Im-Politic: The Supreme Court Mess I

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Antonin Scalia, Barack Obama, Biden Rule, conservatives, Constitution, Democrats, election 2020, elections, Ginsburg, Im-Politic, Joe Biden, lame duck Congress, liberals, Merrick Garland, Mitch McConnell, Republicans, rule of law, Ruth Bader Ginsburg, Senate, Supreme Court, Trump

I call this piece “The Supreme Court Mess I” rather than “The Ginsburg Mess I” because the fix in which the nation finds itself regarding the replacement of the late Supreme Court Justice Ruth Bader Ginsburg reflects a number of much deeper problems America is suffering. These stem from the firestorm-like nature of some recent battles over the roster of this nearly (but not quite paramount) arbiter of the Constitution, which makes it a the nearly last word regarding the entire U.S. legal system and its often decisive, lasting effects on every dimension of American life. (The Roman numeral tells you that there will be another post on this subject coming real soon, probably tomorrow.)

Today we’ll focus on the immediate question at hand: whether the Senate should vote on President Trump’s nominee for a new Justice. To me, the only answer with any merit: Absolutely. Indeed, nothing could be stronger, and more important to affirm, than the conclusion that any President has every right to nominate a new Justice at any time during any of his or her terms in office (i.e, through Inauguration Day, January 20), and that the Senate has every right to vote on his choice during this time. Why? Because it’s what the Constitution says, and neither the Framers nor any American leaders have ever formally tried to change the system since 1789. That is, there are no exceptions made – including for presidential election years, as many Democrats are calling for now.

If you think about it non-hysterically, you can see why. Abandoning this standard opens the door to the kind of bizarrely and indeed laughably convoluted and self-serving case being made now by Republican Senate Majority Leader Mitch McConnell of Kentucky to explain why (a) he’s decided to allow a vote on a Supreme Court nominee this presidential election year, but (b) refused to allow former former President Obama’s appointment of Supreme Court nominee Merrick Garland be considered during the previous presidential election year.

According to McConnell, the governing principle for Court nominations is the result of the latest Senate election. As he wrote right after Ginsburg’s passing:

“In the last midterm election before Justice [Antonin] Scalia’s death in 2016, Americans elected a Republican Senate majority because we pledged to check and balance the last days of a lame-duck president’s second term. We kept our promise. Since the 1880s, no Senate has confirmed an opposite-party president’s Supreme Court nominee in a presidential election year.

“By contrast, Americans reelected our majority in 2016 and expanded it in 2018 because we pledged to work with President Trump and support his agenda, To

To which the only serious reaction has to be “Seriously”? Not only is this position even further from the Constitutional standard than the presidential carve-out position. If it’s followed, it’s easy to see how other unscrupulous politicians could use even more arbitrary maxims like this to completely paralyze the Supreme Court nomination process.

After all, if it’s the Senate’s makeup that counts most of all, then why not bar nominations during the run-up to such elections – which of course take place every two years (when a third of the Senate faces reelection). For by McConnell’s logic, it wouldn’t be possible to know the people’s will on such matters for certain until those Senate results are in. And how would anyone define “run-up”? A month? Two? Six? A full year? On what objective basis could anyone distinguish among these possibilities? The only reasonable answer? None.

Lest you want to blame Republicans alone for this kind of sophistry, keep in mind that its origins lie in the so-called “Biden Rule” – when in 1992, the former Vice President and current Democratic presidential nominee argued that “once the political season is under way, and it is, action on a Supreme Court nomination must be put off until after the election campaign is over.” And in an example of poetic justice, McConnell and many other Republicans and conservatives cited this reasoning to justify their own Supreme Court positions when former President Barack Obama in March, 2016 nominated senior federal judge Merrick Garland to fill the seat left by Scalia’s death in February.

Three final observations: First, any number of politicians and pundits are citing various supposed historical traditions for justifying their stances on election year Supreme Court votes. (See here for Republicans and conservatives, and here for Democrats and liberals.) To which I can only say, “Tradition, shmadition.” As indicated above, although interpretation is possible and often needed for all laws and many Constitutional provisions, when the latter set out clearcut procedures – as for the nomination and approval of Supreme Court Justices (but not so much for impeachment) – Americans drift away from them at their peril. If you don’t like these procedures, then use the amendment process of the Constitution to change them, rather than pretending that traditions and non-legal precedents and other practices are adequate substitutes.

Second, equally ludicrous and even more dangerous is the claim that the nation’s current divided circumstances justify waiting until after the presidential election to fill the Ginsburg seat. That’s essentially warning that violence may erupt if the President and Senate exercise their Constitutional prerogatives, and in effect supporting a surrender to the threat of mob rule.

It’s absolutely true that practically all decisions made by political leaders – elected and unelected alike – are at least partly political in nature, and can profoundly affect the national interest short term and long term. It’s entirely legitimate, therefore, and even important for President Trump to take into account in his Ginsburg approach non-Constitutional considerations.

But it’s something else entirely, and far more dangerous, to contend that such judgment calls are or should in any way be legally binding. As with federal government personnel choices, Constitutional procedures can be used to protest and overturn presidential or other decisions that are entirely legal but unpopular for whatever reason. They’re called elections, and Americans would do far better to focus on taking all (legal) steps to ensure that their candidates and viewpoints prevail, rather than dreaming up spur-of-the-moment rationalizations for ignoring settled law that may create momentary advantages, but that contain equal backfire potential, and that can only erode the rule of the law to everyone’s ultimate detriment.

Third, my only strong preference in this matter is that a Senate Supreme Court vote not take place during a lame duck session – which would be convened after the presidential election. That’s because a possibly decisive number of Senators who would be considering the nomination would be Senators who have been voted out of office. What an offense to the idea of representative government that would be! At the same time, it’s only my preference. These sessions themselves are entirely legal, and I’m not about to claim that my views should substitute for Constitutional procedures.

(What’s Left of) Our Economy: Let’s Get Real When Criticizing Trump’s China Trade Deal

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Charles Schumer, China, dispute resolution, enforcement, Made in China 2025, Phase One, rule of law, tariffs, Trade, trade deal, {What's Left of) Our Economy

Of all the desperation- and Trump Derangement Syndrome-fueled arguments used to disparage the President’s new “Phase One” trade deal with China, one stands out as especially silly. It’s the complaint that the agreement hasn’t secured Beijing’s agreement to change its laws permitting the various predatory trade and broader predatory commercial practices that China is using to seize world leadership in key advanced industries and technologies, or otherwise promise verifiably to halt them. (Senate Democratic leader Charles Schumer of New York has been particularly outspoken on this point.)

And the complaint isn’t silly simply because the very title of the deal – Phase One – makes completely clear that it was never meant to once and for all solve all the grave problems that Chinese predation has created. It’s mainly silly for two reasons. First, the absence of anything remotely resembling rule of law in China means that Chinese promises to change laws and regulations and even actions to change what’s on paper could not be less important.

For China’s system is based on the arbitrary exercise of power  That is, by definition, its dictators and the bureaucracies they run feel absolutely no obligation to adhere to whatever text happens to be on paper at a given moment. In fact, one of the main purposes of publishing these fake measures is to keep outsiders ignorant of the practices both of the central government and of the various layers of sub-national government – i.e., the situation on the ground, and what needs to be done to become or remain viable in China.

Second, thanks to Phase One’s actual terms, whether the Chinese do or don’t change their laws, and even their practices, matters little now. That’s because the stiff remaining tariffs on massive amounts of Chinese goods intended for American customers effectively deny Beijing the ability to turn its technology extortion into advantages in the U.S. market – the market it needs to access and dominate in order to realize its ambitions. Indeed, the highest remaining tariffs (25 percent) penalize the very high value products targeted by the Made in China 2025 program that’s carrying out Beijing’s plans.

Moreover Phase One’s dispute-resolution and enforcement system – which ingeniously and crucially establishes a de facto American last word – goes far toward preventing China from using Made in China 2025 to turn its predation into advantages in the China’s own large market, either. If it makes the attempt, American victims can take their cases to the Washington, which enjoys broad authority under the deal to hike duties on key Chinese products even higher – and without fear of tit-for-tat Chinese retaliation. China’s only legal option is pulling out of agreement entirely – which given its continuing heavy reliance on accessing the American market, would amount to cutting off more than its nose to spite its face.

Thoughtful criticisms of Phase One have come from some quarters. Further, as I wrote in my initial assessment of the dispute-resolution system, realizing its benefits for the United States will require American leaders to show major poker-playing skills – which shouldn’t be taken for granted under the Trump administration, let alone under future Presidents. Neither development is guaranteed. But Phase One critics genuinely seeking to make certain that it works for the United States should focus on identifying actual weaknesses rather than trying to portray successes as failures.

(What’s Left of) Our Economy: Trump’s Muddled Asia Trade Speech

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Asia, globalization, Obama, rule of law, sovereignty, Trade, Trump, Vietnam, World Trade Organization, WTO, {What's Left of) Our Economy

There were so many important points in President Trump’s speech today in Vietnam on trade and globalization that urgently needed to be made. What a shame, then, that they could well be undercut by massive contradictions in the president’s message. Two in particular stand out. The first concerns Mr. Trump’s critique of the current rules-based global trade system. The second concerns a key aspect of that critique and its relationship to his views on national sovereignty.

Mr. Trump was absolutely accurate in his description of the problems that have plagued the world trade system as it’s evolved to date, and especially its ostensible focus on organizing global economic activity according to universally accepted and followed rules and norms. Who, after all, can reasonably argue with his proposition that “Organizations like the WTO [the World Trade Organization] can only function properly when all members follow the rules and respect the sovereign rights of every member. We cannot achieve open markets if we do not ensure fair market access. In the end, unfair trade undermines us all.” In fact, it’s so uncontroversial that every one of Mr. Trump’s recent White House predecessors has made the same seminal point (including President Obama’s administration).

The Trump trade approach toward the WTO so far has differed from those of Presidents Clinton, George W. Bush, and Obama mainly in that it’s criticized the organization’s workings much more intently, and actually taken some actions to gum up its works.

But the President will be repeating their fundamental mistakes if he believes that the solution to today’s flawed rules-based system is constructing a better rules-based system. That goal faces so many insuperable obstacles. For example, few of the countries involved in the system accept Anglo-American rule of law principles in their own political and legal systems, or the economic practices that flow inexorably from them.

Mr. Trump praised governments represented in his audience in Vietnam today for pursuing “visions of justice and accountability, [promoting] private property and the rule of law, and [embracing] systems that value hard work and individual enterprise,” along with seeking partnerships “directed toward mutual gain.”

Yet anyone who knows anything about most East Asian economies know that this description is at best seriously misleading. Instead, the region’s recipe for impressive economic success was based largely on practices that the president highlighted just a few paragraphs later in his address. Not that they’ve been alone, but it’s been the Asian economies that have masterminded “product dumping, subsidized goods, currency manipulation, and predatory industrial policies.” It’s they who have so systematically “ignored the rules to gain advantage over those who followed the rules, causing enormous distortions in commerce and threatening the foundations of international trade itself.”

And just legally speaking, why would these same countries do an about-face and start treating foreign businesses more equitably than they treat their own people?

Even more bizarre, the President specified (correctly) that “Such practices, along with our collective failure to respond to them, hurt many people in our country and also in other countries. Jobs, factories, and industries were stripped out of the United States and out of many countries in addition. And many opportunities for mutually beneficial investments were lost because people could not trust the system.”

In principle, the United States can use its economic power – stemming from the overwhelming importance of its market to an Asian region and indeed entire world heavily dependent on growing by amassing trade surpluses – to convert other economies to its values and policies. But at least for the foreseeable future, this strategy would require the United States – not an international organization created to reflect a global consensus on appropriate economic behavior that clearly is nowhere to be seen – to enforce these rules energetically and continuously until genuine conversion takes place.

Further, that conversion seems a remote prospect. For as the President himself has repeatedly stated, just as he feels obliged “to put America First,” he expects other national leaders “to put your countries first” – a remark evidently applauded by his audience.

Moreover, leaving aside the enormous administrative challenge of this enforcement mission, the process would clash violently with the President’s promise to Asian countries to “respect your independence and your sovereignty. We want you to be strong, prosperous, and self-reliant, rooted in your history….”

Far more promising for President Trump to dispense entirely with the idea of rules-based trade systems, whether regional or global, and use the nation’s (still) unmatched economic leverage to lay down the rules of access to its market, enforce them unilaterally, and leave other economies free to accept them or seek prosperity without the privilege of doing business with the United States.

This approach would generate a major strategic benefit as well – the conceptual freedom to use trade and broader economic diplomacy to offer better deals (which would still benefit the domestic economy) with countries or regions of special importance, whether economic or geopolitical or both. One possible example – creating a genuine North American trade bloc capable of strengthening Mexico’s economy, society, and political system, and/or broader arrangements to enrich other close hemispheric neighbors whose problems often become America’s.

In fact, Mr. Trump’s trade speech sounds like it’s two dramatically different speeches stapled together – something like a famous address on U.S.-Soviet detente delivered by former President Jimmy Carter decades ago. Carter’s apparent refusal to make up his mind reinforced his image as a worrisomely confused leader. Unless President Trump understands that “to govern is to choose,” he could well suffer Carter’s one-term fate.

Im-Politic: Comey’s Real Motivation?

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2016 election, Charles Krauthammer, classified material, Eric Holder, FBI, Financial Crisis, Hillary Clinton, Im-Politic, indictment, James Comey, prosecutors, rule of law, Wall Street

Possibly the only certainty surrounding the FBI’s decision not to indict Hillary Clinton for mishandling sensitive government documents is that we’ll be buried in analysis and commentary for the foreseeable future. That’s why it’s so remarkable that the most important point we’ll hear about the controversy may have already been made – by nationally syndicated conservative columnist Charles Krauthammer.

Addressing FBI Director James Comey’s unwillingness to recommend criminal charges against the presumptive Democratic presidential candidate, Krauthammer provided an explanation that’s far more convincing than the claims that Comey’s conclusion was legally justified (unless the “gross negligence” set as a bar for criminality is indeed substantially different than the “extreme carelessness” the FBI did find).

The Krauthammer take is also more convincing than the charges filling the air that the Republican Comey was responding to political pressure from a Democratic administration, or that he absolved Clinton in exchange for an implicit or explicit promise of an official job if she won the White House. Not that this kind of sleaze is unknown in American politics. But these accusations and insinuations apparently clash with everything said over the years by Democrats and Republicans, including hyper-partisans, about Comey’s integrity.

Krauthammer’s alternative hypothesis was more comforting – but only somewhat so. In his view, Comey wound up opposing criminal prosecution for fear of decisively influencing the presidential election – the nation’s most important political contest – with a legal decision. In Krauthammer’s words, Comey:

“knows if he had indicted her, that’s the end of her campaign. That will be the event of the 2016 campaign history. He will be the — it will be the decision that sways everything the most. I think he didn’t want to be that. And I think it’s because she is running. Not so much she is a Clinton, not so much because of her reputation and all that and her power, but I think Comey did not want to be the person that history remembers as changing the course of this presidential election.”

From a purely human and political standpoint, such reluctance to shape political outcomes through even entirely legitimate exercises of legal authority would be entirely understandable. In many ways, the nation still hasn’t recovered from the Supreme Court’s involvement in the 2000 presidential election’s Florida recount. Another legal decision that further poisons the atmosphere and further polarizes the electorate is the last thing America needs.

Nonetheless, if this was indeed Comey’s rationale, then he greatly overstepped his job description. However defensible this judgment on the merits, precisely because law enforcement and politics should be kept as separate as possible, Comey would have had no business deciding a criminal case based on his (or anyone’s) sense of how even the most important election would be affected. The scope for abuse is so vast that this simply can’t be the justice system’s call.

In fact, such reasoning would be disturbingly reminiscent of former Attorney General Eric Holder’s refusal to prosecute Wall Street kingpins for their role in fostering the financial crisis because he was

“concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”

Prosecutors are supposed to prosecute – nothing more, nothing less. If they don’t feel free to pursue lawbreakers with a “chips fall where they may” attitude, they inevitably undermine the foundational American belief that no person or institution is above the law. Comey may have had the best of intentions, but even if a sincere and reasonable belief that the public interest required legal restraint motivated him, he would stand guilty of betraying the public trust.

Im-Politic: Why Trump-ism Could Have Staying Power

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2016 election, America First, Bernie Sanders, Donald Trump, foreign policy, George W. Bush, Hillary Clinton, Im-Politic, internationalism, Jimmy Carter, John Kerry, national interests, national security, Obama, Peggy Noonan, Richard Nixon, rule of law, The Wall Street Journal, Trade

Welcome to the Age of Trump!

Since ages these days come and go a lot faster than previously in history, this one could well end in November, if he loses the presidency. Who, though, can doubt that, until then, the presumptive Republican presidential nominee will dominate the news cycle with his outsiders’ instincts and his matchless flair for publicity, and keep his presumptive rival, Democrat Hillary Clinton, the quintessential insider, continually on the defensive?

At the same time, the reasons for supposing that what might be called “Trump-ism” in American policy (and yes, I’m aware of all the contradictory views he still needs to resolve) is no flash in the pan are much stronger than widely realized.

Even given the implacable hostility he’s generated throughout the Mainstream Media, because of all the of digital ink spilled already on Trump’s remarkable rise, it’s hard to imagine anyone recently coming up with something fundamentally new – including me. But the Wall Street Journal‘s Peggy Noonan (who gained fame as a star speechwriter for Ronald Reagan) achieved just that objective in her April 28 column, when she wrote that the key to Trump’s appeal has been his supporters’ conviction that “he is on America’s side.”

Moreover, before you say, “Duh,” Noonan’s basic analysis ultimately also explains why Trump is so detested by the nation’s policy establishment across the political spectrum, along with the establishment journalists that flack for them – and why his approach to America’s challenges and opportunities holds much more promise than the reigning framework, especially in world affairs.

As you’ll see if you read the article, Noonan’s definition of “pro-American” entails much more than an avowed determination to defend and advance the nation’s interests. Of course, all public officials will call that their goal, and nearly all will sincerely mean it. What Noonan emphasizes, however, is the tendency of mainstream liberal, conservative, and centrist politicians alike to dilute that goal with numerous other considerations. These often are compatible with what’s best for America, or could be. But they’re not necessarily or intrinsically “pro-American” and can easily – and often have – compromised U.S. security or prosperity.

Noonan’s writes that Trump’s literal America First outlook “comes as a great relief to [his backers] because they believe that for 16 years Presidents Bush and Obama were largely about ideologies. They seemed not so much on America’s side as on the side of abstract notions about justice and the needs of the world. Mr. Obama’s ideological notions are leftist, and indeed he is a hero of the international left. He is about international climate-change agreements, and leftist views of gender, race and income equality. Mr. Bush’s White House was driven by a different ideology—neoconservatism, democratizing, nation building, defeating evil in the world, privatizing Social Security.

“But it was all ideology.

“Then Mr. Trump comes and in his statements radiate the idea that he’s not at all interested in ideology, only in making America great again—through border security and tough trade policy, etc. He’s saying he’s on America’s side, period.

I’d elaborate with two points. First, there’s a fundamental, bipartisan worldview and approach to world affairs underlying all these disparate positions. As I’ve explained, it’s called internationalism, and its bedrock tenet holds that America’s best bet for security and prosperity is pursuing what political scientists call milieu goals – literally trying to shape the world to make it safe for America.

As a result, especially since Pearl Harbor, this strategy has led the nation’s leaders on what I’ve called (especially in writing about national security and international economic policy) a search for abstract (a word Noonan uses in passing) standards to guide policy rather than simply asking what makes America and its people safer or wealthier. In fairness to the policy gurus and their acolytes, they insist that they’re simply taking a broader, more complex (sophisticated, etc.) and indeed more realistic view of U.S. interests. In particular, they claim to understand that the long run is more important than instant gratification.

That’s why even long before President Obama entered the White House, American leaders have been talking about strengthening peaceful global norms of behavior and the international institutions that should be administering them; about preserving relationships; about submitting to a “global test” before going to war (Secretary of State John Kerry’s words as the 2004 Democratic presidential candidate); about creating New World Orders and balances of power and “global structures of peace” (a Richard Nixon favorite); about freeing global trade and commerce to the greatest possible extent; about winning foreign “hearts and minds” (a Vietnam War campaign); about figuring out who’s on the “right side of history” (a big bone of contention during Jimmy Carter’s presidency); about eradicating global poverty; about controlling arms; about demonstrating credibility; about exercising or maintaining “global leadership.”

Of course, America and the world as a whole would indeed likely be much better off if much of this substantive progress (i.e., disarmament, trade liberalization) came to pass. But the main question facing policy-makers is rarely, “What would be advantageous” but “What is achievable at acceptable cost and risk?” Just as important is the question, “Compared to what?” For countries without alternatives, questing for a more congenial world environment is arguably the policy to follow – even though, paradoxically, however, their very lack of alternatives logically reflects a weakness that places this goal far out of reach.

As I’ve argued, however, the United States is in a different, and much more favorable, situation entirely, thanks to its geographically isolated location, its still dynamic social system, its sheer size, and its consequent economic power and potential for self-sufficiency. And logically, a policy of relying on variables that are relatively easy to control (i.e., a country’s own capabilities and actions) makes much more sense than a policy relying on variables that are relatively difficult to control (i.e., the capabilities and actions of others).

The arguments for pursuing the procedural aims of internationalism (those institutional goals) are even weaker for the United States. Given its military and economic superpower status and potential, yoking America to internationally agreed on standards of behavior seems likeliest to crimp valuable freedom of action, and hand influence over America’s fate over to powers that are either indifferent or hostile, without contributing on net to national security or well-being.

Also worth fretting about are time-frames (which are closely related to cost and risk issues). Let’s assume that even all of the above goals would benefit America sufficiently to warrant their pursuit. That still leaves the matter of how long the nation is supposed to wait for the benefits to start flowing. And nowhere is this question more important than in the international trade field, where Americans have repeatedly been told either (a) that their jobs and incomes should be sacrificed for the greater good by decisions to win and keep allies by handing them chunks of U.S. markets; and (b) that whatever economic pain liberalized trade is inflicting will eventually be more than offset by greater efficiencies or wider consumer choices or even more employment opportunities and higher wages (when foreign countries finally decide to open their markets).

It’s important to note that a “Trump-ian” crockery-breaking pursuit of greater and quicker policy benefits has no place in domestic politics. At home, Americans have developed a strong consensus on acceptable standards of behavior that justifies the supremacy of rule of law and its consequent proceduralism.  Nothing close to such a consensus is visible internationally.

But here’s something that’s at least as important to note: Even though it’s by no means certain that internationalism’s assumptions have been discredited, or that its promises have been broken, what is certain from the success this year of Trump as well as Democrat Bernie Sanders – another staunch critic of U.S. trade policy – is that Americans increasingly are out of patience. They’re demanding policies that safeguard their livelihoods and raise their wages now. And they’re in no mood to be told that such measures might violate World Trade Organization rules or antagonize allies whose own free trade bona fides are dubious at best – or offend populations in a dysfunctional Middle East that hasn’t exactly been showering Americans with affection lately.

Finally, the politics of the divide between Trump supporters and policy elites has been positively inflamed by the latter’s ability to avoid most of the costs and risks of glittering, quasi-utopian visions still all too far from panning out. Precisely because these electoral considerations dovetail so neatly with a policy shift strongly grounded in geopolitical and economic realities, unless U.S. security and international economic policies start delivering concretely for many more Americans very soon, the Age of Trump could have real legs.

(What’s Left of) Our Economy: On Trade, Now What?

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currency manipulation, dispute resolution, environmental standards, fast track, Financial Crisis, free trade agreements, gross domestic product, labor standards, Obama, offshoring lobby, reciprocity, recovery, rule of law, Senate, Trade, trade enforcement, Trans-Pacific Partnership, transparency, U.S. Trade Representative, unilateralism, {What's Left of) Our Economy

Although yesterday’s Senate vote doesn’t mean that President Obama’s hopes for winning fast track trade negotiating are dead, this historically trade- (and offshoring-) friendly body’s decision to delay debate with a new presidential election cycle already heating up certainly dims the odds. Just as important, their Senate victory starts putting the onus on critics to propose a new U.S. trade strategy. Here are some of my ideas.

First, about the only true statement Mr. Obama has made during the debate over a measure that would prevent Congress from amending newly signed trade agreements is that the status quo on this policy front is unacceptable. To me, the most damning indictment of the current trade landscape is my finding that the portion of U.S. trade flows most influenced by trade deals and related policies has worsened greatly during this feeble economic recovery – and slowed real growth since the last recession.  Since that article was published, that growth toll has risen to nearly 20 percent.

The answer, however, isn’t doubling down on the kinds of treaties that have produced this policy disaster. Nor is it dressing up the current framework with Congressional directives to enforce higher labor and environmental standards at foreign factories. Too many well-intentioned trade critics in particular ignore the immense difficulties Washington has had adequately regulating in the United States. As I’ve repeatedly written, the notion that huge foreign factory complexes can be monitored more effectively doesn’t stand to reason.

I’m much more sympathetic to adding what are called strong, enforceable curbs on foreign currency manipulation to the list of Congress’ mandatory trade negotiating instructions to presidents, but even this idea faces a huge problem. Many of America’s prospective trade deal partners are determined to retain the right to undervalue their currencies to undersell U.S.-origin goods and services for reasons totally unrelated to free markets or underlying competitiveness. Therefore, unless the United States wins unprecedented voting power in the dispute-resolution systems created by new trade agreements, other parties to the deal will easily be able to reject even the best-founded American complaints.

These very weaknesses in the current trade policy models supported by both supporters of current deals (and to a fascinating extent by the critics) start pointing the way to a fundamentally new approach. So do the unmistakable realities that the U.S. market is by far the biggest prize of any trade negotiations; that it enjoys a matchless potential for economic self-sufficiency; and that even though rebounding trade deficits (especially those shaped by policy) are dragging on America’s weak-enough recovery, the U.S. economy has been a global out-performer lately. (Interestingly, preliminary figures have just revealed that the chronically troubled Eurozone expanded faster than America in the first quarter of this year, but the main reasons are improving European trade balances and worsening American deficits.)

As a result, Washington should scrap its commitment to traditional negotiations and the quest for new international deals as the basis for its trade policy. Since access to the American market is so uniquely valuable to most foreign economies, and since Washington has so much more capacity to enforce laws and regulations within the U.S. economy than without, U.S. leaders should focus instead on establishing the terms of doing business in America unilaterally. Foreign governments could certainly retaliate, although the chronically lopsided pattern of global trade can leave no doubt that they’d come out the worse in any resulting “trade war.” It’s far likelier that America’s competitors would, in essence, pay to play.

And here’s another reason that any overseas protests would be short-lived: Because the United States takes seriously values like the rule of law and transparency, an exclusively American-run system for enforcing domestic trade justice would give them a much fairer shake than their own governments often give their own companies and workers in their own economies.

This new approach need not destroy all employment opportunities at America’s trade negotiating agencies. Officials at the U.S. Trade Representative’s office could still find useful work devising deals based on genuine reciprocity. But because the main foreign trade barriers nowadays consist of practices developed and carried out by highly secretive foreign bureaucracies, making evidence painfully difficult to find, determining whether such reciprocity has been achieved would be up to Washington exclusively.

Ironically, many American trade policy critics can be expected to charge that this unilateralism would trample the sovereignty of countries all around the world. But nothing could be further from the truth. Any foreign governments finding the new policy unacceptable would be perfectly free to seek growth and employment and prosperity without utilizing American demand. Of course, the offshoring lobby and various avowed free market champions will angrily condemn the new approach as neanderthal protectionism. But it’s truer to private sector norms in one crucial respect. Rather than giving away for free an enormously valuable asset like the American market, this strategy would charge a price.

Since the new strategy would represent such a dramatic and disruptive policy revolution, it’s best to phase it in – the way current trade agreements phase in agreed-on reductions or elimination of many trade barriers. Economic actors certainly deserve time to adjust. In fact, here’s a possible compromise for the squeamish: Washington could continue seeking trade deals that establish various new rules and standards for U.S. and foreign economies. But America’s role in any dispute-resolution system should be proportionate to the size of its economy in any new free trade zone. So for President Obama’s proposed Pacific Rim trade deal (the Trans-Pacific Partnership), the United States would hold nearly two-thirds of the votes, because America’s gross domestic product equals that percentage of the prospective free trade zone’s economic output. Surely that’s more equitable than the standard one-country-one-vote approach.

These ideas are strong medicine, to be sure. But critics should keep in mind that the historic imbalances produced by America’s current trade strategy helped set the stage for last decade’s financial crisis and its dispiriting aftermath, and that even despite the slow U.S. and global recoveries, trade flows are becoming similarly lopsided again. I’m perfectly willing to acknowledge that superior approaches might be developed. But what have their creators been waiting for?

Our So-Called Foreign Policy: A Call for More Idiocy on China

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China, cyber-security, espionage, Huawei, legalism, Michael Hiltzik, national security, Our So-Called Foreign Policy, precautionary principle, rule of law, state capitalism, The Economist, transparency

Anyone still harboring doubts that China’s government and its allies in the American offshoring lobby have snookered otherwise smart reporters about the nature of the PRC’s economic system and how best to cope with it? If so, look no further than Michael Hiltzik’s new Los Angeles Times column about Huawei.

According to Hiltzik, the telecommunications giant has been largely shut out of the U.S. market by “commercial xenophobia.” The U.S. government, he writes, has not officially banned the sale of Huawei products.  But it’s accomplished this aim for all intents and purposes “through bureaucratic winks and hints” that are based on a Congressional committee report that was “long on innuendo and short on hard information.” As a result, Huawei has been unfairly forced to prove a negative – that it is not assisting Chinese government espionage efforts.

Here of course is the problem. Hiltzik – and other apologists for China, like The Economist magazine he seems to consider gospel on such matters – apparently believe that Chinese companies like Huawei are as transparent as private sector companies everywhere. In their view, non-Chinese authorities have ready access to corporate records at Huawei and other Chinese companies, and face no difficulties in determining these firms’ ties to Beijing, and even any spying they may be carrying out. So it’s manifestly unjust to base policy on observation’s like the Congressional report’s conclusion that “China has the means, opportunity, and motive to use telecommunications companies for malicious purposes.”

Even if China didn’t have a scary record of government-sponsored cyber-hacking, these views might be reasonable – if China had anything remotely like a free market economy where reasonably bright lines separate the public and private sectors, or if China’s legal and corporate governance systems were based on anything remotely like the free flow of knowledge and rule of law. But who possessing a working brain really believes any of those propositions?

In fact, because China (and many other countries run by opaque bureaucracies and lacking rule of law traditions) are so fundamentally different from the United States, dealing with it with American legal principles that are justly revered in U.S. domestic affairs too often turns policy into an idiot.

As I wrote shortly after the Congress’ Huawei report came out, “because China is so thoroughly different and troublesome, handling it conventionally could amount to waiting for potential intelligence or security debacles to become actual. So the only responsible approach is precautionary — placing a heavy burden on China’s state capitalist system to prove its innocence.” Two years later, a major problem with America’s China policy is that Washington’s approach to Huawei remains an all-too-exceptional example of rejecting policy idiocy and embracing common sense.

Our So-Called Foreign Policy: A Welcome Corrective to Washington’s China Delusions

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alliances, China, national security, Obama, Our So-Called Foreign Policy, rule of law, TPP, Trade

This morning’s Washington Post Outlook piece by Steven Mufson nicely covers many of the biggest questions surrounding America’s strategy toward China, and China’s emerging place in world politics. And when I say “nicely,” I mean that, in a refreshing change from standard Mainstream Media practice, he doesn’t simply assume that the U.S. policy establishment consensus view on dealing with China is the only approach within the bounds of sanity.  Far from it.

Especially gratifying was Mufson’s pointed reminder that, although for decades, U.S. Presidents from both parties have tried to turn China into what one top diplomat called “a responsible stakeholder” in the international system, the very concept was till recently so foreign to China that the language couldn’t even translate it. The author didn’t explicitly echo my view, expressed in Fortune over the summer, that this strategy of taming China has been a complete failure.  But his article makes abundantly clear how remote success remains, and how high the obstacles tower.

I was also pleased to see Mufson question the idea of inducing China to observe international economic and political rules and norms by pointing out that the concept of rule of law clashes with the imperatives of Communist rule. I’d actuallly go farther, and say that Chinese civilization lacks anything like a legalistic tradition at least as it’s defined in the West.  But he made clear the broader point:  If Chinese leaders don’t follow rules when dealing with their own people, why would they take them seriously when dealing with foreign powers or businesses?

Mufson also skillfully reveals inconsistencies in America’s own position. Yes, Washington has long endorsed the idea of turning world politics from a law-of-the-jungle system to a rule-of-law based system.  Indeed, in important instances – like its acceptance of a powerful one-country/one-vote World Trade Organization – the United States has subordinated its immediate, concrete interests to this ideal. But just as often, American policy has made clear its expectation that the United States would remain first among equals and, as Mufson notes, that the rules would be U.S.-inspired. (Similarly, in its alliance policies, American leaders have frequently urged on NATO’s European members and Japan to assume more of the common defense burden, but have balked at agreeing to share decision-making power more fully.)

There’s one subject I wish Mufson has raised, though – America’s hedging strategy, or lack thereof. Not that Washington hasn’t thought of Plan Bs in case its version of the “China Dream” isn’t realized. But U.S. plans for coping with the possibility (or, as I would call it, the reality) of an uncooperative China can’t legitimately inspire confidence.

After all, repeated U.S. promises to stand by regional allies quarreling with China over various territorial disputes matter much less than the Chinese military advances that are steadily depriving America of the strategic nuclear edge needed to prevail in confrontations, and to deter Beijing’s belligerence in the first place.

Economically, both Presidents Bush (43) and Obama decided to rely on efforts to seek a Trans-Pacific Partnership trade deal both to counter China’s growing commercial influence and to create incentives for it to accept Western-style standards by requiring such commitments for entry. But as I’ve previously written, East Asian manufacturing in particular has long operated as a region-wide production system whose hub for the most part is China. This high level of integration means that current TPP countries that are part of this system (Japan, Singapore, Vietnam, and Malaysia) will be constantly pressuring Washington to admit Beijing whether it measures up to TPP’s terms or not.

Moreover, TPP member Australia has already negotiated its own free trade agreement with China, and Japan (along with South Korea) is still working on one with China, despite still simmering geopolitical tensions between Beijing and Tokyo.

Most worrisome, the leaderships of both major American political parties seem so invested in the idea of engaging with and thus normalizing China, that it’s difficult to imagine either of them acknowledging failure.  The odds of U.S. leaders reaching this heterodox conclusion in time to prevent a disaster or major setback seem slimmer still.

Making News: Podcast of Yesterday’s John Batchelor Show Appearance

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China, John Batchelor Show, Making News, multinationals, national security, protectionism, rule of law, Trade

As promised, here’s the podcast of my appearance last night on John Batchelor’s nationally syndicated radio show. The conversation covered not only China’s harassment of foreign multinationals and what it means for U.S. and world trade, but how it relates to a relentless, mercantilist Chinese drive for economic power that threatens U.S. national security. The segment starts at the top of the hour.

(What’s Left of) Our Economy: The Real and Surprising Lessons of China’s Bullying of Foreign Firms

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China, comparative advantage, crackdown, economic nationalism, free trade, globalization, multinationals, protectionism, rule of law, {What's Left of) Our Economy

It was tempting to dismiss a recent Financial Times op-ed by a China-based international lawyer with a few (appropriately) cynical tweets. The author, after all, was urging the Chinese government to heed Premier Li Keqiang’s call for more rule of law in the People’s Republic, and wrote that abundant evidence indicated that Beijing authorities are picking exclusively on foreign firms in their investigations of corporate wrongdoing. What else can you reasonably say but “Too funny” and “Duh”, respectively?

Worthier of serious comment was author Tao Jingzhou’s observation that “none of the foreign companies singled out by” China’s National Development and Reform Commissin for price rigging “has mounted a defence. All admitted wrongdoing even before a price investigation began.”

Yet what’s important about the foreign firms’ behavior is not the apparent cravenness it reveals. These companies have meekly endured corruption and legal and regulatory discrimination for decades. Their reasoning? Access to China’ big and potentially gargantuan market would eventually more than offset their tribulations. What’s important instead is what the multinationals’ assumptions show about an ignorance of China’s development philosophy that far transcends the corporate sector, and that explains why continued economic integration with the current Chinese regime can only be a loser for America, and for the entire world economy.

For China’s behavior, and especially its clearly ramped up campaign against foreign investors, should make clear that Beijing emphatically rejects the doctrine of comparative advantage that has justified global trade liberalization literally for centuries and U.S. trade policy in particular for decades. This theory, of course, holds that the freer global trade flows become, the better able national economies will be to focus on the goods and services production at which they’re most proficient, the more efficient the entire world economy will become, and the more prosperous all countries and their people will grow. In other words, freer trade will enable the power of specialization to create an optimal global division of labor.

In particular by encouraging foreign firms to bring their capital and technology to China, and by reducing many trade barriers and introducing numerous other free market reforms, Chinese leaders have long indicated that they buy into comparative advantage and all of its implications. But as revealed by their ever rougher treatment of foreign investors, and by other signs of resurgent protectionism, helping to create the most efficient possible global division of labor and the most prosperity for all was never part of China’s game plan.

Rather, the aim was always maximizing China’s wealth and capabilities, whatever the international impact. As long as foreign capital and technology have been needed to achieve this goal, they’ve been welcome. Now, however, China evidently views foreign contributions to its economy as ever less important. And having chewed up these non-Chinese enterprises, it now looks like it’s starting to spit them out.

Comparative advantage, of course, portrays this behavior as perverse not only from a global standpoint, but from China’s standpoint. But before reflexively endorsing this view, think of the situation as China’s leaders undoubtedly do (unless you believe they’re completely stupid): China is already an immense economy and keeps growing. Its population, though stabilizing, is even bigger. Therefore, the country is already a gigantic store of actual and potential talent, knowledge, and resources. Which means that China already possesses, or can realistically hope to develop on its own, all of the main assets and capabilities that comparative advantage theory and its corollaries claim can only be accessed by extensively integrating with the global economy. That is, Chinese leaders view their own country as a reasonably close approximation of the international economic system as a whole in crucial respects, and believe that by focusing exclusively on China’s own development, it can reap all of the advantages of such integration while paying none of the costs.

And here’s an irony for you: The United States has always been, and remains in, a far better position to prosper without freer trade and greater global integration than China. For unlike China, the United States has always been diverse enough economically and socially to reap on its own at least most of the benefits of competition that free global trade alone supposedly can provide. A much greater degree of competition, moreover, could easily be created through greater anti-trust enforcement. Finally, whatever the United States does need to access from the international economy could readily be obtained, in principle, China-style – by capitalizing on the truly matchless lure of its domestic market, and strategically opening to trade and investment. Surely that’s why, for most of its history, free trade etc. had nothing to do with the strategy the United States actually pursued — and the unprecedented success it achieved.

China’s social and political systems are so noxious that it’s easy to understand why Americans reject the notion that the PRC’s bullying of foreign firms can teach them anything useful. Why Americans keep refusing to learn from their own economic history, especially given the mounting failures of their current approach to the world economy, is much harder to figure out.