(What’s Left of) Our Economy: Blaming the Restaurant Crisis on…Trump’s Tariffs

Tags

Europe, food, imports, productivity, restaurants, spirits, tariffs, The Washington Post, Trade, Trump, wine, {What's Left of) Our Economy

It’s like the Washington Post, and especially the folks who run its op-ed page, will do anything to slam President Trump’s tariff-centric trade policies. Example number 4,369,589? A piece not from an Offshoring Lobby mainstay, or one of this pressure group’s hired gun think tank hacks, or an academic economist with his or her head stuck in the clouds – but from two of America’s leading chefs and restaurateurs.

I’ll give Post editors and the authors – Kwame Onwuachi and Alice Waters – style points for creativity at least. The article contends that a great way for apparent President-elect Joe Biden to provide some desperately needed help for a national restaurant sector decimated by the CCP Virus would be to lift a set of tariffs imposed by Mr. Trump on European food products. The tariffs, they contend, are adding 25 percent to the costs of restaurants that use these products exactly at a time when few establishments in this usually low-margin sector can afford such burdens.

Unfortunately, all the piece makes clear is that chefs and restaurateurs should stick to cooking and serving and running their own businesses rather than advising the nation on trade, and that the folks at the Post should try requiring their authors to meet some minimal standards of credible argumentation.

After all, as Onwuachi and Waters themselves point out, these Trump tariffs were imposed last October 19. And the nation’s restaurants seemed to be doing just fine until…the pandemic and the lockdowns came along. So blaming the trade curbs for any significant contribution to the restaurant crisis seems a major stretch.

No doubt dining establishments that rely heavily on sales of products stressed by the authors like “wine from France, Spain and Germany, whiskey from Ireland and Scotland, and Spanish olives and olive oil, along with cheeses from all over the continent, pork, and much more” are now seeing their remaining (post-lockdowns) earnings suffering.

But nowhere in the piece are readers given the bigger picture. For example, what share of the nation’s restaurants even serve any of these foods or beverages? And what share of their total costs do such imports from Europe represent? Further, what percentage of these restaurants have closed for good, meaning that tariff elimination won’t provide them with a speck of relief at all? As RealityChek regulars know, presenting economic data in isolation is the first refuge of an intellectual scoundrel.

The authors – and their editors – also seem unaware that lots of domestic substitutes are available for these European products. For instance, on the eve of the pandemic, U.S.-produced wine accounted for about two-thirds of all the wine sold in the country both by value and by volume. I’m no oenophile, but I keep hearing that many measure up quite well against their foreign counterparts – and often better. In addition, not all the imports, or even the choice imports, come from Europe, as connoisseurs of Australian, South American, and South African wines can attest.

It’s a shame that the Trump tariffs won’t enable the restaurants that do maintain an extensive European wine menu to offer their customers exactly what they want, at exactly the prices to which they’re accustomed. But I strongly suspect that diners today are in a pretty supportive, accomodating mood. And if restaurateurs are indeed desperate – which so many clearly are – they won’t gripe excessively about switching to non-tariffed wines.

Moreover, any restaurateur worth his or her salt should have the marketing chops to encourage customers to expand their palates. Heaven knows they’ve succeeded extraordinarily in persuading Americans to sample all sorts of new, exotic, and often downright weird dishes and drinks containing equally new, exotic, and often downright weird ingredients and combinations thereof.

Since wine and other spirits play an outsized role in restaurant sales and profits, it’s that alcohol trade picture that counts most, and it’s enough to refute in large measure the case for saving or even meaningfully boosting the dining industry by rescinding the tariffs. But as opposed to my indifference to wine, I am a cheese lover, and can personally attest that many outstanding domestic varieties are available, too, for gourmet chefs to place on appetizer or dessert plates.

Finally, both the authors and the Post editors ignore the economics maxim holding that businesses facing cost increases can absorb them without raising prices by boosting their productivity. And although cooking, serving, and dining probably don’t strike many as an activities where efficiency can be greatly raised, the industry itself admits that its productivity growth is unacceptably low and needs to get on the stick.

Just as important, unless Unwuachi, Waters, any other spokes folks for their sector, or Post editors can come up with more convincing evidence that U.S. trade policy has decisively impacted their fortunes, focusing on improving productivity would sure be a better use of their time than whining about Mr. Trump’s tariffs.

Making News: Podcast On-Line of National Radio Interview on U.S.-China Relations & the Biden Manufacturing Plan

Tags

Biden, China, election 2020, Europe, European Union, innovation, Joe Biden, Making News, manufacturing, Market Wrap with Moe Ansari, offshoring, technology, Trade, trade war, Trump

I’m pleased to announce that a podcast is now on-line of an interview I did yesterday on Moe Ansari’s nationally syndicated radio show.  Click here and then scroll down a bit to the segment with my name on it to listen to a timely, informative session on the CCP Virus’ impact on U.S.-based manufacturing; on U.S.-China relations and President Trump’s trade war (which could include Europe), and on presumptive Democratic Presidential nominee Joe Biden’s plan for reviving American industry. The segment comes on at about the 23:50 mark.

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

Im-Politic: The CCP Virus Crisis Has Become Even More of a Nursing Home Crisis

Tags

Canada, CCP Virus, coronavirus, COVID 19, Europe, Following Up, lockdown, nursing homes, reopening, seniors, shutdown, Sweden, The New York Times, United Kingdom, Wuhan virus

About three weeks ago, I posted about the degree to which total U.S. CCP Virus-related deaths were occurring in nursing homes and other special facilities for seniors. And I noted that the answer – “really big” – provided significant evidence for the idea that substantial reopenings of the U.S. economy were much more feasible than widely believed.

The reason: If the virus’ main dangers were so highly concentrated in a single, highly vulnerable, and already confined population, then by definition, such dangers to the rest of the public were considerably less serious than widely believed. Therefore, relatively low-risk populations could be permitted to reengage in normal economic activity sooner rather than later.

Three weeks later, the case for faster, wider reopenings is even stronger – along with the arguments for focusing virus containment measures on seniors, and especially those inside or outside such facilities.

For example, that previous post cited data indicating that about twenty percent of all U.S. virus deaths were taking place in elder care facilities. More recently, a comprehensive New York Times survey pegged the share at 35 percent.

Moreover, data are coming in making clear that this pattern is hardly confined to the United States. In Canada, the share has been reported at 81 percent. Across Europe, national shares are thought to be between 42 percent and 57 percent. In the United Kingdom, it’s estimated at 25 percent.

Possibly the most intriguing findings concern Sweden. That’s because its lockdown was the lightest imposed among the wealthier national economies. The overall Swedish virus death rates, however, have been right in the middle of the pack for Europe.  (See here for the latest numbers.) Yet the Swedish government has also reported that nearly half those deaths have taken place in elder care facilities.

In other words, if Sweden had its nursing home act together, its virus fatalities would have been about 185 per million people – which would have put it well behind the United States, Spain, the United Kingdom, Italy, France, Belgium, the Netherlands, and Switzerland. Sweden’s economy, unfortunately, seems unlikely to escape taking a major virus-related economic hit anyway. But the toll seems largely due to its relatively small size and as a result its relatively heavy reliance on foreign trade – not to its failure to shut down more broadly.

The United States, of course, is much less reliant on foreign trade. In theory, then, if its nursing and similar facilities get the aid they need, America’s economy can continue reopening – and even faster than at present – without running major further health risks. Indeed, as I’ve also noted previously, such reopening per se could well curb other emerging public health dangers. Moreover, as observed by the Washington Post editorial board, moving toward the Swedish model might speed up progress toward creating herd immunity in the United States. This status would mean considerable protection against the second virus wave that might arrive along with cooler weather this fall.

As always, “reopening” doesn’t mean an immediate, complete return to the pre-virus normal. And serious uncertainties continue surrounding the nursing homes data, and indeed all virus-related data. But a pattern visible in so many high income countries can’t be dismissed, either, and it should put ever more pressure on backers of slower reopenings to justify their positions.

(What’s Left of) Our Economy: Is the New U.S. Trade Report a Virus Portent or Anomaly?

Tags

China, decoupling, Europe, healthcare goods, high tech goods trade, Ireland, manufacturing, pharmaceutical, pharmaceuticals, PPE, protective gear, services trade, Trade, trade deficit, travel services, {What's Left of) Our Economy

Were this morning’s latest monthly U.S. trade figures (for March) just one of those things? Or a sign of CCP Virus-affected trade patterns to come? Evidence for both propositions can be found in the weeds, though on balance I remain confident that as the nation’s economy remains gravely wounded (and could well face worse), its trade shortfall will continue its recent (and highly beneficial) Trump-era trend of narrowing.

The reasons for dismissing the new trade report as an outlier stem from the tendency (with numerous exceptions) of the gap to narrow when the economy weakens and to expand when it strengthens. So it was a real surprise to find that, from February to March, when all indicators showed that a major downturn was beginning thanks to the pandemic, the trade deficit rose a strong 11.57 percent – from a downwardly adjusted $39.81 billion to $44.42 billion.

Also surprising for a U.S. economy that’s not very export focused but that’s usually voracious importer: The main reason for the deficit’s growth both in absolute and percentage terms was a drop-off in the former. In March, total U.S. overseas sales sank on month by 9.63 percent, from an upwardly adjusted $207.75 billion to $187.75 billion. That was the lowest monthly total since November, 2016’s $185.49 billion. Combined goods and services imports were down, too – but by a smaller 6.22 percent, from an upwardly adjusted $247.56 billion to $232.16 billion. That total was the lowest for a month since December, 2016 ($234.56 billion).

Moreover, in terms of the trade balance, March’s worse U.S. performance can’t be pinned on the virus-produced collapse in travel. Make no mistake about it – international travel both to and from the United States did collapse. In value terms, two-way travel sank from $28.77 billion in February to $13.49 billion. In other words, it was more than cut in half. But the travel services trade surplus actually improved during that period – from $4.53 billion to $4.72 billion. That means not only that, on net, legal visitors to the United States (including students) as usual spent more in America than Americans spent overseas between February and March. It means that foreign spending in the United States exceeded Americans’ spending abroad by an even greater amount.

Another puzzling result that doesn’t have obvious staying power – at least not to me: The biggest single contibutor to the March trade deficit increase was a more than doubling of the monthly goods trade shortfall with Europe – from $11.37 billion to $22.97 billion. That’s the biggest monthly total ever and the biggest absolute increase ever (the figures go back to 1997), and the third biggest percentage increase of all time (after July, 1997’s 418.80 percent and March, 1998’s 205.89 percent – both totals coming when trade volumes were much smaller, and big percentage increases therefore much easier to generate).

The big Europe merchandise trade deficit surge, moreover, came on the the import side. These soared to $56.04 billion in March (another record), and the 26.42 percent sequential rise was the biggest since March, 2011’s 29.35 percent.

U.S. goods exports to Europe didn’t do badly – they hit $33.07 billion in March, the third best total ever. But the monthly increase was a bare 0.26 percent.

Some of the Europe trade results were due to a much bigger goods deficit and much greater goods imports from Ireland – which is a major foreign supplier of pharmaceuticals to the United States. Despite the overall sequential decrease in American merchandise exports and imports in March, trade in pharmaceutical preparations rose both coming and going. The trade shortfall increased by 13.25 percent, with imports rising by 14.92 percent. And the goods trade gap with Ireland (not all due to pharmaceuticals, to be sure) soared by 45.81 percent with imports up 41.91 percent.

It’s true that both the deficit with Ireland and imports from the Emerald Isle fell sharply on month in February. But both totals were all-time highs.

At the same time, India is another big pharmaceutical supplier to the United States, and although its March merchandise trade deficit with America shot up by 47.87 percent month-to-month, imports actually dipped (by 0.37 percent).

And what about March U.S. trade with China – which gave the world the virus, and remains a major supplier of the chemical building blocks of pharmaceutical products as well as protective medical gear?

In an unmistakably good development for those who recognize both the health security and broader economic dangers of doing extensive business with a predatory trader that’s increasingly hostile geopolitically, the U.S. merchandise trade deficit with the People’s Republic plummeted dramatically again – by just over 26 percent month-to-month, to $11.83 billion. You’d have to go back to March, 2004 to find a lower monthly figure ($10.44 billion).

U.S. goods exports to China actually improved sequentially in March – by 16.98 percent, to $7.97 billion. That’s far from the biggest absolute or percentage monthly increase on record. But with China’s economic growth at multi-decade lows due largely to the virus and the Trump tariffs, it’s encouraging that America’s goods exports to China have held up since the Phase One trade deal was signed in January.

U.S. goods imports from China, meanwhile, fell by 13.18 percent on month in March, to $19.81 billion. That total is the lowest since February, 2009 ($18.85 billion), during the depths of the Great Recession.

On a year-to-date basis, the American merchandise merchandise deficit with the People’s Republic is now down an astonishing 32.61 percent. That’s nearly three times more than the comparable drop in the global U.S. goods deficit, and a clear sign that trade diversion and decoupling from China are taking place even as the overall American trade gap narrows – and are likely to continue taking place.

Two other oddities worth noting in the March trade report. First, the manufacturing deficit rebounded from February’s $63.01 billion (the lowest total since February, 2017’s $60.47 billion) to $75.80 billion. That’s a very big 20.30 percent higher. Even though overseas markets for America’s domestic manufacturers are tumbling into recession and maybe worse along with the U.S. economy, manufacturing exports still managed a monthly gain of 3.55 percent in March – to $93.26 billion. But despite signs of weakness in domestic U.S. manufacturing and the overall economy, manufacturing imports shot up by 10.45 percent, to $169.06 billion. It’s difficult to see how either trend lasts until the CCP Virus is brought under control.

Incidentally, the March totals bring the manufacturing trade gap to $220.75 billion so far this year – down 7.01 percent from last year’s comparable $237.38 billion. Manufacturing exports year-to-date as of March are down four percent, and imports have declined 5.38 percent.

Similarly, the longstanding U.S. trade shortfall in high tech goods more than doubled sequentially in March, from $5.13 billion to $10.30 billion. Sure, this increase followed a 55.62 percent plunge in February, but the turnaround is still stunning. And although high tech exports rose in March on month by a healthy 8.55 percent, the big change, as in February, was on the import side – where U.S. purchases from abroad jumped by 22.24 percent.

More detailed March trade data — particularly shedding more light on U.S. trade in healthcare-related goods — should be out from the federal government shortly, and I’ll be sure to keep you up to date on those developments.   

Im-Politic: A (Huge) Nursing Home Factor in U.S. Virus Deaths

Tags

ABC News, CCP Virus, coronavirus, COVID 19, demographics, Europe, Im-Politic, lockdown, long-term care facilities, nursing homes, reopening, restart, seniors, shutdown, WHO, World Health Organization, Wuhan virus

Whenever I hear about a CCP Virus outbreak at a nursing home or similar seniors facility, I wonder how these especially tragic episodes have been influencing the national data. The issue matters greatly, because the numbers could reveal much about the virus’ spread and virulence among Americans not so aged and confined – i.e., the vast majority of the population.

Of course, avoidable and unavoidable testing shortcomings are making all the statistics dodgy.  And state and local authorities’ standards for identifying and reporting CCP Virus cases – and therefore deaths – are both highly diverse and constantly changing.  What’s emerged so far, though, shows that nursing homes and the like are indeed where the disease’s worst effects are appearing, and by wide margins. As a result, however, these statistics also strongly indicate that the virus is much less dangerous for other Americans than originally thought.

The most comprehensive picture we have of nursing homes’ role has come from ABC News. Its examination of state-level numbers concluded that, as of yesterday, at least 10,631 of nationwide CCP Virus-induced fatalities had been long-term care residents. That’s about a fifth of the U.S. total. But the “at least” in the previous sentence is really important. For the ABC numbers are based on information from only 28 of the states plus the District of Columbia. That leaves the nursing homes’ share of fatalities unknown for 22 states. ABC didn’t say which states were and weren’t included in the count, but it’s almost certain that the more state figures are examined, the higher the nursing home share will rise.

One reason for confidence in this conclusion: The World Health Organization (WHO) stated on Thursday that as many as half of all of Europe’s coronavirus-related deaths have occurred in long-term care facilities. Of course, WHO’s performance during the pandemic has been roundly criticized. But you have to assume that it’s found it much easier getting reliable data from Europe than from dangerously secretive China.

It’s also important to note that Europe’s populations are significantly older than the United States’, which no doubt explains much of that towering European estimate. In addition, Europe was hit by the virus earlier. But along with the incomplete nature of the U.S. data, the the demographic gap is narrow enough to suggest that nursing home residents’ share of American deaths will continue growing.     

Combined with mounting evidence (see, e.g., here and here) that the CCP Virus has infected many more Americans than first estimated – meaning that the disease’s lethality looks considerably lower than once feared – the apparent concentration in nursing homes is unquestionably good news for most of the nation (except, of course, if any of your loved ones lives in these facilities). One possible implication:  With the right, targeted, precautions, a more extensive earlier reopening of the U.S. economy is warranted. The bad news, however, is that the virus’ impact is most deadly in one of America’s most vulnerable populations. Let’s all hope that, if this finding holds up, one result will be more mitigation where it’s needed most.

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

Tags

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

Tags

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

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

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

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

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

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

Some of the country-specific results?

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

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

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

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

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

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

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

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

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

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

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

Our So-Called Foreign Policy: Trump’s Record and the Bolton Effect

Tags

Afghanistan, alliances, America First, Asia-Pacific, Barack Obama, China, Europe, extended deterrence, globalism, Iran, Iran deal, Iraq, Israel, Japan, John Bolton, Joint Comprehensive Plan of Action, Kim Jong Un, Middle East, neoconservatives, North Korea, Our So-Called Foreign Policy, Palestinians, Republicans, South Korea, Syria, Trump

With John Bolton now out as President Trump’s national security adviser, it’s a great time to review the Trump foreign policy record so far. My grade? Though disappointing in some important respects, it’s been pretty good. Moreover, Bolton’s departure signals that performance could improve significantly, at least from the kind of America First perspective on which Mr. Trump ran during his 2016 campaign. That’s less because of Bolton’s individual influence than because what his (clearly forced) exist tells us about the President’s relationship with the Republican Party and conservative establishment.

There’s no doubt that the Trump foreign policy record is seriously lacking in major, game-changing accomplishments. But that’s a globalist, and in my view, wholly misleading standard for judging foreign policy effectiveness. As I’ve written previously, the idea that U.S. foreign policy is most effective when it’s winning wars and creating alliances and ending crises and creating new international regimes and the like makes sense only for those completely unaware – or refusing to recognize – that its high degrees of geopolitical security and economic self-reliance greatly undercut the need for most American international activism. Much more appropriate measures of success include more passive goals like avoiding blunders, building further strength and wealth (mainly through domestic measures), and reducing vulnerabilities. (Interestingly, former President Obama, a left-of-center globalist, saltily endorsed the first objective by emphasizing – privately, to be sure – how his top foreign policy priority was “Don’t do stupid s–t.”)     

And on this score, the President can take credit for keeping campaign promises and enhancing national security. He’s resisted pressure from Bolton and other right-of-center globalists to plunge the country much more deeply militarily into the wars that have long convulsed Afghanistan, Syria, and Iraq, and seems determined to slash the scale of U.S. involvement in the former – after nineteen years.

He’s exposed the folly of Obama’s approach to preventing Iran from acquiring nuclear weapons. Although Tehran has threatening to resume several operations needed to create nuclear explosives material since Mr. Trump pulled the United States out of the previous administration’s multilateral Iran deal, it’s entirely possible that the agreement contained enough loopholes to permit such progress anyway. Moreover, the President’s new sanctions, their devastating impact on Iran’s economy, and the inability of the other signatories of Obama’s multilateral Joint Comprehensive Plan of Action to circumvent them have both debunked the former President’s assumption that the United States lacked the unilateral power to punish Iran severely for its nuclear program and ambitions, and deprived Tehran of valuable resources for causing other forms of trouble throughout the Middle East.

Mr. Trump taught most of the rest of the world another valuable lesson about the Middle East when he not only recognized the contested city of Jerusalem as Israel’s capital, but actually moved the U.S. Embassy there. For decades, American presidential contenders from both parties had promised to endorse what many of Israel’s supporters called its sovereign right to choose its own capital, but ultimately backed down in the face of warnings that opinion throughout the Arab world would be explosively inflamed, that American influence in the Middle East would be destroyed, and U.S. allies in the region and around the world antagonized and even fatally alienated.

But because the President recognized how sadly outdated this conventional wisdom had become (for reasons I first explained here), he defied the Cassandras, and valuably spotlighted how utterly powerless and friendless that Palestinians had become. That they’re no closer to signing a peace agreement with Israel hardly reflects an American diplomatic failure. It simply reveals how delusional they and especially their leaders remain.

Nonetheless, Mr. Trump’s Middle East strategy does deserve criticism on one critical ground: missing an opportunity. That is, even though he’s overcome much Congressional and even judicial opposition and made some progress on strengthening American border security, he’s shown no sign of recognizing the vital America First-type insight holding that the nation’s best hope for preventing terrorist attacks emanating from the Middle East is not “fighting them over there” – that is, ever more engagement with a terminally dysfunctional region bound to spawn new violent extremist groups as fast as they can be crushed militarily. Instead, the best hope continues to be preventing the terrorists from coming “over here” – by redoubling border security.

The Trump record on North Korea is less impressive – but not solely or even partly because even after two summits with North Korean dictator Kim Jong Un, no progress has been made toward eliminating the North’s nuclear weapons or even dismantling the research program that’s created them, or toward objectives such as signing a formal peace treaty to end the Korean War formally that allegedly would pave the way for a nuclear deal. (Incidentally, I’m willing to grant that the peninsula is quieter today in terms of major – meaning long-range – North Korean weapons tests than when the President took office – and that ain’t beanbag.)

Still, the main – and decisive – Trump failure entails refusing to act on his declared instincts (during his presidential campaign) and bolstering American security against nuclear attack from North Korea by withdrawing from the peninsula the tens of thousands of U.S. troops who served as a “tripwire” force. As I’ve explained previously, this globalist strategy aimed at deterring North Korean aggression in the first place by leaving an American president no choice except nuclear weapons use to save American servicemen and women from annihilation by superior North Korean forces.

But although this approach could confidently be counted on to cow the North before Pyongyang developed nuclear weapons of its own capable of striking the United States, and therefore arguably made strategic sense, now that the North has such capabilities or is frighteningly close, such “extended deterrence” is a recipe for exposing major American cities to nuclear devastation. And if that situation isn’t inexcusable enough, the United States is playing such a dominant role in South Korea’s defense largely because the South has failed to field sufficient forces of its own, even though its wealthier and more technologically advanced than the North by orders of magnitude. (Seoul’s military spending is finally rising rapidly, though – surely due at least in part to Trump pressure.) 

Nonetheless, far from taking an America First approach and letting its entirely capable Asian allies defend themselves and incentivizing them plus the Chinese and Russians to deal as they see fit with North Korean nuclear ambitions that are most threatening to these locals, the President seems to be happy to continue allowing the United States to take the diplomatic lead, bear much heavier defense spending burdens than necessary, and incurring wholly needless nuclear risk. Even worse, his strategy toward Russia and America’s European allies suffers the exact same weakness – at best.

Finally (for now), the President has bolstered national security by taken urgently needed steps to fight the Chinese trade and tech predation that has gutted so much of the American economy’s productive sectors that undergird its military power, and that his predecessors either actively encouraged, coddled, or ignored – thereby helping China greatly increase its own strength.

In this vein, it’s important to underscore that these national security concerns of mine don’t stem from a belief that China must be contained militarily in the Asia-Pacific region, or globally, as many globalists-turned-China economic hawks are maintaining. Of course, as long as the United States remains committed to at least counterbalancing China in this part of the world, it’s nothing less than insane to persist in policies that help Beijing keep building the capabilities that American soldiers, sailors, and airmen may one day need to fight.

I’ll be writing more about this shortly, but my main national security concerns reflect my belief that a world in which China has taken the military and especially technological need may not directly threaten U.S. security. But it will surely be a world in which America will become far less able to defend its interest in keeping the Western Hemisphere free of excessive foreign influence, a la the Monroe Doctrine, and in which American national finances and living standards will erode alarmingly.

The question remains, however, of whether a Bolton-less administration’s foreign policy will tilt significantly further toward America First-ism. President Trump remains mercurial enough to make any such forecasting hazardous. And even if he wasn’t, strategic transitions can be so disruptive, and create such short-term costs and even risks, that they’re bound to take place more unevenly than bloggers and think tankers and other scribblers would like to see.

But I see a case for modest optimism: Just as the end of Trump-Russia scandal-mongering and consequent impeachment threat has greatly reduced the President’s need to court the orthodox Republicans and overall conservative community that remain so influential in and with Congress in particular, and throw them some big bones on domestic policy (e.g., prioritizing cutting taxes and ending Obamacare), it’s greatly reduced his need to cater to the legacy Republicans and conservatives on foreign policy.

Not that Mr. Trump has shown many signs of shifting his domestic priorities yet. But I’m still hoping that he learns the (screamingly obvious) lessons of the Republicans’ 2018 midterms losses (e.g., don’t try to take an entitlement like Obamacare away from Americans until you’re sure you can replace it with something better; don’t endorse racist sexual predators like Alabama Republican Senatorial candidate Roy Moore simply for partisan reasons). It’s still entirely possible that the growing dangers of his remaining globalist policies will start teaching the President similar lessons on the foreign policy front.

Im-Politic: Biden’s Fake History on Fighting Russia’s Political Interference in Europe

Tags

Alliance for Securing Democracy, Biden, Bill Kristol, Eastern Europe, election 2016, election interference, Europe, German Marshall Fund, Im-Politic, John Podesta, NATO, North Atlantic treaty Organization, Obama, Putin, Russia, Trump, vital interests, Western Europe

Maybe Joe Biden’s main problem isn’t simply that he’s “gaffe-prone” – at least not nowadays, as he again seeks the Democratic nomination for President. Maybe the former Vice President’s main problem is that he’s suffering major memory loss – and I mean major memory loss. Either that, or his recollection of how the Obama administration in which he served responded to Russian political subversion in Europe reveals a truth-telling problem comparable to the one widely believed displayed by President Trump.

How else can the following recent Biden statement be explained, in a CNN interview in which he charged that Mr. Trump’s reelection would wind up destroying the North Atlantic Treaty Organization (NATO) – America’s most important post-World War II security alliance:

“Why did we set up NATO…? So no one nation could abuse the power in the region in Europe, would suck us in the way they did in World War I and World War II. It’s being crushed.

“Look at what’s happened with [Russian President Vladimir] Putin. While he — while Putin is trying to undo our elections, he is undoing elections in — in Europe. Look what’s happened in Hungary. Look what’s happened in Poland. Look what’s happened in — look what’s happening. You think that would have happened on my watch or Barack [Obama]’s watch? You can’t answer that, but I promise you it wouldn’t have, and it didn’t.”

Leave aside for now the massively inconvenient truth that the Obama-Biden watch was exactly when Putin most recently tried to “undo” (bizarro phrasing, I know) a U.S. election. Leave aside also the incoherence of the claim that “You can’t answer that, but I promise you it wouldn’t have, and it didn’t.”

Because even if Biden is only referring to Russian interference with politics in Europe, his statement ignores literally dozens of such instances and campaigns during his White House years. Abundant evidence comes from the Alliance for Securing Democracy – a research organization housed in the German Marshall Fund – a quintessentially globalist, Washington, D.C.-based think tank. For good measure, the Alliance’s “Advisory Council” contains not only the usual crew of bipartisan Washington foreign policy Blob hangers-on from previous globalist administrations, but virulent Trump-haters like long-time neoconservative stalwart Bill Kristol, as well as John Podesta, who chaired Democratic nominee Hillary Clinton’s unsuccessful presidential run in 2016. So clearly, this source has no interest in putting out anything that will make Mr. Trump look good relative to political rivals.

The Alliance maintains a handy-dandy interactive search engine called the “Authoritarian Interference Tracker,” which makes it easy to identify political subversion efforts by a wide range of countries in a wide range of countries. And here’s just a small sample of what comes up when the controls are set for the Obama years:

>2008 – present: “In 2008, the Institute of Democracy and Cooperation, a pro-Russia think tank headed by former Duma deputy Natlaya Norchnitskaya, opened in Paris. According to Radio Free Europe/Radio Liberty, ‘the organization toes a blatantly pro-Kremlin line.’ The Institute’s Director of Studies…told Radio Free Europe/Radio Liberty that its financing comes from ‘the Foundation for Historical Outlook in Moscow, which in turn is financed by unspecified private Russian companies.’”

>2008-2017: “According to the [British newspaper] The Guardian, between 2008 and 2017, Rossotrudnichnestvo, a Russian government-organized non-governmental organization (GONGO) worked with state-sponsored media outlet TASS and Russian intelligence agencies as part of a nearly decade-long influence effort that sought to distance Macedonia from the EU [European Union] and N NATO and to prevent the success of the Macedonian name change referendum.”

>2009-2011: “According to the Czech Security Information Service’s (BIS) annual reports for 2009 and 2010, Russian intelligence services were actively involved in programs to build closer relations with the Russian expatriate community in the Czech Republic as a way to expand influence in the country. These programs specifically targeted academic and intellectual elites as well as students, according to BIS.”

>2010-2014: “According to Reuters, between 2010 and 2014, the Russian government offered Ukrainian oligarch Dmytro Firtash lucrative business deals in exchange for Firtash’s political support in Ukraine. Firtash and his companies received large loans and lucrative gas contracts from Russian state-owned energy giant Gazprom at significantly discounted prices. Firtash’s companies would then sell gas to the Ukrainian government at a high price and pocket the difference. Firtash used his domestic political influence in Ukraine to support Russian government-backed presidential candidate Viktor Yanukovych’s successful 2010 campaign for the presidency. According to Reuters, the Russian government instructed Firtash to ensure Ukraine’s position in Russia’s sphere of influence.”

Here are some abbreviated descriptions of other such incidents:

>2010-2011: “Funds from Russian money-laundering scheme funneled to Latvian political party.”

>2010: “Russian government-connected oligarch Vladimir Yakunin finances pro-Russian Estonian political party.”

>2010-2014: “Emails expose Greek political party Syriza’s ties to Russian-connected actors.”

>2013: “Russian money-laundering ring cycles money through Polish, pro-Russia think tank.”

>2013: Bulgaria’s “Pro-Russian Ataka party reportedly receives funding from the Russian embassy.”

>2013: “Russian government-connected oligarch Vladimir Yakunin launches foundation in Geneva [Switzerland]. The foundation allegedly “is part of a network of organizations promoting an authoritarian and Eurasianist model of thought to counter the current liberal-democratic world order.”

>2014: A “new Russian Orthodox Church in Skopje [Macedonia] raised concerns among Macedonian officials that ‘Russia may be trying to use the Orthodox Church to its Russian interests in Macedonia,’ according to” Radio Free Europe/Radio Liberty.

>2014-present: “Emails reveal Russian government-connected oligarch funded network of pro-Russia fringe political groups in Eastern Europe.”

>2014: “French far-right party National Rally, formerly Front National…receives loan from bank ‘with links to the Kremlin.’”

>2015: “Russian government activist founds pro-Russia political party” in Poland.

>2016-17: “Czech intelligence service reports on Russian covert political influence campaign in annual report.”

My point here certainly isn’t to sound the alarm about all this Russian political activity, especially in Eastern Europe – which, as I’ve written repeatedly (see, e.g., here), has long been part of Russia’s sphere of influence, has never been defined as a vital U.S. interest, and where America’s options for responding effectively are limited at best. Nor is my point to vouch for the accuracy of every single one of the above claims, or others like it in the database. And I certainly don’t believe that the above information represents any evidence that Russian interference put Mr. Trump over the top in 2016.

Instead, the point is to show that, despite Biden’s boasts, the kind of Russian activities about which he’s alarmed plainly took place during the Obama years in spades (and have been reported by many Mainstream Media sources, as the database makes clear), they occurred in both Eastern and in (more important to the United States) Western Europe, and that Washington’s responses evidently did little to stop or even curb them.

Indeed, the record shows that, at least when it comes to Biden’s record of fighting the Russian subversion in Europe that he considers a mortal threat to America, by his own standards, he deserves the Trump-ian label of “Sleepy Joe.” As in asleep at the switch.

Our So-Called Foreign Policy: Trump’s Acting Like Uncle Sucker on Alliance Burden-Sharing

Tags

alliances, allies, America First, Blob, Bloomberg.com, burden sharing, Europe, globalism, Japan, NATO, North Atlantic treaty Organization, Our So-Called Foreign Policy, South Korea, Trump

While much of the world is on pins and needles wondering whether President Trump will reach a big trade deal with China and how it will impact the U.S. economy and global commerce, Mr. Trump’s negotiating reputation has also been on the line on another major international front – America’s relations with its top security allies. And the latest reported developments add to the evidence that he’s going to fail miserably.

According to a March 8 Bloomberg.com article, the Trump administration is planning to insist that countries hosting American troops pay the full cost of these deployments, along with an extra 50 percent of that full cost for what’s described as the “privilege” of enjoying American protection.

Predictably, the allies, along with Washington, D.C.’s bipartisan globalist foreign policy establishment are sputtering with outrage – accusing the President of viewing these security relationships as lowly “transactional” relationships focused on enhancing purely American interests rather than as vital pillars of a global liberal, democratic order that since the end of World War II has benefited the United States more indirectly by promoting worldwide peace, prosperity, and democracy. In a journal article last year, I described at length why this quintessentially globalist approach to foreign policy and national security has long been creating many more big problems than it solves for a country as fundamentally secure and prosperous as the United States.

As a result, I strongly sympathize with any efforts to overhaul America’s alliances, however many specific criticisms I may have with the President’s tactics. But the most immediate problem with the Trump strategy is that the President keeps shooting himself in the foot. Specifically, he has repeatedly undercut U.S. leverage by proclaiming that he, too, views these arrangements as crucial for America to maintain.

For example, just two months ago, Mr. Trump insisted that “We’re gonna be with NATO [the North Atlantic Treaty Organization, which binds the United States militarily to Europe] 100 percent ….” Last July, he declared “…I believe in NATO. I think NATO is a very important — probably the greatest ever done.” And the previous year, he explicitly endorsed the alliance’s Article V, which legally commits the United States to come to the defense of any member under outside attack.

Regarding the American alliance with South Korea, Mr. Trump told that country’s National Assembly in November, 2017 that U.S. commitment to that country’s defense represented a line “between peace and war, between decency and depravity, between law and tyranny, between hope and total despair. It is a line that has been drawn many times, in many places, throughout history. To hold that line is a choice free nations have always had to make. We have learned together the high cost of weakness and the high stakes of its defense.” 

And that June he vowed at a Washington, D.C. press conference with South Korean President Moon Jae-in, “the United States will defend itself, always will defend itself, always, and we will always defend our allies.”

Meanwhile, shortly after his inauguration, Mr. Trump and Japanese Prime Minister Shinzo Abe issued a statement affirming that “The unshakable U.S.-Japan Alliance is the cornerstone of peace, prosperity, and freedom in the Asia-Pacific region. The U.S. commitment to defend Japan through the full range of U.S. military capabilities, both nuclear and conventional, is unwavering.”

It’s true that the President has spoken repeatedly, both as a candidate for the White House and as a chief executive, of his desire to withdraw American troops from these countries at some unspecified point. (This archive contains an indispensable, useful comprehensive collection.) But it’s also true that Mr. Trump has endorsed the defining globalist precept that U.S. “security and prosperity [have] depended” on “pushing back” versus threats to the allies.

During his successful White House run, candidate Trump faulted Democratic candidate Hillary Clinton – a Secretary of State under President Obama – for dooming any prospects for reforming American alliances by continually touting their paramount virtues. One of these critiques (cited in the aforementioned archive) is worth quoting at length:

“Now, Hillary Clinton said: ‘I will never leave Japan. I will never leave Japan. Will never leave any of our–‘ Well now, once you say that, guess what happens? What happens? You can’t negotiate. In a deal, you always have to be prepared to walk. Hillary Clinton has said, ‘We will never, ever walk.’ That’s a wonderful phrase, but unfortunately, if I were on Saudi Arabia’s side, Germany, Japan, South Korea and others, I would say, ‘Oh, they’re never leaving, so what do we have to pay them for?’ You always have to be prepared to walk. It doesn’t mean I want to walk. And I would prefer not to walk. You have to be prepared and our country cannot afford to do what we’re doing.”

In other words, Mr. Trump was making one of his characteristic charges that his opponent – and the establishment foreign policy “Blob” to which she’s belonged — had turned the United States into an “Uncle Sucker” who’d forgotten that Washington’s top priority is looking after the American people, not foreign populations. If he doesn’t get his alliance diplomacy act together soon, this self-described master deal-maker will start deserving the same label.