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Making News: Back on National Radio Talking Midterms and Trade…& a New Podcast!

09 Wednesday Nov 2022

Posted by Alan Tonelson in Making News

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agriculture, Biden, CBS Eye on the World with John Batchelor, Congress, Democrats, election 2022, environment, fast track, Federal Reserve, friend-shoring, interest rates, Kevin Brady, labor rights, MAGA Republicans, Making News, manufacturing, midterms 2022, monetary policy, recession, regulation, Republicans, reshoring, taxes, Trade Promotion Authority, U.S. content, U.S.-Mexico-Canada Agreement, unions, USMCA

I’m pleased to announce that I’m scheduled to return tonight to the nationally syndicated “CBS Eye on the World with John Batchelor.”  Our subjects: yesterday’s midterm election and how it might affect Washington’s approach to international trade.

I don’t know yet when the pre-recorded segment will be broadcast but John’s show is on between 9 PM and midnight EST, the entire program is always compelling, and you can listen live at links like this. As always, moreover, I’ll post a link to the podcast as soon as one’s available.

In that podcast vein, the recording is now on-line of yesterday’s interview on the also-nationally syndicated “Market Wrap with Moe Ansari.” The segment, which dealt with what the midterm results (which aren’t all in yet!) will mean for the U.S. economy – and the manufacturing sector in particular. It begins about 22 minutes into the program, and you can listen at this link.

Note: My forecast of significant Republican gains in the House and Senate seems to have been on the over-optimistic side, but of course, many key races remain undecided.

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

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Making News: New Article on Why I Voted for Trump

01 Sunday Nov 2020

Posted by Alan Tonelson in Making News

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Big Tech, Black Lives Matter, censorship, China, Conservative Populism, conservatives, Democrats, economic nationalism, election 2020, entertainment, environment, freedom of expression, freedom of speech, George Floyd, Hollywood, Hunter Biden, Immigration, industrial policy, Joe Biden, Josh Hawley, journalism, Mainstream Media, Making News, Marco Rubio, police killings, regulation, Republicans, Robert Reich, Russia-Gate, sanctions, Silicon Valley, social media, supply chains, tariffs, taxes, technology, The National Interest, Trade, trade war, Trump, Truth and Reconciliation Commission, Ukraine, Wall Street, wokeness

I’m pleased to announce that The National Interest journal has just published a modified version of my recent RealityChek post explaining my support for President Trump’s reelection. Here’s the link.

The main differences? The new item is somewhat shorter, it abandons the first-person voice and, perhaps most important, adds some points to the conclusion.

Of course, keep checking in with RealityChek for news of upcoming media appearances and other developments.

Im-Politic: Why I Voted for Trump

28 Wednesday Oct 2020

Posted by Alan Tonelson in Im-Politic

≈ 6 Comments

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Big Tech, Black Lives Matter, censorship, China, Conservative Populism, conservatives, Democrats, economic nationalism, election 2020, entertainment, environment, free expression, freedom of speech, George Floyd, Hollywood, Hunter Biden, Immigration, impeachment, industrial policy, Joe Biden, Josh Hawley, journalism, Mainstream Media, Marco Rubio, police killings, Populism, progressives, regulations, Republicans, Robert Reich, Russia-Gate, sanctions, Silicon Valley, social media, supply chains, tariffs, taxes, technology, Trade, trade war, Trump, Truth and Reconciliation Commission, Ukraine Scandal, Wall Street, wokeness

Given what 2020 has been like for most of the world (although I personally have little cause for complaint), and especially Washington Post coverage of endless early voting lines throughout the Maryland surburbs of the District of Columbia, I was expecting to wait for hours in bad weather to cast my ballot for President Trump. Still, I was certain that Election Day circumstances would be a complete mess, so hitting the polling place this week seemed the least bad option.

Hence my amazement that the worst case didn’t pan out – and that in fact, I was able to kill two birds with one stone. My plan was to check out the situation, including parking, at the University of Maryland site closest to my home on my way to the supermarket. But the scene was so quiet that I seized the day, masked up, and was able to feed my paper ballot into the recording machine within about ten minutes.

My Trump vote won’t be surprising to any RealityChek regulars or others who have been in touch with on or off social media in recent years. Still, it seems appropriate to explain why, especially since I haven’t yet spelled out some of the most important reasons.

Of course, the President’s positions on trade (including a China challenge that extends to technology and national security) and immigration have loomed large in my thinking, as has Mr. Trump’s America First-oriented (however unevenly) approach to foreign policy. (For newbies, see all the posts here under “[What’s Left of] Our Economy,” and “Our So-Called Foreign Policy,” and various freelance articles that are easily found on-line.). The Biden nomination has only strengthened my convictions on all these fronts, and not solely or mainly because of charges that the former Vice President has been on Beijing’s payroll, via his family, for years.

As I’ve reported, for decades he’s been a strong supporter of bipartisan policies that have greatly enriched and therefore strengthened this increasingly aggressive thug-ocracy. It’s true that he’s proposed to bring back stateside supply chains for critical products, like healthcare and defense-related goods, and has danced around the issue of lifting the Trump tariffs. But the Silicon Valley and Wall Street tycoons who have opened their wallets so wide for him are staunchly opposed to anything remotely resembling a decoupling of the U.S. and Chinese economies and especially technology bases

Therefore, I can easily imagine Biden soon starting to ease up on sanctions against Chinese tech companies – largely in response to tech industry executives who are happy to clamor for subsidies to bolster national competitiveness, but who fear losing markets and the huge sunk costs of their investments in China. I can just as easily imagine a Biden administration freeing up bilateral trade again for numerous reasons: in exchange for an empty promise by Beijing to get serious about fighting climate change; for a deal that would help keep progressive Democrats in line; or for an equally empty pledge to dial back its aggression in East Asia; or as an incentive to China to launch a new round of comprehensive negotiations aimed at reductions or elimination of Chinese trade barriers that can’t possibly be adequately verified. And a major reversion to dangerous pre-Trump China-coddling can by no means be ruled out.

Today, however, I’d like to focus on three subjects I haven’t dealt with as much that have reinforced my political choice.

First, and related to my views on trade and immigration, it’s occurred to me for several years now that between the Trump measures in these fields, and his tax and regulatory cuts, that the President has hit upon a combination of policies that could both ensure improved national economic and technological competitiveness, and build the bipartisan political support needed to achieve these goals.

No one has been more surprised than me about this possibility – which may be why I’ve-hesitated to write about it. For years before the Trump Era, I viewed more realistic trade policies in particular as the key to ensuring that U.S.-based businesses – and manufacturers in particular – could contribute the needed growth and jobs to the economy overall even under stringent (but necessary) regulatory regimes for the environment, workplace safety, and the like by removing the need for these companies to compete with imports from countries that ignored all these concerns (including imports coming from U.S.-owned factories in cheap labor pollution havens like China and Mexico).

I still think that this approach would work. Moreover, it contains lots for folks on the Left to like. But the Trump administration has chosen a different economic policy mix – high tariffs, tax and regulatory relief for business, and immigration restrictions that have tightened the labor market. And the strength of the pre-CCP Virus economy – including low unemployment and wage growth for lower-income workers and minorities – attests to its success.

A Trump victory, as I see it, would result in a continuation of this approach. Even better, the President’s renewed political strength, buoyed by support from more economically forward-looking Republicans and conservatives like Senators Marco Rubio of Florida and Josh Hawley of Missouri, could bring needed additions to this approach – notably, more family-friendly tax and regulatory policies (including childcare expense breaks and more generous mandatory family leave), and more ambitious industrial policies that would work in tandem with tariffs and sanctions to beat back the China technology and national security threat.

Moreover, a big obstacle to this type of right-of-center (or centrist) conservative populism and economic nationalism would be removed – the President’s need throughout the last four years to support the stances of the conventional conservatives that are still numerous in Congress in order to ensure their support against impeachment efforts.

My second generally undisclosed (here) reason for voting Trump has to do with Democrats and other Trump opponents (although I’ve made this point repeatedly on Facebook to Never Trumper friends and others). Since Mr. Trump first announced his candidacy for the White House back in 2015, I’ve argued that Americans seeking to defeat him for whatever reason needed to come up with viable responses to the economic and social grievances that gave him a platform and a huge political base. Once he won the presidency, it became even more important for his adversaries to learn the right lessons.

Nothing could be clearer, however, than their refusal to get with a fundamentally new substantive program with nationally unifying appeal. As just indicated, conventional Republicans and conservatives capitalized on their role in impeachment politics to push their longstanding but ever more obsolete (given the President’s overwhelming popularity among Republican voters) quasi-libertarian agenda, at least on domestic policy.

As for Democrats and liberals, in conjunction with the outgoing Obama administration, the countless haters in the intelligence community and elsewhere in the permanent bureaucracy, and the establishment conservatives Mr. Trump needed to staff much of his administration, they concentrated on ousting an elected President they considered illegitimate, and wasted more than three precious years of the nation’s time. And when they weren’t pushing a series of charges that deserve the titles “Russia Hoax” and “Ukraine Hoax,” the Democrats and liberals were embracing ever more extreme Left stances as scornful of working class priorities as their defeated 2016 candidate’s description of many Trump voters as “deplorables.”

I see no reason to expect any of these factions to change if they defeat the President this time around. And this forecast leads me to my third and perhaps most important reason for voting Trump. As has been painfully obvious especially since George Floyd’s unacceptable death at the hands of Minneapolis police officers, the type of arrogance, sanctimony and – more crucially – intolerance that has come to permeate Democratic, liberal, and progressive ranks has now spread widely into Wall Street and the Big Business Sector.

To all Americans genuinely devoted to representative and accountable government, and to the individual liberties and vigorous competition of ideas and that’s their fundamental foundation, the results have been (or should be) nothing less than terrifying. Along with higher education, the Mainstream Media, Big Tech, and the entertainment and sports industries, the nation’s corporate establishment now lines up squarely behind the idea that pushing particular political, economic, social, and cultural ideas and suppressing others has become so paramount that schooling should turn into propaganda, that news reporting should abandon even the goal of objectivity, that companies should enforce party lines in the workplace and agitate for them in advertising and sponsorship practices, and that free expression itself needed a major rethink.

And oh yes: Bring on a government-run “Truth and Reconciliation Commission” to investigate – and maybe prosecute – crimes and other instances of “wrongdoing” by the President, by (any?) officials in his administration. For good measure, add every “politician, executive, and media mogul whose greed and cowardice enabled” the Trump “catastrophe,” as former Clinton administration Labor Secretary Robert Reich has demanded. Along with a Scarlet Letter, or worse, for everyone who’s expressed any contrary opinion in the conventional or new media? Or in conversation with vigilant friends or family?

That Truth Commission idea is still pretty fringe-y. So far. But not too long ago, many of the developments described above were, too. And my chief worry is that if Mr. Trump loses, there will be no major national institution with any inclination or power to resist this authoritarian tide.

It’s reasonable to suppose that more traditional beliefs about free expression are so deeply ingrained in the national character that eventually they’ll reassert themselves. Pure self-interest will probably help, too. In this vein, it was interesting to note that Walmart, which has not only proclaimed its belief that “Black Lives Matter,” but promised to spend $100 million on a “center for racial equality” just saw one of its Philadelphia stores ransacked by looters during the unrest that has followed a controversial police shooting.

But at best, tremendous damage can be done between now and “eventually.” At worst, the active backing of or acquiescence in this Woke agenda by America’s wealthiest, most influential forces for any significant timespan could produce lasting harm to the nation’s life.

As I’ve often said, if you asked me in 2015, “Of all the 300-plus million Americans, who would you like to become President?” my first answer wouldn’t have been “Donald J. Trump.” But no other national politician at that point displayed the gut-level awareness that nothing less than policy disruption was needed on many fronts, combined with the willingness to enter the arena and the ability to inspire mass support.

Nowadays, and possibly more important, he’s the only national leader willing and able to generate the kind of countervailing force needed not only to push back against Woke-ism, but to provide some semblance of the political pluralism – indeed, diversity – required by representative, accountable government. And so although much about the President’s personality led me to mentally held my nose at the polling place, I darkened the little circle next to his name on the ballot with no hesitation. And the case for Mr. Trump I just made of course means that I hope many of you either have done or will do the same.

Im-Politic: Evidence that Trump Would Be Foolish Not to “Run on China”

22 Wednesday Apr 2020

Posted by Alan Tonelson in Im-Politic

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2020 election, CCP Virus, China, climate change, coronavirus, COVID 19, cybersecurity, Democrats, environment, Gallup, human rights, Im-Politic, Jobs, Joe Biden, Pew Research Center, polls, public opinion, Republicans, tariffs, Trade, trade deficit, trade war, Trump, Wuhan virus

Monday I laid out the case that presumptive Democratic presidential nominee Joe Biden has cheer-led every major Washington policy decision in recent decades that has enabled the rise of a wealthy, powerful, and worst of all, hostile and dangerous China. So it’s at least awfully interesting that the day after, a new poll was released making clear that the Trump campaign’s decision to brand the former Vice President as “soft on China” is not only on the mark substantively, but a smart political move.

The poll, conducted by the Pew Research Center, shows that Americans of all political stripes have turned into strong China critics. And especially important – there’s much more going on here than blaming Beijing for the CCP Virus outbreak. Respondents across-the-board now strongly agree that China poses a major threat to a wide range of U.S. interests – including on the trade front, where President Trump’s tariffs were widely reported to be devastating pretty much every major group of actors in the American economy, from businesses to consumers, and from farmers to manufacturers.

P.S. It’s not like Pew has ever itself shown any signs of being critical of China. Indeed, its introduction to the results includes this moral equivalence-friendly assessment: “…with the onset of an unprecedented pandemic, the stage has been set for both sides to cast aspersions on the other.”

The finding Pew emphasizes is a dramatic rise in unfavorable American views of China since Mr. Trump’s inauguration. When he entered office at the beginning of 2017 , the respondents Pew interviewed disapproved of China, but only by a narrow 47 percent to 44 percent margin. The most recent results show unfavorable ratings thumping favorable by 66 percent to 26 percent. The latest negative reviews garnered by Beijing, moreover, represent its worst such showing since Pew began asking the question in 2005.

And as Pew points out, looking at this divergence over time makes clear that China’s ratings began deteriorating long before the virus appeared. In fact, the sharpest increases in Beijing’s unfavorables and sharpest decreases in its favorables started in 2018 – when the administration began announcing and imposing steep levies on huge amounts of prospective imports from China.

Indeed, China’s image among Americans is now so bad that it’s shared among Democrats and Republicans alike. Frustratingly, the survey doesn’t measure the attitudes of declared political independents, but the latest figures show that 72 percent of Republicans and those “leaning” Republican hold unfavorable views of China, and that 62 percent of Democrats and their “leaners” agree. And both negatives are up sharply since the trade war began – or more accurately, since the United States started fighting back.

Not that trade is the only China-related concern expressed in the Pew survey, or even the strongest. Pew gauged U.S. opinion on several China-related issues, and the biggest worries were voiced over “China’s impact on the global environment.” Fully 91 percent of respondents labeled it as a “very serious” or “somewhat serious” problem for the United States, the former responses hitting 61 percent. Next came “cyberattacks from China,” rated as problems by 8 percent of those surveyed, and as “very serious” problems by 57 percent.

Coming in third and fourth were the economic issues. Eighty five percent saw the U.S. trade deficit with China as a problem, including 49 percent calling it serious. And for “the loss of U.S. jobs to China,” the numbers came in at 85 percent and 52 percent, respectively. Interestingly, those latter results nearly matched those for the issue of “China’s growing military power” (84 percent and 49 percent, respectively).

Important to note, however, is evidence that, high as they are, the economic concerns have been leveling off in recent years, while the environmental concerns have been rising (along with those centered on human rights). That’s not necessarily great news for Mr. Trump, whose focus has been on the jobs and overall economy impact (along with the technological threat from China – which is a major source of public China-related concern).

Much better news for the President – Americans aged 50 and older (whose voter turnout rates have long been high) – hold the most negative views of China. Yet this year, Beijing’s image has turned negative for Americans in the 18-29 age class for the first time ever. And for both groups, disapproval of China surged starting in 2018.

Of course, China’s not the only issue on which Americans will be voting this fall. But the latest Gallup results, for example, show that virus-related issues have surged to the top of their rankings for the “most important problem facing the U.S.” If the President can link the virus with the overall China challenge in voters’ minds, his odds of reelection would seem to be pretty good. His biggest obstacle? Possibly the companion Gallup finding that right behind the virus on the list of national problems is “The government/poor leadership.”

Glad I Didn’t Say That! Laughable Claims of China Smog Progress

26 Monday Dec 2016

Posted by Alan Tonelson in Glad I Didn't Say That!

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air pollution, China, environment, Glad I Didn't Say That!, smog, The New York Times

I’m pleased to announce the introduction of a new category of posts on RealityChek – which I’ll be calling “Glad I Didn’t Say That!” These items will consist of examples of statements made by prominent American leaders, economists, businessmen, journalists, and others that are flatly contradicted either by readily available facts and/or data – and sometimes even by other statements made by these individuals themselves, or by the governments, companies, universities, news organizations, or other institutions with with they’re associated. Prominent among these will be predictions about policy decisions, like trade agreements, that have been wildly off-base.

In my quarter century (!) of writing about these topics, it’s become clear to me both that such statements and contradictions are not only in massive oversupply, but that the ineptitude they reveal is rarely, if ever, covered. The inevitable result: Individuals and institutions that should enjoy zero credibility on any number of public issues continue to be taken seriously – often with disastrous policy consequences.

In other words, “Glad I Didn’t Say That!” is another effort on RealityChek to introduce the idea of accountability into American policy and politics. And because crowd-sourcing is such an effective and exciting new way to share information and accomplish important goals, I invite all eagle-eye readers to send me any examples you believe deserve highlighting. One tip: the simpler and more straightforward, the better!

And here’s the first in this new series – which also shows the format I’ll be using. Revealingly, it comes from the same newspaper – on the same day!

“China Has Made Strides in Addressing Air Pollution, Environmentalist Says”

–The New York Times, December 16, 2016

“Beijing, Bracing for 5 Days of Heavy Pollution, Issues Red Alert”

–The New York Times, December 16, 2016

(Sources: “China Has Made Strides in Addressing Air Pollution, Environmentalist Says,” by Didi Kirsten Tatlow, The New York Times, December 16, 2016, http://www.nytimes.com/2016/12/16/world/asia/china-air-pollution-ma-jun.html and “Beijing, Bracing for 5 Days of Heavy Pollution, Issues Red Alert,” by Jane Perlez, ibid., http://www.nytimes.com/2016/12/16/world/asia/beijing-air-pollution.html?_r=0)

Im-Politic: How Bernie Can “Win”

09 Thursday Jul 2015

Posted by Alan Tonelson in Im-Politic

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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.

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

12 Wednesday Nov 2014

Posted by Alan Tonelson in (What's Left of) Our Economy

≈ 2 Comments

Tags

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.

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The Brighter Side

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Those Stubborn Facts

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The Snide World of Sports

  • (What's Left of) Our Economy
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  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

Guest Posts

  • (What's Left of) Our Economy
  • Following Up
  • Glad I Didn't Say That!
  • Golden Oldies
  • Guest Posts
  • Housekeeping
  • Housekeeping
  • Im-Politic
  • In the News
  • Making News
  • Our So-Called Foreign Policy
  • The Snide World of Sports
  • Those Stubborn Facts
  • Uncategorized

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