving up this red herring? I’m not a mind-reader, but Congress’ Democratic leaders acknowledge that they’re following the polls, and they show plain as day that, since late October, public support for impeachment and removal has fallen steadily – to the point where it’s clearly under 50 percent and still shrinking. And some evidence shows that the numbers are worse for the Democrats on this issue in key presidential election battleground states and Congressional districts crucial to their continued control of the House.

I’m not questioning whether House Judiciary Democrats, or any other Trump opponents, sincerely believe that the President has committed impeachable offenses, or whether they view the evidence as clearcut and even overwhelming. But the new Judiciary report’s baseless charge Trump supporters would oppose impeachment under any circumstances is strong evidence that, in this ultimately political debate, they’re far from making the political case.

(What’s Left of) Our Economy: Trade War(s) Update

Tags

Argentina, Bloomberg.com, Brazil, business investment, China, CNBC, consumption, currency manipulation, debt, Democrats, digital services tax, election 2020, EU, European Union, export controls, Financial Crisis, France, Huawei, internet, investors, manufacturing, production, steel, steel tariffs, tariffs, Trade, Trade Deficits, trade enforcement, trade war, Trump, Wall Street, Wilbur Ross, Xi JInPing, {What's Left of) Our Economy

The most important takeaway from this post about the current status of U.S. trade policy, especially toward China, is that it may have already been overtaken by events since I began putting these thoughts together yesterday.

What follows is a lightly edited version of talking points I put together for staffers at CNBC in preparation for their interview with me yesterday. I thought this exercise would be useful because these appearances are always so brief (even though this one, unusually, featured me solo), and because sometimes they take unexpected detours from the main subject. .

Before presenting them, however, let’s keep in mind this new Bloomberg piece, which came on the heels of remarks yesterday by President Trump signaling that a trade deal with China may need to await next year’s U.S. Presidential election, and plunged the world’s investors into deep gloom. This morning, however, the news agency reported that considerable progress has been made despite “harsh” rhetoric lately from both countries. It seems pretty thinly sourced to me, and the supposed course of the trade talks seems to change almost daily, but stock indices are up considerably all the same.

Moreover, even leaving that proviso aside, what I wrote to the CNBC folks yesterday seems likely to hold up pretty well. And here it is:

1. The President’s latest comments on the China trade deal – which he says might take till after the presidential election to complete – seriously undermines the claim that he considers a deal crucial to his reelection chances because it’s likely to appease Wall Street and thereby prop up the economy. Of course, given Mr. Trump’s mercurial nature, and negotiating style, this latest statement could also simply amount to him playing “bad cop” for the moment.

2. His relative pessimism about a quick “Phase One” deal also seems to reinforce a suggestion implicitly made yesterday by Commerce Secretary Wilbur Ross when he listed verification and enforcement concerns as among the obstacles to signing the so-called Phase One deal. I have always argued that such concerns are likely to prevent the conclusion of any kind of trade deal acceptable to US interests. That’s both because of China’s poor record of keeping its commitments, and because the Chinese government is too secretive and too big to monitor effectively even the most promising Chinese pledges to change policies on intellectual property theft, illegal subsidies, discriminatory government procurement, and other so-called structural issues.

3. Recent reports of the United States considering tightening (or expanding) restrictions on tech exports to Chinese entities like Huawei also support my longstanding point that the US and Chinese economies will continue to decouple whatever the fate of the current or other trade talks.

4. In my opinion, the President is absolutely right to play hard-to-get on China trade, because Chinese dictator Xi Jinping is under so much pressure due to his own weakening economy, and because of the still-explosive Hong Kong situation.

5. I’ll be especially interested to learn of the Democratic presidential candidates’ reactions to Mr. Trump’s latest China statement, as well as the announcement of the reimposed steel tariffs on Argentina and Brazil, and the threatened tariffs on French “digital services” [internet] taxes. With the exception of Massachusetts Senator Elizabeth Warren and Vermont Senator Bernie Sanders, the candidates’ China policies seem to boil down to “Yes, we need to get tough with China, but tariffs are the worst possible response.” None of them has adequately described an alternative approach. The reactions of Democratic Congress leaders Nancy Pelosi in the House and Charles Schumer will be worth noting, too. The latter has been strongly supportive of the Trump approach in general.

6. The new steel tariffs, as widely noted, are especially interesting because they were justified for currency devaluation reasons, with no mention made of the alleged national security threats originally cited as the rationale. Nonetheless, I don’t believe that they represent a significant change in the Trump approach to metals trade, because the administration has always emphasized the need for the duties to be global in scope – to prevent China from transshipping its overcapacity to the US through third countries, and to prevent third countries to relieve the pressures felt by their steel sectors from Chinese product by ramping up their own exports to the US. Obviously, all else equal, countries with weakening currencies (for whatever reason) will realize big advantages in steel trade, as the prices of their output will fall way below those of competitors’ steel industries.

7. Regarding the tariffs threatened in retaliation for France’s digital services tax, they’re consistent with Trump’s longstanding contention that the US-European Union (EU) trade relationship has been lopsidedly in favor of the Europeans for too long, and that tariff pressure is needed to restore some sustainable balance. In this vein, I don’t take seriously the French claim that the tax isn’t targeting U.S. companies specifically. After all, those firms are the dominant players in the field. Second, senior EU officials have started talking openly about strengthening Europe’s “technological sovereignty” – making sure that the continent eliminates its dependence on non-European entities in the sector (including China’s as well as America’s). The digital tax would certainly further the aim of building up European champions – and if need be, at the expense of US-owned companies.

By the way, this position of mine in no way reflects a view that more taxation and more regulation of these companies isn’t warranted. But it’s my belief that these issues should be handled by the American political system.

Also of note: Trump’s suggestion this morning that the French tax isn’t a big deal, and that negotiations look like a promising way to resolve the disagreement.

Finally, here are two more points I wound up making. First, I expressed agreement that the President’s tariff-centric trade policies have created significant uncertainties in the economy’s trade-heavy manufacturing sector in particular – stalling some of the planned business investment that’s essential for healthy growth. But I also noted that much of this uncertainty surely stems from the on-again-off-again nature of the tariffs’ actual and threatened imposition.

As a result, I argued, uncertainty could be significantly reduced if Mr. Trump made much clearer that, whatever the trade talks’ fate, the days of Washington trying to maximize unfettered bilateral trade and investment are over, and a new era marked by much more caution and many more restrictions (including tighter export controls and investment restrictions, as well as tariffs), is at hand.

Second, at the very end, I contended that President Trump deserves great credit for focusing public attention on the country’s massive trade deficits in general. For notwithstanding the standard economists’ view that they don’t matter, reducing them is essential if Americans want their economy’s growth to become healthy, and more sustainable. For as the last financial crisis should have taught the nation, when consumption exceeds production by too great a margin, debts and consequent economic bubbles get inflated – and tend to burst disastrously.

Glad I Didn’t Say That! Politico Shoots Itself in the Foot on Foreign Meddling

Tags

Democrats, election 2016, election interference, Glad I Didn't Say That!, Mainstream Media, MSM, Politico, Trump, Ukraine

“…acting White House chief of staff Mick Mulvaney told reporters the U.S. aid was withheld at least in part because of a request to have Ukraine investigate unfounded allegations that foreign countries assisted Democrats in the 2016 election.”

–Politico, October 17, 2019

“Ukrainian government officials tried to help Hillary Clinton and undermine Trump by publicly questioning his fitness for office. They also disseminated documents implicating a top Trump aide in corruption and suggested they were investigating the matter, only to back away after the election. And they helped Clinton’s allies research damaging information on Trump and his advisers, a Politico investigation found.”

– Politico, January 11, 2017

 

(Sources: “Mulvaney acknowledges Ukraine aid was withheld to boost political probe,” by Quint Forgey, Politico, October 17, 2019, https://www.politico.com/news/2019/10/17/mulvaney-confirms-ukraine-aid-2016-probe-050156 and “Ukrainian efforts to sabotage Trump backfire,” by Kenneth P. Vogel and David Stern, Ibid., https://www.politico.com/story/2017/01/ukraine-sabotage-trump-backfire-233446)

(What’s Left of) Our Economy: Now What in the U.S.-China Trade War?

Tags

agriculture, allies, China, decoupling, Democrats, election 2020, forced technology transfer, Hong Kong, Huawei, impeachment, intellectual property theft, National Basketball Association, Phase One, Steven Mnuchin, subsidies, supply chains, Taiwan, tariffs, Trade, trade talks, Uighurs, verification, {What's Left of) Our Economy

This is the second working day since the United States and China reached what the Trump administration is calling a “Phase One” trade deal with Beijing last Friday, and the questions surrounding the agreement still far outweigh what’s known. That alone should tell you that towering obstacles continue blocking any confident assessment of where the President’s so-called trade war stands, much less where the conflict is likely to go. Even so, here are some observations I hope are useful.  (Teaser:  One major point concerns tonight’s Democratic presidential candidates debate.)

First, the absence of any written statements or documents from the U.S. side describing or even summarizing what’s actually in the agreement justifies big doubts that anything deserving the term “deal” has been reached at all. Further reinforcing legitimate skepticism is China’s long record of broken promises on trade.

Second, especially strong skepticism is warranted about U.S. claims that any meaningful progress has been made on the so-called structural issues focused on from the very beginning by the Trump administration. For it as I’ve long argued, China’s government is so vast and secretive, and leaves such scanty written records of key decisions, that it will simply be impossible for the United States to monitor and enforce even the most promising Chinese commitments on intellectual property theft, technology extortion, discriminatory Chinese government procurement, and Beijing subsidies that shaft U.S.-owned and other foreign businesses vis-a-vis their Chinese rivals.

Third, even if China currently means to keep its alleged promises to binge buy American agricultural products, any number of external events could upset the apple cart. They include the Hong Kong picture becoming uglier (its becoming prettier can’t be totally ruled out, but seems highly unlikely); new Chinese crackdowns on other protests that may emerge (especially among the Uighur Muslim population) or revelations of new Chinese atrocities against the Uighurs or other minorities or other protesters; more attempted Chinese bullying of high-profile U.S. businesses like the National Basketball Association; a major flare-up of tensions over Taiwan or China’s aggressive moves in the South China Sea; a step forward in the Huawei case that increases the chances that the CFO daughter of the founder of this Chinese telecommunications giant will be extradited to the United States from Canada for sanctions-busting; and Chinese moves that persuade Washington that Beijing has no intention of keeping its perceived agriculture or other promises.

Moreover, the longer China takes to ramp up its buys from American farmers, the greater the potential for these kinds of shocks to bring this “Phase One” agreement crashing down.

Fourth, the less impressive the “mini-deal” keeps looking, the more convincing my view that its apparent modesty reflects President Trump’s belief that his domestic political position has weakened significantly – both because of the new impeachment threat and signs of an economic slowdown.

It’s true that Treasury Secretary Steven Mnuchin has suggested that if the deal hasn’t been finalized by December 15, the Trump administration will go ahead with a previously vowed 15 percent increase on $156 billion worth of levies on Chinese imports. But that’s anything but a concrete threat. In addition, it’s important to note this report suggesting (the specifics are really sloppily described) that China wants the sequencing to work in the opposite way:  First, tariffs get rolled back (or frozen in place?), then the agriculture buys begin. 

Moreover, no one in the administration has said anything about reversing its Phase One-related decision to suspend a big tariff increase (to up to a formidable 30 percent on some products) previously announced to begin on October 15. So even though U.S. duties on some $360 billion worth of Chinese goods would still remain in place if China blows Mr. Trump off, there’s a real chance that Beijing won’t incur any further punishment – doubtless because the President believes that tariffs above and beyond current levels and coverage could panic investors again and further soften economic growth.

Some kind of blow-up in Hong Kong or elsewhere could yet change Mr. Trump’s calculations. But the more important point so far is that events, not the President, are now in charge of the trade talks track of his China policy.

Fifth, at the same time, none of the above means that the United States is devoid of leverage versus China and in particular the kind of clout that can keep advancing its economic as well as closely related technology and national security interests, and this is where a second, arguably more important, track of the Trump China policies needs to be remembered. As I’ve written, the President has sought not only to end the threat of China’s economic predation by forcing Chinese policy changes through tariff pressure. Although he rarely speaks of it, he’s also been trying to repel Chinese threats to U.S. security and prosperity through a series of unilateral measures aimed at decoupling the United States from China economically.

By crimping trade, investment, and technology flows, these decoupling steps are reducing America’s vulnerability to China by significantly reducing the access to the U.S. market so crucial to the success of China’s advanced industries; by shrinking the footprint of China’s state-controlled economy in America’s largely free market system; and by cutting off a Chinese tech sector that could be become highly dangerous from critical supplies of U.S. components.

Decoupling has also been advanced by those tariffs so far imposed on $360 billion worth of Chinese products (amounting to nearly 86 percent of all goods imports from China last year). They haven’t done much to achieve their stated aim of improving China’s behavior, but they have decreased China’s importance to the U.S. economy by prompting an exodus of global manufacturing supply chains out of the People’s Republic.

Further, the Trump decoupling campaign has also helped awaken many foreign governments to the China tech and broader economic threat – though because so many other countries (including major American treaty allies), were profiting so handsomely from the pre-Trump globalization status quo, progress on this front has been uneven and disappointing. (See here for why Germany, for example is so conflicted.) 

Sixth and finally, one major set of actors in this drama, though, hasn’t been very woke on China issues:  most of the Democratic presidential candidates. Sure, many have supported a policy of “doing something” on China (though rarely involving tariffs – or any other concrete measures). But so far, none seems to view China’s multi-dimensional challenge to America as a major concern – and all the top-tier contenders and most others now support impeaching the President. 

Consequently, they could greatly strengthen not only Mr. Trump’s position, but the American position, with firm declarations in tonight’s debate that China will stay squarely in Washington’s cross-hairs if they win the White House, and that therefore there’s no point in stonewalling in hopes of easier post-2020 U.S. policies. Not that any confidence looks well founded that any of them will.        

(What’s Left of) Our Economy: What the Mini-Deal Says About Trump’s China Policy

Tags

agriculture, business investment, censorship, China, decoupling, democracy, Democrats, election 2020, Elizabeth Warren, Hong Kong, Hong Kong protests, human rights, impeachment, Populism, Republicans, tariffs, Trade, trade talks, trade war, Trump, Uighurs, Ukraine, Ukraine Scandal, {What's Left of) Our Economy

The “Phase One” min-deal reached by the United States and China tamping down bilateral trade tensions for the moment, speaks volumes about the three major forces that are now driving President Trump’s China policy, and that will keep shaping it through the next U.S. election – though not always in consistent ways. They are:

>the President’s evident belief that his reelection hopes are being threatened mainly by revived impeachment threats but also by an economic slowdown that has unmistakably been influenced by the so-called trade war with China;

>his consequently increased need for political support from the establishment Republicans so numerous in Congress who have never boarded the Trump Tariff Train and who are worried about their own reelection chances next year; and

>Mr. Trump’s consistent (though generally unstated) belief that no matter how the formal trade talks proceed, America’s national security as well as economic interests require the U.S. economy to continue steadily decoupling from China’s.

The strength of the impeachment drive faced by the president is now indisputable. Some polls are even showing growing Republican support for not only impeachment by the House but removal by the Senate. Moreover, this political challenge comes at a time when the President’s strongest suit by far (at least according to polls) – his economic policy record – is looking somewhat weaker.

Few signs point to a recession breaking out by Election Day, much less during the preceding weeks or months. But growth has been slowing to levels that Mr. Trump himself has deemed unacceptable – in no small measure because they were the rates that prevailed for most of the Obama administration.

The tariff-heavy Trump trade policies hardly deserve all the blame. (See, e.g., this recent post.) But the failure of business investment to stay elevated following passage of major tax cuts for business is especially telling. It buttresses claims that both the President’s various sets of tariffs and the inconsistency with which they’ve been both threatened and applied have inhibited companies from approving big new expenditures on new factories and other facilities.

As a result, nothing that can reasonably be expected from Washington (in other words, ruling out a big infrastructure spending bill) is likelier to boost the economy more than a nerve-calming trade truce with China mainly featuring some Chinese market opening or re-opening (especially for agricultural products) in return for some U.S. tariff cuts, promises to refrain from new levies, or some some combination of such moves. At the least, such an agreement would in theory help growth maintain the momentum it has remaining.

A mini-deal along these lines would also please the Senate Republicans who might ultimately judge the President’s fate, and who generally have lagged far behind the GOP base in turning against pre-Trump China and broader trade policies. Moreover, as I’ve written, impeachment politics have greatly magnified their sway over Mr. Trump before. Despite his sky-high popularity with Republican voters, the President was heavily dependent on their political backing until this spring in order to neutralize any impeachment chances while his Russia ties were being investigated. That’s surely why his early policy initiatives were dominated by traditional Republican priorities, like tax cuts and repeal of former President Barack Obama’s healthcare overhaul, rather than by populist priorities like an infrastructure bill and the prompt imposition to tariffs.

Once the Special Counsel and other investigations flopped for various reasons, Mr. Trump had a much freer hand. But because of the emergence of “UkraineGate,” for now, those days are over. Probes growing out of those events are certain to last for months. Therefore, continued, much less higher, tariffs on China that could further drag on the economy and further frustrate the rural constituencies so crucial to the President and many other Republicans seem out of the question.

The President is so hamstrung that he’s been unable to marshal greater public support for staying the tariff course even though China is antagonizing American public opinion with its harsh suppression of the Hong Kong protests and the Muslim Uighur minority, and with its heavy handed efforts to extend its censorship practices to the National Basketball Association and other U.S. businesses. And don’t forget: These developments have placed China in a much weaker position, too.  

One reason that the President hasn’t been able to capitalize could well be his reluctance to declare publicly the functional equivalent of economic war, or his intent to decouple – presumably because any such statements would prompt the Chinese to crack down even further on American companies even doing business in the PRC that have nothing to do with job and production offshoring aimed at serving the U.S. market from super-cheap and highly subsidized Chinese facilities, as opposed to serving Chinese customers. And that reasoning has been entirely understandable.

Much less understandable – the President’s insistence that a trade war with China would be easy to win and inflict no economic harm on Americans, rather than choosing to challenge his compatriots to endure some sacrifices in order to beat back a mortal threat to their national security as well as prosperity. No wonder public support for so-called hard-line policies remotely strong enough to offset the opposition and reservations of the Congressional Republicans and most Democratic politicians is nowhere to be seen.

And don’t doubt that the Chinese fully understand. Whatever problems they initially experienced in figuring Mr. Trump out, they surely have concluded that they’re best advised to play the waiting game on the broader and deeper so-called structural issues dividing the two countries (e.g., intellectual property theft, technology extortion, massive subsidies) until the President is replaced by a Democrat who’s much easier to deal with.

Indeed, the evidence for this conclusion is abundant. China issues have played a small role in the Democratic primary campaign so far – even when it comes to long-time critics of pre-Trump trade policies like Democratic Socialist Vermont Senator Bernie Sanders, and Massachusetts Senator Elizabeth Warren. One likely explanation: In recent years, Democratic voters and leaners have markedly flipped on those pre-Trump approaches, from deep dislike to general approval. This shift in public opinion (matched in part by a trade flip in the other direction among Republicans and leaners) may also warrant some Chinese confidence that even a President Warren might prove a more acceptable interlocutor than Mr. Trump.

Nonetheless, the formal talks are not the only track on which the Trump administration’s China trade policies are running. And the other track – featuring unilateral U.S. moves to restrict Chinese involvement in the American economy, and thereby foster decoupling – is much less controversial than the trade talks and especially the tariffs and tariff threats clearly required to spur any meaningful progress.

Highly revealing on this score (in terms of the importance attached in Washington to decoupling): Even as a high level Chinese delegation was jetting to Washington, the President approved actions against Chinese tech companies and Chinese officials that were justified by human rights concerns, but that in the first case clearly advanced decoupling. Just as revealing (in terms of possible Chinese acceptance of a more skeptical new bipartisan U.S. consensus on China policy): Despite the provocative timing, the Chinese didn’t turn around and head back home once they heard the announcement.

Reinforcing the new American consensus on decoupling has unmistakably been the growing realization by the U.S. corporate sector that its heavy bets on China have dangerously increased its vulnerability not only to the whims of American politics, but to a Chinese regime that’s turned out to be much less hospitable than expected. As a result, “Phase One” is not only a suspiciously convenient-looking term being used by the President to describe his new deal. It also looks suitable for describing where his administration’s overall China policy stands right now.     

Im-Politic: Why Trump’s Ukraine China Ask Was So (Needlessly) Stupid

Tags

China, collusion, conflict of interest, Democrats, election 2020, Hunter Biden, Im-Politic, impeachment, Ivanka Trump, Joe Biden, Obama, Pelosi, Swamp, Trump, Trump-Russia, Ukraine

It’s lucky for President Trump that being stupid per se isn’t (yet?) grounds for impeachment, because if it was, his recent call for Beijing’s aid to investigate the Biden family’s possibly corrupt activities in China would surely qualify. In fact, it’s hard to think of a presidential action in recent memory that fails on so many substantive and political grounds. And no, I don’t agree with Florida Republican Senator Marco Rubio that the President was simply trying to troll the press.

Even so, it’s still possible that this episode could have a silver lining for Trump-World.

First, let me repeat my previous position that there’s absolutely nothing wrong with Mr. Trump probing Hunter Biden’s business dealings in China, Ukraine, or anywhere else, and whether they’ve improperly or illegally influenced U.S. policy toward those countries while his father was Barack Obama’s Vice President. In fact, since the current challenges and opportunities facing Americans nowadays from both countries have been strongly affected by policy decisions made during the Obama years, every American caring about the nation’s interests should want to know more about the Bidens’ goings on.

Nor should Joe Biden’s presidential bid this year shield him from scrutiny. In fact, as the President has pointed out in remarks on the Bidens and China, the former Vice President’s White House bid makes full disclosure absolutely essential. After all, as Mr. Trump has asked, “How would you like to have, as an example, Joe Biden negotiating the China deal if he took it over from me after the election? He would give them everything. He would give them everything. How would you like to have that?”

Can Americans be certain that a President Biden would sell his country down the river in China trade talks or on other fronts? Of course not. Can they be certain that Biden let China off the hook on various important interests, or urged doing so, since Hunter (successfully) began soliciting Chinese business in 2010? No on that score, too. But the uncertainties created and the undoubted, ongoing possibility of various payoffs are precisely why conflict of interest laws are on the books to begin with.

Moreover, conflicts of interest are especially important to investigate when it comes to countries like China and Ukraine. For there, governments and/or the oligarchs to which they’re closely connected call all the major economic and business shots.

Of course, claims abound that Mr. Trump is vulnerable to comparable (or even worse) charges. But regarding the Russia allegations, they’ve been big news since his 2016 Republican primary campaign began gathering real steam. In addition, after his inauguration, they were thoroughly examined by a Special Counsel probe that lasted nearly two years. And so far he’s still innocent until proven guilty in a legal sense. In addition, and revealingly, the current impeachment probe isn’t attempting to revive any of these charges.

Policy-wise, the Trump Russia record has been mixed, including support for measures (like strengthening the U.S. military presence in Eastern Europe right up against Russia’s borders, and strongly backing the American fossil fuels production revolution), that plainly aren’t pleasing Moscow.

It’s true that Trump daughter Ivanka operated a business that made shoes and apparel in China and imported these wares into the United States. I’d joined the ranks of those who believed those ties should have been severed at least once Mr. Trump became the Republican nominee. But Ivanka Trump has now shut down her China business. And can anyone seriously believe that in return for whatever copyrights she received from Beijing while her father was in office, that the President has taken it easy with China? After tariffs on literally hundreds of billions of dollars worth of Chinese products that have deeply wounded China’s economy? And a Taiwan policy that has poked Beijing in the eye on an issue of deep importance to China’s leaders and many of its people?

By contrast, it’s entirely legitimate – and important – to point out that the Obama-Biden record on both China trade and security issues was an eight-year exercise in coddling Beijing.

And both leaders’ records get to much of the reason why the President’s ask to Beijing was so boneheaded. Whether the Bidens are playing dirty or not, how can it help but legitimately expose Mr. Trump to the same kinds of conflict-of-interest charges he’s leveling against Biden? Indeed, House Speaker Nancy Pelosi is now making them. Moreover, it’s not as if China has anything like an impartial, rule-of-law-dominated criminal justice system. And let’s not forget the so-called political optics of his gambit at precisely the time when Beijing is violently repressing democratic protests in Hong Kong. “Appalling” isn’t too strong an adjective.

Just as bad, the President’s ask undercuts one of his most effective campaign themes – that for decades, his predecessors and their cronies had conspired with foreign governments like China’s to shaft everyday Americans on trade issues in particular. Just think back to his Inaugural Address. So now the same Chinese regime that’s conspired with Swamp-ers from both parties is supposed to help a President damage someone he’s labeled (with good reason) as a prime member of that corrupt complex?

The only justification I can think of for the China ask – at least politically – is the following (and don’t think I’ve got a lot of faith in this speculation): Now that Beijing has brushed off the President, he could turn around and contend that the Chinese are helping the Bidens cover up. Substantively – and whether this objective is being sought intentionally or not – the China ask could result in Mr. Trump taking a harder line on the trade talks.

More credibly, and encouraging in my eyes given my doubt that any verifiable China trade deal is possible: Even had Beijing complied, the President could come under enough Pelosi-like pressure to make impossible the kind of cosmetic deal that in principle could have solved some big potential China-related political problems heading into the election (i.e., with farmers angered at losing a big export market, or consumers outraged at tariff-induced higher prices).

The problem is that constructing these kinds of tortuous scenarios should be completely unnecessary, because, as I’ve stated,

>the Bidens’ conduct has been so questionable;

>the China-related case against them looks so compelling:

>Mr. Trump surely can get enough damning foreign government information about their doings from less substantively and politically controversial sources like Australia and, yes, Ukraine (to which the Democrats seem strongly devoted); and

>consumer and farmer complaints aside, the Democrats will have a devil of a time this coming election year making political hay by accusing the President of being too tough on China.

So the China ask looks an awful lot like another damaging and completely unforced Trump error. Nonetheless, the next time such a blunder seals his political fate will be the first. And even though my above scenario is pretty far-fetched, who can still confidently say that the President’s string of good luck has finally run out?

Making News: Video of Presidential Campaign Economics Interview Now On-Line!

Tags

Democrats, economy, election 2020, Elizabeth Warren, Liquid Lunch, Making News, NewsmaxTV.com, Wall Street

This past week has been so crazy news-wise that I’d completely forgotten to post a link to a video of an interview I did for NewsmaxTV.com two Fridays ago. The subject: some recent economy-related developments in the current and intensifying presidential campaign!

So click here for a great (and still timely!) discussion on the “Liquid Lunch” program focusing in particular on Massachusetts Senator Elizabeth Warren’s rise to just-about-front-runner status among the Democratic contenders – and on an apparently strong reaction from Wall Street.

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

Im-Politic: Why the Impeachment Case Isn’t Even Remotely Serious Yet

Tags

collusion, Deep State, Democrats, foreign aid, House of Representatives, Hunter Biden, Im-Politic, impeachment, Joe Biden, military aid, Mueller investigation, Nancy Pelosi, Trump, Trump-Russia, Ukraine, Viktor Shokin, Volodymyr Zelensky

OK, it’s not a verifiably un-doctored recording (apparently, they’re never available) – even though nearly all the Democratic members of the House of Representatives and many of the party’s presidential candidates view it as more than enough to warrant President Trump’s impeachment. (Removal from office? We’ve heard much less on that related but separate matter.)

All the same, the record of President Trump’s July 25 phone call with his Ukrainian counterpart, Volodymyr Zelensky, sure doesn’t look like a Nixonian smoking gun to me – and yes, in the interests of full disclosure, I strongly support many of Mr. Trump’s policies.

The allegations that led the President to release this document – which was apparently prepared via the same procedures normally used for all such confidential conversations – haven’t always been made with exactly surgical precision. So in this vein, the most useful version may come from an opinion article written for the Washington Post by seven freshman Democratic House Members.

Because of the prior national security experience all of them boast, and their reputations for moderation, the concerns they expressed yesterday reportedly imbued the push for impeachment with enough momentum to spur House Speaker Nancy Pelosi to authorize the launch of an “official impeachment inquiry” – an unusual procedure that seems to have no bearing on the various ways that this body has initiated impeachment proceedings in the past, and that certainly doesn’t guarantee the holding of the kind of full House vote needed to impeach and move to a Senate trial to determine removal.

Here’s what those seven first-term Democrats wrote:

“The president of the United States may have used his position to pressure a foreign country into investigating a political opponent, and he sought to use U.S. taxpayer dollars as leverage to do it. He allegedly sought to use the very security assistance dollars appropriated by Congress to create stability in the world, to help root out corruption and to protect our national security interests, for his own personal gain.”

But the way I read it, nothing in this version of the conversation does much to support either charge. Some of the key passages seem to be the following:

“President Zelenskyy: … I would also like to thank you for your great support in the area of defense. We are ready to continue to cooperate for the next steps specifically we are almost. ready to buy more Javelins [portable anti-tank missiles] from the United· States for defense purposes.

“The President [Trump]: I would like you to do us a favor though because our country has been through a lot and Ukraine knows a lot about it. I would like you to find out what happened with this whole situation with Ukraine, they say Crowdstrike… I guess you have one of your wealthy people… The server, they say Ukraine has it. There-are a lot. of things that went on, the whole situation . I think you’re surrounding yourself with some of the same people. I .would like to have the Attorney General call you or your people and I would like you to get to the bottom of it. As you saw yesterday, that whole nonsense ended with a very poor performance by a man named Robert Mueller, an incompetent performance, but they say a lot of it started with Ukraine. Whatever you can do, ·it’s very important that you do it if that’s possible.”

Despite the non-coercive language, President Trump clearly established a quid pro quo involving U.S. military aid and Ukrainian cooperation on an investigation having to do with American politics. For me, the key is his use of the word “though” in his first sentence. (Not that Mr. Trump will win any articulateness awards.)

But where is the evidence that the quid pro quo involves a simple “political opponent,” as the seven House Democrats insist? (Obviously, it’s former Vice President and current Democratic presidential hopeful Joe Biden.) Everything in this passage, from his mention of “Crowdstrike” to the “nonsense” that “ended with a very poor performance” by Robert Mueller has to do with:

>the accusations (which that former Special Counsel’s investigation’s findings determined were untrue) that Mr. Trump’s 2016 presidential campaign colluded with the Russian government to ensure his election at the expense of Democratic rival Hillary Clinton; and

>the counter-accusation that those Russia collusion charges were manufactured by Mr. Trump’s opponents in the FBI, the intelligence community, elsewhere in the so-called Deep State, and the Obama administration. (This possibility is currently being investigated by the Trump Justice Department.)

That counter-accusation is especially important here. If anything like it is true, it’s imperative for the health of American democracy that it be discovered. And in turn, if a foreign government like Ukraine’s can shed light on the facts, why wouldn’t anyone except the guilty and their allies want Washington to use foreign policy leverage to achieve that result – which would unmistakably serve important U.S. national interests.

Of course, Biden’s name did appear in the five-page document – about a page after the above passages – in this statement from Mr. Trump:

“The other thing, There’s a lot talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that so whatever you can do with the Attorney General would be great. Biden went around bragging that he stopped the prosecution so if you can look into it… It sounds horrible to me.”

These sentences have to do with a Ukrainian probe of the ties between Biden’s son Hunter and a Ukrainian energy company – and Biden’s public boast in 2018 that, as Vice President, in 2016, he secured the firing of a Ukrainian prosecutor who had vowed to investigate the company in question by threatening to withhold a billion-dollar American loan package if that official, Viktor Shokin, stayed in office.

His supporters contend that the quid pro quo Biden offered differed fundamentally from the Biden quid pro quo that Mr. Trump seems to have presented in his July phone call because Biden was carrying out firmly established U.S. government policy in order to serve the country’s national interests while President Trump’s interests were purely selfish and political.

All of which could be true. Except the 2016 date of the Biden episode should warn against imputing purely or even mainly non-political motives to his actions. In this vein, revelations during a presidential election year that Biden’s son was involved in shady or even criminal foreign doings certainly wouldn’t help the fortunes of the incumbent administration’s political party – so the former Vice President’s motivations might have been exclusively political.

Some considerations on this score do work in Biden’s favor, though – mainly evidence that Western European governments and the International Monetary Fund, all of which were complaining that Ukrainian corruption was undercutting their own aid programs, also sought Shokin’s firing. But illicit activity in Ukraine has been so pervasive that these non-American actors might have their own embarrassments to hide.

Just as important: If the Vice President of a previous administration, or any of his colleagues, was manipulating American foreign policy to cover up the activities of the Veep’s son, isn’t something that urgently requires examination from a national interest standpoint? Wouldn’t this be the case whether that former Vice President was currently running for office or not? In fact, wouldn’t that especially be the case if that former Vice President was running for office?

To be sure, the seven freshman Democrats also appear to be accusing President Trump of pressuring Ukraine to help dig up dirt on the Bidens (again, for solely political reasons) by freezing the disbursement of a previously approved military assistance package shortly before his phone call with Zelensky. 

Mr. Trump has admitted doing so, and as has been pointed out, he’s offered different explanations for this decision (which was overturned earlier this month). I agree that sounds fishy. But the reasons themselves (that other U.S. allies were shirking their obligations to help Ukraine, and that continuing Ukrainian corruption could prevent many of the funds from being spent effectively) are anything but ludicrous.

Also interesting:  More than three weeks before the aid freeze was first revealed by the Washington Post – and connected with the Zelensky phone call – ABC News reported that the administration was sitting on the Ukraine military assistance but not as part of any campaign to undermine Biden. Instead, the delay stemmed from a broad debate between Trump administration supporters of foreign aid generally and colleagues who were highly critical. The main reported complaints from Democrats had nothing to do with Biden, either. They centered on the President’s supposedly excessive coziness with Russian leader Vladimir Putin.

And most interesting of all:  Mr. Trump never brought up the frozen aid in his phone conversation with Zelensky. If the seven freshman Democrats are right and the President had blocked spending the funds “for his own personal gain,” why didn’t he even signal this blackmail attempt to its target?        

Ongoing and broadening investigations of all these controversies by Congressional committees and by the Justice Department could well provide definitive answers to all the above questions, and even produce more and/or worse bombshells. Indeed, maybe the phone call document itself has been doctored. But when it comes to impeachment, or even besmirching the Trump record, that’s exactly what should be the main point now. There haven’t been such answers or bombshells yet. And until some start appearing, talking up impeachment will continue looking  like a thoroughly reckless course of action – and one with plenty of boomerang potential.