Following Up: The Cheap Labor Lobby Looks Ever Shadier

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Aman Kapoor, Biden administration, Cato Institute, Cecelia Rouse, Chronicles, conflict of interest, David Bier, economics, economists, Following Up, FWD.us, George J. Borjas, idea laundering, Immigration, Immigration Voice, Jeremy Beck, Koch Brothers, NumbersUSA, Open Borders, Pedro Gonzalez, think tanks, wages

In late September, I posted on evidence that one of the supposedly most authoritative studies on the effects of large-scale immigration on the wages of the existing U.S. workforce came up with an answer (in a phrase, “no big deal”) based on no hard evidence whatever.

Since then, I’ve come across material indicating that the intellectual fraud committed by the Biden administration economists and National Academies of Sciences, Engineering, and Medicine (NAS) “experts” team involve was much worse – along with documentation apparently showing that a leading U.S. private sector think tank whose research has armed much of the corporate Cheap Labor Lobby agitation for Open Borders-like policies is literally shilling for that powerful interest group.

As I wrote in that previous post, a mid-September blog item lead-authored by President Biden’s chief White House economic adviser Cecelia Rouse attempted to calm fears that the kinds of juiced up immigration inflows sought by the administration wouldn’t significantly harm already hard-pressed low-income and low-skill U.S. workers. But its case boiled down to nothing more than the kind of appeal to authority that typically seeks to cover up for a paucity of facts and figures – and indeed, an appeal to (NAS) authorities who the White House blog admitted themselves can’t cite much concrete evidence for their conclusions themselves.

But a month later, a post by Jeremy Beck of the immigration realist organization NumbersUSA spotlighted a much more serious problem with the NAS’ immigration analysis. It relied on mathematical models that didn’t actually find or conclude that Americans today holding or seeking poorly paying jobs have nothing important to worry about from big immigrant inflows. Instead, these models proceeded from this assumption.

Beck’s post was based on a conference presentation made by Harvard University labor economist George J. Borjas, who’s not only one of the world’s top specialists on immigration economics, but one of the very few noted economists critical of any aspect of what might be called pre-Trump U.S. immigration policies. So maybe his word shouldn’t be taken as gospel? Maybe not, but it’s noteworthy that the conference panelist he was paired with (another prominent labor and immigration economist) uttered not a word of objection. Nor did the moderator of the session, a Cato Institute analyst who could not be more enthusiastic about mass immigration. (Beck conveniently supplies the full video of the event.)

And speaking of the Cato Institute, that’s the think tank accused of hiring itself out to U.S. corporate interests anxious to pump up the supply of workers available them, and therefore drive down the wages they can command.

The charges appear on the website of the journal Chronicles. The publication and its contributors, like NumbersUSA, are definitely on the restrictionist side of the immigration policy debate. But the post, by Chronicles Associate Editor Pedro Gonzalez presents what it purports to be emails from an organization called Immigration Voice complaining that Cato immigration analyst David Bier has been writing less on the issues it paid him to focus on (boosting the numbers of foreign tech workers that can be employed by firms in the United States) and more on subjects of concern to another group seeking to increase immigration inflows that began paying him more.

According to a bitter message allegedly sent by Immigration Voice president Aman Kapoor, “this guy is like mercenaries, working to push the agenda of the highest bidder. We have [sic] him money when no one knew him and he was fresh out of Congress as a staffer, and no one was willing to support him. Now he has become an influencer because of the papers we suggested him to write any [sic] gave him money to do that….” And because the other Cheap Labor Lobby group, FWD.us, “is giving them money,” Bier is “only pushing” its favored topics.

In other words, there’s no honor among hired gun employers.

It’s not as if the Cato Institute wouldn’t be supporting Open Borders-like policies without Cheap Labor Lobby funding. It’s a libertarian outfit, and its platform strongly opposes pretty much any government interference in any aspect of the economy. But as Gonzalez observes (making points that, as I’ve written, apply to pretty much all of America’s major think tanks to varying extents), “Cato presents itself as providing independent policy research. Kapoor’s allegations raise concerns about the integrity, independence, and transparency of this research, which can have an outsized influence on policy debates.”

In other words, these financial ties create exactly the kind of appearance of conflict of interest that every organization with any integrity seeks either to avoid or to deal with by making crystal clear which of its products are literally made-to-order – and need above all to please the client rather than seek the truth.

And the two main reasons that think tanks like Cato that engage in these practices are so influential directly distort and therefore corrupt national policy debates and the decisions they produce. First, the big bucks provided by donors like Immigration Voice and FWD.us give it the wherewithal to spread the word about its work with some of the best public relations that money can buy. Second, the lack of donor transparency enables the funders to take advantage of what I’ve called idea-laundering: using think tanks to issue materials that push their particular agendas while garbing them in quasi-academic raiment to create the impressions of objectivity and intellectual respectability.

At this point I need to acknowledge that I myself have spoken at Cato conferences and written chapters for Cato books. They’ve concerned foreign policy, a field in which the Institute’s non-interventionist positions would be difficult to match with any corporate or other selfish private ends. In fact, I’ve heard that in at least one instance, Cato’s opposition to the first Persian Gulf War, they’ve cost the organization contributions. And in 2012, the Institute resisted for a time what some staff and board members viewed as an attempt by billionaire industrialist brothers Charles and the late David Koch to politicize the organization excessively.

I’ll also give Cato credit for hosting the aforementioned Borjas presentation. But Cato’s immigration work in general now looks a good deal less than principled – and about as reliable as that of the academic specialists who seem determined to deal with some of the biggest problems caused by supercharging immigration inflows by simply defining them out of existence.

P.S. Thanks to U.S. Tech Workers, an organization pressing to reform U.S. immigration laws to promote the hiring of Americans in specialty positions, for alerting me to the Chronicles post. 

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Making News: New National Interest Article on Why the Foreign Policy Establishment Was Always Overrated

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academia, Afghanistan, alliances, Blob, Bretton Woods, China, Cold War, foreign policy establishment, forever wars, global financial crisis, globalism, Iran, liberal global order, Mainstream Media, Making News, Max Boot, Richard Haass, Soviet Union, The National Interest, think tanks

I’m pleased to announce that The National Interest has just published my latest article for an outside publication: an essay on why recent defenses of America’s bipartisan globalist foreign policy establishment (AKA, “The Blob”) wouldn’t hold any water even if this powerful, durable in-crowd hadn’t botched practically everything about Afghanistan. Here’s the link.

Also, a new twist today: Unfortunately, I thought some of the edits undermined the flow of the piece. I’m going to try to get at least some of them corrected. But in the meantime, to show careful readers what they were, I’m presenting below the draft as I sent it off. Let me know if you think I have some grounds for grousing. (P.S. I’m just fine with their title and love the subhead’s reference to the “poisoned well”!)

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

Why the Blob Really Has Been Unimpressive

by Alan Tonelson

So the Blob is starting to fight back. The bipartisan globalist national foreign policy establishment is being blamed both for President Biden’s hellaciously botched withdrawal from Afghanistan, and (including by the Blob-y Mr. Biden himself), for pushing the transformation of a necessary anti-terrorist operation into a naively grandiose nation-building project.

It’s time, the argument goes, to marginalize – or at least view more skeptically – this hodgepodge of former diplomats and Congressional aides, retired military officers, genuine academics, and think tank hacks that has shaped American diplomacy in two critical ways: by being used as the main personnel pool for staffing presidential administrations and House and Senate offices on rotating bases, and for serving up informal advisers for these politicians; and by dominating the list of sources used by overwhelmingly sympatico Mainstream Media journalists to report and interpret the news, and thus define for the public which foreign policy ideas are and aren’t legitimate to discuss.

“Don’t throw the baby out with the bathwater!” Blob-ers are responding.

“The foreign policy establishment did get it wrong in Iraq, where the U.S. overreached,” allowed Richard Haass, who as President of the Council on Foreign Relations would arguably win a contest for Blob-er-in-Chief. “We got it wrong in Libya, we got it wrong in Vietnam. But over the last 75 years, the foreign policy establishment has gotten most things right.”

Washington Post pundit (and neoconservative apostate) Max Boot similarly has declared that “we can confidently say that, overall, the foreign policy establishment has served America well over the past 76 years.”

In other words, look past not only Afghanistan and Libya and Iraq and Vietnam but also the failure to anticipate the September 11 terrorist attack; and the long-time cluelessness about the emergence of security and economic threats from China (following the stubborn, decades-long determination to antagonize China after 1949); and a peacekeeping debacle in Somalia; and the Bay of Pigs fiasco; and the blind loyalty to an Iranian Shah hated by nearly all his subjects. Focus instead on all the – presumably more important – successes. (I’m excluding the numerous Blob-y decisions to back all manner of dictators, primarily in the developing world, and ignore human rights considerations because whatever their ethical flaws, only the Vietnam and Iran policies undermined American interests significantly.)

Paramount among them: victory over the Soviet Union in the Cold War; the protectorate-alliances, foreign aid, and open trading system that keyed this triumph – in the process pacifying and democratizing Germany and Japan – fostering recovery in these former enemy dictatorships as well as the rest of Western Europe; and ushering in decades of record prosperity in these regions.

One obvious rejoinder: Today’s Blob and its most recent forerunners merit zero credit for those achievements because almost none of its members simply weren’t around or in power then. Meaning maybe America simply needs a more competent Blob?

At the same time, there’s inevitably been personnel continuity in the Blob’s ranks over time (think of recently deceased centenarian George Shultz, and the 98-year old Henry Kissinger, both still influential well into their golden years). Moreover, today’s establishment was largely groomed in Blob-y institutions, claims to be acting in that original Blob-y tradition, and has clearly remained stalwart in its advocacy of tireless international activism, and support for what it calls the liberal global order and its constituent institutions created by the older Blob generation. As a result, including those decades-old developments in judgements of today’s Blob is eminently defensible.

And in retrospect, what’s particularly revealing but neglected about these achievements is the extent to which they stemmed from circumstances almost ideally suited for foreign policy success, rather than from Blob-er genius. Globalists of the first post-World War II decades unquestionably faced serious domestic political obstacles to breaking with the country’s historic aloofness to most non-Western Hemispheric developments.

But they also enjoyed enviable advantages. Especially important was global economic predominance, which blunted much criticism on the home front by permitting subsidization of both the security and well-being of enormous foreign populations without apparent cost to American living standards or national finances.

It’s no coincidence, therefore, that as this advantage eroded, and the core Blob tactic of handling problems literally by throwing money at them and refusing to choose meaningfully between guns and butter became more problematic, the Blob’s record worsened – and undercut the intertwined domestic political and economic bases of active and passive public support for its strategies.

In fact, post-Vietnam, it’s difficult to identify any important foreign policy decision that Blob-y leaders have gotten right, or even handled reasonably well, with the exception of the first Persian Gulf War. (Ronald Reagan’s dramatic military buildup certainly helped spend and innovate the Soviets into collapse, but it was opposed by much and possibly most of the Blob, which favored continued containment and the simultaneous pursuit of arms control and detente.)

Just as important, this Blob’s very profligacy meant that many of its biggest post-Vietnam failures were economic in nature. Two leading examples – the messy collapse of the early World War II international monetary system and structural inflation and long sluggish growth that followed; and the 2007-09 global financial crisis and ensuing Great Recession.

Both crises were brought on fundamentally by global financial imbalances stemming from the Blob-ers’ stubborn refusal to support even minimal budget discipline on the foreign policy side; and from their failure to require reciprocal market access for traded goods either in the early post-World War II Bretton Woods monetary system or into its patchwork successors. And both revealed the Blob’s obliviousness to the intertwined imperatives of maintaining the national economic power needed to pay for their preferred policies responsibly; and of defining U.S. interests realistically enough to avoid needless costs and addiction to debt, inflation, or both.

Do today’s attacks, then, mean that the Blob’s demise is in sight? Not nearly likely enough. After all, it’s survived its decades-long string of blunders with its status pretty much intact. It’s bound to be keep being replenished by the same elite universities whose relevant faculty members are overwhelmingly Blob-y themselves. There’s no sign that their corporate funders are backing away from the think tanks that keep its many of its members employed when they’re out of public office. And its record will surely keep being reported principally by a news media that’s thoroughly Blob-y itself. That – frighteningly – leaves a foreign policy catastrophe inflicting lasting damage on the nation as America’s best hope for replacing the Blob even with simply a more genuinely diverse source of experience and expertise.

Im-Politic: Why China’s U.S. Election Interference is a Very Big Deal

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battleground states, Center for Strategic and International Studies, China, Chinese Americans, collusion, Democrats, election 2020, elections, entertainment, Freedom House, Hollywood, Hoover Institution, Im-Politic, Mike Pence, multinational companies, Nancy Pelosi, National Basketball Association, NBA, Robert Draper, Robert O'Brien, social media, The New York Times Magazine, think tanks, Trump, Trump-Russia, Wall Street

It’s baaaaaaack! The Russia collusion thing, I mean. Only this time, with an important difference.

On top of charges that Moscow is monkeying around with November’s U.S. elections to ensure a Trump victory, and that the President and his aides are doing nothing to fend of this threat to the integrity of the nation’s politics, Democrats and their supporters are now dismissing claims administration about Chinese meddling as alarmism at best and diversionary at worst.

In the words of House Speaker Nancy Pelosi, commenting on recent testimony from U.S. intelligence officials spotlighting both countries’ efforts, to “give some equivalence” of China and Russia on interference efforts “doesn’t really tell the story. 

She continued, “The Chinese, they said, prefer [presumptive Democratic nominee Joe] Biden — we don’t know that, but that’s what they’re saying, but they’re not really getting involved in the presidential election.” ,

The Mainstream Media, as is so often the case, echoed this Democratic talking point. According to The New York Times‘ Robert Draper (author most recently of a long piece in the paper’s magazine section on Mr. Trump’s supposed refusal to approve anti-Russia interference measures or take seriously such findings by the intelligence community ), China “is really not able to affect the integrity of our electoral system the way Russia can….”

And I use the term “Democratic talking point” for two main reasons. First, the Chinese unquestionably have recently gotten into the explicit election meddling game – though with some distinctive Chinese characteristics. Second, and much more important, China for decades has been massively influencing American politics more broadly in ways Russia can’t even dream about – mainly because so many major national American institutions have become so beholden to the Chinese government for so long thanks to the decades-long pre-Trump policy of promoting closer bilateral ties.

As for the narrower, more direct kind of election corrupting, you don’t need to take the word of President Trump’s national security adviser, Robert O’Brien that “China, like Russia and Iran, have engaged in cyberattacks and fishing and that sort of thing with respect to our election infrastructure and with respect to websites.”

Nor do you have to take the word of Vice President Mike Pence, who in 2018 cited a national intelligence assessment that found that China “ is targeting U.S. state and local governments and officials to exploit any divisions between federal and local levels on policy. It’s using wedge issues, like trade tariffs, to advance Beijing’s political influence.”

You can ignore Pence’s contention that that same year, a document circulated by Beijing stated that China must [quoting directly] “strike accurately and carefully, splitting apart different domestic groups” in the United States.

You can even write off China’s decision at the height of that fall’s Congressional election campaigns to take out a “four-page supplement in the Sunday Des Moines [Iowa] Register” that clearly was “intended to undermine farm-country support for President Donald Trump’s escalating trade war….”

Much harder to ignore, though: the claim made last year by a major Hoover Institution study that

“In American federal and state politics, China seeks to identify and cultivate rising politicians. Like many other countries, Chinese entities employ prominent lobbying and public relations firms and cooperate with influential civil society groups. These activities complement China’s long-standing support of visits to China by members of Congress and their staffs. In some rare instances Beijing has used private citizens and companies to exploit loopholes in US regulations that prohibit direct foreign contributions to elections.”

Don’t forget, moreover, findings that Chinese trolls are increasingly active on major social media platforms. According to a report from the research institute Freedom House:

“[C]hinese state-affiliated trolls are…apparently operating on [Twitter] in large numbers. In the hours and days after Houston Rockets general manager Daryl Morey tweeted in support of Hong Kong protesters in October 2019, the Wall Street Journal reported, nearly 170,000 tweets were directed at Morey by users who seemed to be based in China as part of a coordinated intimidation campaign. Meanwhile, there have been multiple suspected efforts by pro-Beijing trolls to manipulate the ranking of content on popular sources of information outside China, including Google’s search engine Reddit,and YouTube.”

The Hoover report also came up with especially disturbing findings about Beijing’s efforts to influence the views (and therefore the votes) of Chinese Americans, including exploiting the potential hostage status of their relatives in China. According to the Hoover researchers:

“Among the Chinese American community, China has long sought to influence—even silence—voices critical of the PRC or supportive of Taiwan by dispatching personnel to the United States to pressure these individuals and while also pressuring their relatives in China. Beijing also views Chinese Americans as members of a worldwide Chinese diaspora that presumes them to retain not only an interest in the welfare of China but also a loosely defined cultural, and even political, allegiance to the so-called Motherland.

In addition:

“In the American media, China has all but eliminated the plethora of independent Chinese-language media outlets that once served Chinese American communities. It has co-opted existing Chineselanguage outlets and established its own new outlets.”

Operations aimed at Chinese Americans are anything but trivial politically. As of 2018, they represented nearly 2.6 million eligible U.S. voters, and they belonged to an Asian-American super-category thats been the fastest growing racial and ethnic population of eligible voters in the country.

Most live in heavily Democratic states, like California, New York, and Massachusetts, but significant concentrations are also found in the battleground states where the many of the 2016 presidential election margins were razor thin, of which look up for grabs this year, like Florida, Georgia, North Carolina, Texas, Michigan, and Pennsylvania.

As for the second, broader and indirect, Chinese meddling in American politics, recall these developments, many of which have been documented on RealityChek:

>U.S.-owned multinational companies, which have long profited at the expense of the domestic economy by offshoring production and jobs to China, have just as long carried Beijing’s water in American politics through their massive contributions to U.S. political campaigns. The same goes for Wall Street, which hasn’t sent many U.S. operations overseas, but which has long hungered for permission to do more business in the Chinese market.

>These same big businesses continually and surreptitiously inject their views into American political debates by heavily financing leading think tanks – which garb their special interest agendas in the raiment of objective scholarship. By the way, at least one of these think tanks, the Center for Strategic and International Studies, has taken Chinese government money, too.

>Hollywood and the rest of the U.S. entertainment industry has become so determined to brown nose China in search of profits that it’s made nearly routine rewriting and censoring material deemed offensive to China. And in case you haven’t noticed, show biz figures haven’t exactly been reluctant to weigh in on U.S. political issues lately. And yes, that includes the stars of the National Basketball Association, who have taken a leading role in what’s become known as the Black Lives Matter movement, but who have remained conspicuously silent about the lives of inhabitants of the vast China market that’s one of their biggest and most promising cash cows.

However indirect this Chinese involvement in American politics is, its effects clearly dwarf total Russian efforts – and by orders of magnitude. Nor is there any reason to believe that Moscow is closing the gap. In fact, China’s advantage here is so great that it makes a case for a useful rule-of-thumb:  Whenever you find out about someone complaining about Russia’s election interference but brushing off China’s, you can be sure that they’re not really angry about interference as such. They’re just angry about interference they don’t like.`      

Im-Politic: What Even Barr Has Missed About the China Threat

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Center for Strategic and International Studies, China, idea laundering, Im-Politic, Jeanne Whalen, lobbying, Mary E. Lovely, multinational corporations, offshoring, Peterson Institute for International Economics, Scott Kennedy, Steven Zeitchik, think tanks, Trump, Washington Post, William P. Barr

As masterly as Attorney General William P. Barr’s Thursday speech about China’s sweeping “whole-of-society” challenge to the United States was – and “masterly” is an entirely fitting description – it still missed one key danger that’s been created by big Americans businesses’ determination to advance China’s agenda. And conveniently, the nature and importance of this danger was (unwittingly, to be sure) made clear by the Washington Post‘s coverage of Barr’s alarm bell-ringing.

The Attorney General’s address was unquestionably a landmark – and a badly needed one – in the history of U.S.-China relations. The decisive break of course was Donald Trump’s election as President. For decades, American administrations had permitted and even encouraged U.S. multinational corporations and their recklessly shortsighted offshoring- and tech transfer-happy agenda to dominate policymaking toward China. (See here for the Bill Clinton-era origins of this approach.) Sometimes raggedly to be sure, the Trump administration has been reversing decisions that had exponentially increased China’s wealth and therefore military to the detriment of U.S. prosperity and national security.

But Barr’s speech indicates the launch of a new phase in this America First strategy – not only spotlighting corporate activities that keep endangering America, but naming and shaming some of the leading perps.

Especially important was the warning about Chinese leaders “and their proxies reaching out to corporate leaders and inveighing them to favor policies and actions favored by the Chinese Communist Party.” As Barr explained:

“Privately pressuring or courting American corporate leaders to promote policies (or politicians) presents a significant threat, because hiding behind American voices allows the Chinese government to elevate its influence and put a “friendly face” on pro-regime policies.  The legislator or policymaker who hears from a fellow American is properly more sympathetic to that constituent than to a foreigner.  And by masking its participation in our political process, the PRC avoids accountability for its influence efforts and the public outcry that might result, if its lobbying were exposed.”

In other words, Barr was talking about a form of “idea laundering” – the practice of pushing proposals that would benefit special interests first and foremost in ways meant to disguise their source of sponsorship and funding.

I identified one variety of idea laundering way back in 2006 – when I testified to Congress about how prevalent it had become for these offshoring-happy multinationals to pay think tanks to create the illusion that their self-serving objectives were also strongly supported by disinterested experts solely dedicated to truth-seeking. Barr has now pointed out that the multinational executives who have been funding idea laundering through think tank studies and op-eds and the like have also begun serving themselves as lobbyists-on-the-sly for China. In addition, he usefully warned them that they risk running afoul of U.S. laws requiring transparency from any individual or entity shilling for foreign interests.

But I wish Barr had mentioned the think tank version of idea laundering because a reminder of its perils came the day after he spoke, in the form of that Post coverage. Reporters Jeanne Whalen and Steven Zeitchik described and cited verbatim most of Barr’s indictment of corporate behavior. They rightly sought and received reactions from some of the companies fingered (Apple and Disney).

But then they played into the hands of the idea launderers when they claimed that “The attorney general’s warnings drew criticism from some economists, who said he at times exaggerated the threat China poses and downplayed benefits American industry has gained by trading with China….”

That’s surely the case, but the two individuals whose views the Post presented were hardly just any old economists. In fact, one – Scott Kennedy – isn’t even an economist, in the sense that he holds no academic degree in economics. Far more important, though, is that both of these authorities work for and get paid by think tanks that are heavily funded by offshoring multinationals – the Center for Strategic and International Studies (which employs Kennedy) in the academic-y-sounding position of “Senior Adviser and Trustee Chair in Chinese Business and Economics” and Mary E. Lovely, who is an economist (at Syracuse University) but who’s also a (academic-y-sounding) “Senior Fellow” at the Peterson Institute for International Economics.

Moreover, it’s crucial to note that both the Center for Strategic Studies and the Peterson Institute are also financed both by foreign multinational companies and even foreign governments with stakes in returning to the pre-Trump U.S. China trade and global trade policy status quo just as great as that of U.S.-owned multinationals. In fact, the Center even lists a contribution in the $5,000-$99,000 annual range from the Shanghai Institutes for International Studies, which, like all Chinese think tanks, is an arm of the Chinese regime. (It receives U.S government funding as well – in the greater-than-$500,000 annual neighborhood.)

To repeat a point I’ve made…repeatedly… there is nothing intrinsically wrong with any of these individual think tankers, the think tanks themselves, businesses, or even foreign governments trying to influence U.S. public policy. But as Barr has noted, there is everything wrong with these activities being conducted deceptively, which is the case with both forms of idea laundering. And the dangers to American democracy and U.S. interests are greatly compounded when journalists who should know better (and the two Washington Post reporters named above are hardly the only examples) help sustain this charade.

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

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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

Tags

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!

Tags

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.