Im-Politic: The Mainstream Media Keeps Abetting Think Tank Fraud

Tags

AICGS, American Institute for Contemporary German Studies, Carnegie Endowment for International Peace, idea laundering, Im-Politic, lobbying, Mainstream Media, national security, NATO, Swamp, The Johns Hopkins University, think tanks, Trade, Trump

The following item didn’t even merit a full article in the eyes of Politico editors. But it speaks volumes on how the nation’s journalists continue to do a terrible job of reporting on the vested interests behind much of the opinion and analysis on which they rely to flesh out their coverage of any number of issues.

Here it is in full, beneath the headline “Hopkins Pushes U-Turn on German Trade Policy:

“A new report from Johns Hopkins University advises the winner of the U.S. presidential election to reverse many of the trade and defense policies the Trump administration has pursued with Germany.

“The paper from the the school’s American Institute for Contemporary German Studies [AICGS] recommends redoubling the U.S. commitment to NATO, which Trump has de-emphasized over his term, and pursuing a “safe trade” strategy that would aim for a new U.S.-EU trade agreement to lower tariffs across the Atlantic. It also argues the countries should commit to reform the WTO to counter China’s rise.”

To begin on a personal note, I first encountered the Institute in the mid-1980s, when I was an editor at FOREIGN POLICY magazine. It was newly created, and my reaction to its appearance was probably much the same as your reaction to its mention in this press item: It’s a think tank, it’s connected with a major university, so its work must top some kind of quality threshhold.

Revealingly, this period came before private sector and other special interest donors became so dominant in the think tank world and, more important, began actively and indeed strategically using these institutes to further highly self-interested, specific agendas. (See this history for an excellent account of how and why it changed.)

In other words, many and probably most of them weren’t chiefly engaged in what I’ve called “idea laundering” – seeking to advance these agendas by using think tanks to garb them in the raiment of traditional, truth-seeking scholarlship. So I didn’t ask myself who was funding the Institute. (Full disclosure: The think tank that then published FOREIGN POLICY magazine, the Carnegie Endowment for International Peace, was at that time financed by big bucks provided for its creation by Gilded Age industrial magnate Andrew Carnegie. To my knowledge, that endowment to that point was so big, and managed and invested so smartly, that no outside fund-raising was necessary.)

But precisely because times have changed so dramatically, I not only wondered who pays for the Institute – I investigated the subject. And what I found is that not only is the AICGS financed significantly by large banks and corporations who have had a strong vested stake in restoring what was for them a very lucrative pre-Trump U.S.-Germany economic status quo (one of whose main beneficiaries was China). It’s also financed significantly by the German government – which has at least as strong a vested stake in restoring a pre-Trump status quo that was not only economically profitable, but strategically advantageous. For under President Trump’s predecessors, the United States was willing to subsidize heavily  Germany’s defense because numerous German governments (including today’s) have preferred to free ride militarily and spend public monies elsewhere – or let German taxpayers keep them.

Specifically, the Institute’s donors include the “Transatlantic Program of the Federal Republic of Germany with funds from the European Recovery Program (ERP) of the Federal Ministry of Economics and Energy” the Landesbank Baden- Wurttemberg (a regional-level German central bank), and the German Academic Exchange Service – which sounds non-governmental, but whose budget, its own website tells us:

“is derived mainly from the federal funding for various ministries, primarily the German Federal Foreign Office, but also from the European Union and a number of enterprises, organisations and foreign governments.”

Nor are these government funds trivial. According to the latest information AICGS has provided to the U.S. Internal Revenue Service (as required), in 2016, the organization raised just under $2.61 million in total revenue. Roughly half of this amount came from “contributions and grants” (a category that, oddly, doesn’t include “fund-raising events” income). And of the $1.34 million taken in through contributions and grants, the German economic affairs and energy ministry donated $206,434, and the German Academic Exchange Service gave $113,590. (No Landesbank contributions were recorded, presumably because they fell below the $1,000 level mandated by the Internal Revenue Service for reporting – although there’s no way to know how much this official German financial agency, or the other German government agencies, contributed to one of AICGS’ fund-raising events.),

And there can be no doubt that both the businesses and the German government consider it much more effective and convincing to have a scholarly sounding American Institute for Contemporary German Studies carrying their water than spreading their messages themselves. In fact, Politico fell for this ruse hook, line, and sinker, and indeed reinforced the deception – with a headline describing the study’s results as coming not even from a think tank, but from a leading U.S. university. 

As I’ve argued often before (e.g., the Congressional testimony linked above), there’s nothing inherently wrong with any special interest using a think tank to push its priorities. Nor is there anything wrong with a foreign government engaging in the same practice.

But there’s a great deal wrong with these donors using think tanks on the sly. And when it comes to foreign governments, a legal issue comes up: whether these think tanks should be required to register a foreign lobbyists, as required by law.

As suggested above, AICGS is hardly the only idea launderer in Washington, D.C. and elsewhere in the country, and if you look hard enough – as I did – you can find the information on-line. But why should anyone have to make any significant effort? Why shouldn’t sponsorship information be displayed prominently on all the publicly released products of AICGS and think tanks generally? And since it’s not, why do Politico and other media outlets not report this information routinely?

Oncc the Trump era began, the Mainstream Media began ostentatiously adopting official slogans like “Democracy Dies in Darkness.”  I’m not aware of any references to “Draining the Swamp.”  And these news organizations’ continuing failure to expose idea laundering and similar strategies can’t help but keep feeding suspicions that they’re part of this morass.   

Im-Politic: Has a Major U.S. Economist Secretly Been in China’s Pocket?

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China, donors, economists, globalization, Huawei, Im-Politic, Isaac Stone Fish, Jeffrey D. Sachs, national security, Project Syndicate, technology, telecommunications, think tanks, trade war, Trump, Trump Derangement Syndrome, Washington Post

I’ve always been skeptical of claims that money explains everything about where prominent folks stand on policy debates. Sure, money talks loudly, and that’s why, for example, I’ve so consistently reported on how leading U.S. think tanks are lavishly funded by corporate interests (e.g., here) and even by foreign governments (e,g, here) with huge stakes in matters on which they regularly comment, such as trade and globalization issues.

But I’ve believed that for the most part, their positions are also at least partly sincerely held – reflecting either an inability even to question what they’ve learned in school, or the power of group-think in their professional and social circles (inside the Washington, D.C. Beltway in particular these realms tend to overlap substantially), their honest convictions, and typically some combination of the above.

I still refuse automatically to write off analysts who disagree with me as simple donors’ mouthpieces, but a recent incident has reminded me that – in the words of a close long-time friend – when seeking to understand political behavior, the most cynical explanation is rarely wrong.

The story begins with an article on the Project Syndicate website – a sort of digital global op-ed page (which, to be sure, overwhelmingly publishes writers with globalist/establishment viewpoints) – by economist Jeffrey D. Sachs.

Sachs is a world-renowned figure in his field, but as with many of his colleagues, seems to assume that mastery of conventional economic concepts translates into expertise on all other subjects. (Google “Krugman, Paul” for perhaps the leading example of this phenomenon.) So I wasn’t entirely surprised to see him writing on the recent American arrest, on sanctions-busting charges, of a senior executive from the Chinese telecommunications entity Huawei – even though he has no special credentials on China, or technology, or national security.

I was very surprised by the nature of Sachs’ attack on the U.S. action, which ran on December 11. Most criticisms of the arrest focused on whether it would escalate the U.S.-China trade war – whether because it signaled a more aggressive turn in Washington’s approach, or because it would trigger Chinese retaliation – or whether the United States ultimately could curb China’s technological development, or whether the American tech industry could continue excelling after a cutoff of its access to Chinese markets or parts and components.

But according to Sachs, the Huawei arrest mattered most because it showed that “The Trump administration, not Huawei or China, is today’s greatest threat to the international rule of law, and therefore to global peace.” That’s pretty out there given that Huawei’s largest shareholder is a Chinese telecommunications company owned outright by the Chinese state, that its close relationship with Beijing has caused governments the world over to limit its presence in their markets for national security reasons, and that the Chinese regime itself has been challenging international law, and in turn peace and security, in the South China Sea region.

Still, I was inclined to write off Sachs’ diatribe as yet another example of Trump Derangement Syndrome, or the outgrowth of idolatry of the globalization status quo fanatical enough to fuel (sincere) outrage at any development threatening to change it – e.g., President Trump’s decision to confront China’s trade predation.

As a result, I was inclined to dismiss as off-base the reaction of one of my Twitter followers to Sachs’ article: “I guess we know who is signing Jeffrey Sachs’ paycheck these days.”

So imagine my surprise when, on December 12, Washington Post columnist Isaac Stone Fish reported that Sachs had written the forward to a big report put out by Huawei in November.

Nothing necessarily improper there. Academics engage in such activities all the time. And if Sachs genuinely believes that an entity that clearly is an arm of the repressive Chinese government deserved “kudos” for “producing… a timely and clear roadmap to help governments, businesses and civil society [emphasis added] to create digital nations on the path to sustainable development,” well that’s his business.

What is massively improper has been Sachs’ reactions to Fish’s questions about Sachs’ relationship with Huawei in light of his glowing praise of the entity both in the report and in his Project Syndicate piece: “Did Huawei pay you for that [the forward]? If so, don’t you think you should disclose that?”

Rather than respond to Fish, Sachs stonewalled – in fact, going so far as to delete his Twitter account.

In the process, he not only made it difficult to avoid the conclusion that he has something to hide when it comes to Huawei. He’s also unavoidably created shadows over two respected organizations with which he’s been closely affiliated: Columbia University’s Earth Institute (which he headed between 2002 and 2016), and that Institute’s Center for Sustainable Development (which he heads now).

I’ve been looking for evidence of Huawei or other Chinese funding for these organizations, and haven’t found any yet. But that doesn’t mean that there hasn’t been any (perhaps funneled through third parties?), and that it hasn’t colored their work. Because like I said, when seeking to understand political behavior, the most cynical explanation is rarely wrong.

(What’s Left of) Our Economy: Trump Tariffs Would Supercharge U.S. Auto Prices…Not

Tags

auto dealers, auto parts, auto-makers, automotive, autos, Bloomberg.com, Kyle Stock, tariffs, think tanks, Trade, Trump, {What's Left of) Our Economy

If President Trump imposes steep tariffs on U.S. automobile and auto parts imports, the prices of the vehicles we all drive will go through the roof, right? After all, everyone in the know says so. Like the auto-makers. And the dealers. And the leading think tanks.

As known by RealityChek regulars, though, logic alone – along with even a rudimentary knowledge of business practices – warrant deep skepticism. After all, if the auto industry believes that, once the tariffs are in place, the market for their products will be able to support vehicle prices thousands of dollars higher than what their customers pay today, why aren’t they raising prices to these levels right now? And why haven’t they been charging more all along? The only possible answers are that (a) they really don’t believe the higher prices would stick or (b) they’ve been accepting less revenue in order to give consumers a break. You tell me which is even remotely plausible.

And just last week came new evidence showing how phony these forecasts appear: As reported by Bloomberg.com‘s Kyle Stock, there’s a huge glut of vehicles on the U.S. market for several intertwined reasons. Inventories are way too high because auto-makers produced too much (and probably imported too much). Higher and higher shares of auto purchases each year consist of previously owned, not new vehicles. And demand for new models in absolute terms seems set to dip for the first time in ten years.

Moreover, Stock’s article makes clear why the auto-makers and dealers really oppose the tariffs: Precisely because they know they’ll never be able to push through significant price increases, the levies will force them to accept lower profits. Another point worth contemplating – the industry’s pleas for tariff forebearance reveal how unwilling or unable they are to improve productivity in order to absorb the added costs without hurting their bottom lines.

That still leaves the question of why thinktankers – who aren’t supposed to have vested stakes in the automotive industry’s profitability – are peddling this nonsense. And the likely answers here aren’t flattering, either. First, many of them (like the Peterson Institute, whose tariff warnings are featured in the USAToday article linked above) get big bucks from the industry. Peterson’s latest list of donors prominently features Toyota, Ford, GM, Mitsubishi, and the governments of many of the foreign auto-makers who rely so heavily on exports to the American market. Nor are the numbers involved trivial; Toyota, for example, is listed in the $100,000-$999,000 per year category.

Second, analysts at Peterson or elsewhere could be so devoted ideologically to the pro-free trade stance of mainstream economics that they simply don’t want to present or even consider contrary evidence.

Whichever is the explanation, one conclusion comes through loud and clear: As long as the U.S. automotive market remains glutted, the price increase warnings of such experts deserve no more credibility than the pitches of used car salesman.

Im-Politic: Enough with the Neocons Already

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American Enterprise Institute, Cato Institute, chattering class, Eric Levitz, Im-Politic, journalism, libertarians, media, neoconservatives, New York magazine, think tanks, Trump

Boy, am I glad I read Eric Levitz’ recent piece in New York magazine all the way through! Not that the author sprung any pleasant surprises on me. Based on the headline, I was expecting just another example of arrogant, intolerant liberalism, and Levitz’ certainly didn’t disappoint in this respect. His main argument: that major liberally oriented opinion publications and op-ed pages should no longer seek left-right ideological and political balance nowadays because the only American conservatism in the age of Donald Trump that has any influence is yahoo-ism in various forms. Instead, these liberal referees of the national political debate generally should keep their forums open almost exclusively to voices from more responsible and rational the left of center.

But within this laughably tendentious claim is a point that’s entirely valid, and that in fact has been bugging me for many years. It concerns the – long-time – practice of either liberal or even nominally neutral opinion forums (i.e., most of the national media) for publishing viewpoints, from whatever perspective, that obviously have no notable constituencies outside the bounds of the interlocking and increasingly hidebound ranks of America’s chattering class elites.

And in my mind, the viewpoint that sticks out more than any other in this respect is neoconservatism. This branch of conservatism began as an interesting hybrid of (a) the kind of Big Government-oriented liberalism that since the New Deal era has dominated the views of Democrats on domestic issues, and (b) the kind of aggressive anti-communism and, more recently, broader global activism that many Democrats have rejected since the Vietnam War began going bad. In addition, much neoconservatism was animated by what its pioneers considered the Democrats’ abandonment of the goal of racial integration in favor of various programs of racial preferences and forms of racial pandering.

As documented in this insightful article by Michael J. Lind of the New America Foundation, the neoconservatives steadily became more conventionally conservative on domestic issues – including a strong enthusiasm for standard free trade policies and mass immigration. But something that still hasn’t changed has been their stunning talent for attracting media attention – a record that genuinely qualifies as stunning because there’s never been a shred of evidence that neoconservatives have any significant following among the general public.

Of course there are many Americans who support the low-tax, small-government positions now taken by neoconservatives these days. There are many fewer who support their brand of foreign policy activism, but at least this position hasn’t completely disappeared from the electorate. Yet have you encountered many friends, neighbors, and relatives who believe in slashing federal spending and shrinking the national tax base on the one hand; sending American troops to the furthest, least important corners of the world to nation-build, spread democracy, fight extremism etc on the other; and opening the national doors wide open to imports from places like China and immigrants the world over? In fact, have you ever met anyone fitting this description?

Just as important (and not unrelated), can you identify many national politicians or office-seekers who embody this set of views? After Republican Senators John McCain and Jeff Flake of Arizona (the former of course afflicted with aggressive brain cancer and the latter deciding to leave office before suffering certain defeat in his state’s Republican primary), and their South Carolina GOP colleague Lindsey Graham?

Until recently, you could have added Florida Republican Senator Marco Rubio to this short list, but in recent months, he’s definitely been reading the handwriting on the wall. Just look at his new stances on confronting China both militarily and economically, and complaining about important aspects of the latest tax cuts passed by Congress.

All the same, however, the neoconservative presence in the national media remains impressive. Writers from neoconservative publications like The Wall Street Journal, The Weekly Standard, and Commentary appear constantly on the nation’s talk shows, and they’re frequently joined by neoconservative colleagues from less doctrinaire publications and from think tanks like the American Enterprise Institute. Maybe most revealing, when the proudly mainstream liberal New York Times chose the latest columnist to add to its roster of regulars, it picked card-carrying neoconservative Bret Stephens – a Wall Street Journal alum.

Now it’s true that President Trump, who generally is loathed by neoconservatives, has chosen two of their leading lights as major foreign policy aides – John R. Bolton to serve as his White House national security adviser, and former Kansas Republican Congressman Mike Pompeo to serve as his Secretary of States (after a year of running the CIA). And some important Trump foreign policies look awfully neocon-y, most prominently his approach to countering the influence of ISIS-like terrorists and the Iranian government in the Middle East (combined so far with a loudly stated aversion to massive American boots on the ground). But Trump as a neoconservative-in-the-making? Talk about a wildly premature judgment at best.

So why is the mainstream media still so enamored with neoconservatives? Four main reasons. First, many are still strongly anti-Trump, so featuring them on the air, on-line, and in print enables Trump-hating news organizations to pretend that most opposition to the President remains bipartisan. Second, the United States was governed by a largely neoconservative administration as recently as 2008. And since former this-es and that-s are so skilled at finding post-government careers in Washington, neoconservatives make up an abundant supply of voices with governing experience on which journalists can rely for right-of-center analyses. Third, neoconservatives are still so easy to find in Washington (and secondarily in New York City) largely because although this faction has almost no grassroots, it’s generously funded. So think tank perches and related jobs (including a wide variety of non-tenure university appointments) in the two cities tend to be readily available for individual neoconservatives, and their publications tend to be at least adequately funded.

Fourth, precisely because neoconservatives have been so numerous in the nation’s two main media centers for so long, they’ve become thoroughly familiar to the media. In addition to their widespread and easy availability to newsmen and women as sources of information and analysis, neoconservatives can socialize routinely with their journalistic counterparts. Not only is there no shortage of conferences and receptions at which these segments of the chattering class can socialize (many of which are sponsored by neoconservative or neoconservative-leaning organizations). But neoconservatives (along with other think tankers and the like) and journalists tend to live in the same small group of affluent neighborhoods and send their children to the same first-rate public schools and exclusive private academies.

And as is common with people who hang out a lot together, neoconservatives (and other think tankers) and journalists often become very chummy. The more so if they’re college buddies, or went to the same school, and took the same kinds of courses from the same kinds of professors. The latter of course increases the odds of media types finding themselves in broad agreement with the neoconservatives, and thus regarding these figures as doubly appealing.

New York‘s Levitz argues that conservatives generally shouldn’t be shut out of the news media entirely – and decidedly deserve to appear if they have something new and/or especially interesting to say. I believe the same about neoconservatives. But no doubt largely because these thinkers have had such easy access to the mainstream media, and enjoyed all the associated glistening economic and status prizes, they’ve had little incentive to change their fundamental tune, and surmount this hurdle. So given their predictability and lack of influence, maybe news organizations could at least dial down the overexposure?

Incidentally, for the same reasons, I’d favor treating libertarians the same way. Their funding is impressive, indeed lavish. (Doubt me? Check out the Cato Institute‘s Washington, D.C. headquarters sometime, along with its wide-ranging agenda of conference and similar events). But where are their grassroots? In particular, which noteworthy portions of the electorate share their enthusiasm for unilaterally opening America’s markets no matter how protectionist trade rivals remain, erasing U.S. borders and requiring American workers to compete against an immense new influx of very low-wage foreign counterparts even for high-skill jobs, trusting the private sector (including Wall Street) to regulate itself, and eliminating the major entitlement programs? Even individually, these stances command precious little popular support. Taken together, they comprise a modest minority. That’s surely why Americans have elected exactly zero libertarians as President, and why even Republicans have resoundingly rejected them in presidential primaries even well before the Trump phenomenon appeared. Moreover, read libertarian writings on any of the above issues from decades ago, and you won’t see much difference in terms of their analytic framework with libertarian writings today.

Of course, simply ostracizing neoconservatives, or neoconservatives plus libertarians, from major opinion forums, or at least sharply limiting their presence, would leave the national political debate nearly as narrow, and phony, as following a Levitz-type approach. So what the media referees need to do is work much harder to find contributors who represent not only reasonably coherent emerging schools of thought (like populism’s conservative and liberal variants) but who are trying to turn American politics less rigidly formulaic and exploring various combinations of positions that have never, or not recently, been combined before, along with those who are seeking wholly new answers to pressing national questions.  Moreover, it should go without saying, important new factual findings should always be welcome, no matter how they cut politically.

The op-ed editors and talk show hosts will face a formidable challenge in achieving this goal. After all, success would require exercising judgment, rather than flipping through their familiar (electronic rolodexes). But success is urgently needed – for it would mean a national opinion universe that looks much less like the tiny, inbred communities in which they’re embedded, and much more like America.

Making News: Back on National Radio Talking Trump and China Trade…& More!

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Buffalo News, China, Douglas Turner, Gordon G. Chang, Making News, tariffs, The John Batchelor Show, think tanks, Trade, Trump

I’m pleased to announce that I’ll be returning to John Batchelor’s nationally syndicated radio show tonight. The segment, slated to start at 10:15 PM EST, will deal with the Trump administration’s planned tariffs on Chinese imports and the possibility of retaliation by Beijing.

Here’s the link at which you can listen live on-line to what’s sure to be a provocative discussion among John, me, and co-host Gordon G. Chang. And as usual, if you can’t listen live, I’ll post a link to the podcast as soon as one’s available.

In addition, it was great to see my recent post on think tanks that take foreign government money cited in this Sunday piece by Douglas Turner of the Buffalo (N.Y.) News.

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

 

 

Im-Politic: The Foreign Governments Funding Think Tank Experts on Trump Tariffs

Tags

aluminum, Brookings Institution, Center for Strategic and International Studies, Im-Politic, Peterson Institute for International Economics, steel, tariffs, think tanks, Trade, Trump

With the announcement of the Trump tariffs on steel and aluminum – and the prospect of more trade curbs to come – the news organizations on which Americans rely for accurate and impartial information have understandably turned to private sector specialists for facts and analysis.

What’s much less understandable is that many of these specialists work at Washington, D.C.-headquartered think tanks that receive significant funding from foreign governments – many of whose economies will be profoundly affected by any major changes in U.S. trade policy. Even worse, the press coverage of the Trump tariffs has consistently failed even to mention these conflicts of interest – even though some news outlets have reported on the subject in considerable detail.

To give you an idea of how widespread these conflicts are, here’s a list of the foreign government donors for three major think tanks, drawn directly from their websites, and some figures indicating the often major sums these governments (including groups they fund) have contributed to these organizations’ budgets for the most recent data year available:

 

The Brookings Institution, 2016-17:

$1 million – $1.999999 million

Government of Norway:

$500,000-$999,999

Australian Government, Department of Foreign Affairs & Trade

United Arab Emirates

$250,000-$499,999

The Japan Foundation Center for Global Partnership

Japan International Cooperation Agency

Taipei Economic and Cultural Representative Office in the United States

$100,000-$249,000

Australian Government, Department of Industry, Innovation, & Science

$50,000-$99,999

Government of Denmark

European Recovery Program, German Federal Ministry of Economic Affairs and Energy

European Union

Government of Finland

Korea International Trade Association

CAF-Development Bank of Latin America

Department for International Development, United Kingdom

Embassy of France

Japan Bank for International Cooperation

Temasek Holdings

The Korea Foundation

Korea Institute for Defense Analysis

Embassy of the Kingdom of the Netherlands

 

Peterson Institute for International Economics, 2016

$25,000-$49,999

Korea Institute for International Economic Policy

Swiss National Bank

Up to $24,999

Central Bank of China, Taipei

European Parliament

Japan Bank for International Cooperation

Korea Development Institute

Korea International Trade Association

Embassy of Liechtenstein

Monetary Authority of Singapore

 

Center for Strategic and International Studies 2016-17

$500,000 and up

Japan

Taiwan

UAE

Academy of Korean Studies

Korea Foundation

$100,000-$499,999

Australia

Denmark

South Korea

Turkey

$5,000-$99,999

Canada

China

France

Liechtenstein

The Netherlands

United Kingdom

Japan Foundation Center for Global Partnership

European Development Finance Institutions

Norwegian Institute of Defence Studies

Norwegian Institute of International Affairs

Shanghai Institutes for International Studies

Taiwan Foundation for Democracy

 

As I’ve written before, even analysts whose paychecks are wholly or partly written by foreign governments (or other special interests, like offshoring-happy multinational companies) can provide valuable insights.  They also have every right to weigh in on any policy debate they choose.  But unless you believe we don’t live in a world in which money talks, and that this goes double in a national capital, it’s clear that news consumers have an equally important right to know the source of the money behind the views they’re reading about – and that the media is letting its readers, viewers, and listeners down when this information is kept concealed.   

 

Following Up: Vital Background on “Idea Laundering” — and Washington Corruption

Tags

Bloomberg.com, conflicts of interest, corruption, hedge funds, idea laundering, Im-Politic, James K. Glassman, journalism, lobbying, Mainstream Media, Nick Confessore, special interests, The Washington Monthly, think tanks

Since I’m a great believer in giving credit where it’s due, I feel honor-bound to report that I just learned that a development I thought I first identified (along with a catchy name) wasn’t spotted first by me after all. At the same time, it’s also a pleasure to make this confession, because it creates a golden opportunity to recommend two excellent pieces of journalism that shine much needed additional light on this development – which has tremendously deepened corruption in American policymaking.

The development? “Idea laundering” – which I’ve defined as the now widespread practice of special interests (like corporations) using think tanks to issue materials that push the particular agendas of these funders while garbing them in quasi-academic raiment to create the impressions of objectivity and intellectual respectability. In other words, it’s become practically standard operating procedure in the policy world for outfits with scholarly-sounding names like “The Brookings Institution” to put out reports and articles that flack for the companies and other donors (now including foreign governments) that pay the rent without disclosing the hand that’s feeding them. Just as bad, journalists almost never reveal these conflicts of interest – or even ask about them.

I thought that I was the first to spotlight and name this deception, in 2006 testimony before Congress on Chinese influence-peddling operations in America. But yesterday, while reading a terrific piece on Bloomberg.com on how hedge funds have been using an especially insidious variant of the practice, I learned that it was first described in a 2003 Washington Monthly article by Nick Confessore, who is now a reporter for The New York Times. Interestingly, the individual at the center of both articles is James K. Glassman, a long-time fixture in the Washington, D.C. chattering class scene who Confessore credited with pioneering this deceitful new version of lobbying.

I do believe that I’ve been writing and warning about idea laundering more than anyone else. But I’m glad to acknowledge publicly that I was beaten to the punch when it comes to parenthood. It’s also great to see that more and more journalists are looking underneath the hood of the writings and Congressional and media appearances that so profoundly shape America’s approach to virtually all foreign and domestic issues.

Unfortunately, as made clear by this recent post, we’re a long way from the point at which reporters name the donors routinely, and when editors demand this vital information just as often. Until they do, the idea launderers and their paymasters will keep winning far too many victories at the expense of Main Street Americans.

Im-Politic: A Think Tank-/China-Gate That Should be Investigated?

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China, China-United States Exchange Foundation, Hong Kong, Im-Politic, John Podesta, lobbying, Podesta Group, The Swamp, think tanks, Tony Podesta, Tung Chee-hwa

If you (like me) thought that revelations about the corrupting funding practices of leading American think tanks couldn’t get any worse, we’ve been proven wrong in a jaw-dropping article in FOREIGN POLICY by contributing writer Bethany Allen-Ebrahimian.

Thanks to the author’s work, it’s now known that many of these organizations – on which U.S. policy-makers rely heavily for information and analysis that’s portrayed as the result of dispassionate research – not only receive contributions from a number of foreign governments. They receive contributions from an organization “bankrolled by a high-ranking Chinese government official with close ties to a sprawling Chinese Communist Party apparatus that handles influence operations abroad, known as the ‘united front.’”

The organization is a Hong Kong-based non-profit called the China-United States Exchange Foundation (CUSEF), and was founded in 2008 by Tung Chee-hwa, the former Hong Kong leader who strongly supported maintaining close ties with China following the city’s handover to the People’s Republic in 1997.

According to Allen-Ebrahimian, Tung “currently serves as the vice chairman of one of the united front’s most important entities — the so-called Chinese People’s Political Consultative Conference, which is one of China’s two rubber-stamp assemblies. The body is one of Beijing’s most crucial tentacles for extending influence.”

In addition, CUSEF “has cooperated on projects with the the People’s Liberation Army and uses the same Washington public relations firm that the Chinese Embassy does.”

Allen-Ebrahimian’s entire article is well worth reading – and essential to keep in mind in evaluating any China-related research or analysis from these organizations. But two other related points are well worth mentioning. First, CUSEF is a foreign agent registered with the Justice Department. In other words, it lobbies, which means that organizations accepting its donations arguably should be required to register, and identify themselves as lobbies, too – which think tanks so far haven’t done. Even those who think it’s perfectly for the leaders of an increasingly belligerent China to be perfectly should be free to buy influence in America’s policy-making process would surely agree that Chinese government sponsorship should be displayed front and center on these efforts.

Second, one of the D.C. lobbying mainstays the Foundation had hired to influence Congress on U.S.-China relations was the Podesta Group, which closed down last month after being connected with Donald Trump’s former presidential campaign chair Paul Manafort’s indictment for breaking American lobbying law.

The Podesta Group was founded and run by Tony Podesta and his brother John, former Secretary of State Hillary Clinton’s 2016 presidential campaign chair. And the Senate Intelligence Committee is investigating John Podesta’s possible involvement in the Democratic National Committee’s decision to pay for opposition research on Trump based partly on Russian sources.

So Allen-Ebrahimian’s article is a timely reminder that the Washington, D.C. swamp constantly attacked by President Trump and others entails many actors other than the standard industry lobbyists, that it’s totally bipartisan, and that Russia isn’t the only potentially dangerous foreign country that’s been swimming in it under the radar.

Making News: New NAFTA Column on Marketwatch.com – & More!

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Brendan Kirby, Canada, CNBC.com, Crain's Cleveland Business, Lifezette.com, Making News, manufacturing, Marketwatch.com, Mexico, NAFTA. North American Free Trade Agreement, tax reform, think tanks, Trade, Trump

I’m pleased to announce that an op-ed column of mine was published (yesterday afternoon) on Marketwatch.com. The piece explains how the North American Free Trade Agreement (NAFTA) can be rewritten to serve the interests of all three signatory countries (the United States, Canada, and Mexico) by turning the current continental trade zone into a genuine trade bloc.  Click here to read it.

In addition, on October 18, it was great to see Lifezette.com‘s Brendan Kirby spotlight my research and analysis of the mounting intellectual dishonesty and outright corruption at the nation’s major think tanks – and how they regularly hoodwink the media. Here’s the link.

On October 14, Crain’s Cleveland Business featured my views of President Trump’s manufacturing and trade policies – which I said so far have produced some positive and negative surprises.  You can access the article at this link.

On October 12, this Lifezette piece quoted me on Mr. Trump’s emerging NAFTA revamp strategy.

Finally, for now, this October 11 CNBC.com summarized my appearance that day in a segment that I thought would deal with NAFTA and trade, but instead – strangely – wound up focusing on tax reform.

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

Im-Politic: Mainstream Media Again Foster NAFTA Myths and Think Tank Corruption

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Canada, donors, Google, Im-Politic, Japan, Korea, Mainstream Media, media, Mexico, NAFTA, Navistar, New America, North American Free Trade Agreement, offshoring, Peterson Institute for International Economics, Reuters, tariffs, think tanks, Trade, trucks, Trump, Washington Post, Woodrow Wilson Center

Although Donald Trump’s presidency might still turn out to be a watershed for U.S. trade policy, it already seems clear that trade policy coverage from the Mainstream Media will remain uniformly terrible, and unmistakably slanted toward the conventional approach that candidate Trump promised to disrupt. As recent articles from Reuters and the Washington Post remind, the bias takes both subtle and non-subtle forms.

Both pieces deal with the talks to renegotiate the North American Free Trade Agreement (NAFTA), which have resumed in Washington, D.C. this week. Despite its failings, Reuters correspondent Sharay Angulo’s article on the talks’ possible impact on multinational truck manufacturers contained some important information. For instance, she reported that 98 percent of the trucks exported from Mexico are sent to the United States and Canada – which oddly precedes a claim that most of these truck companies “have a similar strategy of building in Mexico to export to countries other than the United States.”

We also learn from her that more than half the “original parts” of U.S. firm Navistar’s Mexico-made trucks come from the United States and Canada (although this information comes from Navistar itself, and like other company-specific information re NAFTA, offshoring, and trade in general, so far can’t be independently verified). In addition, the article (again citing Navistar statistics) states that the firm exports fewer than half its Mexico-made vehicles to the United States – which seems to differentiate it sharply from its competitors.

Where the report veers sharply from the rational is in its unquestioning acceptance of the claim that “Higher tariffs on imports or reduced trade flows would raise the cost of production and of exporting to the United States. That would make trucks more expensive for all Navistar’s customers….”

What’s somehow missed by the author (and all the “experts” consulted by Reuters who allegedly agreed with this contention) is that this result would unfold only if Mexico retaliated against any Trump administration tariffs on its exports to the United States with new levies of its own that would hit manufacturers like Navistar. Given Mexico’s heavy dependence on parts imports to support its export-oriented truck and other industrial production, why on earth would its government take this step? Such retaliation would “raise [its] costs of production and of exporting to the United States” yet higher. Talk about cutting off one’s nose to spite one’s face.

Also missed by Angulo – how higher Mexico production costs could well achieve Mr. Trump’s revamp objectives by shifting truck manufacturing back to the United States. She’s correct in suggesting that low tariffs on Mexico exports to the United States may not suffice. But a logical (and seemingly obvious) implication is simply that higher tariffs will be needed.

The less subtle form of bias came in an October 6 Washington Post article previewing the latest NAFTA talks, and although it’s a more common variety, it was especially flagrant. One big problem is the authors’ (and their editors’) decision, with a single exception, to quote only critics of the Trump administration’s efforts.

Thus, readers are presented with the perspective of a Canadian trade lawyer, a former Mexican trade negotiator who now works for a D.C.-based consulting firm with many offshoring companies as clients, a Mexican business lobbyist who officially advises his country’s NAFTA negotiators, a former Canadian official, a former Obama administration economic aide, and four specialists from two Washington, D.C.-based think tanks.

A second big, and related problem – at a time when the intellectual integrity of such think tanks has come under a positively stygian cloud due to the uproar over New America’s firing of several researchers who ran afoul of big donor Google, the Post piece makes absolutely no mention that both of these organizations depend heavily on contributions from both companies and foreign government organizations with vital stakes in maintaining the NAFTA status quo.

For example, the latest info from the Mexico Institute of the Woodrow Wilson Center (itself a recipient of U.S. taxpayer funding), base for one of the specialists showcased in the piece, reveal that the organization receives contributions from no less than six big Mexican companies, plus Wal-Mart (a big importing business) and the main trade association of the American pharmaceutical industry – which manufactures in Mexico for export to the United States.

The Canada Institute, where the other quoted Wilson Center specialist is based, lists the Canadian government as a donor.

As for the other think tank relied on by the Post for (supposedly objective) expertise, the Peterson Institute for International Economics (PIIE), among its U.S. and foreign multinational funders that produce in Mexico for export to the United States are Toyota, GE, Caterpillar, IBM, Ford, GM, Samsung, John Deere, Procter & Gamble, and Mitsubishi.

PIIE also takes contributions from three foreign government entities that help their countries’ companies engage in export-oriented operations in Mexico: the Korea Institute for International Economic Policy, the Korea Development Institute, and the Japan Bank for International Cooperation.

In addition, in recent years, the Peterson Institute has also cashed big checks from Mexican building materials giant Cemex, and from the U.S. Chamber of Commerce – the organizational spearhead of America’s corporate offshoring lobby.

As I’ve repeatedly emphasized, the point here is neither that these think tanks’ findings and opinions lack merit, or they or their donors have no right to weigh in on important trade and other policy debates. It’s that these ostensible research groups should make clear who’s paying their rent – and that if they continue with what I’ve called deceitful idea laundering on behalf of their sponsors, the press should call them out.

The Mainstream Media, however, keeps failing to fulfill this responsibility – which can only deepen already profound suspicions that it’s abandoning its watchdog role and turning into an establishment lapdog instead.