It is typical for pundits to criticize the Jones Act claiming that it harms American consumers or benefits others — some even outlandishly claim it benefits Russian President Vladimir Putin. These hypercritical pundits all seem to either overlook or completely ignore a number of critically important facts. In a fact free world, one can come to any conclusion — even silly ones. But when facts and sound reasoning matter, the conclusions must stand up to scrutiny.
The Merchant Marine Act of 1920 (also known as the Jones Act) was passed in the aftermath of World War I to ensure that America had a viable merchant marine that could provide support to our navy and military in times of war or national emergency. It was also intended to ensure that we had a viable ship-building and ship repairing capability — again to support our military. In a world where many foreign nations heavily subsidize their shipping industries as well as their ship building and repairing industries, we must not allow ourselves to become dependent upon other nations to maintain our naval strength.
Contrary to the view that the Jones Act is favored by despots like Vladimir Putin, the act has significant national security benefits for the U.S. Consider the Vice Chairman of the Joint Chiefs of Staff Gen. Paul Selva, who said, “I am an ardent Supporter of the Jones Act. It supports a viable ship building industry, cuts costs and produces 2,500 qualified mariners. Why would I tamper with that?” Likewise, Former Coast Guard Commandant Adm. Paul Zunkunft has said, “You take the Jones Act away, the first thing to go is these shipyards and then the mariners… If we don’t have a U.S. fleet or U.S. shipyard to constitute that fleet how do we prevail?” The military understands that the Jones Act is critically important to our national security.
History teaches an important lesson. In 1812, Napoleon left France with an army of about 700,000 soldiers. Napoleon’s army easily pushed through western Russia and made it all the way to Moscow. But as Napoleon’s supply lines became attenuated, his army lacked the ability to feed and supply itself. Napoleon, despite having the world’s greatest army, was defeated because he couldn’t supply his troops. When he returned to France six months later, his army had only 27,000 soldiers who could defend France and the balance of power in Europe was radically altered for a century.
The lesson we must learn from this is obvious — we may have the best technology and the best trained military on the planet, but if we cannot properly supply them, we too could meet with disaster. The Jones Act is an important part of our military’s ability to supply itself.
In a world in which China and Russia are expanding their naval capabilities, the need for the Jones Act is all the greater. Putin would like a weaker America, not a strong America – with a functioning domestic shipping industry to support our nation’s military strength.
The Jones Act also has a significant impact on homeland security. It limits foreign flagged ships and foreign crewed ships from sailing around America’s inland waterways. Dr. Joan Mileski, head of the Maritime Administration Department at Texas A&M, said, “If we totally lifted the Jones Act, any foreign-flagged ship — with an entirely unknown crew — could go anywhere on our waterways, including up the Mississippi River.” Obviously, this would make our defenses very porous.
Since 9/11/2001, our homeland security approach has been to place most of our security resources and assets at our coasts and at the ports that have the most traffic. But few assets and resources are used along the more than 25,000 miles of navigable inland waterways in the United States. There we rely upon the Jones Act to provide security. American flagged and American crewed ships are trained and keep a watchful eye for signs of terrorism and are thus an important part of our nation’s homeland security layered defense.
Our southern border is 1,989 miles long. The U.S. has more than 25,000 miles of navigable waters. Without the Jones Act, we’ve just made both sides of every river a possible entry point. Michael Herbert, Chief of the Customs & Border Protection’s Jones Act Division of Enforcement has said: “We use the Jones Act as a virtual wall. Without the Jones Act in place, our inland waterways would be inundated with foreign flagged vessels.”
The truth is the Jones Act is more important today than even when it was first passed. Today, it not only provides America with trained and skilled mariners and a viable ship building and ship repairing capability to support our military and Navy, but it also protects us from terrorists and other nefarious international bad actors.
Imagine if Chinese government owned ships could operate freely up and down the Mississippi River and remain there throughout the year. They would use that access to spy and intercept even civilian communications.
Adam Smith, the father of free market economics, in his seminal work — The Wealth of Nations — strongly supported and defended the British Navigation Act, which was a cabotage law much like America’s Merchant Marine Act. His rationale included, “The defense of Great Britain, for example, depends very much on the number of its sailors and shipping.”
The Jones Act protects America. This is a verifiable fact. Any alleged costs are amorphous and difficult to verify or prove. But what is not difficult to prove is that America’s security is benefited and protected by the Jones Act. The world is a dangerous place, filled with adversaries that will be all too happy if the Jones Act is weakened. It is time tested and proven.
A new proposal under discussion by the Senate Finance Committee is a perfect example of the folly of trying to centrally design the economy — in this case by a ham-handed attempt at price controls.
The proposal, from Sen. Ron Wyden (D-OR) and under consideration by Chairman Chuck Grassley (R-IA), would change the Medicare Part D prescription drug rebate to penalize drugs whose prices rise faster than the rate of inflation.
It’s ironic the proposal targets Part D, one of the few islands of economic sanity to be found in the health care sector, which, beset by rampant government intervention, suffers from a wide variety of perverse unintended consequences.
Part D is one of the few government health care programs to successfully foster price-based productivity increases. In most parts of the economy, over time, prices go down and quality goes up, due to increases in productivity. The underlying mechanism driving this is competition.
One sign of how successful Part D has been in wielding competition is that in its first decade of existence, it cost over 40% less than what the Congressional Budget Office estimated it would, a historical and underappreciated achievement.
Tacking on feel-good, one-off pricing rules like Wyden’s “faster than inflation” penalty could easily disrupt the market-based dynamics that enabled Part D to flourish in the first place.
It’s just silly to think that something as complex, distributed and organic as a worldwide market for pharmaceutical drugs could be controlled by something as ramshackle as a “faster than inflation” rule.
Consider the variety of pricing mechanisms that exist in well-functioning markets. In retail, there are coupons, package deals, membership plans and other discounts. In the stock market, there is the “continuous auction,” providing ongoing price discovery that can react to new information in a matter of seconds.
Amazon’s server rental business offers clients a tremendous range of pricing options, split by eighteen datacenter regions, dozens of server types, and several tiers of availability.
There is a whole world of financing, from store-offered, no interest payment plans to credit cards to mortgages. Stores employ all manor of psychological pricing tricks, such as charging 99 cents instead of $1. One of the more incredible such tricks, which would be hard to believe without the well-established research backing it up, is that prices that contain fewer syllables (when read out loud) are more attractive than those with more syllables. For instance, $28.16 (five syllables) is better than $27.82 (seven syllables).
The incredible diversity in pricing practices stems from the decentralized nature of the market. You could never ask a single committee, or even a large organization, to come up with this level of creativity and variety on its own. It’s only from the organic interaction between millions of businesses and billions of customers, each expertly seeking their own interests, that it can ever arise.
You might compare Wyden’s “faster than inflation” proposal to the fences in Jurassic Park — “life finds a way,” as Dr. Ian Malcolm tells us, foreshadowing the inability of the park to contain the beasts contained within. Except, at least the 40-foot electric fences were a good faith effort. Wyden’s proposal is more like if they attempted to keep the T-Rex at bay with only the thin walls of the bathroom hut the hate-able lawyer ran and hid inside, shortly before becoming a dinosaur’s dinner.
In other word’s this “faster than inflation” rule is a laughable, pitiful attempt at something that isn’t even achievable by the most expert, determined effort — something like, say, the Soviet Union, which tried, and failed, to put price controls into practice at super power scale.
But that’s not to say it can’t do harm. At the very least, it will increase the cost of participating in the market, both in terms of compliance costs, and in the changed incentives and their inevitable unintended consequences. For example, a company that requires more revenue to survive might raise the prices slightly on all its products, instead of steeply on just one. How this all plays out is impossible to predict. What can be said for certain is the market’s “logic” would now be less about providing the most value for customers at the lowest price, and now more about the political ramifications of pricing decisions.
More specifically, as it relates to the Part D drug market in particular, the rule could crowd out existing rebates negotiated by the plans buying the drugs. Many plans have already secured “price protection rebates” which kick in if prices increase more rapidly than some agreed-upon threshold. In other words, the market has already invented, in a much more sophisticated and dynamic way, the “faster than inflation” rule on its own.
The worst case scenario is more dire. Generally speaking, fostering well-functioning markets in the health care sphere is exceedingly difficult, given the immense government intervention at every level. Part D’s success in doing so is nearly unique. Additional rules that make supply and demand less important to how the market functions could result in it ceasing to function as a market entirely. It certainly would not be the first time the government accidentally killed a market.
Wyden’s proposal exemplifies the folly of centrally-designed price controls. It will harm one of the only well-functioning parts of the federal government’s health care policy. For those reasons, Chairman Grassley and Committee Republicans should cast it in the dustbin of bad socialist ideas.
Last week Wall Street focused on what the Trump-Xi summit would mean for the China trade war, the global economy and the Dow Jones. But the high-stakes meeting turned out to be a warm-up act. President Donald Trump’s real diplomatic flourish came as he crossed into the DMZ to shake hands with North Korea’s Kim Jong-un.
Investors are still trying to discern whether China trade talks will bear fruit after Trump’s big concession to Chinese President Xi Jinping. In addition to holding off on further tariffs, Trump said he would ease a ban on American technology sales to Chinese telecom equipment giant Huawei. Beijing appeared to give up little or nothing, and shows no sign of caving to Trump’s demands.
That raises the risk of another sudden collapse of China trade talks and a further escalation of tariffs. If that happens, both the U.S. economy and Dow Jones look vulnerable, even as the Dow hit record highs Wednesday.
But it may make sense to look at the China trade war through the prism of Trump’s push for a North Korea breakthrough. It’s a good bet that Trump-Kim DMZ meeting wouldn’t have happened if he hadn’t gotten China trade talks back on track.
Now Trump is pushing for a White House visit and reportedly wants North Korea to agree to substantially freeze nuclear weapons capabilities. As long as Trump sees Beijing as a “strategic partner” reining in North Korea’s nuclear ambitions, further escalation of the China trade war seems unlikely.
The relationship between North Korea and China is complex. But China has significant economic ties with North Korea, has often taken Pyongyang’s side against harsh international sanctions and has been seen as able to influence its behavior. International relations experts also say that Beijing has long used its role in mediating North Korea’s threat as a buffer against criticism by the West.
Trump has previously discussed China’s North Korea ties as a consideration in the U.S.-China trade dispute. While that hasn’t averted a major trade conflict, this past weekend isn’t the only time North Korea nuclear issue and China trade war have seemed to follow a parallel path.
Last December, Trump and Xi agreed to their first trade cease-fire. Then came Trump’s February summit with the North Korean leader in Hanoi. Trump walked away from that meeting, putting talks on ice. In May, China trade talks also broke down as Trump lost patience with Beijing for backtracking on commitments. On May 5, Trump threatened to escalate tariffs. Four days later, North Korea fired off short-range missiles in an implicit challenge to the U.S.
The odds of a China trade deal look pretty low, given the depth of the differences separating the two sides. The U.S. insists that China write new laws resolving complaints over theft of intellectual property, forced technology transfers, currency manipulation, access to Chinese markets and state subsidies. Even then, the U.S. wants Trump tariffs to remain in force, with some falling away as Beijing clears these benchmarks. China has refused all of these demands as humiliating and a violation of its sovereignty.
Trump may be losing hope for a huge China trade deal, but he seems to think a North Korean nuclear deal could be in reach. Trump may even see a certain logic in letting a North Korea deal come first. If Beijing really is a “strategic partner,” as Trump said in a Saturday press conference, Chinese leaders will encourage North Korea to complete a nuclear deal with him. If that happened, Trump might be more trusting of China to abide by any trade agreement, rather than keeping tariffs in place until Beijing proves it will keep its word.
By Fox News•
I’m not quite old enough to remember the “global cooling” scare of the 1970s and the media’s drumbeat of the coming ice age that would end mankind. But I have been told many times the end is near by doomsday prophets who have frightened people into green orthodoxy better than any cult leader.
As an 8-year-old kid I was particularly jarred by an episode of the TV show “Diff’rent Strokes” in which acid rain caused Kimberley’s hair to turn green. I lived in New York City just like the TV character, I believed my rain was poison.
Throughout high school I was told that chlorofluorocarbons (CFCs) and aerosols were tearing a hole in the ozone layer, and that it could never be repaired. Deadly UV rays would give us all cancer because I used spray deodorant. I switched to roll-on.
Then came the mother of all doomsday scenarios: global warming. It blew away other environmental issues like candles on a cake. Deadly heat and floods. Ice caps melting. Polar bears dying. Alligators and sharks invading. TV shows. Movies. Books.
Former Vice President Al Gore warned we were all going to die from global warming.
Thirty years ago this week, the United Nations issued a global warming report that I distinctly remember. It predicted worldwide disaster.
According to the report, the Great Plains of America would return to the Dust Bowl. The oceans would rise by several feet, causing low-lying countries like the Maldive Islands and Bangladesh to be underwater.
The report said North Africa would bake into wastelands. Rainforests would be gone, as would much animal life. And it was all because of fossil fuels. American greed. Us. Me. Switching deodorant did nothing to stop it.
Tough lessons for a 15-year-old high school sophomore.
And here we are 30 years later, and I look back at that 1989 report, I think only this: What happened?
The predictions in the report were not just a bit “off” – like my calculations in my high school math class, my understanding of Shakespeare, or my failed attempt to high jump. The U.N. report was flat-out wrong. It was 100 percent, complete opposite, 180-degree wrong.
Can I get an explanation, please?
The report claimed “even the most conservative scientists” said there was nothing we could do to stop the Earth from warming three degrees. But Earth didn’t warm that much.
The report claimed we had a 10-year window to fix this or it would be irreversible. It wasn’t.
The report claimed the Soviet Union would have a bumper crop harvest because of shifting weather patterns. The Soviet Union collapsed months later.
I’d be OK if this were a one-time mistake, but the U.N. continues to issue such hyperbolic reports. It’s International Panel on Climate Change (IPCC) issued the latest one last December, and it, too, triggered a countdown clock.
The phrase “we have 12 years to fix this” is parroted by almost every 2020 Democratic presidential candidate and their party’s de facto leader, Rep. Alexandria Ocasio-Cortez of New York.
On the bright side, we were told we had 10 years in 1989, so at least the prognosis is better this time.
Why issue another report without correcting the first one? That’s not the scientific method. Can we ask for a correction? Here’s a simple question: What did the U.N. report get wrong in 1989?
After all, this is “science,” and one is expected to believe in science. So let’s lay out the facts dispassionately and objectively, as any unbiased scientist would. Please identify the error and methodological change or formula or data point that has been corrected. Show your work.
Otherwise, why should we believe you got it right 30 years later?
Surely the IPCC has the means to do an after-action review. Since the report was issued the IPCC has raked in over $150 million.
Looks like there’s a prophet making a profit.
No presidential candidate, and practically no politician, would ever say he or she is skeptical of these U.N. predictions. “Climate denier” is an accusation akin to “war criminal,” and with a leftist movement that is growing more violent and assaulting and doxing journalists, it’s almost imprudent to voice an alternative view.
But the U.N. has a 30-year track record of being wrong on this issue, so I take its reports on climate change and “we have 12 years left” with a grain of salt the size of the Maldives.
In 30 more years, I’ll be 75. I can’t wait to read the U.N. report.
"This is the flip side (of) tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?" said New York Governor Andrew M. Cuomo on Feb. 4
After the Trump tax cut went into effect one year ago, we predicted that the Trump tax reform would supercharge the national economy but could cause big financial problems for the highest-tax states: New Jersey, Illinois, Connecticut, and New York.
The capping of the state and local tax deduction at $10,000 raised the highest effective state tax rates by about 66% (for example, in New York City, the rate on millionaires rose from about 8% to 13.3%). In New Jersey, the highest rate has risen from 7.5% to 12.75%.
Now, we have Andrew Cuomo conceding that the trend of rich people moving out of New York has caused the loss of $2.3 billion of tax revenue in Albany’s coffers. Cuomo called this tax change “diabolical.” We think it was a matter of tax fairness. No longer do residents of low-tax states have to pay higher federal taxes to support the blob of excessive state/local spending and pensions in the blue states.
As we predicted, the wealthy are fleeing these states. The new United Van Lines data were just released that are a good proxy for where Americans are moving to and from. Guess what four states had the highest percentage of leavers in 2018: 1) New Jersey, 2) Illinois, 3) Connecticut and 4) New York. Even high-tax California had more Americans pack up and leave than enter.
Ironically, liberals like Cuomo who argued for years that businesses don’t make location decisions based on taxes in their states are now forced to admit that the cap on the state and local tax deduction (which primarily affects the richest 1%) is depleting their state coffers. The rich change their residence by moving for at least 183 days of the year to low taxers such as Arizona, Florida, Tennessee, Texas and Utah.
We advised Cuomo and other blue state governors to immediately cut their tax rates if they wanted to remain even semi-competitive with low-tax states. They are doing the opposite. Connecticut, Illinois and New Jersey have led the nation in tax increases on the rich over the last three years, while “progressives” have cheered them on.
Last year, legislators in Trenton went on a taxing spree, raising the income tax on those making more than $5 million a year to 10.75% — now the third-highest in the country — and then enacting a health care individual mandate tax on workers, a corporate rate increase and an option for localities to impose a payroll tax on businesses. And they are still short of cash. Idiotically, these tax hikes were passed after the state and local tax deduction cap was enacted, thus pouring gasoline on their fiscal fires.
How has this worked out for them?
In addition to New York’s fiscal woes, the deficit in Illinois is pegged at $2.8 billion (with a $7.8 billion backlog of unpaid bills), and Connecticut faces a two-year $4 billion shortfall despite three tax increases in five years.
New Jersey has a $500 million deficit this year (even after the biggest tax hike in the state’s history) and Moody’s predicts that gap will widen to $3 billion over the next five years. This is all happening at a time when most states have healthy and unexpected surplus revenues due to the Trump economic boom and the historic decline in unemployment.
A Pew study published late last year on which states are bleeding the most red ink ranked New Jersey worst, Illinois second worst and Connecticut seventh worst. New York was also in the bottom 10.
Let us state this loud and clear in the hopes that lawmakers in state capitals across the country are paying attention: The three states that have raised their taxes the most now have the worst fiscal outlook.
Worst of all, things don’t look like they are going to get better in any of these states.
Last fall, Connecticut, Illinois and New Jersey voters elected mega-rich Democratic Govs. Ned Lamont, J.B. Pritzker and Phil Murphy, who have promised to sock it to the rich — the ones who haven’t yet left. In Illinois, Pritzker would eliminate the state’s constitutionally protected flat tax so that he can raise the income tax on the rich by as much as 50%. After raising income taxes three times in the last five years, Connecticut’s legislature now wants to raise the sales tax rate. No one in any of these progressive states even dares utter the words tax cut. In just one decade, New York lost 1.3 million net residents; Illinois 717,000, New Jersey 516,000 and Connecticut 176,000. California has lost 929,000.
There is also a useful warning for the soak-the-rich crowd of progressives in Washington. If a rise in the state tax rate from 8% to 13% because of the state and local tax deduction cap can have this big and immediate negative impact, think of the economic carnage from doubling of the federal tax rate from 37% to 70% as some want to do. The wealthy would relocate their wealth and income in low-tax havens like Hong Kong, the Cayman Islands and Ireland. That would do wonders for the middle class living in those countries.
We are sticking with our warnings from last year. If the four states of the Apocalypse — Connecticut, Illinois, New Jersey and New York — do not reverse their taxing ways and choose to keep making things worse, these once very rich and prosperous states will see thousands more rich taxpayers leave. The politicians in these states just don’t seem to understand math. A soak-the-rich tax rate of 8%, 10% or even 13% on income of zero yields zero income when the wealthy leave the state. Cuomo was right: The bleak outlook for the four states of apocalypse is “as serious as a heart attack.”
A game where only one side plays by the rules is rigged. We have now locked ourselves in an embrace with a corrupt regime, and it has not been to our benefit economically or morally.
The United States and China have traded since the early days of our republic, but only recently has the scale of that trade become a political issue. More than any other point, Donald Trump’s rhetoric against outsourcing to China gave him the blue-collar Midwestern votes that made up his margin of victory in 2016. His election was a break with the generation-long bipartisan consensus that more and freer trade is better, whether the trading partner is a liberal democracy that respects the rule of law or a communist dictatorship where unfree people labor in unsafe conditions for government-suppressed wages.
Even to call trade with China “free” is a misnomer. Besides the minor tariffs still in place, there is also an uneven use of non-tariff trade barriers. Chinese goods enter our markets cheaply and freely because we agree to follow our agreements, our laws, and the rules of the World Trade Organization (WTO). Our goods, on the other hand, are subject to arbitrary restrictions by the communist government, while Chinese companies and government routinely infringe our intellectual property rights. The high hopes of free trade have been replaced with humiliation and decline.
Free trade with unfree nations smells like a conspiracy: the rich get richer by paying peanuts for production, while blue-collar workers lose their jobs and are bought off with cheap goods and more welfare. The truth is not criminal, just criminally stupid.
In classic American broad-mindedness, when our system won the Cold War, we bent over backward to befriend our former enemies. Free trade would lead to a prosperous, freer China, the thinking went. We thought that lowering our guard would turn a foe into an ally. Instead, the American worker just got sucker-punched.
One of the best examples of the perils of this uneven trade is the dispute over rare earth elements. Rare earths—a group of 17 different elements—are plentiful, but difficult to mine and environmentally hazardous to process. In recent years, rare earths have become more important, as many are used in modern electronics and military and high-tech applications.
At present, about 80 percent of the world’s production of rare earths comes from China. That undoubtedly suits China just fine, and the western companies that have outsourced industrial production there don’t have a problem with it, either. After all, if your iPhone comes from China, why shouldn’t its components?
But China’s dominance of the field has other effects. While the United States once led the world in rare earth production, we now import the vast majority of these minerals from China. The loss in mining jobs is bad enough, but the extreme concentration in the field means that China essentially controls the world’s access to a vital industrial and military resource.
Free-market conservatives confronted with a situation like this one usually laud the efficiency gained by trade and competition. They are not completely wrong: it is more efficient to have third-world workers in an unfree country mining hazardous materials. Mining is a dirty, dangerous job: why not let someone in a country with terrible environmental laws and lax workplace safety rules do it?
If rare earths were only used for toys and video games, that might be a financially acceptable albeit morally dubious answer. The military applications, though, make this a much bigger problem. Once China achieved a near-monopoly on rare earths, their position was ripe for abuse.
And, wouldn’t you know it, they abused it. Between 2009 and 2012, China drastically reduced its export of rare earths and two other important metals, tungsten and molybdenum. In a free economy, that would encourage production in sources outside of China, where the artificial scarcity Beijing imposed would make it worthwhile to produce at higher prices.
In 2012, U.S.-based Molycorp, attracted to the higher prices that resulted from the Chinese government’s efforts to boost profits by restricting REE [i.e., rare earth elements] exports, made plans to ramp up domestic REE production, investing nearly $800 million in state-of-the-art mining operations in California. At the moment when the project was poised to succeed, China flooded the market with REEs just long enough to knock Molycorp out of the market. After its Chapter 11 bankruptcy reorganization, Beijing is allowing Molycorp to continue operations in China. But once again, the U.S. has no domestic REE production.
This anti-competitive behavior in a domestic company would earn an investigation by the Federal Trade Commission (FTC). In the international economy, the American government’s options were more limited. The Obama administration, joined by Japan and the European Union, filed a complaint against China in the Dispute Settlement Body of the World Trade Organization (WTO).
America won its case, but the Molycorp mine in California was still bankrupt. In 2017, the rare-earth mining assets were sold to a consortium of buyers that includes Shenghe Resources Holding Company, a Chinese firm with ties to the PRC’s government, according to mining executives quoted in IndustryWeek. The Chinese government broke the rules of the WTO and still came out on top.
The rare earths industry is one of the more egregious instances of a non-market economy manipulating the markets, but it is far from the only one. The problem began when the free nations of the world agreed to admit China into the WTO in the first place. The WTO grew out of the General Agreement on Tariffs and Trade, a post-World War II attempt to rationalize trade and reduce barriers to it. As far as it concerned trade between developed nations recognizing the rule of law, it was a great success.
China joined the WTO in 2001. The organization’s press release from that day is full of hopes for expansion of “its rules-based system” that, in retrospect, look naive. “As a result of the negotiations,” the press release reads, “China has agreed to undertake a series of important commitments to open and liberalize its regime in order to better integrate in the world economy and offer a more predictable environment for trade and foreign investment in accordance with WTO rules.”
The specific promises are even less believable 18 years later:
China will provide non-discriminatory treatment to all WTO Members…many of the restrictions that foreign companies have at present in China will be eliminated or considerably eased after a 3-year phase-out period. In other areas, like the protection of intellectual property rights, China will implement the TRIPS (Trade-related Aspects of Intellectual Property Rights) Agreement in full from the date of accession.
Many of these changes have been made in Chinese law, but in a communist country, the law matters less than the will of those enforcing it. Intellectual property rights of foreign nations are routinely ignored, and counterfeits from China are sold around the world with the tacit acceptance of their government.
China also ignores environmental and occupational safety laws while banning independent trade unions from organizing. In a country that respects the rule of law, these things have been judged to make the marketplace more humane. They also make it more expensive to do business, but most people accept that tradeoff. China routinely ignores what laws it does have and squashes any independent source of power like trade unions or industry groups that might challenge the state to change.
China’s accession to the WTO came with the expectation that China would be a “market economy” before very long. These actions show that it has not, and has no intention of ever doing so. Even so, we continue to trade with China on unfavorable terms, a reflection of the consensus among bipartisan elites that free trade benefits everyone, with little or no tradeoffs. The rare earths dispute shows how untrue that is.
Conservatives have recently been transfixed by a dispute between Sohrab Ahmari and David French over whether the liberal democratic system will allow social conservatism to co-exist with the values of the secular left when the secular left increasingly refuses to play by liberal democracy’s rules. A similar argument needs to be had about free market competition with non-market economies that are just as lawless in their pursuit of victory. Conservatives have long fought for greater market efficiencies, but we must now ask ourselves if that goal is worth the price.
Free traders have been very pleased to divide the debate between two sides: those who want to trade with the world, and those who want to keep out all foreign goods. It is a false dichotomy between absolutes. In between, there are many who would be happy with trade, provided it were among free nations. In a system where all involved can be trusted to obey the rules, and where violations can be punished with more than a slap on the wrist, trade can improve all nations’ prosperity.
But a game where only one side plays by the rules is—and there is no other way to say this—rigged. Competition among equal parties is fair and free. If a factory in one state loses out to another, so long as no government’s thumb is on the scale, the result is just. Everyone follows the rules. May the best company, and the best workers, win.
Compare that to competition with an unfree country’s manufacturers. Is a factory in China polluting in violation of their laws? We have no way of knowing. Even if we did, there is little we can do about it when their court system serves only the will of the Chinese Communist Party.
Are their factories working cheaper because they are unsafe? Likely, but again there is no justice system that will remedy it. There are no independent unions to fight for work rules that protect people’s health, nor for increased wages like those in the developed world. China pretends to be a worker’s paradise, but in reality, it is a billion-member factory town.
This month in The Atlantic, Reihan Salam argued normalizing trade with China was a mistake from the beginning. Salam dates the problem to a year before China’s WTO accession, when Congress extended “permanent normal trade relations” (PNTR) to China, rather than annually renewing most-favored-nation status. The results were stark:
The annual battles over whether or not China merited MFN status naturally brought human rights issues to the fore, and gave voice to champions of the Tibetans and other marginalized, and sometimes brutalized, minorities. The deepening of economic ties that followed PNTR had the opposite effect—rather than draw attention to all the reasons the U.S. might want to be wary of further entanglement with China, it greatly enriched those who profited from that entanglement.
We have now locked ourselves in an embrace with a corrupt regime, and it has not been to our benefit economically or morally. The rare earths trade has been one of the worst examples of how Red China has used our openness against us, but it is far from the only one. Now, bound to a hostile nation that grows in power every day, we have outsourced so much of our economic machinery to them that business leaders are heard to say that reshoring manufacturing is “impossible.”
It is not impossible, but it requires hard work. Congress—yes, Congress—must reassess the ease with which unfree nations are granted access to American markets. The entire international trade structure of the WTO has become an unequal treaty, with the United States and the rest of the developed world on the losing end.
China is familiar with the concept. Its trade with the Western world was once starkly unfair in the other direction. More powerful nations, including the United States, forced China to sign unequal treaties beginning in the 1840s. What came next was a “century of humiliation,” followed by the isolation caused by the communists’ victory in their revolution in 1949.
Our politicians may be ignorant of history, but China’s are not. American surrender on trade could cause our own century of humiliation. To avoid it, our leaders must, at last, ask the question workers across the country have asked for 20 years: has unrestricted, one-sided, free trade with China really benefited the average American community? Has ceding control of strategic resources to the enemy made us safer as a nation? After two decades of humiliation, the answer is clear.
International trade is a critical growth engine for the nation’s economic strength and prosperity. Today, we’re at several crossroads with many of our largest trading partners to ensure the U.S. is not unfairly disadvantaged in the global marketplace. As the Administration confronts these issues — including at a highly anticipated meeting between President Trump and China’s President Xi at the G-20 Summit this weekend – it’s vital for Congress to avoid shortsighted new policies that would undercut the very kinds of market access the U.S. is seeking to secure in these negotiations.
Unfortunately, that’s exactly what a proposal included in a bill to reauthorize the U.S. Export-Import Bank (Ex-Im) would do. Passing limits on the Ex-Im Bank that would limit American exports to China is what President Xi is lobbying for and exactly what Americans have been fighting against. Why Members of Congress would side with Chinese interests is hard to explain!
Ex-Im Bank, which provides financing and insurance to U.S. manufacturers and their foreign buyers that are paid for at market rates, is a critical tool that levels the playing field for American businesses while making a profit for the U.S. taxpayer. Other nations often give direct subsidies and government provided financing. We don’t do that. But with the Ex-Im Bank we try to give our businesses that export goods and services the ability to offer reasonable financing to their buyers if there are not other options.
While the Bank’s periodic authorization has historically been a bipartisan matter, it’s faced recent contention in Congress from conservatives who argue the federal government should not be involved in U.S. export sales. However, as I have argued before, in a world where our competitors in China, Russia, Brazil, France and most of Europe and South Africa continue to utilize their own versions of Ex-Im Bank and provide direct subsidies to reap the economic benefits of increased exports — for Americans to hamper our own Ex-Im Bank, only hurts U.S. companies and benefits of our competitors.
Unilateral disarmament won’t make the world safer from war. Likewise, unilateral trade disarmament won’t make the US more competitive or prosperous. In fact, all it will do is surrender business opportunities and jobs to our foreign competitors.
Unfortunately, a new provision tucked into a reauthorization bill that the House Financial Services Committee is scheduled to consider this week would restrict Ex-Im financing for transactions involving any Chinese state-owned entity with more than 25 percent Chinese ownership. This may sound tough against China, but it actually precisely aligned with China’s trade policies which exclude America from their markets. Simply stated, this provision would not only cut off the ability of American companies to export to China, but also to other countries and buyers where the Chinese are also engaged in the transactions.
America’s workers do not favor this proposed policy because it means exporting their jobs to our competitors. I can also guarantee you that China’s totalitarian government is hoping this proposals passes. They would love for us to take ourselves out of international competition. And China won’t be the only nation rooting for this misguided policy. Every competitor we have in the international marketplace will benefit from our unilateral economic disarmament.
Not only is this provision completely counterproductive to the President’s goal of reducing the U.S. trade deficit with China, it undermines the national economic benefits that come from growing U.S. exports all around the globe. Worse yet, this provision would single out the United States as the only country in the world imposing huge limits on doing business with state-owned and state-controlled enterprises through export credit agencies. This does nothing to advance American security or jobs. But it gives foreign competitors a huge upper hand over American companies — with the American economy and the American worker paying the price.
The undertaking of a long-term reauthorization bill is an admirable endeavor, especially in a way that attempts to avoid the brinksmanship of past reauthorizations that have threatened the Bank’s very existence and undercut certainty for American workers trying to compete overseas. For these reasons, it’s hard to imagine any member of Congress could stand behind a provision that would forfeit U.S. exports — and the manufacturing jobs that come with those exports — to our competitors around the world.
This is exactly the type of economic unilateral disarmament that American workers hope to avoid in this year’s timely reauthorization bill, and is the opposite of what the President is fighting for with our major trading partners around the world.
By Fox News•
Americans hate to wait. We scout out the shortest grocery line. We choose the fastest delivery option. We chafe at slow-moving internet speeds. And we don’t like to wait for health care when we or our loved ones urgently need it. But if America gets saddled with a radical new health care system called “Medicare-for-All,” a lot of waiting for health care will be in your family’s future.
When Americans got tired of waiting around in clogged emergency rooms for last-minute care, the marketplace responded. Urgent care facilities started sprouting up, offering care for non-life-threatening illnesses and injuries. Hospitals, sensing a threat to their business, now buy billboards advertising current wait times in their ERs.
But in countries where the marketplace has been supplanted by government-run health care systems like Medicare-for-All, people have no choice but to wait for desperately needed health care on the government’s timetable. Not for minutes or hours, but weeks and months.
According to a comprehensive study by the nonpartisan Fraser Institute, patients in Canada wait an average of nine weeks to see a specialist, and an additional 11 weeks on top of that to receive treatment. Even when every day counts, such as treatment of cancer, patients have to wait a month before getting radiation therapy.
Advanced-stage heart disease can trigger a heart attack or stroke at any time, but in Canada, you’ll wait about two and a half months for coronary bypass surgery unless you are already in an emergency situation. If your life is not at imminent risk, you will wait even longer for care. If you need to be treated by an OB-GYN in Canada, expect to wait 21 weeks. If you’re suffering from acute knee or back pain, you’d better stock up on ibuprofen: you could wait six months to three-quarters of a year for orthopedic surgery.
In Britain, where the government’s role in health care is even more pervasive, wait times are much worse. A 2019 study by the Royal College of Ophthalmologists found that tens of thousands of elderly patients are left struggling with near blindness due to a government cost-cutting drive that relies on them dying before they qualify for cataract surgery. According to another study by the Royal College of Surgeons, nearly a quarter of a million Britons were waiting more than six months—some even longer than nine months—to be scheduled for surgery and other medically necessary treatment.
Why do government-run health care systems—including so-called single-payer schemes like Medicare-for-All—result in long waits for needed care? Because unlike the private sector, government has zero incentive to customize care to individual needs. It achieves efficiencies primarily by doling out one-size-fits-all health care to everyone, regardless of unique circumstances.
Government is also poor at adjusting to medical innovations, new technologies and changes in epidemiology. For example, Canada has struggled to handle the rise in asthma incidence rates. The Canadian Lung Association found that the average wait time for asthma testing is four weeks, with one in four asthma sufferers waiting longer than three months to be tested. In the U.S., private insurance usually covers most of the cost of expensive MRIs to evaluate medical conditions. But in Canada, where MRIs are “free,” wait times have steadily increased, reaching 364 days in British Columbia. Not surprisingly, some Canadians have taken to paying out-of-pocket for an MRI.
Medicare-for-All and its various derivatives all have one ultimate goal: to push the private sector out of health care and replace it with more government. This means that government will be deciding what health care Americans can get and when—not doctors, not hospitals, and certainly not patients. When politicians absurdly promise to make health care “free,” what they actually mean is that government will pick up the tab and bill us later, while deciding what it will pay for and how much to pay. Those decisions obviously and inevitably will impact choice, quality and availability.
This week, on June 26-27, twenty Democratic presidential contenders will face off against one another on the debate stage. Nearly all of them publicly support Medicare-for-All or some variation. Each one should be asked: why should Americans be forced to wait longer (and ultimately pay more) for lower-quality, government-controlled health care?
By Fox News•
Peer pressure is a powerful tool employed to influence and control the behavior of others. It used to be the case that it was truly only effective amongst children, those not yet strong enough in character and resolve to resist the condemnation of others. In recent times, however, in our culture of political correctness, adults and corporations can regularly be seen caving to the demands of their peers for conformance.
Celebrity and activist Kim Kardashian West faced just such peer pressure last week when she announced her plans to visit the White House and celebrate the “First Step Act” with its key designers President Trump, his daughter Ivanka, and her husband Jared Kushner. Instead of conforming to prevailing Hollywood winds and avoiding the president, Kim, who has made criminal justice equality and prison reform her flag-in-soil issues, made the trip and made strong statements in support of the new program.
It was roughly a year ago that TMZ broke the story that Jay-Z had pressured fellow rapper Meek Mill, an outspoken supporter of criminal justice reform, to cancel a planned visit to Washington to participate in a conference the president had called to discuss the issue. Mill was given a chance to turn words into action and get involved in actually solving a problem. Peer pressure caused him to back away.
In praising the president’s freshly enacted legislation which gives an opportunity to people who have served their time for their criminal infraction, Kardashian committed Hollywood heresy by saying, “It is really such an honor to be here today,” and by calling the president’s new program “magic.”
Kardashian also went further when she likely infuriated late-night show hosts by using social media to praise Ivanka Trump:
“Thank you @IvankaTrump for helping me to start this amazing journey of fighting for people who truly deserve a second chance!”
Ivanka and Jared have been the subject of so much Hollywood hatred that you know Kim risked some serious Los Angeles heat by making such a positive public statement.
Courage is considered one of the four Cardinal Virtues of Western Civilization. It, along with wisdom, moderation, and justice, was identified going back to Plato as being essential to the ideal person. Aristotle said that courage was the mean between rashness and cowardice and pointed out that a person cannot live a good life if they went around being afraid all the time.
Politicians, not just celebrities, have been bowing to the fear created by peer pressure. During President Trump’s exploration of the prison reform issue, many Democratic politicians who harped on the need for such reform for years refused to participate because of the president’s involvement. They feared reprisal for standing alongside President Trump.
Where is the bellicose House Speaker Nancy Pelosi in all of this? Why isn’t the lady who has spoken out so often of injustice in the federal prison system not standing right next to the president talking about what is likely going to be the only piece of meaningful legislation passed prior to the 2020 election? She’s hiding. She’s afraid.
There can be no question that Pelosi supports the measure, indeed, she issued a terse, but positive statement back in December when the House passed the bill. But, stand next to the president and work together on Second Step legislation? Not happening.
The Speaker lacks courage. Like so many other politicians, celebrities, and everyday Americans she finds it easier to pander than she does to make a difficult stand, face criticism, and do what is right. She is a follower cast in the role of a leader.
This lack of courage is not some sort of liberal disease to which conservatives find themselves immune. In going to the White House and standing next to the president, Kim showed more courage than many Republicans have over the past three years. From Paul Ryan to Justin Amash, too many Republicans have been unwilling publicly to show support for the president, even though in the privacy of a smoke-filled room while gripping a cognac they whisper that they agree with what he is doing.
Courage hasn’t completely disappeared from the American political landscape. Activist Van Jones was a strong public advocate of the First Step Act despite his political and general lack of agreement with the president. It takes courage and strength to enter discussion and forge agreements with people whom you might otherwise find disagreeable. Cicero knew this 2,000 years ago. Nothing has changed.
Kim Kardashian West shows courage; Nancy Pelosi does not. Adam Levine shows courage playing at the Super Bowl; numerous other performers do not. Until American adult influencers and political leaders learn how to withstand peer pressure, our liberty is at stake. Why can’t adults resist the very thing they all teach their children to resist?
Donald Trump is many things. But one thing he is not is a defender of the 2009-2016 status quo and accepted progressive convention. Since 2017, everything has been in flux. Lots of past conventional assumptions of the Obama-Clinton-Romney-Bush generation were as unquestioned as they were suspect. No longer.
Everyone knew the Iran deal was a way for the mullahs to buy time and hoard their oil profits, to purchase or steal nuclear technology, to feign moderation, and to trade some hostages for millions in terrorist-seeding cash, and then in a few years spring an announcement that it had the bomb.
No one wished to say that. Trump did. He canceled the flawed deal without a second thought.
Iran is furious, but in a far weaker—and eroding—strategic position with no serious means of escaping devastating sanctions, general impoverishment, and social unrest. So a desperate Tehran knows that it must make some show of defiance. Yet it accepts that if it were to launch a missile at a U.S. ship, hijack an American boat, or shoot down an American plane, the ensuing tit-for-tat retaliation might target the point of Iranian origin (the port that launched the ship, the airbase from which the plane took off, the silo from which the missile was launched) rather than the mere point of contact—and signal a serial stand-off 10-1 disproportionate response to every Iranian attack without ever causing a Persian Gulf war.
Everyone realized the Paris Climate Accord was a way for elites to virtue signal their green bona fides while making no adjustments in their global managerial lifestyles—at best. At worst, it was a shake-down both to transfer assets from the industrialized West to the “developing world” and to dull Western competitiveness with ascending rivals like India and China. Not now. Trump withdrew from the agreement, met or exceeded the carbon emissions reductions of the deal anyway, and has never looked back at the flawed convention. The remaining signatories have little response to the U.S. departure, and none at all to de facto American compliance to their own targeted goals.
Rich NATO allies either could not or would not pay their promised defense commitments to the alliance. To embarrass them into doing so was seen as heretical. No more.
Trump jawboned and ranted about the asymmetries. And more nations are increasing rather than decreasing their defense budgets. The private consensus is that the NATO allies knew all along that they were exactly what Barack Obama once called “free riders” and justified that subsidization by ankle-biting the foreign policies of the United States—as if an uncouth America was lucky to underwrite such principled members. Again, no more fantasies.
China was fated to rule the world. Period. Whining about its systematic commercial cheating was supposedly merely delaying the inevitable or would have bad repercussions later on. Progressives knew the Communists put tens of thousands of people in camps, rounded up Muslims, and destroyed civil liberties, and yet in “woke” fashion tip-toed around criticizing the Other. Trump then destroyed the mirage of China as a Westernizing aspirant to the family of nations. In a protracted tariff struggle, there are lots of countries in Asia that could produce cheap goods as readily as China, but far fewer countries like the United States that have money to be siphoned off in mercantilist trade deals, or the technology to steal, or the preferred homes and universities in which to invest.
The Palestinians were canonized as permanent refugees. The U.S. embassy could never safely move to the Israeli capital in Jerusalem. The Golan Heights were Syrian. Only a two-state solution requiring Israel to give back all the strategic border land it inherited when its defeated enemies sought to destroy it in five prior losing wars would bring peace. Not now.
The Palestinians for the last 50 years were always about as much refugees as the East Prussian Germans or the Egyptian Jews and Greeks that were cleansed from their ancestral homelands in the Middle East in the same period of turbulence as the birth of Israel. “Occupied” land more likely conjures up Tibet and Cyprus not the West Bank, and persecuted Muslims are not found in Israel, but in China.
An aging population, the veritable end to U.S. manufacturing and heavy industry, and an opioid epidemic meant that America needed to get used to stagnant 1 percent growth, a declining standard of living, a permanent large pool of the unemployed, an annual increasing labor non-participation rate, and a lasting rust belt of deplorables, irredeemables, clingers and “crazies” who needed to be analyzed by Barack Obama and Hillary Clinton. At best, a middle-aged deplorable was supposed to learn to code or relocate to the Texas fracking fields. Perhaps not now.
In the last 30 months, the question of the Rust Belt has been reframed to why, with a great workforce, cheap energy, good administrative talent, and a business-friendly administration, cannot the United States make more of what it needs? Why, if trade deficits are irrelevant, do Germany, China, Japan, and Mexico find them so unpleasant? If unfettered trade is so essential, why do so many of our enemies and friends insist that we almost alone trade “fairly,” while they trade freely and unfairly? Why do not Germany and China argue that their vast global account surpluses are largely irrelevant?
Representative Alexandria Ocasio-Cortez (D-N.Y.) assured us that the world would be suffocating under greenhouse gases within 12 years. Doom-and-gloom prophecies of “peak” oil warned us that our oil reserves would dry up by the early 21st century. Former Vice President Al Gore warned us that our port cities would soon be underwater. Economists claimed Saudi Arabia or Russia would one day control the world by opening and closing their oil spigots. Not now.
Three million more barrels of American oil are being produced per day just since Trump took office. New pipelines will ensure that the United States is not just the world’s greatest producer of natural gas but perhaps its largest exporter as well.
Trump blew up those prognostications and replaced them with an optimistic agenda that the working- and middle classes deserve affordable energy, that the United States could produce fossil fuels more cleanly, wisely, and efficiently than the Middle East, and that ensuring increased energy could revive places in the United States that were supposedly fossilized and irrelevant. Normal is utilizing to the fullest extent a resource that can discourage military adventurism in the Middle East, provide jobs to the unemployed, and reduce the cost of living for the middle class; abnormal is listening to the progressive elite for whom spiking gasoline and power bills were a very minor nuisance.
Open borders were our unspoken future. The best of the Chamber of Commerce Republicans felt that millions of illegal aliens might eventually break faith with the progressive party of entitlements; the worst of the open borders lot argued that cheap labor was more important than sovereignty and certainly more in their interests than any worry over the poor working classes of their own country. And so Republicans for the last 40 years joined progressives in ensuring that illegal immigration was mostly not measured, meritocratic, diverse, or lawful, but instead a means to serve a number of political agendas.
Most Americans demurred, but kept silent given the barrage of “racist,” “xenophobe,” and “nativist” cries that met any measured objection. Not so much now. Few any longer claim that the southern border is not being overrun, much less that allowing a non-diverse million illegal aliens in six months to flood into the United States without audit is proof that “diversity is our strength.”
The Republican Party’s prior role was to slow down the inevitable trajectory to European socialism, the end of American exceptionalism, and homogenized globalized culture. Losing nobly in national elections was one way of keeping one’s dignity, weepy wounded-fawn style, while the progressive historical arc kept bending to our collective future. Rolling one’s eyes on Sunday talk shows as a progressive outlined the next unhinged agenda was proof of tough resistance.
Like it or not, now lines are drawn. Trump so unhinged the Left that it finally tore off its occasional veneer of moderation, and showed us what progressives had in store for America.
On one side in 2020 is socialism, “Medicare for All,” wealth taxes, top income tax rates of 70 or 80 or 90 percent, a desire for a Supreme Court of full of “wise Latinas” like Sonia Sotomayor, insidious curtailment of the First and Second Amendments, open borders, blanket amnesties, reparations, judges as progressive legislators, permissible infanticide, abolition of student debt, elimination of the Immigration and Customs Enforcement bureau and the Electoral College, voting rights for 16-year-olds and felons, and free college tuition.
On the other side is free-market capitalism but within a framework of fair rather than unfettered international trade, a smaller administrative state, less taxation and regulation, constitutionalist judges, more gas and oil, record low unemployment, 3-4 percent economic growth, and pressure on colleges to honor the Bill of Rights.
The New, New Normal
The choices are at least starker now. The strategy is not, as in 2008 and 2012, to offer a moderate slow-down of progressivism, but rather a complete repudiation of it.
One way is to see this as a collision between Trump, the proverbial bull, and the administrative state as a targeted precious china shop—with all the inevitable nihilistic mix-up of horns, hooves, and flying porcelain shards. But quite another is to conclude that what we recently used to think was abjectly abnormal twenty years ago had become not just “normal,” but so orthodoxly normal that even suggesting it was not was judged to be heretical and deserving of censure and worse.
The current normal correctives were denounced as abnormal—as if living in a sovereign state with secure borders, assuming that the law was enforced equally among all Americans, demanding that citizenship was something more than mere residence, and remembering that successful Americans, not their government, built their own businesses and lives is now somehow aberrant or perverse.
Trump’s political problem, then, may be that the accelerating aberration of 2009-2016 was of such magnitude that normalcy is now seen as sacrilege.
Weaponizing the IRS, unleashing the FBI to spy on political enemies and to plot the removal of an elected president, politicizing the CIA to help to warp U.S. politics, allying the Justice Department with the Democratic National Committee, and reducing FISA courts to rubber stamps for pursuing administration enemies became the new normal. Calling all that a near coup was abnormal.
Let us hope that most Americans still prefer the abnormal remedy to the normal pathology.
His flip-flops suggest that he remains troublingly clueless about the biggest geo-political peer rival and potential challenger to the United States.
Under old-school journalism, reporters would be camping in front of Joe Biden’s campaign offices asking questions on his foreign policy: whether he still thinks Qatari-funded jihadis wanted to topple Syria’s Bashar Assad, if Libya intervention under President Obama was a mistake, and the reason for the flop of Obama’s Asia Pivot. In the last few weeks, Joe Biden has shown he would say anything to be president, including first promising to cure cancer, then flip-flopping on abortion, and finally flipping on China.
American domestic politics are for Americans to decide when the election comes, but at a time Beijing is returning to Tiananmen form, no bigger issue needs further scrutiny than Biden’s China stance.
Biden recently said in Iowa that China is a “serious challenge” and threat, adding, “We are in a competition with China. We need to get tough with China. They are a serious challenge to us and in some areas a real threat.”
Funny, because in May, he mocked the China threat, saying, “China is going to eat our lunch? Come on, man…They can’t even figure out how to deal with the fact that they have this great division between the China Sea and the mountains in the east, I mean in the west.”
Biden then added that he is worried about President Trump’s tariff wars against China, which is arguably “exacerbating the challenge,” and said “if we do what we need to do here at home…we can out-compete anyone.” According to reports, Biden then said: “You bet I’m worried about China…if we keep following Trump’s path.”
While pondering the alternative way, Biden said he would force China to go green: “Biden will rally a united front of nations to hold China accountable to high environmental standards in its Belt and Road Initiative infrastructure projects so that China can’t outsource pollution to other countries.” Yes, good luck with that. It might sound plausible in a school kid’s Earth Day project, but not in the policy plans of the prospective leader of the free world.
This, is, of course, pure madness. There is no bigger potential challenge for the West, and especially for the United States, than the rise of a near peer-rival great power like China. At this very moment, Chinese government lackeys in Hong Kong are cracking down on the largest protests of 2019, where more than a million Hong Kongers are marching to stop China’s de facto takeover of Hong Kong’s justice system, which would allow any dissident to be packed off to trial in mainland China.
But that is not the biggest issue. The problem is China is a challenge unprecedented to U.S. policymakers. Chinese peacetime gross domestic product is overtaking America’s, and China is set to soon, as a percentage of relative power, eclipse all previous great power challenges that the United States has ever faced, including Imperial Spain, Imperial Germany, Nazi Germany, Imperial Japan, and even the Soviet Union.
To put it simply, the conflict of interest between the rising China and an established hegemon in the United States is inevitable. In international relations, it is known as “the Thucydides Trap“.
Consider the world of international politics like a snooker table. Unlike the domestic politics of a nation state, the international system is anarchic in nature. That is because, in domestic politics there is an established government that can decide and, if needed, enforce. The lack of hierarchy in international politics makes it anarchical, in Kenneth Waltz’s terminology, because there is no global governance, and any attempt to form a global empire would invite backlash from rival powers, while any attempt at global governance would result in a global war.
Naturally, international politics is determined by nation-states, and more importantly great powers, which are the single most important actors of world politics. And great powers rise or fall due to a variety of factors: stupid policies, ideological and military overstretch, spending more than one can afford, foolish wars and global policing, failure or decline in technological competition, juvenile or effeminate elites, and the biggest variable of all: time.
In that light, the Thucydides Trap comes in.
Throughout history, there has been one completely consistent pattern: Growing and rising powers always challenge established powers. From Athens and Sparta, to Rome and Carthage, to Napoleon, to the two World Wars, and the Cold War, this pattern remained the same. China and the United States are just the new avatars of this great game, as the actors change, but the game remains the same.
In this context, conflict does not always mean war. It could be a cold war, trade war, proxy wars, anything, but conflict between a rising and established power is inevitable. As J.J. Mearsheimer states in his book, China will try and push away the United States from Asia, just as the United States once pushed away European great powers from the Western Hemisphere.
Meanwhile, Biden is flip-flopping on this biggest challenge confronting the United States, tweeting friendship bands about how much he misses Barack Obama, and claiming there was not a hint of scandal during his eight years as vice president. For all his problems, President Trump has been forthright about the China challenge, much more than any current Democrat, or even a majority of the Republican leaders. In the future, this might be considered his legacy.
While most focus on tariffs and economics, China—with its AI research, space research, naval build-up, data and IP theft, and unfair trade practices—is a much bigger challenge than to suffer a dollar increase in the price of a beer can. There are questions already on how one should contain China, or what in itself is an intelligent containment strategy.
Some are pointing out their doubts about whether the present U.S. leadership and population is even martial enough to withstand the long-coming generational conflict. But whatever the case, to lightly rephrase an old and used proverb, you cannot choose whether to be interested in a coming Cold War, as the Cold War is already interested in you.
Biden’s callousness about identifying that and then his face-saving flip-flop is, therefore, the most troubling aspect of his candidacy. The less said about his Democratic colleagues, the better.