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Archive for the ‘ecomomics’ Category

A Socialist Revolution?

Sunday, September 6th, 2020

With the election just about 64 days in the future, this is an important article to consider

 ConservativeHQ

Richard Viguerie

Democrats Embrace Riots And Socialist Revolution

George Rasley, Editor

Despite the best efforts of the anti-Trump media to portray the ongoing violence as “peaceful protest,” most Americans are appalled by the violence going on in the streets of Democrat-controlled cities, such as Portland, Seattle, Chicago and New York.

And under aircover from the Trump hating media, Democrat politicians have enthusiastically embraced the violence.

“There’s violence across the whole country. Do you disavow the violence from Antifa that’s happening in Portland right now?” an independent journalist asked Democrat House Judiciary Committee Jerrold Nadler. Nadler responded by saying the riots “are a myth that’s being spread only in Washington.”

After long suffering Attorney General Bill Barr appeared before the Democrat Nadler’s House Judiciary Committee for a Mao-like ritual humiliation session, Far Left California Democrat Rep. Ted Lieu tweeted:

I wonder if @TheJusticeDept concluded yesterday after the grilling of Bill Barr that many of the actions of the unwelcomed, unmarked, poorly trained federal forces in Portland were excessive and illegal.

Los Angeles Mayor Eric Garcetti – who responded forcefully when BLM tried to riot in ultraliberal Hollywood – tweeted about Portland:

Demonstrators for racial justice represent the best of our democratic ideals. The President’s unilateral deployment of federal forces betrays them — and does nothing to keep us safe.

L.A. stands with our friends in Portland.

And to explain why Portland has become the years-long epicenter of street violence, look no further than Portland City Commissioner Jo Ann Hardesty who addressed one of the pre-riot pep sessions, saying “We are setting the standard for the rest of the country…We will not fail!”

As we explained in our series “It’s Not A Protest, It’s Not A Riot, It’s A Revolution” the street violence occurring in the wake of George Floyd’s death is part of a larger Leftist plan to undermine and eventually dissolve our constitutional republic. Making the United States “ungovernable” by creating chaos during the 2020 presidential election cycle is a key part of their strategy.

We are not the only ones to conclude the street violence was pre-programed into the 2020 election cycle. Bill Gertz, reporting for the Washington Times wrote that activists of the far-left Antifa movement began planning to foment a nationwide anti-government insurgency as early as November as the U.S. presidential campaign season kicked off in earnest, according to a law enforcement official with access to intelligence behind the shadowy group.

Mr. Gertz reported, that while law enforcement officials would not speak on the record about Antifa’s plans as the election season heats up, longtime analysts of the group say such a move would be entirely in character.

“Antifa’s actions represent a hard break with the long tradition of a peaceful political process in the United States,” said former National Security Council staff member Rich Higgins. “Their Marxist ideology seeks not only to influence elections in the short term but to destroy the use of elections as the determining factor in political legitimacy.”

Added Joe Myers, a former Defense Intelligence Agency official and counterinsurgency expert, “President Trump’s election and revitalization of America are a threat to Antifa’s nihilist goals. They are fomenting this violence to create havoc, despair and to target the Trump campaign for defeat in 2020.” Mr. Myers argued that Antifa clearly meets the criteria for being labeled a terrorist and insurgent movement. “It is employing organized violence for political ends: destruction of the constitutional order,” he said. (You can read the entire article through this link to Unconstrained Analytics.)

Despite the Democrats’ best efforts to silence him, during Nadler’s show trial – we mean hearing – Attorney General Barr managed to make one key point that every American should keep in mind going into the 2020 election, “What makes me concerned for the country is this is the first time in my memory the leaders of one of our great two political parties, the Democratic Party, are not coming out and condemning mob violence and the attack on federal courts.” Attorney General Barr left hanging the obvious reason why Democrats have failed to condemn the violence in Portland and other cities – it’s their allies and voters who are trying to burn down the courthouse, and the American constitutional republic with it.

 

US-China Confrontation Will Define Global Order

Friday, May 8th, 2020

China is the source of COVID-19 that is presently destroying our world. China is America’s most serious enemy both economically and militarily. Somehow, after the VIRUS are gone, we will need to deal with the Chinese. Victor Davis Hanson lays out some interesting ideas.

Victor Davis Hanson: US-China Confrontation Will Define Global Order

Monday, May 20, 2019

Hoover Institution, Stanford University

The United States is at a crossroads with an increasingly aggressive China, which could define America’s security and the international order for decades to come, Hoover scholar Victor Davis Hanson says.

Hanson, the Martin and Illie Anderson Senior Fellow at the Hoover Institution, studies military history and the classics. Last year, Hanson won the Edmund Burke Award, which honors people who have made major contributions to the defense of Western civilization. He is the author of the 2019 book The Case for Trump, and 2017’s The Second World Wars. He was recently interviewed on US policy toward China:

What is the Trump strategy behind these tariffs, short term and long term?

Hanson: Short term, Trump feels that he can take the hit of reciprocal Chinese tariffs, given that quietly his opposition, the Democrats, have been raging about Chinese cheating for decades, and, second, that the US economy is so huge and diverse that China simply cannot cause serious damage.

Remember the United States is a country one-third the size of China that produces over double China’s annual gross domestic product and fields a military far more formidable with far more allies—while enjoying a far more influential global culture and a far more sophisticated system of higher education and technological innovation. China’s Asian neighbors and our own European Union allies quietly are hoping Trump can check and roll back Chinese mercantilism, while publicly and pro forma chiding or even condemning Trump’s brinksmanship and his resort to fossilized strategies such as tariffs and loud jawboning.

Long term, Trump believes that if present trends are not reversed, China could in theory catch and surpass the US. And as an authoritarian, anti-democratic superpower, China’s global dominance would not be analogous to the American-led postwar order, but would be one in which China follows one set of rules and imposes a quite different set on everyone else—perhaps one day similar to the system imposed on its own people within China.

Is China a more formidable rival now than Russia was during the Cold War, and if so, why?

Hanson: Yes. Its population is five times greater than that of even the old Soviet Empire’s. Its economy is well over twenty times larger, and over a million Chinese students and business people are in European and American universities and colleges and posted abroad with Chinese companies. So, unlike the old Soviet Union, China is integrated within the West, culturally, economically, and politically. The Soviets—like Maoist China—never leased Western ports, or battled Hollywood over   unflattering pictures, or posed as credible defenders of Asian values or owned large shares of Western companies or piled up huge trade surpluses with Western nations. Soviet propaganda and espionage were crude compared to current Chinese efforts.

What is China doing in terms of cheating on trade and intellectual property as the Trump administration says, and how can the United States stop this behavior? 

Hanson: China does not honor patents and copyright laws. It still exports knock-off and counterfeit products. It steals research and development investment through a vast array of espionage rings. It manipulates its currency.

Its government companies export goods at below the cost of production to grab market share. It requires foreign companies to hand over technology as a price of doing business in China. And, most importantly, it assumes, even demands, that Western nations do not emulate its own international roguery—or else.

The result is a strange paradox in which the United States and Europe assume that China is an international commercial outlaw, but the remedy is deemed worse than the disease. So, many Western firms make enormous profits in China through joint projects, and so many academic institutions depend on China students, and so many financial institutions are invested in China, that to question its mercantilism is to be derided as a quaint nationalist, or a dangerous protectionist, or a veritable racist. China is an astute student of the Western science of victimology and always poses as a  target of Western vindictiveness, racism, or puerile jealousy.

Remedies? First, we must give up the 40-year fantasies that the richer China gets, the more Western and liberal it will become; or that the more China becomes familiar with the West, the greater its admiration and respect for Western values; or that China has so many internal problems that it cannot possibly pose a threat to the West; or that Western magnanimity in foreign policy and trade relations will be appreciated and returned in kind. Instead, the better paradigm is imperial Japan between 1930 and 1941, when Tokyo absorbed Asian allies; had sent a quarter-million students and attachés to the West to learn or steal technology and doctrine; rapidly Westernized; declared Western colonial powers and the US as tired and spent, and without any legitimate business in the Pacific; and considered its own authoritarianism a far better partner to free market capitalism than the supposedly messy and clumsy democracies of the West.

How is China able now to leverage its arguably less powerful military to confront the United States globally?

Hanson: Global naval dominance is not in the Chinese near future. Its naval strategy is more reminiscent of the German Kriegsmarine of 1939 to 1941, which sought to deny the vastly superior Royal Navy access at strategic points without matching its global reach. China is carving out areas where shore batteries and coastal fleets can send showers of missiles to take out a multibillion-dollar American carrier. And its leasing of 50 and more strategically located ports might serve in times of global tensions as transit foci for armed merchant ships. But for now they do not have the capabilities of the American carrier or submarine fleet or expeditionary Marine forces—so the point is to deny America reach, not to emulate its extent.

Why are the current administration policies different than those in the past in confronting China on many different fronts and levels?

Hanson: Trump believes that economic power is the key to global influence and clout. Without it, a military wilts on the vine. A country with GDP growth at a 3 percent annual clip, energy independence, full employment, and increasing labor productivity and trade symmetry can renegotiate Chinese mercantilism and reassure China’s Asian neighbors that they need not appease its aggression. Past administrations might have agreed that China violated copyright and patent laws, dumped subsidized goods, appropriated technology, and ran a massive global espionage apparatus, but they considered remedies either impossible or dangerous and so essentially negotiated a slowing of the supposed predestined Chinese global hegemony. Trump was willing to confront China to achieve fair rather than free trade and take the ensuing heat that he was some sort of tariff-slapping Neanderthal.

Any other thoughts?

Hanson: I think Secretary of State Mike Pompeo’s State Department is the first to openly question the idea that China will eventually rule the world and has offered a strategic plan to check its trade and political agendas. In this regard, a number of Hoover Institution scholars, currently working with Hoover fellow Kiron Skinner, director of policy planning at the US Department of State, are offering alternatives to orthodox American approaches of the past, with the caveat that the most dangerous era in interstate relations is the transition from de facto appeasement to symmetry—given that the abnormalities of the  past had become considered “normal,” and the quite normal efforts of a nation to recalibrate to a balanced relationship are damned as dangerously “abnormal.”

Victor Davis Hanson is also the chairman of the Role of Military History in Contemporary Conflict Working Group at the Hoover Institution. 
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The “New Normal”: Thoughts about the Shape of Things to Come in the Post-Pandemic World

Sunday, May 3rd, 2020

Here is a very interesting and insightful essay on what the future now holds after COVID – 19. It is disturbing, but certainly quite possible.

 

The “New Normal”: Thoughts about the Shape of Things to Come in the Post-Pandemic World

by Nicholas Eberstadt

April 18, 2020

 Nicholas Eberstadt

Nicholas Eberstadt holds the Henry Wendt Chair at the American Enterprise Institute in Washington, D.C., and is a Senior Advisor to the National Bureau of Asian Research.He is Senior Advisor, The National Bureau of Asian Researc        Nicholas Eberstadt offers insights into the challenges to U.S. leadership in a post-pandemic world. This is the inaugural essay in the series “The New Normal in Asia,” which explores ways in which the Covid-19 pandemic might adjust, shape, or reorder the world across multiple dimensions.

Though we are as yet barely weeks into the Covid-19 pandemic, what should already be apparent is that it has precipitated the deepest and most fundamental crisis for Pax Americana that this set of global economic and security arrangements has faced in the past three postwar generations.

We are still very much in the “fog of war” phase of the calamity. The novel coronavirus and its worldwide carnage have come as a strategic surprise to thought leaders and political decision-makers alike. Indeed, it appears to be the intellectual equivalent of an unexpected asteroid strike for almost all who must cope in these unfamiliar new surroundings. Few had seriously considered the contingency that the world economy might be shaken to its foundations by a communicable disease. And even now that this has happened, many remain trapped in the mental coordinates of a world that no longer exists.

Such “prewar” thinking is evident everywhere right now in the earliest phase of what may turn out to be a grave and protracted crisis. Here in the United States, we watch, week by week, as highly regarded financial analysts from Wall Street and economists from the academy misestimate the depths of the damage we can expect—always erring on the side of optimism.

After the March lockdown of the country to “flatten the curve,” the boldest voices dared to venture that the United States might hit 10% unemployment before the worst was over. Four weekly jobless claims reports and 22 million unemployment insurance applications later, U.S. unemployment is already above the 15% mark: north of 1931 levels, in other words. By the end of April, we could well reach or break the 20% threshold, bringing us to 1935 levels, and 1933 levels (25%) no longer sound fantastical. Even so, political and financial leaders talk of a rapid “V-shaped recovery” commencing in the summer, bringing us back to economic normalcy within months. This is prewar thinking, and it is looking increasingly like the economic equivalent of talk in earlier times about how “the boys will be home by Christmas.”

This is moreover a global crisis, and vision has not yet focused on the new realities in other leading powers and major economies. If we try to take an unflinching measure of the impact globally, we can see both good news and bad news—although the two are by no means equally balanced.

The good news is that policymakers the world over have learned from the prewar Great Depression and are unlikely to repeat its exact mistakes. Instead of reducing the money supply and forcing bank collapses, the U.S. Federal Reserve this time is flooding the world with liquidity. Likewise, U.S. fiscal policy, far from attempting to impose further austerity on an already imploding economy through balancing budgets, is embracing Keynesianism with an abandon that might have startled Keynes himself. Given the “stimulus” packages already passed in the last month, this year’s U.S. budget deficit to GDP ratio is already certain to be of World War II scale. And, at least so far, no emanations of Smoot-Hawley-like impulses are on the policy horizon. Last time around, protectionism had devastating reverberations on an already severely stressed international trade and financial system. Confidence in U.S. and international economic management of the current crisis, at least for the time being, is reflected inter alia in the surprisingly sanguine valuations of the stock indices both in the United States and abroad.

The bad news, on the other hand, lies in the nature of the virus itself and in its implications for human life and socioeconomic arrangements. Covid-19 is an extremely contagious virus with high lethality for those exposed to it, and it can be transmitted by asymptomatic “super spreaders.” Further, since this disease is zoonotic (contracted from another species) and novel (our species has no preexisting immunity), the pandemic will roam the world in search of human quarry until an effective vaccine is invented and mass-produced—or until so many people are infected that herd immunity is conferred.

A Darwinian experiment to invite global herd immunity is unthinkable because it could entail untold millions of deaths. New vaccines, for their part, typically take many years to develop. Barring some miracle, even a crash program to perfect a vaccine is currently expected to take at least a year, and it could be a year and a half or longer before a serviceable serum is generally available to the public. Reports now emanating from South Korea, moreover, suggest that survivors might also be susceptible to reinfection. If so, the quest to come up with a lasting inoculation against Covid-19 may be all that much more daunting.

Consequently, societies the world over face the prospect of rolling lockdowns and quarantines until such time as a technological breakthrough rescues them from this condition. This would seem to mean that not just a single national lockdown of a country’s population and economy is in store to fend off mass contagion but rather quite possibly a succession of them—not just one mother-of-all-economic-shocks but an ongoing crisis that presses economic performance severely in countries all around the world simultaneously.

The potential downside of this crisis looks dire enough for affluent societies: even with excellent economic management, they may be in for gruesome recessions, both painful and prolonged. But the situation for the populations of low-income countries—and for least-developed, fragile states—could prove positively catastrophic. Not only are governments in these locales much less capable of responding to pandemics, but malnourished and health-compromised people are much more likely to succumb to them. Even apart from the humanitarian disasters that may result directly from raging outbreaks in poor countries, terrible indirect consequences may also lie in wait for these vulnerable societies. The collapse of economic activity, including demand for commodities, such as minerals and energy, will mean that export earnings and international remittances to poor countries are set to crash in the months ahead and remain low for an indefinite period. Entirely apart from contagion and lockdowns, this can only mean an unavoidable explosion of desperate need—and under governments least equipped to deal with this. While we can hope for the best, the worst could be much, much worse than most observers currently imagine.

Eventually, of course, we will emerge from the current crisis. Envisioning the post-crisis “new normal” is extraordinarily difficult at this early juncture—not that much less demanding, perhaps, than imagining what the postwar world would look like from the vantage point of, say, autumn 1939. Lacking clairvoyance, we can only peer through the glass darkly at what may be the shape of things to come in the post-pandemic order. Yet it is not too soon to offer one safe prediction about that coming order, and to identify three critical but as yet unanswerable questions, the answers to which promise to shape it decisively.

The safe prediction is that the Indo-Pacific, then as now, will be the locus of global economic, political, and military power—and will remain so for at least the coming generation, possibly much longer. Currently, countries belonging to the Asia-Pacific Economic Cooperation (APEC) account for as much as 60% of the world’s estimated GDP and close to half of global trade. If we add India, which is not an APEC member, to that roster, the economic predominance of the region looks even more overwhelming. APEC plus India likewise accounts for much—perhaps most—of the ongoing knowledge production in the world today. By such necessarily imprecise measures as publications in peer-reviewed scientific journals, authors from the APEC-plus-India region are responsible for about three-fifths of current global output. The only state with truly global military capabilities (the United States) is part of this region, as are the only other two governments entertaining global strategic ambitions (China and Russia). In addition to these countries, India and (alas) North Korea are nuclear weapons states. For the moment, the combined nuclear potential of all nuclear powers outside the APEC-plus-India region (France, Britain, Pakistan, and Israel) is dwarfed by the atomic arsenals within it.

Barring a catastrophe of truly biblical proportion (a formulation that may admittedly seem to be tempting fate, given current circumstances) it is impossible to see what configuration of states or regions could displace the Indo-Pacific as the epicenter of world power anytime soon. Someday Africa might in theory become a contender for geopolitical dominance, but that date looks so distant that such scenarios for now are perhaps best narrated by science fiction writers.

“Will the Covid-19 pandemic bring a brutal end to the second age of globalization that began in 1945, just as World War I heralded the cataclysmic death of the first globalization (1870–1914)?”

As for the questions that stand decisively to shape the coming global order, the first concerns the scope and character of what we have been calling “globalization” in the years and decades ahead. Will the Covid-19 pandemic bring a brutal end to the second age of globalization that began in 1945, just as World War I heralded the cataclysmic death of the first globalization (1870–1914)?

At this early point in the crisis, it would take a brave (or foolish) soul to assert confidently that an end to our current far-reaching arrangements for world economic integration simply could not happen. That said, at least for now, it would look as if a lot of things that have not yet gone wrong would have to go wrong, and at the same time sweep away the foundations (and memory plastic) for the networks of trade, finance, communications, technology, culture, and more that have come to deeply connect societies all around the world today. Not much less than a continuing, cascading, and unabated series of worldwide political blunders—not excluding military adventures—would be required to burn this edifice to the ground.

On the other hand, it is also hard to see how a post-pandemic world will pick itself up and carry on with commerce, finance, and global governance as if nothing much happened around the year 2020. Even under the optimistic assumptions—i.e., the assumptions wherein the second age of globalization survives Covid-19’s heavy blow—much will need to be dramatically different. Until the advent of some biometric, post-privacy future, the more or less free movement of peoples across national borders will be a nonstarter. “Davos” stands to become a quaint word, somewhat like “Esperanto,” as national interests and economic nationalism come roaring back. International supply chains will tend to be resourced domestically, notwithstanding the immediate apparent cost in terms of production and profits. At the same time, today’s crisis may explode and wipe out old inefficient business models that had already outlived their usefulness: the “big box” store and retail malls, the unproductive (but sociologically alluring) office, the law firm (with its Soviet-style valuations of its services on the basis of inputs rather than outputs), perhaps the cartelized, price-fixing university as well, and more.

On the positive side, the creative destruction the crisis will unleash will eventually offer immense opportunities for innovation and dynamic improvements in productivity, so long as resources from inefficient or bankrupt undertakings are reallocated to more promising new purposes. To give just one example, the returns on remote communications will likely be high, incentivizing impressive breakthroughs. Post-pandemic economies around the world will need all the productivity surges they can squeeze out of technological and organizational innovation, too—for they will almost certainly be saddled with a far higher burden of public debt than today. Moreover, given current demographic trends and the prospect of significantly less immigration, the shrinking of labor forces and the pronounced aging of national populations may be characteristic of a growing number of economies in the APEC-plus-India region and the rest of the world, and not just in high-income settings. Japan may become a model here, but not in a good way: avoiding “Japanification” could become a preoccupation of policymakers, pundits, and populaces in an epoch of diminished expectations for globalization.

A second huge question for the post-pandemic world concerns China: more specifically, how will the rest of the international community treat this increasingly powerful but intrinsically problematic state?

The world has yet to conduct the authoritative blue-ribbon scientific inquiry into the origins of the coronavirus pandemic that is obviously and urgently needed. However, there is little doubt that heavy responsibility for the global health and economic crisis we are now coping with falls on the Chinese Communist Party (CCP)—and to a lesser but by no means negligible degree, on China’s collaborators within the World Health Organization. Had the CCP placed its population’s health above its own—had it behaved like an open society or followed international transparency norms—there is no question that the global toll from the Covid-19 pandemic would only be a fraction of what has been exacted to date. Epidemiologists from the University of Southampton in the United Kingdom have suggested that the damage might have been contained to just 5% of what we have thus far suffered with an expeditious (and honest) response to the Wuhan outbreak. If that estimate is overly precise, it nonetheless gives a sense of the price the world has paid for the CCP’s priorities and standard operating procedure. We also already know of the complicity of the World Health Organization at its highest levels in buying time for Beijing as the regime figured out how to spin the story of what happened in Hubei Province.

“…the post-pandemic world will have no choice but to contend at last with a problem long in the making: the awful dilemma of global integration without solidarity.”

It would be one thing if this crisis were a one-off—dreadful as the tragedy would be. The problem, unfortunately, is that it is not a one-off, and in fact cannot be. At the heart of the tragedy is an uncomfortable but unavoidable truth: the CCP simply does not share the same interests and norms as the international community into which it has been so momentously and thoroughly integrated. Moreover, there is scant evidence that integration into the world economy and global governance has been “reforming” the Chinese regime, in the sense of bringing its politics and behavior into closer alignment with those acceptable to Western populations. Quite the contrary: in the Xi Jinping era, China’s politics have manifestly been moving away from convergence as the regime has concentrated on perfecting a surveillance state policed by “market totalitarianism” (a social credit system powered by big data, artificial intelligence, and more).

Thus, the post-pandemic world will have no choice but to contend at last with a problem long in the making: the awful dilemma of global integration without solidarity. China is deeply interlinked with every APEC-plus-India economy and with those of the rest of the world as well. Chinese interests are likewise deeply embedded in much of the institutional apparatus that has evolved to facilitate international cooperation. How will the rest of the countries in the international community manage to protect their interests (including health security interests, but by no means limited to this alone) in such a world? Will it be possible to accurately identify and carefully isolate all the areas in which win-win transactions with the CCP are genuinely possible and cordon off everything else? Or will the CCP’s authoritarian influence compromise, corrupt, and degrade these same institutions, and likewise constrain or poison opportunities for truly free international economic cooperation and development after the Covid-19 pandemic?

Last, but by no means least important, there is the question of the United States’ disposition in a post-pandemic world.

Even before the Covid-19 crisis, it was not exactly a secret that the United States—which is to say, Americans—was becoming increasingly reluctant to shoulder responsibility for world leadership in the global order that Washington had been instrumental in creating and that U.S. power was indispensable in supporting. The skepticism and disfavor with which American proponents of internationalism were increasingly greeted at home, however, was not entirely explained by the deep historical roots of isolationism in our country. Nor can it be dismissively described as yet another paroxysm of paranoia and anti-intellectualism on the part of the yahoos, as would-be Hofstadters from today’s chattering classes would like to have it.

Such discontent with our nation’s considerable international obligations skews strongly with socioeconomic status. For those in the bottom half of the country, grievances with the status quo (which not so incidentally includes a strong political commitment to Pax Americana) are by no means delusional. Over the past two generations, the American escalator has broken down for many. Just before the Covid-19 crisis, at the supposed peak of a business cycle, work rates for prime-age American men (the 25–54 age group) were slightly lower than they had been in 1939, near the end of the Great Depression. It is hardly reassuring that this alarming situation has attracted relatively little attention from the talking and deciding classes (many of whom are shielded from personal familiarity with how the other half lives by Charles Murray’s famous bubble).

Scarcely less disconcerting than the work rates for American men are the dismal trends in wealth formation for the less well to do. According to estimates by the Federal Reserve, the mean real net worth for the bottom half of households in the United States was lower in 2019 than it had been in 1989 when the Berlin Wall fell. By these estimates, in fact, the net worth of such households was about a third lower in 2019 than it had been three decades before. Voters from these households might be excused if they were prompted to ask what the fabled “end of the Cold War” had done for them. Recall that these same Americans witnessed a decline in net household worth in a period when overall nominal net worth in the United States soared by almost $80 trillion—an average of almost $250,000 for every man, woman, and child in our country today. Since the arrival of Covid-19 on our shores, the net worth of the bottom half of Americans has dropped still further, as their indebtedness has risen and the value of their assets (mainly homes) declined. It could be quite some time before the balance sheets of those homes look as “favorable” as they did in 2019.

In the United States, the constitutional duty to obtain the consent of the governed obtains for the little people, too, even if they happen to comprise a majority of voters. And in a post-pandemic world, it may be even more difficult to convince a working majority that the globalized economy and other international entanglements actually work in their favor.

If U.S. leaders wanted to generate broad-based domestic support for Pax Americana, they need to devise a formula for generating prosperity for all. Such an agenda, of course, would win on its own merits, with or without an eye toward international security. Absent such a credible agenda, popular support for U.S. international leadership could prove increasingly open to question in the post-pandemic United States. The peril that declining domestic U.S. support poses to the current global order should not be minimized. If or when Pax Americana is destroyed, its demise may be due not to threats from without but rather to pressures from within.

Nicholas Eberstadt holds the Henry Wendt Chair at the American Enterprise Institute in Washington, D.C., and is a Senior Advisor to the National Bureau of Asian Research.

 

 

Clovid-19 and China’s Responsibility

Sunday, May 3rd, 2020

It is clear that Clovid-19 came from China. And the Chinese did not inform the rest of the world concerning many facts of how this coronavirus was released out of a laboratory in the city of Wuhan, and the nature of the virus’s capabilities for death and distraction. The following commentary by the Heritage Foundation provides an interesting approach to China now that Clovid-19 has destroyed the world as we know it.

 

Clovid-19 and China’s Responsibility

Commentary By

Riley Walters

Riley Walters is a policy analyst in the Davis Institute for National Security and Foreign Policy at The Heritage Foundation.

Dean Cheng

Dean Cheng brings detailed knowledge of China’s military and space capabilities to bear as The Heritage Foundation’s research fellow on Chinese political and security affairs.

 

Americans are understandably upset. Businesses are closed, and people’s lives and livelihoods are at stake.

It makes sense that people would demand the government take action against those responsible for the spread of the COVID-19 pandemic once we’ve made it through.

Here’s how—and how not—to hold China accountable for the new coronavirus.

>>> When can America reopen? The National Coronavirus Recovery Commission, a project of The Heritage Foundation, is gathering America’s top thinkers together to figure that out.

As of right now, for very good reason, the Chinese Communist Party is culprit No. 1. However, it won’t be so easy getting it to fork over restitution.

There’s the reality that nations are generally not able to be sued, under the concept of “sovereign immunity.” While there are some exceptions, it would require the construction of a very tight case, in this case against the Chinese Communist Party.

In these trying times, we must turn to the greatest document in the history of the world to promise freedom and opportunity to its citizens for guidance.

To build such a case, policymakers would need to answer three important questions:

  1. Who exactly is responsible for the COVID-19 outbreak? Meaning, who in the Chinese Communist Party is responsible for suppressing the information that heroes such as Dr. Li Wenliang tried to share with the world before COVID-19 grew rampant?
  2. What exactly are they guilty of? Meaning, is the Chinese Communist Party simply guilty of the suppression of information? Are they also guilty of not acting soon enough? What else, exactly?
  3. How do we even begin to calculate the restitution owed to the U.S.? Some estimates suggest that the coronavirus has generated losses of as much as $4 trillion. That’s roughly one-third of China’s economy.

Perhaps because of the complications with a legal case, folks are talking about ways to make China “pay” in other ways. Many of the ideas are lacking a dose of reality.

Here’s how we should not hold China accountable:

  1. Refuse to pay Chinese holders of U.S. debt. As of January, Chinese investors held $1.1 trillion worth of U.S. Treasury securities (debt). Chinese holders of U.S. debt (both private and government entities) account for more than 15% of total foreign holders of U.S. debt, but only a fraction of total public debt.

If there is one thing that would destroy the credibility of the American dollar and the American financial system, it would be to raise any doubts about the American commitment to meeting its financial obligations.

Such a threat would shatter the faith of every holder of American debt, not just the Chinese.

After all, if the U.S. could suddenly decide not to pay Chinese holders of American debt, what would keep us from doing the same to the Saudis? Or the Japanese? And that, in turn, would effectively end the role of the American dollar as the global reserve currency. This is truly one case where the cure would be worse than the disease.

  1. Get U.S. companies to leave China and come home. Some suggest COVID-19 is a great opportunity to bring U.S. companies back from China. The problem is that while some companies might leave China (and there could be incentives to encourage them to do so), few would then relocate back to the U.S.

Companies went to China in pursuit of cheaper costs, and COVID-19 doesn’t change that. Most of the companies that are leaving China won’t be coming to the U.S. They’ll more likely be going to Vietnam or Mexico, or many other places.

  1. Kick out all Chinese news reporters. This has little to do with China’s suppression of information about the COVID-19 virus, and more to do with China’s overall suppression of a free press.

After all, it wasn’t Chinese reporters in the U.S. that failed to report on COVID-19 developments in China.

Kicking China’s reporters out of the U.S. would simply justify China’s ejection of American journalists, to little effect on the pandemic (other than limiting what unrestricted information is available).

  1. Decouple entirely from the Chinese economy. Some suggest the U.S. should have no business with China whatsoever. But China was our fourth-largest trading partner in 2019, with $560 billion worth of traded goods.

Historically, U.S. and Chinese investors have directly invested more than $150 billion in each other (about twice as much U.S. direct investment in China than vice versa). Subsidiaries of U.S. companies sell hundreds of billions of dollars of goods in China every year on top of what they export there from the U.S.

These benefits would be hard to give up. Are there costs of doing business in China? Yes. But businesses are there because there are also benefits.

There are more realistic ways to put the Chinese Communist Party’s feet to the fire and hold it accountable.

  1. A human rights approach. Sanctioning specific individuals for specific rights violations can be more successful than trying to punish a nation of 1.4 billion people.
  2. An international approach with allies. This includes taking international legal action as another possibility. Legal scholar James Kraska has laid out one such approach. But litigation could take years and still lack the desired effect Americans might want to see this year.
  3. Public diplomacy. It will take some patience and not have the visibility of legal action. That is to say, legal action would feel good up front, but would take years to maybe reach results, and then only if accompanied by painstaking diplomatic work.

Diplomacy includes keeping the spotlight on the Chinese Communist Party and the nefarious impact it has on the world. Results may vary, but doing this and letting people and governments around the world take matters into their own hands will have a lasting effect.

The truth is that this virus has given the Chinese Communist Party a big black eye and right now the Chinese are doing all they can to shift the blame or obfuscate the truth.

The Trump administration is likely to continue pushing back against China’s efforts to reshape the international narrative, much like we’ve seen the U.S.-China competition across the international arena.

But the outbreak of COVID-19 doesn’t change that the People’s Republic of China will be our most persistent and consequential U.S. foreign-policy challenge for the next several decades.

There might be right ways to hold the Chinese Communist Party accountable for the COVID-19 outbreak and its other misdeeds. But there are also wrong ideas that undermine U.S. long-term interests.

Let’s not mix those up.

 

 

Return to the Blog

Sunday, May 3rd, 2020

After a four-month hiatus, I am coming home to my blog. The hiatus was an attempt to finish, to my own satisfaction, my latest novel, Donovan’s Run. Although my attempt was partially successful, there still remain more to be done. However, given the enormous amount changes that are occurring all our world at this time, I thought it would be appropriate to return to the blog and inject it with some important elements now moving through our lives. So, I will thank in advance the few good friends who will continue to read this material and tell me when it is good, when it is bad, and when it is indifferent.


William S. Frankl, MD, All Rights Reserved