Our So-Called Foreign Policy: The Globalist Blob Wants the U.S. to Keep Looking for Trouble

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alliances, Blob, China, Council on Foreign Relations, East Asia-Pacific, extended deterrence, globalism, Japan, North Korea, nuclear weapons, Our So-Called Foreign Policy, Project-Syndicate.org, Richard N. Haass, South Korea, Taiwan, Trump

I’d like to offer a deal to anyone in America’s bipartisan globalist foreign policy establishment: You come up with defenses of the pre-Trump strategies and approaches you support that aren’t transparently ridiculous, and I’ll start portraying them as something other than sick jokes.

Judging by Richard N. Haass’ latest column for the Project Syndicate website, it’s clear that even if these members of the Blob (a wonderful nickname for this crew of former officials, genuine scholars, think tank creatures, Mainstream Media journalists, and business and finance leaders) cared about what I think, they’d flunk this test.

Haass is an especially important Blob-er because he not only served as a top policymaker under three Republican presidents (and in a more junior position during Jimmy Carter’s administration). He’s the President of the Council on Foreign Relations – the Blob’s oldest and most prominent think tank. (Truth in advertising: He also preceded me by two years at our Long Island, N.Y high school, but we had no personal dealings.)

But we should all hope that the advice he dispensed in government was much better than that he seems to have offered in “Asia’s Scary Movie.” Because his arguably underlying message – that the United States should reinforce its commitment to militarily defending the East Asia-Pacific region even though the region shows signs of fracturing on the economic and security fronts – is nothing less than a recipe for increasing America’s exposures to perils it can’t possibly control.

Especially and dangerously nutty is Haass’ clear belief that the United States should maintain its security relationships with Japan and South Korea even though the two countries are engaged in a literal trade war that’s disrupting interactions between their two gigantic clusters of information technology hardware manufacturing – which are so big that global trade and production in these critical sectors could take a major hit if the feud escalates further.

After all, as noted in that post linked just above, American ties with these two countries are “vital to its aims of balancing China and addressing the threat from North Korea” – both of which threats Haass correctly describes as growing and as worrisome as ever, respectively. In other words, in the event of trouble that may require a military response, the United States is relying on help from Tokyo and Seoul – which, in turn, are going to need to be working together.

But military relations between these two Asian countries have long been threadbare at best. Worse, their latest dispute – amid the backdrop of the rising China challenge and the ongoing peril from North Korea, which endanger both – has broken out because of grievances and grudges dating from Japan’s long and brutal occupation of the entire Korean peninsula in the decades preceding the end of World War II.

Given the history, it’s easy to understand why there’s no love lost between these two peoples. But alliances make sense only when the participants can count on each other for effective assistance if and when the shooting starts. Can anyone seriously believe that Japan and South Korea are going to get their act together suddenly if North Korean forces barrel across the Demilitarized Zone, or if Beijing moves against Taiwan? Or that responsible American defense planning should assume this rosy scenario?

Even worse, if trouble does break out on the Korean peninsula, nearly 30,000 American troops will be right in the middle. As I’ve written repeatedly, their vulnerability to superior North Korean conventional forces means that a U.S. President might need to use nuclear weapons to save them. For many years, North Korea’s inability to hit the American homeland with its own nukes made this threat (known as “extended deterrence”) credible and helped keep the peace. Given the North’s major progress toward precisely this capability, the current U.S. strategy could soon amount to risking the complete destruction of a big American city – or two. That may even be the case now.

In other words, given all these major, worsening Asia problems, the logical U.S. response is not stubbornly staying seated atop a powder keg. It’s to disengage ASAP. But any disengagement is such anathema to Haass and the rest of the Blob that he’s actually portrayed President Trump’s various statements criticizing the wisdom of America’s alliances as major contributors to East Asia’s stability.

Ironically, though, despite the Blob’s complaints, Mr. Trump’s biggest mistake along these lines clearly has been to continue his predecessors’ alliance policies, and even to double down in Eastern Europe – a region that could be as dangerous as East Asia.

That is, Haass and the rest of the Blob should be resting a lot easier. What a tragedy that there’s no reason to say that for the rest of us.

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(What’s Left of) Our Economy: Mainstream U.S. Trade Policy’s Main Rationale Has Just Been Blown Up

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Bill Clinton, BRICS, China, emerging markets, EMs, Financial Times, globalization, Jim O'Neill, multinational companies, offshoring, Project-Syndicate.org, Sherrod Brown, The Race to the Bottom, Trade, trade agreements, {What's Left of) Our Economy

I’m always struck by how often in the news media or policy writing (e.g., in journals like Foreign Affairs), genuinely game-changing points are made in passing, and for folks with any interest in the trade and globalization issues raised to such prominence by President Trump. And two such instances dealing with this subject just came in the Financial Times newspaper and the website Project-Syndicate.org.

The observation they both made with mind-boggling offhandedness – economic growth in countries dubbed “emerging markets” (EMs) is slowing to rates no faster than those of the rest of the world, and thus rendering them incapable as far as the eye can see of replacing the United States as a global growth engine.

This claim matters decisively for trade policy because these EMs have dominated America’s approach in this field for more than two decades. First identified in the early 1990s, they consist of economies in the developing world that not only boasted enormous populations. But largely because communism and a heavy state role in economic policy had been so thoroughly discredited due to the end of the Cold War, they were steadily transitioning to more free market approaches, and thus were seen to have huge growth potential. China and Mexico were the leading examples, but various definitions of the main emerging markets also included India, Brazil, Russia, Turkey, South Africa, and others.

According to trade enthusiasts, this combination of characteristics was going to make the EMs so important that accessing their vast current consumer markets and even greater consuming and importing potential needed to be Washington’s top trade priority. Their significance was portrayed as all the more important given America’s status as a “maturing” economy whose growth was bound to continue slowing. (Former President Bill Clinton used exactly this term while advocating for an emerging markets push in a document that’s not on-line but that’s cited in my book on globalization, The Race to the Bottom. The document was the 1995 Report of the President of the United States on the Trade Agreements Program and it was published by the Office of the U.S. Trade Representative at the start of 1996.)    

Yet however impressive and promising they seemed, the idea was a crock from the beginning – at least in terms of its importance in driving American trade policy for the foreseeable future. EM cheerleading suffered two fatal flaws. First, despite rapid growth and immense growth potential, the emerging markets were starting from such low bases – especially in terms of their populations’ consuming power – that they wouldn’t become significant markets in absolute terms for many years at best. Second, precisely because they remained so poor and under-developed, their governments invariably realized that their own best growth opportunities came from exporting to much wealthier countries like the United States – where the needed consumption power already existed.

So why the EMs euphoria? As documented exhaustively in The Race to the Bottom, the multinational corporations that dominated American trade policy-making never saw the emerging markets as final consumption markets. They viewed them as super low-cost production bases from which they could supply the U.S. market much more profitably than possible from their domestic factories. Which is exactly why, starting with the pursuit of trade expansion with Mexico at the onset of the 1990s, American trade policy almost exclusively targeted the emerging markets and other very low-income countries (like Vietnam and the countries of Central America) for negotiating new trade deals.

Ohio Democratic Senator Sherrod Brown (a possible 2020 Democratic presidential contender) described the multinationals sales pitch to leading EM China somewhat too charitably when he said in 2015, “while walking the halls of Congress, [lobbyists for the multinationals] talked about they wanted access to 1 billion Chinese customers. What they didn’t say is they also wanted access to 1 billion potential Chinese workers.”

As The Race to the Bottom also made clear, EM touting was star-crossed from the start – even embarrassingly so. As it peaked, in the mid-1990s, many of these same countries started experiencing problems that led to major financial crises even before the decade ended. That is, their markets became evaporating, not emerging, and in numerous cases they kept afloat only by cheapening their currencies, limiting their own consumption and importing still further, and making them more powerful exporters than ever.

Yet the multinationals’ power and influence remained so decisive throughout America’s political (and media) establishment that emerging markets hucksterism continued to justify trade agreements with such countries. Hence the continued repetition of wholly misleading contentions like “95 percent of the world’s consumers live outside the United States” (which I debunked here).

So that’s why I was so interested to see the following in a Financial Times blog post – and by no less than a former senior official at the International Monetary Fund and another leading international economic institution:  

“EM growth has slowed to about 4.5 per cent at present….In the long run, according to the OECD, the potential growth rate of the Briics (Brazil, Russia, India, Indonesia, China and South Africa — accounting for most of EM GDP) is expected to slow further, converging to mature market trend growth of 2 per cent. In other words, the growth advantage of more than 4 percentage points that EMs enjoyed over mature markets in the 2000-2010 period has narrowed to about 2 percentage points and will probably disappear in the long run.”

And guess what? Unlike in the United States, in particular, even much of this EM growth will rely on maximizing exports and minimizing imports. So their importance as markets for American-made goods and services will be even less impressive than this impeccably mainstream analyst suggests.

Equally startling: This Project-Syndicate column by Jim O’Neill. O’Neill, for the unitiated, was perhaps the highest profile EM cheerleader, and coined a popular acronym for those economies that described those he believed most promising: BRICS (Brazil, Russia, India, China, South Africa).

The former Goldman Sachs banker has remained a believer in China, and has actually added some countries to his list of economies he believes will loom much larger in this century. But in the column, he also argued that, if China falters in what he (wrongly, in my view) considers its role as a global growth engine, and the American consumer gets tapped out, none of the other emerging economies “is in a position to match the growth of Chinese consumption today, or even over the course of the next decade.” And by extension, the likelihood of these countries replacing the United States is even more infinitesimal.

Former French leader Charles de Gaulle once famously said that “Brazil is the country of the future…and always will be.” The two examples above show that the same solidly grounded skepticism is also finally seeping into the ranks of globalization cheerleaders. How long will it take before the American political, business, academic, and media establishments finally start paying attention?

(What’s Left of) Our Economy: With Friends Like This, Today’s World Trade System Doesn’t Need Enemies

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Bill Emmott, Chad Bown, dispute resolution, free trade agreements, Peterson Institute for International Economics, Project-Syndicate.org, The Economist, Trade, Trump, unilateralism, World Trade Organization, WTO, {What's Left of) Our Economy

One of the best pieces of advice I’ve ever received about analytical and opinion writing is “Let your adversaries hang themselves with their own words.” So on the eve of Thanksgiving, 2017, I’m especially grateful to Bill Emmott, the former editor-in-chief of The Economist magazine, for making clear why President Trump and other nationalist critics of U.S. trade policy have been exactly right in slamming as a huge mistake America’s decision to join the World Trade Organization (WTO) – the linchpin of the global trade order for the past two-plus decades.

Writing on the Project-Syndicate.org website, Emmott reports that the Trump administration has embarked on a campaign to cripple the operations of the WTO, which went into business at the beginning of 1995 and which possesses unprecedented internationally recognized authority not only to develop rules for governing many kinds of global commerce, but for enforcing them.

As with other efforts to subject countries to some legal-type checks, the ostensible purpose of the WTO was to remove power from the picture when countries negotiated trade arrangements, and especially when they dealt with the disputes over such arrangements that inevitably arise.

Many powerful critiques of the WTO have been advanced by trade policy critics across the spectrum, but I’ve always viewed two interlocking objections as supremely convincing. First, despite its lofty stated legalistic objectives, the WTO has always been as quintessentially a political organization as other international organizations, like the United Nations. Second, the politics of the WTO has always been decidedly anti-American – for the overwhelming majority of its members depended heavily on amassing big trade surpluses with the United States in order to generate adequate growth for themselves.

So Washington’s decision (backed by Democratic and Republican leaders alike of course) to spearhead the WTO’s creation and become a founding member achieved none of its promised major advantages for the U.S. economy (an impartial forum for handling trade disputes), and saddled the country with all of the major drawbacks of such a system (nullifying most of its ability to use its immense market power to resolve most of these disagreements favorably).

And wouldn’t you know it? Emmott, whose former publication was created in the mid-19^th century precisely to advocate for so-called free trade principles, strongly agrees! As he wrote in an essay yesterday:

“With the WTO essentially out of the picture, the US will launch a new initiative to strike bilateral deals on trade rules – an approach that Trump advocated in his APEC [Asia Pacific Economic Cooperation forum] speech. Given that the US remains a vital market for most exporters, such an initiative will have clout.”

Even Emmott’s suggestion that these U.S. moves will fail unwittingly confirms the case that American leverage will secure the best possible outcomes for Americans. “Asian and European countries,” he writes, “should be preparing for the worst by negotiating their own trade agreements with one another to preempt American mercantilism. After all, taking the initiative to boost trade and other commercial contacts is the best way to resist a trade war.”

What the author apparently misses is that the United States is such “a vital market for most exporters” precisely because the latter countries simply don’t believe in opening their economies to others’ goods and services any more than is absolutely necessary. It’s entirely possible that the dramatically altered circumstances created by new unilateralist U.S. policies could imbue these mercantile economies with some free trade religion. But decades- – and in some cases, centuries- – old approaches generally don’t die so easily. Moreover, if such market-opening did indeed take place, and it could be adequately monitored and enforced, why wouldn’t the United States want to take part?

Until then, however, it would make the most possible sense for Washington to proceed along the unilateralist lines Emmott dreads. For thanks in large measure to its transparent political system and strong rule-of-law tradition, the reciprocal market-opening promises offered by America in bilateral trade diplomacy will be much more credible than those made by Japan, or China, or Germany, or other major protectionist economies. The days of selling the United States much more than they buy from it would come to an end. But genuinely intelligent foreign leaders will recognize that receiving a half a loaf from dealing with Washington on this new basis is the best trade bet they can realistically hope for.

As for countries that stubbornly refuse (possibly egged on by free trade zealots like Emmott) the United States – with its considerable present degree of self-sufficiency and matchless potential for much more – will be more than capable of shrugging its shoulders and moving on.

Incidentally, as RealityChek regulars may recall, Emmott isn’t the first globalization cheerleader unintentionally to reveal that the WTO was a pig in a poke for U.S. economic interests, and indeed was created expressly to neuter American power. Chad Bown, a former World Bank economist now with the Offshoring Lobby-funded Peterson Institute for International Economics, handed trade policy critics, and the American people, a similar gift just last August.

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.