Im-Politic: Where Blame is Due

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civil rights, Derek Chauvin, George Floyd, Hennepin County, homicide, Im-Politic, Jr., Justice Department, manslaughter, Martin Luther King, Mike Freeman, Minneapolis, Minneapolis protests, Minneapolis riots, Minnesota, murder, police killings, prosecutors, race relations, vandalism

Two sets of thoughts today about the killing of an unarmed, subdued black male crime suspect by a white Minneapolis police officer, and specifically who s to blame – for starters – for its too often violent aftermath.

>First, muddled thinking is abounding about the different categories of groups and individuals involved in this past week’s upheaval. And the problem centers on those who have acted violently.

It should be, but clearly isn’t, obvious that the arsonists and window-smashers and brick-throwers etc mustn’t simply be divided between locals and outside agitators, or between those whose anger is longstanding and genuine and those who have simply gotten caught up in mass hysteria. For if the typology used even for the violent participants isn’t valid, it’s unlikely that the country’s collective response will be constructive.

In my view, none of the violence is acceptable in the slightest – in the sense that its outbreak or continuation can be safely tolerated by any governmental authority. So I’m not completely with the late Rev. Dr. Martin Luther King Jr’s position that “a riot is the language of the unheard.” I say “completely” because it’s crucial to look at the targets of the violence.

Specifically, rioters who attack police stations and vehicles, or government buildings, or even properties with clearly symbolic importance (e.g., a stock exchange) undoubtedly are assailing a system they consider oppressive, and that they believe prevents the peaceful attainment of their objectives (which could in principle even include bringing on anarchy).

I don’t agree with this view because I don’t accept the underlying analysis. But it’s logical. It’s coherent. And it’s principled. At the same time, it can’t be accepted, because a widespread breakdown of order would threaten essential levels of personal safety and well-being for the vast majority of Americans. Which means that these rioters (and their sympathizers) need to recognize that the authorities are justified in using any legal means needed to stop and/or prevent this violence. In other words, attack this system if you will, but don’t complain when it exercises its right to self-defense.

Rioters who attack other targets – like businesses or other sites without symbolic importance – may be motivated by genuine anger against an oppressive system. But ethically speaking, their actions are even less defensible. The best that can be said of them is that they’ve acted without the simple judgment and self-control that’s also needed for society to function satisfactorily. So that society has a legitimate interest in using any legal means necessary to stop and/or prevent their violence. And their sincerity consequently doesn’t warrant lenient treatment, either.

As for the looters – they’ve clearly lost the moral right to carry a social or racial justice warrior ID card. They’re nothing better than common thieves who deserve common thief treatment from the criminal justice system, and no sympathy whatever from their fellow citizens.

>Second, however strong my conviction that none of this week’s violence is acceptable, I can’t shake the feeling that the Minnesota state authorities made the crucial mistake by failing to indict the police officer in question, Derek Chauvin, much faster.

After all, much of violence was sparked by a belief that, despite the unmistakably incriminating video evidence, the authorities were taking much longer in arresting Chauvin than they would have taken in dealing with non-white suspects (even in more ambiguous circumstances).

And in this instance, they were absolutely right. The lion’s share of the blame here goes to Hennepin County (Minnesota) Attorney Mike Freeman, whose first instinct was to announce that “We are going to investigate it as expeditiously, as thoroughly and completely as justice demands. Sometimes that takes a little time. And we ask people to be patient.”

He continued:

“That that video [of the killing] is graphic and horrific and terrible and no person should do that. But my job in the end is to prove that he violated criminal statute. And there is other evidence that does not support a criminal charge. We need to wade through all of that evidence to come to a meaningful determination and we are doing that to the best of our ability.”

But however reasonable and responsible and even necessarily fair these comments may have sounded, they were conspicuously timid to anyone with any familiarity with the criminal justice system. For there was no intrinsic need – and certainly no need in this case – for Minnesota authorities to conduct the kind of relatively protracted pre-arrest investigation of this killing that Hennepin County Attorney Mike Freeman described in a press conference yesterday.

After all, the video (whose authenticity no one has challenged) shows the action in question and Chauvin’s involvement undeniably. Would Freeman call for a detailed investigation if he saw a security camera recording of an unmasked thief robbing a liquor store?

Sure, there was the question of specifying the charges against Chauvin. Given the above categories of murder and manslaughter (and in some states, but not Minnesota, “negligent homicide”), that’s not a no-brainer. (On Friday, Freeman announced them to be third-degree murder and second-degree manslaughter.)

But not even these decisions are always or even typically based on meticulous examinations of available evidence. Prosecutors enjoy considerable discretion, and it’s common to file a more serious charge in order to create the worst-case certainty of a lesser conviction. In any event, an experienced District Attorney shouldn’t need three days to make up his or her mind. Which means that Freeman’s dithering surely, and needlessly, fed volatile, racially-tinged suspicions of the criminal justice system.

Where more careful investigation may be justified is in the second, and separate, related probe of the Floyd killing that will be conducted by the federal government. Under the U.S. Constitution, most crimes (except for those designated as federal offenses) are dealt with by the states. These include unlawful homicides like the one Chauvin allegedly committed. (Legally speaking a homicide refers to any taking of one person’s life by another person, legally permitted or not.)

The federal government’s Justice Department, however, is responsible for enforcing federal civil rights law, and on Friday, Attorney General William P. Barr ordered an investigation into whether Floyd’s killing warrants prosecution according to those statutes.

In some instances, apparently, these prosecutions can be more difficult to conduct successfully than standard criminal homicide trials. So it wasn’t completely crazy for U.S. Attorney Erica MacDonald to talk about the the need to “methodically continue to gather facts” and compiling “all available information and thoroughly evaluate evidence and information obtained from witnesses.”   

At the same time, the Justice Department’s own guidelines seem to show that meeting this standard shouldn’t be especially challenging.for an indictment and even conviction in Floyd/Chauvin case given the video evidence, and in particular given the lengthy period during which Floyd clearly was in major distress at Chauvin’s hands:

“…the government must prove each of the following elements beyond a reasonable doubt: (1) that the defendant deprived a victim of a right protected by the Constitution or laws of the United States, (2) that the defendant acted willfully, and (3) that the defendant was acting under color of law. A violation …is a felony if one of the following conditions is met: the defendant used, attempted to use, or threatened to use a dangerous weapon, explosive or fire; the victim suffered bodily injury; the defendant’s actions included attempted murder, kidnapping or attempted kidnapping, aggravated sexual abuse or attempted aggravated sexual abuse, or the crime resulted in death. Otherwise, the violation is a misdemeanor.

“Establishing the intent behind a Constitutional violation requires proof beyond a reasonable doubt that the law enforcement officer knew what he/she was doing was wrong and against the law and decided to do it anyway. Therefore, even if the government can prove beyond a reasonable doubt that an individual’s Constitutional right was violated,[the statute] requires that the government prove that the law enforcement officer intended to engage in the unlawful conduct and that he/she did so knowing that it was wrong or unlawful. See Screws v. United States, 325 U.S. 91, 101-107 (1945). Mistake, fear, misperception, or even poor judgment does not constitute willful conduct prosecutable under the statute.”

So an argument can be made that the Feds were being too scrupulous by half, too.

Law enforcement should never be influenced by politics – much less by fear that unpopular indictments or verdicts will spark civil unrest. That’s a great recipe for mob rule. And as argued above, many of the rioters weren’t going to be appeased even by the swiftest Minneapolis indictments.

But the Justice Department has officially acknowledged the “sensitive nature of the constitutional and statutory issues involved [in dealing with civil rights crimes] and the desirability of uniform application of federal law in this field….” Which means that prosecutors need to demonstrate a little situational awareness. And that there’s a strong case that this was a test that both Minnesota and federal attorneys flunked in the Floyd/Chauvin case.

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(What’s Left of) Our Economy: A Pundit’s China Policy Delusions

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2016 election, artificial intelligence, big government, China, Holman Jenkins, incomes, Jobs, Jr., national security, offshoring, tech transfer, The Wall Street Journal, Trade, Trump, Welfare State, {What's Left of) Our Economy

Holman Jenkins, Jr. did make one important and useful point in his Wall Street Journal column yesterday on U.S.-China trade policy (which puts him far ahead of most of the punditocracy): He’s absolutely right to call on President Trump to “lay out for the American people just how thoroughly [he] intends to shake up the hugely important U.S.-China economic relationship.”

For weeks, I’ve offered Mr. Trump exactly the same advice – to explain his China end game comprehensively to the American people in a prime-time Oval Office address (though unlike the free trade-obsessed Jenkins, I believe such a speech would boost public support for the Trump China agenda by describing the compelling long-term stakes of what I view as an effort to disengage economically from the PRC – and why they’re more than worth short-term sacrifices).

As for the rest of his column? It’s useful only for reminding Americans how internally contradictory and dangerous (not to mention downright ditzy) the case remains for retaining most of the pre-Trump China policy status quo. Just a few key examples:

>Jenkins insists that rather than pursue a “shakeup” that would amount to “following [Chinese leader] Xi Jinping down the path of seeking foreign scapegoats for failure and heavy-handed intervention at home,” the United States should be “building up our military and alliances.”

But what would be the point of sending more troops and equipment to East Asia while Washington returned to trade policies that have transferred literally trillions of dollars to the Chinese state and helped fuel a rapid military buildup, and investment policies that have ignored the massive export of advanced defense-related knowhow to Chinese entities, and for too long overlooked Chinese acquisitions of similar assets in the American economy?

>According to Jenkins, “China’s avid pursuit of artificial intelligence” shouldn’t worry Western experts because it’s “likely to be employed mainly in destroying the creativity and initiative of its own people.” But capabilities even remotely that massive won’t threaten any major U.S. strategic interests?

>In Jenkins’ view, central to strengthening the U.S. economy sufficiently to meet the Chinese threats he doesn’t laugh off is “dealing with the fiscal challenge of our welfare state.” But good luck with the politics of shrinking social safety nets under an American approach to globalization that kept sending valuable opportunities to earn middle- and even living-wage working- class incomes to China and other penny-wage and regulation-free production and export platforms.

Jenkins isn’t entirely wrong in his overall conclusion that “American prosperity is still made at home.” But the impact of purely domestic reforms is bound to be seriously diluted after decades of Jenkins and his crowd at the Journal (along with most of the rest of the nation’s punditocracy, the pre-Trump Republican party, and the Clinton-ite Democrats) focusing like laser beams on building a truly globalized economy.

And finally – about that headline calling for a “vote on a China Cold War”  (even though the article’s body only glancingly mentions the point): During his successful White House run, President Trump made no secret of his determination to overhaul America’s China trade policy. From the standpoint of democratic legitimacy, the Trump 2016 election victory was all the mandate his administration’s China policy measures need.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Im-Politic: Why I’m Not a Think Tank Hypocrite

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business groups, Clyde V. Prestowitz, Economic Strategy Institute, Google, idea laundering, Im-Politic, John B. Judis, Jr., manufacturers, New America Foundation, The New Republic, think tanks, Trade, U.S. Business and Industry Council, USBIC Educational Foundation

Freelance journalist and author John B. Judis is a long-time professional friend. He’s also a pioneer in the study of think tanks and how they’ve added to the corruption of America’s policy-making process, especially in Washington, D.C., where so many of them are headquartered and concentrate their efforts.

So it’s with a double dose of regret that I write this dual-purpose post – which will aim to explain why he’s recently done me a not-trivial injustice in describing me and my relationship with the think tank complex, and in the process contributed to the mis-impression that all organizations that seek to influence policy are alike in their basics.

The problem was created last week in John’s otherwise insightful New Republic article on the uproar kicked up by the news last month that the New America Foundation think tank fired a prominent researcher (and his entire team at a particular program) because their work had begun threatened to antagonize a major donor to the Foundation – Google. You can read my take on this super-revealing incident here.

Because his work on the subject has been so important, I was initially pleased to see John cover the controversy, and even more pleased that he decided to quote me. Unfortunately, he mysteriously decided to use the passage (from that above RealityChek post) in a decidedly and unjustly unflattering way. As John wrote:

“The controversy over New America…has prompted hand-wringing among Washington’s policy community, but some of it seems self-serving. ‘Slowly, and not so surely, the American media is waking up to the pervasiveness of corporate corruption of the nation’s think tank complex,’ wrote Alan Tonelson, who did research for decades at the Business and Industrial Council, which got much of its funds from Roger Milliken and Milliken & Co.”

I don’t think I’m being overly sensitive in believing that this paragraph insinuates that I’m a hypocrite. That is, I’d belonged to that Think Tank World for decades, and now that it’s becoming fashionable, have decided to bite the hand that fed me.

What John didn’t seem to realize is that the work for my former long-time employer that he refers to was done for a business group, not a think tank. As a result, whereas I’ve criticized think tanks for their lack of transparency regarding their (corporate) funders, and accused them of “idea laundering” (that is, issuing materials that push the special interest agendas of their funders while garbing them in quasi-academic raiment), the U.S. Business and Industry Council (USBIC) can’t fairly be accused of this practice even it had been a think tank because its orientation has always been obvious from its name.

Unlike the case with the Brookings Institution or the Center for Strategic and International Studies or the Heritage Foundation or the Carnegie Endowment or the Peterson Institute, when a policymaker or journalist received some information from USBIC, it couldn’t have been clearer that it represented a particular perspective, rather than the work of some disinterested scholar esconced in a ivory tower.

Of course, we tried to be as accurate as possible – both because we were confident enough in the substance behind our viewpoints that we felt no need to exaggerate or soft-pedal or leave out context when such tactics might have strengthened our case, and because those who depart from the conventional wisdom nearly always receive greater and harsher scrutiny than those who stay comfortably inside it.

Moreover, we spent countless hours trying to publicize exactly who we were – an association of smaller manufacturers who had largely rejected an offshoring business model and sought to oppose its nurturing by government trade policies. The reason? We wanted to make sure that our audiences knew that not all businesses or manufacturers favored such policies.

In addition, because the organization wasn’t a household name, whenever we identified ourselves as authors of an article written for an outside publication, we included a brief description of USBIC – something on the order of “an association of small, mainly family-owned, domestically focused manufacturers.” The same went for whenever we were interviewed for an article or broadcast segment. And if we’d been given more space, we’d have been happy to go into more detail.

Now, to be completely accurate, I was employed by the Council’s think tank wing – which we called the USBIC Educational Foundation. And that doesn’t look like a terribly transparent name at first glance. But only at first glance, since even the most casual research effort will reveal the connection. 

Moreover, as with the Council, when the Foundation marketed materials and speakers (like me), it was made completely clear that the very purpose was to represent the views of this distinctive group of manufacturers. In other words, that was the point. I only wish we had been more successful in debunking the stereotype of all industrial companies as footloose multinationals that roamed the world in search of the lowest labor and other costs, heedless or uncaring about the impact on the domestic U.S. economy.

Much the same holds for the organization I worked for previously – the Economic Strategy Institute (ESI). Although the name was less transparent than USBIC’s, from the very start, founder Clyde V. Prestowitz, Jr. strove tirelessly to publicize ESI’s corporate backers, and for a reason very similar to USBIC’s – he wanted to inform policymakers and journalists that not all industries and companies that dissented from an orthodox free trade line were “losers” that were simply seeking government protection from superior competitors. Nothing made that point more clearly that noting that many of ESI’s supporters (like Intel and Motorola) were leaders in the world’s most advanced industries.

Indeed, John might have mentioned that I wound up leaving ESI after a few years precisely because these donors changed their tune on trade issues for various reasons – and unfortunately, the Institute for the most part changed with them, along with venturing into new areas. I was fortunate to find a more like-minded group in the form of USBIC precisely because the Standard Operating Procedure of the donor community have always ensured that organizations analyzing these international economic issues in unconventional ways would be few and far between.

As a result, the tale above should also make embarrassingly obvious that if an author like John wanted to use a policy analyst as an example of opportunistic tut-tutting about the system that long supported him and his family, I was anything but that guy. In that vein (as is clear from the above link), John might have mentioned that I have written about the practice of idea-laundering for more than ten years.

So I hope that John keeps training his eye on the think tank world and the troubling role it plays in the national policy and political worlds. I just hope that his next offerings make their points more carefully and precisely.

Im-Politic: Meet the Real Trade and Jobs Know-Nothings

Tags

2016 election, Bernie Sanders, Clyde V. Prestowitz, Donald Trump, Im-Politic, Jr., manufacturing, manufacturing jobs, Morris Chang, Ronald Reagan, Taiwan Semiconductor Manufacturing Company, The Race to the Bottom, Trade, transplants

Nothing during this wildly unconventional presidential campaign has anchored the economic conventional wisdom more strongly than the claim that only know-nothings like presidential candidates Donald Trump and Bernie Sanders could possibly think that better U.S. trade policies can bring back lots of high-paying manufacturing jobs from countries like China to the United States. And nothing during this same campaign has revealed more Establishment ignorance than this attack on these White House hopefuls.

An excellent recent op-ed in USA Today by former U.S. trade negotiator Clyde V. Prestowitz, Jr. explains why. As Prestowitz (with whom I worked in the early 1990s at the Economic Strategy Institute think tank he founded) writes, anyone thinking that free market forces have turned China, for example, into a major producer of advanced manufactured goods needs to get a clue. China’s natural manufacturing advantage lies in labor-intensive products like apparel and toys, because its workforce is so gargantuan and its technological development still has a long way to go.

But Beijing wasn’t content to keep making such low-value products an instant longer than necessary. So it’s used a raft of active policy carrots and sticks to lure even information technology manufacturing to its shores. My book on globalization, The Race to the Bottom, has exhaustively documented how these policies have long been standard operating procedure for governments all over the world – except America’s. And the supposedly all-powerful multinational companies they’ve mainly targeted? Instead of standing on their high horses, and refusing to jump, they’ve simply asked “How high?”

If you still doubt any of this, forget about what Prestowitz and I have reported. Listen to Morris Chang. He started up and still chairs the Taiwan Semiconductor Manufacturing Company (TSMC), which is the world’s largest contract manufacturer of computer chips, and in fact, pioneered the “foundry” model for the industry.

Chang’s company just announced that it’s building a $3 billion semiconductor fab in China, where it will produce advanced (if not leading-edge) semiconductors. How come? There’s no question that part of the reason is that so many of TSMC’s customers – in the information technology products industry – now manufacture so many of their goods in China. But as Chang also admitted, “We say that with some degree of assurance from the authorities, some degree of assurance that building a plant there will indeed enhance our access to the Chinese market. And reversely, not building a plant there will not enhance.”

That is, China’s policy is “Pay to play” – because it wants to develop its own semiconductor sector, regardless of what economic theory says it should be doing. And Chang doesn’t think he can afford to Just Say No.

Revealingly, no one is more aware than the Chinese that the United States is capable of playing this game effectively, too. As a Chinese company told Bloomberg last year, it chose Alabama as the site of a new factory both “to bring it closer to clients in the South and avoid anti-dumping tariffs on copper products.”

Also revealingly, American leaders haven’t always been brain-dead on this score. In 1981, for example, President Ronald Reagan successfully pressed Japan’s auto makers to curb their exports to the United States “voluntarily.” The following year, Honda began assembling cars in Ohio. By 1990, all the major Japanese auto makers had gone the transplant route.

Can using America’s market power bring back all production and jobs lost to trade? Of course not. Can it bring back or create lots? Of course it can, especially in high-value sectors where a technologically advanced country with well developed capital markets like the United States should be fully competitive. The actual trade know-nothings are those unfamiliar with the historic record and current global realities. Assuming of course that any of them really want to know.

Making News: Briefing Congress on Trade, a New Position – & More!

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Congress, Economic Policy Institute, fast track, Henry George School, John Conyers, Jr., Making News, Marcy Kaptur, Robert Scott, Seeking Alpha, TPA, TPP, Trade, Trade Promotion Authority, Trans-Pacific Partnership

I’m pleased to announce that I will be speaking next week in Washington, D.C. at a briefing on President Obama’s proposed new trade deals being sponsored by U.S. Representatives Marcy Kaptur of Ohio and John Conyers, Jr. of Michigan.  The briefing will be held Tues., March 3 between noon and 1 in Rm. 2456 of the Rayburn House Office Building.  And it’s open to all media and the general public, as well as Members of Congress and their staffs.  Appearing with me will be economist Robert Scott of the Economic Policy Institute.

Accredited journalists seeking more information can contact Jenny Perrino of Rep. Kaptur’s staff at 202-225-4146 or at jenny.perrino@mail.house.gov.

In addition, it’s an honor to have just been elected to the Board of Trustees of the Henry George School of Social Science in New York City.  The School is planning to expand greatly its educational and research programs on domestic and international economics, and I’m grateful for the opportunity to help out. Keep visiting RealityChek for more details on the School’s activities they develop.

Finally, it was great to see my research on America’s dangerously high trade deficits cited on the popular investing website Seeking Alpha.