(What’s Left of) Our Economy: A New U.S. Manufacturing Growth Report That’s the Good Kind of Boring

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aerospace, aircraft, aircraft parts, automotive, Boeing, Build Back Better, CCP Virus, China, coronavirus, COVID 19, Federal Reserve, inflation-adjusted output, infrastructure, interest rates, Iran, Iran deal, Israel, Joe Manchin, machinery, manufacturing, medical devices, nuclear deal, Omicron variant, personal protective equipment, pharmaceuticals, plastics and rubber products, PPE, quantitative easing, Russia, semiconductors, stimulus, supply chains, Taiwan, tariffs, therapeutics, Trade, Ukraine, vaccines, Wuhan virus, {What's Left of) Our Economy

Today’s Federal Reserve after-inflation U.S. manufacturing data (for November) were refreshingly (though encouragingly) boring, with one exception – some genuinely eye-popping revisions in specific, high-profile industries.

Overall real manufacturing output improved on month by 0.68 percent, adding to the evidence that domestic industry has bounced back from summer and early fall doldrums caused partly by damage from Hurricane Ida and partly by a global semiconductor shortage that depressed automotive production.

And in this vein, the November results weren’t dramatically impacted by the vehicle and parts sector, whose inflation-adjusted production rose by a 2.22 percent figure that’s clearly strong but decidedly un-dramatic compared with the roller-coaster it’s been on for most of the year.

In addition, revisions for manufacturing as a whole were modest and mixed.

The list of November’s biggest monthly manufacturing growth winners indicates how broad-based industry’s sequential constant dollar output gains were in November. No fewer than six of the major manufacturing subsectors tracked by the Fed enjoyed price-adjusted production advances of more than one percent. Aside from automotive, they were aerospace and miscellaneous transportation (whose 1.64 percent increase included another strong rise in aircraft, as will be detailed below); paper (up 1.63 percent); plastics and rubber products (1.45 percent); non-metallic mineral goods (1.25 percent); and textiles (1.21 percent).

The biggest losers were petroleum and coal products (down 1.24 percent on month); machinery (off by 0.66 percent); apparel and leather goods (0.53 percent); and printing and related support activities (0.50 percent).

But even in this group, hopeful signs can be found. As RealityChek regulars know, drps in machinery production are worrisome because its products are used so widel in the rest of manufacturing and in big non-manufacturing sectors like construction and agriculture.

But the November decline followed one of those eye-popping revisions. October’s originally reported 1.27 percent sequential decrease is now judged to be a 0.59 percent increase.

Moreover, the printing and petroleum and coal products fall-offs were both preceded by October real production advances that have been downwardly revised (from 4.97 percent to 3.79 percent for the former, and from 1.41 percent to 1.18 percent for the latter) but were still impressive.

Manufacturing industries that have been prominent in the news during the pandemic generally performed worse in November, save for aircraft and parts – whose performance was spurred by news from industry giant Boeing that continues to be pretty good. (See, e.g., here and here.) After-inflation production climbed by 1.90 percent month-to-month in November, and October’s 1.43 percent increase was revised up to 1.54 percent.

Even with a second downward revision to September’s inflation-adjusted output (from 0.45 percent all the way down to a negligible 0.09 percent), constant dollar output in aircraft and parts is now 15.86 percent higher than in February, 2020 – the last full data month before the CCP Virus began seriously distorting the U.S. economy.

Pharmaceuticals and medicines, however, lost even more growth momentum. Despite major demand for and use of vaccines, their price-adjusted output dipped by 0.15 percent sequentially in November, and October’s decrease was revised from 0.51 percent to 0.76 percent. But September saw another one of these enormous revisions – from a downgraded 1.04 percent production fall to a 0.76 percent gain. All told, these industries are now 13.54 percent bigger in constant dollar terms as of November than in February, 2020.

The news was worse in the crucial medical equipment and supplies sector – which includes virus-fighting items like face masks, protective gowns, and ventilators. Real production in November was off by 0.61 percent month-to-month in November, and October’s previously reported 1.08 percent decrease is now estimated at a greater 1.91 percent. Moreover, September’s results saw their second big downgrade – first from an initially reported 1.53 percent growth to a 0.73 percent gain, and this morning to one of just 0.16 percent. So since February, 2020, after-inflation production in this sector is up a mere 0.65 percent.

As with the entire economy, the manufacturing sector is being pushed and pulled by what seems to be an unprecedented number and type of forces and government decisions. On balance, though, unless the Omicron variant of the CCP Virus prompts much more voluntary or officially mandated disruption at home or abroad than seems likeliest now, further manufacturing growth still looks like the best bet for the foreseeable future.

Although prospects for stimulus from President Biden’s Build Back Better bill seem barely on life support due to West Virginia Democratic Senator Joe Manchin’s continuing objections, and the Federal Reserve yesterday announced further reductions in its stimulative bond-buying (AKA quantitaive easing), infrastucture bill money should soon begin flowing.  Further, the central bank still made clear that heavy levels of quantitative easing will continue for months more, and is in no rush to start raising interest rates.

Most consumers still have plenty of money to spend, even though further inflation could weaken their appetites. U.S. employment levels keep rebounding strongly by most measures. Supply chain knots continue untangling, albeit not always quickly. Mr. Biden is keeping nearly all of his predecessor’s China tariffs in place, which is preventing predatory Chinese competition from taking customers from domestic manufacturers. The brightening Boeing picture will help its entire vast U.S.-based supply chain. And American and overseas demand for both CCP Virus vaccines and now therapeutics will surely keep growing whatever the rest of the domestic or global economies do.

One set of gathering clouds shouldn’t be neglected, however. I don’t mean to sound alarmist, and don’t believe conflicts are imminent, but what the investment community calls “geopolitical risk” is troublingly on the rise in Asia (due to mounting Chinese pressures on Taiwan) and Europe (due to Russia’s military buildup on the Ukraine border). Moreover, although negotiations to slow Iran’s progress toward nuclear weapons capability have resumed, this has been ongoing and nearing critical threshholds. And it’s far from clear how well a nuclear Iran would go down with Israel – just as it’s far from clear how well domestic manufacturing and the rest of the economy could withstand a second major non-economic disruption in a very few years.

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Our So-Called Foreign Policy: Biden’s Latest Nod to Trump-ism – Israel-Palestinians Policy?

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Abraham Accords, Antony J. Blinken, Biden, Binyamin Netanyahu, Blob, China, diplomacy, Donald Trump, Gaza, globalism, Hamas, Israel, Jared Kushner, Middle East, North Korea, occupied territories, Our So-Called Foreign Policy, Palestinians, tariffs, Trade, two-state solution, West Bank

As known by RealityChek regulars, one of the leading – and most surprising – features of the Biden administration is a tendency to continue certain Trump administration policies that the current President, and much of the globalist bipartisan policy Blob decried as dangerously naive, xenophobic, short-sighted, isolationist, protectionist [feel free at this point to insert your own scornful epithet].

Now on top of tariffs, China trade and economic strategy, and North Korea policy, there’s a sign that the Biden approach to the Israel-Palestinian conflict can be added to the list. My evidence? Secretary of State Antony J. Blinken’s remarks this morning on the latest eruption after a meeting in Jerusalem with the Jewish state’s prime minister, Binyamin Netanyahu.

The most specific policy statements Blinken made focused tightly on the need for reconstruction aid for Gaza – where Israeli military strikes aimed at stopping Hamas rocket attacks inflicted serious damage – as well as the need “to work to expand opportunity for Palestinians in Gaza and in the West Bank, including by strengthening the private sector, expanding trade and investment, and other means. Assistance and investment like these will help foster a more stable environment that benefits Palestinians and also benefits Israelis.”

By contrast, there were only the most glancing references to resuming diplomatic efforts to bring lasting peace to the region – principally, Blinken’s report that he and Netanyahu discssed “other steps that need to be taken by leaders on both sides to set a better course for their shared future. As President Biden has said, we believe that Palestinians and Israelis equally deserve to live safely and securely; to enjoy equal measures of freedom, opportunity, and democracy; to be treated with dignity.”

And beyond that – nothing. Not even a mention of a negotiated two-state solution that President Biden continues to support as the end goal of U.S. diplomacy.

That looks awfully Trump-y because a focus on economic development in Israel’s occupied territories to ameliorate their populations’ pressing day-to-day needs and create credible hopes for decent living standards and further progress, and an unmistakable deemphasis on returning Israeli and Palestinian leaders to some kind of bargaining table, was a definite hallmark of the former President’s approach to dealing with the conflict. The idea was that the promise and growing reality of prosperity on the West Bank and in Gaza was the best hope for reducing the appeal of violence and creating the conditions in which realistic compromises could – some day – be accepted.

Indeed, Trump’s peace plan conspicuously began with a purely economic proposal – a fund raised from private investors in the Persian Gulf states and other countries that would spend $50 billion over ten years on infrastructure and development projects in the occupied territories. As the plan’s main author, Trump son-in-law and White House advisor Jared Kushner explicitly stated upon its unveiling, “Today is not about political solutions — we will get to them later.”

And although Mr. Biden just issued a re-endorsement of two-state, it’s more than a little interesting that during his Senate confirmation hearings, Blinken acknowledged that “Realistically it’s hard to see near-term prospects for moving forward on that.” That’s hardly a sign of perceived urgency. Perhaps more revealing: The numerous recent articles (all pre-dating the latest Middle East fighting) reporting Mr. Biden’s determination to deemphasize the Middle East as a U.S. foreign priority to begin with – and evidence the administration was following through in official policy declarations and staffing decisions.

Not that this relative indifference marked a significant change in candidate Biden’s campaign positions. In fact, he praised the Trump “Abraham Accords” that normalized relations between Israel and several Arab countries. And although Mr. Biden did charge that Trump’s strong pro-Israel tilt had made a negotiated Israel-Palestinian settlement “even more difficult,” his campaign’s main foreign policy statement didn’t even mention the issue. (Perhaps that’s because he reserved his more detailed – and somewhat more critical – verdict for his campaign’s articulation of a policy toward “the Jewish community.”)

But the foreign policy Blob’s judgement were much harsher – largely because Trump was seen to be recklessly ignoring the Palestinians’ legitimate aspirations and the supposedly obvious reality that not only was peace between Israel and the Palestinians was impossible without taking the latter’s interests seriously, but that meaningful progress toward pacifying and even stabilizing the entire Middle East was as well. (See, e.g., here and here).

It’s an exaggeration to say that the President has now repudiated this pre-Trump conventional wisdom on the Israel-Palestinian conflict. But he’s clearly in no rush to embrace it. And given his other adoptions of Trump-ian stances, it strikes me as evidence that not only is Mr. Biden moving away from pre-Trump globalism, but that the days of this strategy dominating American foreign policymaking writ large are numbered themselves.    

Our So-Called Foreign Policy: No Common Sense, No Peace in the Middle East

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Aaron David Miller, Arabs, Bill Clinton, Blob, Camp David, Ehud Barak, Gaza, globalism, Hamas, Henry A. Kissinger, Israel, Middle East, Nathan Thrall, occupied territories, Oslo Accords, Our So-Called Foreign Policy, Palestine Liberation Organization, Palestinians, PLO, Robert Malley, settlements, Six-Day War, United Nations, West Bank, Yasser Arafat

If I was a gambler, here’s a big bet I’d make:  As certain as the continuation of the conflict between Israelis and Palestinians is, the continuation and worsening of the (often well-meaning) delusions and (often willful) ignorance it’s spawned is even more certain.

I’m not talking about some of the worst absurdities generated by the most recent fighting – like claims that the big excess of Palestinian over Israeli casualties reveals some special degree of ruthlessness on the Israeli side, or an equally special need for Israel to display more restraint responding to rocket attacks on its people. Leave aside for now the precautions Israel clearly has taken to minimize collateral damage or the Hamas fondness for human shields. Israel’s light losses have nothing to do with its enemies’ scruples – not when you’re talking about the firing of literally thousands of projectiles. Instead, this enormous number of rockets took such a meager toll largely because of effective defenses. Put differently, if Hamas didn’t kill many more Israelis, it wasn’t for lack of trying.

Instead, I’m referring to more polished talking points that for decades have dominated the debate over this conflict as conducted inside U.S. administrations, among most elected national officials, and by the mainstream bipartisan globalist foreign policy “Blob” of academics, former officials, think tankers, and journalists. Not that these views are all in perfect lockstep, but the central idea, in its current form, is that the Israelis’ are now so much more powerful than any combination of their enemies that the most sensible course of action to take is cutting the Palestinians a break. In victory, magnanimity, as Winston Churchill famously said. But rather than make entirely affordable concessions, Israel has chosen to rub the Palestinians’ nose in defeat, especially with more aggressive West Bank settlement policies and an ever harsher overall occupation.

In one not-trivial way, this new conventional wisdom improves on its predecessor. That perspective held that, at some point, the power balance between Israel and the Palestinians would start tipping against the former – either because the Palestinians, including Israel’s Arabs, would become so much more numerous than the Jews, or because they’d in tandem with their brethren across the Middle East their power would become irresistible). Therefore, Israel’s only hope or long-term survival would be compromising while it still had any leverage at all.

I’ve written previously on why, from an International Affairs 101 perspective, the earlier version of the conventional wisdom was so wrong-headed. Especially in the wake of the first Persian Gulf War, it was so out of whack with the actual distribution of power in the Middle East, and what by even then was the Arab wotld’s glaringly obvious indifference to the Palestinians, that it could only hope to feed Palestinian pipe dreams that they could gain at the negotiating table through a combination of obstructionism and international pressure what they could not possibly win on the battlefield.

But the uproar over the latest fighting is exposing two intimately related flaws in the new conventional wisdom that are comparably serious – and far more important than childish squabbles over who fired first, or about acceptable and unacceptable levels of force.

The first has to do with Israel’s own alleged obstinacy. However inflexible or high-handed Israel may or may not seem today, there can be no question that the Jewish state has at various times pulled back to varying degrees – including the dismantling of settlements – from various territories taken over after the Six-Day War of 1967. The Palestinian leadership has moved on important issues as well – chiefly on Israel’s right to exist in peace (in the Oslo Accords of 1993). But these two instances of compromise could not be more dramatically different .

Israeli territorial concessions – including withdrawals from the Sinai peninsula (completed in 1982) and Gaza (completed in 2005), from Jericho on the West Bank (1994), and from some West Bank and Gaza settlements freezes and even  some teardowns (in the early 2000s) – entailed tangible assets that directly enhanced the security of this geographically tiny state by making it less tiny. Moreover, although Israeli settler groups have periodically violated these Israeli policies, the Jewish state’s decisions have been the product of an international actor that is capable of enforcing its agreements and that has chosen to do so.

The Palestinian concessions on Israel’s right to exist in secure conditions entailed intangibles that had no material affect on the regional strategic situation because the Palestinians have always been powerless to end Israel’s existence. Indeed, they conferred on Israel no benefits that the Israelis could not substantially gain for themselves – and in fact had gained because of their military superiority.

Just as important, Palestinian leadership groups have never effectively eliminated threats to Israeli lives and property emanating from their community for any substantial period of time.

The question of whether these Palestinian groups could not or would not eliminate these threats has been actively debated, but from the Israeli standpoint, the matter is completely academic. What counts have been the results, and they’ve been sorely inadequate, to put it kindly. In other words, until Israel has reasons to believe that further concessions will result in major, lasting payoffs, the case for such flexibility or magnanimity or however you describe it will be an understandably hard sell.

The second fatal flaw in the recent conventional wisdom has to do with the belief that many more significant Palestinian concessions would be in the offing if peace talks began. The Arab-Israeli conflict may fairly be said to have begun in an act of Arab (including Palestinian) rejectionism – of the 1947 United Nations plan partitioning what had been British Palestine, and which led to Israel’s creation in the first place. This rejectionism, moreover, set a revealing precedent: In the ensuing war begun by the Arab states, Israel won some 50 percent more land than the UN plan allotted it.

These two patterns of Israeli flexibility and Palestinian rejectionism seem to have been illustrated most tragically (and especially for the latter) at the Camp David peace talks in 2000. There’s been no definitive account of the last-minute breakdown of these negotiations, and therefore it hasn’t yet been possible to confirm widespread claims that Palestine Liberation Organization leader (PLO) Yasser Arafat bears most of the blame. But I’ve been struck by the following two observations by former U.S. diplomats involved in the Clinton administration mediation efforts and who are by no means pro-Israel hardliners.

The first comes from Aaron David Miller, a 25-year State Department veteran who worked extensively on Middle East issues. Writing on the twentieth anniversary of the Camp David talks, he recalls that then Israeli Prime Minister Ehud Barak “went further than any Israeli prime minister had gone before” – and on core issues “like borders, security, refugees, and of course Jerusalem’s ownership.” Yet Miller continued, his proposals were nowhere close to what Arafat needed….”

As Miller explains, the PLO chief was tightly constrained by the demands of hardliners in his own organization and those even further out on the extremes, and given the brutal nature of Palestinian and wider Arab politics, understandably feared that any departure from the rejectionist line would bring a bullet into his head. And Barak’s own ability to bring Israeli opinion along was doubtful at best, especially since his political future looked doubtful.

So his argument that the U.S. mediation effort was doomed from the start, mainly it seems because the issues dividing the two sides were “mission impossibles” (but also because the American President made serious tactical goofs), and that the blame for failure was shared, appears reasonable at first glance.

But this interpretation would be genuinely constructive only if the Palestinians and Israelis were then or are now somewhat evenly matched. That’s not remotely the case. Most crucially, the Camp David failure shows that, as desperate as the plight of the Palestinian people was not only at that moment, but had been for decades, their designated representative ruled out of hand decisions that could alleviate their present suffering and build a foundation – however fragile and, yes, uncertain, for future progress because they wouldn’t deliver unalloyed, immediate victory. Indeed, as the author notes, Arafat “was in no hurry to reach any kind of agreement” and had even warned his American hosts that “a premature summit might lead to an explosion.”

Arafat’s warning proved prescient, since Palestinian forces retained impressive capabilities to spark what Miller calls “a hellish descent into violence and terror” for the region. But their continuing inability to triumph or meaningfully change the military facts on the ground ensured that their own already immiserated people would pay by far the highest price.

Revealingly, Miller’s account is roughly paralleled by a piece from a former Clinton administration colleague, Robert Malley.

Malley is plainly much more sympathetic to the Palestinians, and their leaders, than Miller. And perhaps the sharp edge in this article reflects its writing practically in the immediate aftermath of the Camp David failure, rather than from two decades into the future.

All the same, it’s significant that he portrays the years of diplomatic near-paralysis that preceded Camp David as ones marked by “more Israeli settlements, less freedom of movement, and worse economic conditions [for the Palestinian people].” Further, Malley implicitly accepts the view that “Barak broke every conceivable taboo and went as far as any Israeli prime minister had gone or could go” – again, unquestionably important given the lopsided balance of power.

And although the author writes that “Strictly speaking, there never was” an actual offer from the hyper-cautious Israelis, he also argues that proposals presented by Clinton several months later – albeit, near the very end of his presidency – “showed that the distance travelled since Camp David was indeed considerable, and almost all in the Palestinians’ direction.” He goes so far as to add that

“Offer or no offer, the negotiations that took place between July 2000 and February 2001 make up an indelible chapter in the history of the Israeli-Palestinian conflict. Taboos were shattered, the unspoken got spoken, and, during that period, Israelis and Palestinians reached an unprecedented level of understanding of what it will take to end their struggle.”

Yet Arafat still said No, in the evident belief that his most prudent response to an unusually promising opportunity for something better was a veiled threat was rejecting the good in favor of his concept of the perfect. Why was he acting even in the slightest bit picky, however, despite the inevitable result of condemning his people to even more hardship?

As I wrote above, the answer to this paramount question – beside which all the debates surrounding the latest Gaza fighting are harmful distractions – is that Palestinian leaders have been encouraged to assume that any number of (thoroughly irresponsible) international actors (e.g., members of the UN General Assembly and even Security Council) could eventually hand them the clout they have no potential to win through their own devices. The result – which in their eyes evidently has been worth long-term suffering in the West Bank and Gaza – would enable them to deal with Israel at least as equals and possibly, in combination with a near-global consensus, as superiors.

And my confidence in this conclusion has just been borne out upon reading a third piece on failed Middle East diplomacy whose author (an analyst at an entirely mainstream Blob-y think tank) lays the blame overwhelmingly on Israel (while curiously admitting that it holds all the regional power cards and that its preference for a fundamentally secure status quo over a promised rosy future makes perfect self-interested sense).

According to Nathan Thrall, the Palestinians have long hoped that “the support of the majority of the world’s states” will “eventually result” in the kind of two-state agreement that these states have repeatedly make clear they support, but one that is totally unhinged from relative power considerations – that in fact mocks these by pretending that Israel’s pre-1967 borders are adequately secure – and that does nothing to assauge Israeli concerns paper promises that its new Palestinian counterpart will be willing or even able to halt attacks from its own territory.

In a 1974 interview, former Secretary of State Henry A. Kissinger ruefully observed that Americans “believe that every problem is soluble,” are “at ease with redoing the world,” and suggested that his compatriots instinctively rebel “against the pragmatic aspect of foreign policy that is security-oriented, that achieves finite objectives, that seeks to settle for the best attainable, rather than for the best.” He linked this confidence with favored geographic circumstances that obscured the tradeoffs that, for less fortunate countries, are often the inescapable price of simply scraping by.

For all its current advantages, it’s difficult to imagine a country with less in common with the United States in these literally existential senses than Israel. The sooner a critical mass of Americans and their leaders recognize this gulf, and its implications, the more helpful they’ll be able to be not only to the Israelis, but to the Palestinians, who have for so long been the greatest victims of Middle East delusions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our So-Called Foreign Policy: Biden’s Incoherent Iran Nuclear Policy

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Antony Blinken, Biden, Donald Trump, Iran, Iran nuclear deal, Israel, Jake Sullivan, JCPOA, Middle East, nuclear weapons, Our So-Called Foreign Policy, Persian Gulf, Sunnis

In case you dismiss most or all statements during campaigns by office-seekers and their aides as complete baloney, you should take a look at some transcripts recently released by the Hudson Institute of interviews last year with then Joe Biden foreign policy advisers Antony Blinken and Jake Sullivan – who have gone on to become President Biden’s Secretary of State and national security adviser, respectively.

The trouble is that these transcripts make plain as day, among other points, that the Biden view of handling Iran and its nuclear weapons ambitions makes little sense from a standpoint of simple common sense.

The Sullivan transcript – recorded last May – is by far the more thoughtful and serious of the two, but mainly in terms of revealing the fundamental confusion of the Biden outlook.

The central questions surrounding the Iran nuclear issue stem from the “Joint Comprehensive Plan of Action” (JCPOA) signed during the Obama years by the United States, Tehran, China, Germany, Russia, France, and the United Kingdom, which obliged Iran to accept limits on its nuclear research program in return for relief from longstanding international economic sanctions. The Obama administration insisted that even though the Iran nuclear limits would end in 2025, the agreement valuably put off the day when Tehran could produce a bomb on very short notice, and therefore in theory until then defused the greatest potential Iranian threat to American and Middle Eastern security; that a calmer atmosphere could help diplomatic efforts to deal with Iran’s other belligerent behavior; and that the deal represented the best outcome Washington could achieve jointly with other great powers – which were always capable of frustrating unilateral U.S. Iran strategies they considered too confrontational.

Critics (like, eventually, me) countered that the deal left open too many loopholes that could enable Iran to keep making substantial progress toward nuclear weapons capability; that the sanctions relief would give Iran the economic wherewithal to intensify its efforts to gain hegemony over much of the Middle East and Persian Gulf; and that the United States on its own had ample power to cripple Iran’s economic ability to wage proxy wars and sponsor terrorism. And because he basically agreed with the critics, Donald Trump withdrew from the deal in 2018.

The results have been mixed. Unilateral U.S. sanctions have indeed ravaged Iran’s economy – and possibly put at least some constraints on its aggression and subversion, along with other dangerous weapons programs like its drive to create ever more effective, longer-range ballistic missiles. But this behavior has by no means stopped, and the Trump administration’s belief that the pain would foster regime change has been totally far-fetched so far. Further, to protest these sanctions – which Iran calls a violation of the JCPOA – Tehran has said that its own commitments are now null and void, and has taken a series of steps that JCPOA supporters charge demonstrate the failure of the Trump approach, and that deal opponents say Iran was taking clandestinely anyway – or was bound to.

Like his boss (who of course served as Barack Obama’s Vice President), Sullivan is a JCPOA supporter, and the new President has made clear his determination to return to the deal in the belief that Iran will slow down its nuclear research once again. But Sullivan’s remarks also reinforced the case against the deal by unwittingly acknowledging that the Obama-Biden hopes for the kind of changed Iranian behavior that would bring lasting benefits to the region are thoroughly in vain.

Here’s one of two key passages:

“[T]o me, the real issue with Iran, the real limitation on Iran in the region, has not been the availability of cash [i.e., the effectiveness of sanctions]. It’s been the availability of opportunity. And where opportunities have arisen, they’ve taken them. And that was true in the ’80s. It was true in the ’90s. It was true in the 2000s. It was during the 2010s. It remains true today. And even under massive sanction, the Iranians have gotten more aggressive in the Gulf, have remained just as aggressive in Syria and Lebanon, have increased their activities in respect to the Houthis in Yemen, and all of that while under massive economic sanction from the United States.”

I agree with Sullivan’s observation that Iran is so determined to achieve in the Middle East objectives considered dangerous by a broad bipartisan U.S. consensus that it’s pursued this agenda despite paying a major economic price. But does this kind of Iran sound like a country likely to reform in the slightest by the time the JCPOA runs out? Worse, the failure of sanctions to bring Iran to heel, by no means renders inconsequential the resources they’ve denied the country. It’s all too reasonable to conclude that permitting Iran to do business normally with the rest of the world will simply make an aggressive regime much wealthier, and thus able to act more aggressively. As political scientists would say, the result would be a country whose malign intentions haven’t changed but whose malign capabilities are have greatly increased.

The second key passage:

“[M]y view is, if you can take one of the big threats off the board, the Iranian nuclear program, take it off the board, and then use the tools available at your disposal, none of which were stripped from us by the JCPOA, to go after Iran in the region. And to the extent you want to make diplomacy, the central feature of stopping Iran’s malign activities, get the regional actors at the table with the Iranians and stand behind them with some pressure to try to produce a deescalation, say between Iran and Saudi Arabia.”

Here the problem is Sullivan’s apparent belief that, faced with the prospect of being “gone after” by the United States and its other bitterest rivals, Iran will dutifully comply with the JCPOA for the entire length of its duration – which will leave it highly vulnerable to “pressure” to abandon goals that the previous Sullivan passage identified as positively foundational.

It’s far more likely – and I’d call it a virtual certainty – that Iran will do everything possible to prevent this kind of vulnerability/ As a result it can be expected to take every opportunity in the foreseeable future to make the fastest possible progress toward the nuclear weapons threshhold whether the nuclear deal is resumed or not, devoting many of resources made available by sanctions removal to that effort, and continuing even faster (and eventually building a nice sized stockpile) once the JCPOA expires.

Not that there’s no reason for optimism from an American standpoint. For the above scenario makes a U.S. military pullout from the terminally dysfunctional Middle East/Persian Gulf region more appealing than ever. Another reason for optimism for those still worried about Iran despite decisive recent reasons to disengage, like substantial American energy independence:  Trump’s oft-voiced (but only partly-at-best fulfilled) desire to exit had clearly prompted Iran’s Sunni Arab and (nuclear armed) Israeli foes to kick into the next gear their own tacit alliance, which seems more than capable of countering Iranian threats.

Unfortunately, even though in his interview, Blinken stated that a Biden administration would seek to deemphasize the region in U.S. grand strategy in order to focus more on East Asia, President Biden seems bent on keeping the U.S.’ armed regional presence impressively sized.  Can anyone say “Tar Baby” – again?

Following Up: Still No Biden Learning Curve in Sight on the Middle East or China

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America First, China, energy revolution, Following Up, fossil fuels, globalism, Iran, Iran nuclear deal, Israel, Joe Biden, Middle East, oil, Phase One, Saudi Arabia, Sunnis, tariffs, The New York Times, Thomas L. Friedman, Trade, trade war, Trump

Talk about great timing! Just two days ago, I analyzed New York Times columnist Thomas L. Friedman’s new offering warning Joe Biden not to rush back into the Iran nuclear deal because this step could undo lots of the progress made by President Trump’s America First foreign policy approach in greatly improving the prospects for advancing and protecting U.S. interests in the region.

And just this morning, Friedman has published a piece based on lengthy interview with the apparent President-elect making clear that he has no interest in learning these valuable lessons of the recent past. In addition, Biden confirmed that his China policy plans are just as dominated by cynical doubletalk these days as during the 2020 election campaign.

As Friedman argued on November 29, Mr. Trump’s message that Israel and the Arab world’s Sunni Muslim monarchies (mainly Saudi Arabia) should no longer count on the United States to fight their battles accomplished this critical objective: It

“forced Israel and the key Sunni Arab states to become less reliant on the United States and to think about how they must cooperate among themselves over new threats — like Iran — rather than fighting over old causes — like Palestine. This may enable America to secure its interests in the region with much less blood and treasure of its own. It could be Trump’s most significant foreign policy achievement.”

But as Biden made clear in his conversation with Friedman, he either can’t or refuses to understand the key development that validates the Trump approach – the U.S. fossil fuel production revolution that has eliminated America’s overriding reason for treating the Middle East as a vital national security interest, and enabled Washington to adopt a Trump-ian take-it-or-leave-it approach safely.

Not that domestic energy independence means that completely ignoring Middle East affairs is always the best response. But it certainly does mean much greater scope for Washington to advance objectives with varying degrees of importance (notably, preventing a nuclear-armed Iran from dominating the region) in ways far less risky and costly than the lengthy wars and immense military commitments that have dominated globalist strategy.

And as Friedman has indicated, the President has started lifting the United States off its dangerous hook by leaving its Middle East allies no choice but to stop quarreling over trifles (like the fate of the Palestinians) and work together to take responsibility for their own genuinely critical and shared interests.

Biden, however, still believes that America remains so dependent on “getting some stability” in this long-unstable region that deep entanglement in Middle East affairs is unavoidable. Just as worrisome: He’s laid out a genuinely Rube Goldberg-esque rationale for treating the Iran nuclear deal as his strategy’s linchpin. As Friedman describes his blueprint (based on this interview and other conversations with top Biden aides):

“[O]nce the [nuclear] deal is restored by both sides, there will have to be, in very short order, a round of negotiations to seek to lengthen the duration of the restrictions on Iran’s production of fissile material that could be used to make a bomb — originally 15 years — as well as to address Iran’s malign regional activities, through its proxies in Lebanon, Iraq, Syria and Yemen.

“Ideally, the Biden team would like to see that follow-on negotiation include not only the original signatories to the deal — Iran, the United States, Russia, China, Britain, France, Germany and the European Union — but also Iran’s Arab neighbors, particularly Saudi Arabia and the United Arab Emirates.”

To which the only reasonable response is “Good luck with that” – especially given the lack of consensus on Middle East goals among this highly diverse group of countries, and, equally important, the wildly varying stakes in success between governments inside and outside of the Middle East,

On China, the big and encouraging news is that Biden has decided not to remove the steep, sweeping Trump tariffs “immediately.” That position of course makes at best little sense given how disastrous he called these levies’ impact.

Otherwise, the former Vice President showed that his China policy statements could be even more thoroughly dominated by doubletalk and cluelessness than they were during the campaign.

Most troubling was how Biden contended (correctly) that “leverage” is the make-or-break factor in negotiating with China, and then quickly added “in my view, we don’t have it yet.” Even leaving aside Beijing’s at-least-suggestive decision to sign a Phase One trade deal whoppingly one-sided in favor of a country whose markets it needs desperately to secure adequate levels of prosperity, why did the apparent President-elect go out of his way to advertise supposed American weakness? Indeed, this perverse practice looks like an emerging habit of the Biden foreign policy camp.

As Biden told Friedman, he continues insisting that this leverage can be created in large measure by creating a “coherent strategy” behind which the United States and its European and Asian allies can unite. But as I’ve pointed out repeatedly, many of these countries (notably, Germany, Japan, and South Korea) have made too much money trading with China at the U.S.’ expense to support any position but a complete return to the pre-Trump era of actively coddling and enabling the People’s Republic.  (See, e.g., this analysis.)

At the same time, the apparent President-elect deserves credit for recognizing that gaining sufficient leverage to deal with China successfully requires (in Friedman’s words) “developing a bipartisan consensus at home for some good old American industrial policy — massive, government-led investments in American research and development, infrastructure and education to better compete with China.”

Finally, however, Biden still accepts the completely unjustified pre-Trump view that, without the kind of one-sided, pro-U.S. enforcement mechanism at the heart of the Phase One agreement, Washington can negotiate away most of China’s wide-ranging trade predation with precisely enough worded paper agreements. As I’ve explained, the only genuine hope for progress along these lines is the kind of dispute-resolution system set up in Phase One – in which Washington serves as judge, jury, and court of appeals. 

A few days before he spoke with Friedman, Biden told another journalist that he knows the nation and world are “totally different” from his Vice Presidential days and that therefore his administration would not be “a third Obama term.”  His conversation with Friedman, though, strongly indicated that he meant “except for the Middle East and China.”  

Our So-Called Foreign Policy: Another (Really) Surprising Endorsement of America First

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Afghanistan, allies, America First, Gaza, globalism, Golan Heights, Iran, Iran deal, Iran nuclear deal, Israel, Jerusalem, Joe Biden, Middle East, Our So-Called Foreign Policy, Palestinians, Saudi Arabia, Sunnis, The New York Times, Thomas L. Friedman, Trump, West Bank

It’s one thing for globalists in politics and the think tanks and the media and even appointees of apparent President-elect Joe Biden to admit tacitly that the kind of America First-y strategy unevenly pursued by Donald Trump is the only sensible approach to U.S. foreign policy. (As I’ve noted recently here and here.)

It’s something else entirely for a major cheerleader for pre-Trump policies (and an outspoken Never Trumper) explicitly to credit such Trump-ism for constructively realigning the geopolitics of a region best known lately for spawning major threats to U.S. interests and epically failed official American responses in dramatically favorable ways.

This shock was delivered yesterday by New York Times pundit Thomas L. Friedman, who holds a special place in the globalist pantheon.  For decades, he’s touted the virtues of an increasingly globalized and benign world that was rapidly leaving the United States no choice but to stop clinging to national sovereignty, and to leave the big decisions impacting the safety and prosperity of the American people to the private sector visionaries spearheading such progress in technology and finance, and to the disinterested supposed experts, foreign and American alike, who staffed international bureaucracies.  (See here and here in particular.)   

It was amazing enough to see Friedman warn apparent President-elect Joe Biden not to rush the United States back into an Iran nuclear deal lauded by the Obama-style Never Trumpers (including the former Vice President) who negotiated it as the crowning glory of global diplomatic history. Perhaps that’s because one subject in which Friedman’s expertise is truly genuine is the Middle East, where his decades of coverage include many years on the ground. So quite sensibly, he noted that the region has changed dramatically in the years since Biden was in power.

But more amazing still was Friedman’s contention that the main agent of this change – which “may enable America to secure its interests in the region with much less blood and treasure of its own” – has been Mr. Trump’s transformation of U.S. policy.

Friedman focuses on the President’s Trump’s decisions in the fall of 2019, when Iranian aggression against U.S. ally Saudi Arabia threatened to spark yet another regional conflict into which America could well be dragged.

But rather than order the U.S. military to jump to Saudi Arabia’s defense, the President announced in October, “We are sending troops and other things to the Middle East to help Saudi Arabia. But — are you ready? Saudi Arabia, at my request, has agreed to pay us for everything we’re doing. That’s a first.”

And as Friedman makes emphatically clear, it was a first based on a revolutionary (by hidebound pre-Trump U.S. foreign policy standards) insight, and one for which Americansshould be deeply grateful. In the author’s words, the President’s announcement sent the following message:

“Dear Saudis, America is now the world’s biggest oil producer; we’re getting out of the Middle East; happy to sell you as many weapons as you can pay cash for, but don’t count on us to fight your battles. You want U.S. troops? Show me the money.”

And the results? According to Friedman:

“In effect, Trump forced Israel and the key Sunni Arab states to become less reliant on the United States and to think about how they must cooperate among themselves over new threats — like Iran — rather than fighting over old causes — like Palestine. This may [as noted above] enable America to secure its interests in the region with much less blood and treasure of its own. It could be Trump’s most significant foreign policy achievement.”

Actually, Trump’s departure from the dangerously stale globalist conventional wisdom began a good deal earlier, with decisions like his recognition of Jerusalem as Israel’s capital and movement of the U.S. Embassy to that historic city, endorsement of Israeli sovereignty over the Golan Heights, and support for Israeli settlements on the long-occupied West Bank of the Jordan River.

Combined with Mr. Trump’s determination to keep the United States an oil production powerhouse, these moves also revealed that Washington was no longer going to permit Arab regimes in effect to have their cake and eat it, too at America’s expense — using the threat of Arab public opinion exploding and radicalizing over the West Bank and equally occupied Gaza to both (1) sustain open-ended U.S. military support, and (2) thereby continue indulging their ideological determination to keep their embryonic ties with Israel as covert as they were limited.

Something else Friedman should have mentioned: All these Trump decisions have been strongly opposed not only by most American globalists, but by the European allies that Biden is so determined to woo.

I personally still can’t give Mr. Trump an “A” on Middle East policy — not while he still hasn’t put his foot down and pulled nearly all American troops out of Afghanistan over his own military advisers’ objections, and while the United States still maintains way too any forces in the region overall.  But he’s at least pointed U.S. policy in the right direction — as even a committed globalist like Friedman has just told the nation, and the likely next President.      

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

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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.

Making News: Back on National Radio Tonight on the Trump China Tariffs…& More!

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China, Gordon G. Chang, i24News, Israel, Making News, tariffs, The John Batchelor Show, Trade, tradewar, Trump

Nothing like the news business to upset the best laid plans of bloggers – especially in the Trump era!  I was literally minutes away from posting an item on President Trump’s new China tariff threats when I got a query from a national newspaper op-ed editor asking for a piece on the subject.  So I was only too glad to send him what I had just completed – and you’ll be able to read it by Wednesday morning at the latest.

But that doesn’t mean it still won’t be a busy news day today.  Tonight at 9:45 PM EST I’ll be back on John Batchelor’s nationally syndicated radio show to help John and co-host Gordon G. Chang provide crucial background on the latest China trade war developments.  Click here to listen on-line, and if you can’t tune in, I’ll be posting a link to the podcast as soon as it’s available.

Beforehand, moreover, I’ll be appearing on Israel’s i24News television network at 7:30 PM EST to brief its audience on today’s developments.  Unfortunately, viewing i24News on-line requires a paid subscription, and segments aren’t archived for visitors.  But you can sign up for a free trial subscription at this link.

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

 

Our So-Called Foreign Policy: Why Trump Needs to Go Real America First vs the Saudis

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America First, globalism, Iran, Israel, Jamal Khashoggi, Magnitsky sanctions, Middle East, Mohammed bin Salman, oil, Our So-Called Foreign Policy, Saudi Arabia, terrorism, Washington Post

Earlier this year, The National Interest published a lengthy article of mine arguing that President Trump seemed to be repeating a mistake that has doomed previous efforts to replace a failed, longstanding globalist strategy with a fundamentally new foreign policy much better suited to the country’s real strengths and weaknesses. And just this morning, this prediction was borne out by the Washington Post‘s editorial writers (best viewed as among the many unofficial spokespeople for globalist approaches that fill the Mainstream Media) in a piece they wrote on Mr. Trump’s approach to the murder of dissident journalist Jamal Khashoggi authorized at top levels by the Saudi Arabian monarchy.

My article made the case that globalism would never be rejected unless the President made a clean, fully explained, break with the assumptions on which it was based. Instead, it pointed out, he seemed to have settled (wittingly or not) on an approach that might be called “globalism on the cheap.” That is, Mr. Trump’s actions appear to reflect a belief that most and even all of globalism’s supposed economic and security benefits can be realized, and supposed goals achieved (both entailing shaping the entire global environment in ways America allegedly needs in order to be acceptably safe and prosperous) while reducing its costs (e.g., subsidizing the defense of free-riding allies, and their economies with lopsided trade arrangements). The essay also explained that, because similar claims made by globalism critics in the past turned out to be literally too good to be true, numerous chances for genuine and urgently needed foreign policy overhaul have been lost.

That’s why the Post editorial is so revealing. It shows that, because Mr. Trump’s rejection of globalism has been so partial (in this case, when it comes to the Middle East), he’s made himself vulnerable to the kinds of attacks that have vanquished earlier critics and squandered a golden opportunity to stake out a true America First position that would have been strategically sound and politically popular. In fact, the Trump Saudi statements have enabled his critics to slam him in two powerful ways.

First, the Post edit writers have restated the common charge that the President was “craven” in letting Saudi crown prince Mohammed bin Salman off the hook for the Khashoggi murder largely because of economic considerations like the kingdom’s purchases of U.S.-made weapons and its cooperation in keeping oil prices low. As the editorial puts it, Mr. Trump, “cares not a fig for American values….And if he can sell one or two more fighter jets, who cares if a journalist is murdered?”

Small wonder that his decision has been so unpopular even with many of his supporters in Congress. Just as bad, the President’s rationale is so narrow that it’s been easy to undercut on its own terms (e.g., by questioning the actual importance of Saudi Arabia’s imports to the U.S. economy).

But the editorial’s second line of attack is much more important, and is worth presenting in full. The President, according to the Post, is

“undermining the basic understanding that has worked to the United States’ advantage since World War II under presidents both Republican and Democratic.

“Those leaders all accepted that, with less than 5 percent of global population but more than 20 percent of the global economy, the United States, more than any other nation, depends on and benefits from predictable rules. It needs a world where business executives can go forth and come home without fear of kidnapping, where ships can ply the oceans without armed escorts, where contracts are honored and disputes fairly adjudicated. It needs a world where journalists can report and inform Americans on the true conditions on the ground.

“Previous presidents understood that the way to achieve such a world was to enlist allies who would live by the United States’ rules in return for protection — safe in knowledge that the United States would not use its preeminence to squeeze them for every last dollar. They would go along because the United States stood not just for itself but for rules that benefited everyone and for values they cherished, as well: freedom, human dignity, the rule of law. By championing good — albeit imperfectly and inconsistently — the United States did well.”

As my National Interest piece explained, this by-now-standard defense of globalism has the decisive sources of U.S. security and prosperity exactly backward. Far from depending on a placid world largely knit together by alliances and institutions dominated by like-minded countries, the real guarantors of U.S. power and wealth are America’s…power and wealth – i.e., its own assets – along with an unmistakable willingness to use them when advisable.

Further, this power and wealth have been indispensable both in instances when unilateral action has been desirable or unavoidable, and in ensuring that the specific forms taken by various cooperative (“multilateral”) ventures advance American interests – an outcome globalists wrongly take for granted.

These America First-supporting conclusions, by the way, are so valid that it’s become routine for even globalists unknowingly to acknowledge them – as did the Post’s editorialists when they (rightly) accused the President of failing “to see that Saudi Arabia is far more dependent on the United States than the reverse.”

But Mr. Trump’s own failure to recognize the real U.S.-Saudi power balance is far more frustrating for backers of new America First foreign policies. And in a Middle Eastern context, it’s manifested in much more than his views on the Saudi market for American arms exports.

For example, it’s also apparent from his conviction that keeping world and U.S. oil prices relatively low depends on Washington making nice to Riyadh – whereas the Saudis have learned that overly expensive and/or skyrocketing oil prices hurt them (badly) as well. After all, until recently, they’ve reduced American and worldwide economic growth, and therefore reduced the oil revenues on which the kingdom is completely reliant economically. More recently, because of the U.S. energy production revolution (a development vigorously – and correctly – championed by the President), the higher global oil prices rise, the more American oil and natural gas come on stream to the world market, and take market share from the Saudis and other Middle Eastern and foreign exporters.

And, as I’ve written repeatedly, the President’s partial America-First-ism is clear from his belief that it’s vital for U.S. national security to support Saudi Arabia and other Sunni Muslim countries (along with Israel) in order to contain Iran’s regional ambitions.

So what would a real America First approach to the Khashoggi murder have been? Nothing less than the long overdue beginning of a U.S. strategic withdrawal from the hopelessly violent and dysfunctional Middle East based on the (equally long overdue) understanding. This decision would be described an explained in high profile presidential speeches and other declarations that, with the following points, would put the globalists on the defensive for a change: that the United States no longer needs the region’s oil nearly so desperately; that terrorist threats originating in the Middle East are best met by securing America’s own borders, rather than by battling jihadist networks all around the world; and that any Iranian threat to the U.S. homeland is eminently deter-able with U.S. nuclear forces.

P.S. For those concerned about Israel’s security (and that includes me), the Jewish state is more than capable of protecting itself through a combination of its own military strength, its own emerging alliance with the Sunnis – which will also contain any possible headaches from Palestinian radicals – and continuing military and economic assistance from Washington.

In the process, Mr. Trump should announce some painful and specific slaps at the Saudis – like expelling, say, half of their staff from their embassy in Washington and imposing painful so-called Magnitsky sanctions on the personal finances of bin Salman and others at the most senior levels of the Saudi leadership. For nothing is more central to the concept of America First than that, barring truly vital strategic interests to the contrary (the reduction of which itself is a high America First priority), no one gets away with harming American citizens or legal residents (Khashoggi’s status) unjustly.