2016 Election • America • Big Media • Center for American Greatness • China • Donald Trump • GOPe • Government Reform • Greatness Agenda • North Korea • Post • Republicans • The Resistance (Snicker) • Trade

Trump’s Irresistible ‘Trollitics’

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What a time to be alive! To witness a president of the United States dismissively tell a brutal communist dictator, “thanks for the hostages,” is a truly special thing.

Of course, Trump waved off Kim Jong-un on Thursday knowing the “Rocket Man” would realize he made a mistake and come lumbering back to the negotiating table, albeit with an adjusted tone. In a Friday press release that followed Trump’s au revoir, Pyongyang said: “I would like to conclude that President Trump’s statement on the North Korea-U.S. summit is a decision that is not in line with the wishes of the humankind who hope for the peace and stability of the Korean peninsula as well as the world.” That is quite a 180 in rhetoric.

One day after the president dumped a moody Kim, the White House reported “very productive talks” about having the summit after all. Come Saturday, Trump said renewed talks were “doing very well” and after convening in secret at the behest of Kim, South Korean President Moon Jae-in reported that Pyongyang was willing to discuss “complete denuclearization of the Korean Peninsula.” By Sunday, U.S. officials were in North Korea to help organize the summit that, “experts” say, was canceled because Trump was “worried North Korea would beat him to it.”

Business Insider furnished its own faceless yet authoritative source close to the matter to corroborate Paul Vale’s “expert” take in the Huffington Post. These experts, however, are distinct from those Max Boot invokes when in paroxysm over the death of neoconservatism. But I digress.

A New Tone
Enter 
trollitics. Trump has masterfully blended big city mogul with politico, a fusion Scott Adams calls “the unstoppable clown car that is Donald Trump.” Our president is a world-class troll. Through his prolific trolling on Twitter, Trump has made the media his unpleasant yet devoted mistress. More to the point, Trump is a wrecking ball to the institutionalized dandyism of politics, characterized by moral preening and worthless platitudes—see: Conservatism, Inc. And let’s not forget the bootlicking of internationalism that is, properly understood, a utopian pipe dream.

Nobody’s surprised Trump is pushy. He’s a businessman who made his name in America’s most famous concrete jungle. It is an entirely different thing, however, to be that kind of pushy on the stage of international politics.

It became evident that Trump wasn’t going to tone it down during a NATO summit, when he literally pushed his way to the front of a group of heads of state who had until then largely ignored him. “This is not fair to the people and taxpayers of the United States,” Trump declared, regarding the disproportionate contributions of the United States to NATO. The world shuddered at the president’s remarks, the prime minister of Luxembourg appeared to cover his mouth in disbelief, but Americans cheered. For the first time in ages, someone was sticking up for them and cutting seemingly untouchable world players down to size. Trump made posh heads of state feel insignificant, the way they had made Americans feel insignificant.

Flash forward one year and NATO Secretary-General Jens Stoltenberg says, “What we see now is that after years of decline or reducing defense spending across NATO allies in Europe and Canada, all allies have stopped the cuts. All allies have started to increase defense spending. And more and more allies have spent 2 percent, which is a NATO guideline of GDP on defense.” Stoltenberg says the president’s “very strong message” did the trick.

Kim Jong-un, then, is merely the latest victim of Trump’s trollitics. Following the theories of Adams, the model of trollitics on the international stage could be considered “clown car diplomacy.”

A Mallet of Hard Rubber
Trump’s trollitics seem to go something like this: Trump takes on a hot-button issue with what seems to be the reckless abandon of all political and social norms. The clown car has arrived. Then, Trump pulls out a big rubber mallet that makes everyone uncomfortable. “What’s he going to do with that?” Usually, it’s something that Ta-Nehisi Coates and Bill Kristol hate, so it ends up being good for America.

Sure, Trump’s mallet is made of rubber. If he swings it hard enough, it will cause some real damage. But he doesn’t always. This was demonstrated in his approach to China. Trump threatened tariffs, the world subsequently lost its mind over the impending Trademageddon, then China agreed both to buying substantially more American made products and negotiating trade conditions more favorable to the United States. Tariffs haven’t hit yet, but they’re not off the table, and China conceded in ways that are important.

On the Korean Peninsula, Trump went Gallagher and seemingly smashed to smithereens the nascent peace talks, after which South Korea played good cop and sure enough, an American delegation is in North Korea “until Tuesday or beyond” to prepare for a summit. The rubber mallet did its work.

Why It Works
Adams argues there is a method to the president’s madness outlined in
The Art of the Deal. “As far as I can tell, Trump’s ‘crazy talk’ is always in the correct direction for a skilled persuader,” Adams wrote in 2015. When Trump claimed that in one year he would have ISIS routed, everyone laughed at him. When ISIS was defeated one year later, the naysayers had to bite the bullet. The effectiveness of Trump’s trollitics ultimately earned him the title of “Keeper of Promises” from CNN, although that may as well be a pejorative from them.

People are sick of sanctimonious politicking at home and abroad, because Americans invariably are left with the tab. Likewise, mainstream media is a joke, more and more regularly stooping to deceit through nameless sources and absurd claims. Trump has overseen a dramatic turn around in the way the country is run over the last 17 months. If he facilitates peace in North Korea, he will have done so while making a mockery out of the establishment and its progressive intelligentsia. Trollitics, then, embodies the zeitgeist perfectly.

Photo credit: Chip Somodevilla/Getty Images

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America • Americanism • Defense of the West • Donald Trump • EU • Europe • Foreign Policy • Greatness Agenda • political philosophy • Post • self-government • The Constitution • The Left • The Resistance (Snicker) • Trade

One Nation

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Editor’s note: This essay appears in the Spring 2018 issue of the Claremont Review of Books. Reprinted by kind permission of the Claremont Institute. 

In 1993 the president of the American Society for International Law called for a “campaign to extirpate the term [‘sovereignty’] and forbid its use in polite political and intellectual company.” Such a proscription would have been in keeping with the bien-pensant consensus at the end of the past century and beginning of the present one: sovereignty is becoming obsolete and needs to be diluted or shared as mankind progresses toward global governance.

Nonetheless, Donald Trump, Brexit, and the growing resistance to increased centralization by the European Union from its member nations show that sovereignty has returned with a vengeance. This interruption of the inevitable march to globalism creates a problem for the Council on Foreign Relations (CFR), central command for “liberal internationalism,” more accurately described as “transnational progressivism.” From the CFR perspective, the issue is how to defeat the American sovereigntists and their case for democratic self-government. This task is taken up in The Sovereignty Wars: Reconciling America with the World, by Stewart Patrick, director of CFR’s International Institutions and Global Governance program.

* * *

Patrick writes well, is knowledgeable, informative, a pleasant fellow, but he is wrong on the most important issues concerning democratic sovereignty and the right of a free people to rule themselves. His first priority, in effect, is to deconstruct the concept of sovereignty into its constituent but discordant elements, which he sees as threefold. At the top of his framework, “the Sovereignty Triangle,” is authority, which, with respect to America, “implies that the Constitution is the supreme law of the land and no external constraints should limit Americans’ right to govern themselves.” The triangle’s second vertex is autonomy, which “implies that the U.S. government, acting on behalf of the people, should have the freedom of action to formulate and pursue its foreign and domestic policies independently.” The final corner is influence, “the state’s effective capacity to advance its interests,” hence, America’s ability to influence others.

Though these three aspects of sovereignty are “often in tension,” sovereignty itself can be “disaggregated” when we “voluntarily trade off one aspect of sovereignty for another.” These “sovereignty bargains” will be “required” if the United States is to exert influence and shape the future of globalization. Indeed, it is “counterproductive” for sovereigntists to worry too much about autonomy or even authority—the supremacy of the Constitution—because influence is what America most needs “to shape its destiny in a global era.” Patrick concedes that a “liberal internationalist” would prioritize “solving a global problem” through multilateral action “even if that implied a loss of autonomy or, conceivably, even authority.”

Read the rest at The Claremont Review of Books

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Donald Trump • Economy • Foreign Policy • Greatness Agenda • Post • taxes • The Media • Trade

Be Skeptical of This Study Slamming ‘Isolationist’ Trade

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A new study shows that “isolationist trade policies” could cut $2 trillion from America’s gross domestic product (GDP) by 2022. Therefore, Nev Elis suggests in The Hill, President Trump’s tariffs will not make America great again—they will make us poor. America would be better off, Elis argues, embracing “internationalism” as its modus operandi.

There are just two problems. Authors don’t always write their own headlines, but in any case, The Hill’s headline is misleading. Second, the study itself is junk.

It is simply not true, as the headline reads, that: “Isolationist trade policies could cut $2 trillion from GDP.”  The study does not claim “isolationist trade policies” would cut America’s GDP. It simply says that America’s GDP would grow faster under an internationalist model than an isolationist model—growth would occur in either case.

Likewise, the study does not equate “isolationism” with economic protectionism—trade policy is just one component of isolationism. As the study notes, isolationism encompasses other policy areas including immigration, defense and security, cybersecurity, and taxation. To attribute the predicted economic malaise to protectionism alone is to distort severely the study’s findings.

In a world where people mindlessly (and shamelessly) share headlines, it’s important to be as specific as possible, or at least clarify any caveats in the article itself. The Hill failed on both counts.

“Take Not the Merchant at His Word . . .”
Aside from its clickbait headline and omission, The Hill reported the study’s findings more-or-less faithfully. The real problem is that the study itself is junk. Garbage in, garbage out.

To begin with, the study was conducted by Zurich Insurance, Ernst & Young, the Atlantic Council, and the Organization for International Investment. The first red flag is who conducted the study. Zurich Insurance is a Swiss-based company. Ernst & Young is a London-based assurance and consulting firm. What are the odds that foreign companies will produce a study justifying policies that disadvantage foreign companies? Not very high. They have everything to lose and nothing to gain.

Next, the Atlantic Council is an explicitly “internationalist” think tank based in Washington, D.C.,.It seems to specialize in peddling Trump-Putin conspiracy theories and advocating pointless foreign wars. It is hardly an unbiased source.

Finally, although the Organization for International Investment is located in Washington D.C., only one American-headquartered firm is represented on its board of directors executive committee; the rest are European. Furthermore, its motto is “global investment grows America’s economy”— that is, foreign investment. Essentially, the OII appears to be a foreign-backed lobby group disguised as a nonpartisan U.S. think tank.

The common thread here is the groups behind this “study” lose big-time if America embraces an America-first regime. Are such entities likely to publish a study favoring protectionism? No. This is why you never see trade unions pamphleteering to eliminate collective bargaining rights, or illegal immigrants campaigning to “build the wall.” This is not to say that we should dismiss the study outright, but we should approach it with an appropriate degree of skepticism.

I’ve said it before and I’ll say it again: Everything you need to know is summed up in the aphorism: “Take not the merchant at his word, but trust only by the skin of his fruit.”

The Myth of the Time-Travelling Economist
The second red flag is the data used in the study.

The only new data the study rely upon was a survey of 497 chief financial officers from 29 different countries, who represent companies with annual revenues greater than $50 million. The problem is only 103 of these companies (just one-fifth) were based in the United States, with the remaining 394 headquartered abroad.

This raises two questions. First, who cares what foreign companies think? Trump should not kowtow to foreign multinationals; he must put America first.

Second, the dataset is far from neutral. Of course CFOs representing foreign companies would uniformly oppose protectionism. After all, tariffs will benefit American companies at their expense. As such, the survey data is of limited value.

The remainder of the study was an analysis based on raw economic data and growth predictions from the International Monetary Fund. From the study:

Using IMF growth projections as a baseline, decreasing openness to trade depresses growth rates—although small, but cumulatively significant. In 2022, for example, the IMF projects US GDP growth to be 1.68%, but in the Isolationist scenario, it would be 1.45%; in the Atlanticist, it would be 1.60%; and the Internationalist, 1.76% growth. . .

This model estimates that, from 2017 to 2022, the Isolationist scenario would generate a loss of $1.5 trillion of cumulative nominal GDP, a loss of $502 billion cumulative nominal GDP under Atlanticism, and a gain of an additional $505 billion in the Internationalism scenario.

The study presents its models’ conclusions with a veneer of certainty—America’s economy will falter unless we sign “free trade” deals with authoritarian dictatorships like China. This is rubbish. Economists cannot predict the future. In fact, Phil Tetlock has shown that economists (and political pundits, investment gurus, etc.) are worse than chance at predicting economic outcomes.

Economists tend to think the economy is a washing machine, governed by simple cause-and-effect relationships—the apotheosis of which is the law of supply and demand. Essentially, they hold that X will cause Y with certainty. This is very wrong.

In reality, X will often cause Y. Sometimes X will cause Z, or Y and Z, or A and B and C, or nothing whatsoever. This is because the economy is a complex system, much like a jungle, a coral reef, or your family’s decennial reunion—who could have predicted that granny would bruise her lumbago after trying to help your little cousin Tommy blow out his birthday candles, who couldn’t do it because his lungs were too weak following the asthma attack brought on by your sister Suzy’s new husband’s prescription ganja “medication”? The cause-and-effect webs in complex systems are infinitely convoluted, and no statistical model will ever be sufficiently precise to account for them.

Another problem is that economic growth is largely exogenous, and therefore cannot be modeled anyway. At best, we can forecast the likelihood of economic growth based on historical precedents and our limited knowledge of economic ecosystems. When we take this time-tested approach, and bathe in humility, our ability to forecast (not predict) economic performance improves dramatically.

In the end, economists and their waterboys (stooges like Ben Shapiro) destroyed America’s middle class and squandered our economic advantage by cajoling America into embracing global free trade. Why should we listen to yet another “study” produced by foreign-backed entities, and based on spurious data, that recommends more of the same? Enough is enough.

America needs to return to the time-tested protectionist policies that made her rich in the first place.

Photo credit: iStock/Getty Images

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America • Asia • China • Defense of the West • Donald Trump • Economy • Energy • Foreign Policy • military • Post • Technology • Trade • Trump White House

China’s Dream of Global Economic Dominance

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With the implementation of President Trump’s tariffs last month, China is all the talk in the world of trade. The tariffs in question place $50 billion worth of tariffs on Chinese imports following a seven-month investigation into intellectual property theft. These actions against China are much needed and long overdue: about 20 years overdue to be exact.

Since the 1990s and especially since the beginning of the 21st century, we have seen a huge expansion of the Chinese economy and and increase in their global influence.

The Chinese have expanded and modernized their military and technological capabilities, reached heavily into the African, Asian and European continents for control of resources, and have built militarized man-made islands in the South China Sea. Yet with all this, the West is sitting idle and has not done much to respond to this growing menace.

This is partly because of Western capitulation to the draw of cheap manufactured goods and labor costs at the expense of the American worker. Products, services, and companies that Americans use on a daily basis gradually have come under the control of Chinese government corporate proxies. There is no such thing as separation between government and corporate interests in China, which is something many Westerners fail to understand. Moreover, prominent Western politicians are being paid off to maintain lopsided trade deals that favor the Chinese.

No wonder these politicians and corporate leaders are deriding tariffs. They  know that the jig is up and their free ride on the ‘free trade’ train is over. To the dismay of the “Republican” leadership, Trump has begun to overturn years ‘ worth of work designed (wittingly or not) to  empower a hostile foreign entity that entrenched itself across the world and into our own society.

In the years since Mao Zedong’s death, China has grown exponentially in terms of military and economic strength. Under the leadership of Den Xiaoping and successive leaders, China went from being a poor, Marxist, economically downtrodden nation to a powerful global manufacturing and military giant. It has opened its doors to foreign investment and manufacturing, knowing that foreign corporations would rather take advantage of the cheap labor in China than employ citizens of their own nations. In so doing, the West has empowered a hostile foreign nation that has every intention of reviving the glory of its historical dynasties.

China’s intentions are evident in the doctrines of the PRC and in the statements made by prominent military and political leaders of the Chinese government. In retired People’s Liberation Army Colonel Liu Mingfu’s book, The China Dream, he states “China’s job is to create a civilization that grows without conquest, a non-conquering civilization.” He continues, “To use non-conquering methods to create a non-conquering civilization is China’s responsibility. It is the demand of China to create a new world order that prefers peace, development, freedom and cooperative civilization. Chinese civilization’s traditions and cultural heritage will be able to accomplish this important task.” “Non-conquering” or not, the goal is domination and the “peace” they seek is the peace that accompanies submission. If this quote doesn’t send shivers down your spine, I’m not sure what will.

Over the last decade, the United States has seen its industries gradually taken over by various different Chinese corporations. Little do most Americans know that they empower these corporate proxies of the Communist Party of China (CCP) every day. A number of well-known U.S. companies have been bought out and taken over. These include:

Starwood Hotels: Purchased by Anbang Insurance for $14.3 billon in March 2016
Smithfield Foods: Purchased by Shuanghui International for $7.1 billion in May 2013
Ingram Micro: Purchased by Tianjin Tianhai Investment Development Co. in February 2016.
General Electric Appliance Business: Purchased by Qingdao Haier Co. in June 2016
Terex Corporation: Attempted by Zoomlion Heavy Industry Science, but acquisition negations ultimately fell apart.
Legendary Entertainment: Purchased by Dalian Wanda in January 2016
Motorola Mobility: Purchased by Lenovo in January 2014
AMC Entertainment Holdings: Purchased by Dalian Wanda in May 2012

These are only a handful of the largest buyouts by major Chinese corporations. Remember, any Chinese company is either state-owned or beholden to the Communist government in some way.  Given the deep political and business ties between Communist Party officials and corporate heads, it’s hard to distinguish corporate interests from national interests. In effect, the Chinese Communist Party is insinuating itself in key foreign industries in order to exercise greater political and economic influence abroad. This is happening all over Africa, Southeast Asia, Latin America, Australia, and yes, even the United States.

As Peter Schweizer highlighted in his new book, Secret Empires, the depth of Chinese infiltration is astonishing. Two of the biggest American political families have had direct dealings with the PRC. According to Schweizer’s findings, in 2013 When Vice President Joe Biden and Secretary of State John Kerry were conducting sensitive diplomatic work with the Chinese, Biden’s son, Hunter, landed a $1.5 million business deal with the bank of China. This deal happened during these sensitive talks, as Hunter travelled with his father to China for this meeting.

But it’s not just Democrats who have been taken in by Chinese designs. In 2008, Senate Majority Leader Mitch McConnell and his wife, Secretary of Transportation Elaine Chao received between $5 Million and $25 million from Chao’s father, James Chao who is the founder and senior chairman of the Foremost Group, an international shipping and trading company. The Foremost Group is a direct military contractor for the PRC. Elaine’s sister, Angela, sits on the board of directors for The Bank of China. Since marrying Chao, McConnell’s anti-China stance has softened significantly.

With Donald Trump’s rise to the presidency, the United States has taken a hard stance against Chinese neo-mercantilist and expansionist trade practices. His top appointments on trade—Robert Lighthizer, Wilbur Ross, and Peter Navarro— have, like Trump, all warned about the encroaching economic imperialism of the Chinese and are pushing policies that will address China on this matter.

In the last two decades, China has emerged as an international power rivaling that of the United States. Economically, technologically and militarily, China is catching up to us. The United States has been asleep at the wheel for far too long and Trump’s $50 billion in tariffs are only the beginning to of a shift in policy and understanding that will be required to take on China in their game of global dominance.

Photo credit:  Vitaly NevarTASS via Getty Images

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America • Americanism • Defense of the West • Deterrence • Donald Trump • EU • Europe • Foreign Policy • Germany • Middle East • NATO • Post • Russia • the Presidency • Trade

Trump Gives Merkel Some Tough Love

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On the heels of the near love fest between French President Emmanuel Macron and Donald Trump, the White House hosted a meeting with a rather frigid German Chancellor Angela Merkel. Trump publicly (and appropriately) lambasted Germany for its unwillingness to live up to its NATO commitments. The president also beautifully ripped into Merkel for the massive trade deficit between the United States and the European Union.

Trump was right and Merkel knew it.

Germany is a great country. Since losing two world wars and then surviving as a bifurcated frontline state in the Cold War, Germany has risen to be the dominant power in Europe. In fact, today, the European Union essentially is the German Union. After its disastrous experience in the 20th century, Germany opted to trade military might for economic preeminence.  Today, Germany possesses the fifth strongest economy in the world, with a gross domestic product of more than $3 trillion. According to the Organization for Economic Cooperation and Development, “In Germany, the average household net-adjusted disposable income per capita is USD $33,652” which is higher than the OECD average (America’s is slightly higher at $44,049).

Oh, and the German people rarely have to concern themselves with the messy business of national defense. This has gone on for decades at our expense.

And that’s a big part of the problem. Judging from Germany’s actions since the end of the Cold War, they certainly do seek dominance in Europe. Unfortunately, they still wish to be viewed by Washington, D.C. (as they have been up till now) as the helpless ward of the United States. Germany calculated that it was a very simple tradeoff: they rely on America’s military to defend them and the money that the German republic saves is then channeled into their welfare state.

This must end.

For all of her globalist rhetoric, Merkel is one of the stingiest practitioners of classical geopolitics in the modern age. For instance, in case the Trump Administration missed it, the recent Franco-American state visit (chock full of fawning rhetoric, awkward kisses, and the classic French slap at the end) was not what it appeared to be. Despite possessing the most advanced, nuclear-armed military in continental Europe, France is deeply indebted to Germany. Also, France forms part of an axis of anti-American European resistance, which includes Germany and, yes, Russia. It has existed in some form since the 1990s, but solidified over these countries’ opposition to the Iraq War of 2003.

Despite its military power, France’s turgid economy makes it the weakest of the three members of this European axis of resistance. Macron came to the United States not out of friendship to the United States but as Merkel’s errand boy. The new European order is easy to understand: the French military is subordinated to German economic dominance, and both are dependent (or were) on cheap Russian energy.

Germany needs the United States to maintain its commitment to the pathetic Iran nuclear deal that the Obama Administration crafted in 2015 (as does France and much of the rest of Europe). All of these countries are deeply committed to trade with Iran. If the United States were to withdraw from the deal, the Europeans would take a significant economic hit. Given the anemic economic situation in Europe, countries like Germany and France need every boost they can get. When it became clear that the Trump Administration was averse to recertifying the Iran nuclear agreement, Macron went to Congress and lambasted the American president. The French left in a huff, and a few days thereafter, the Teutonic Merkel came to Washington to badger the president.

But Merkel’s brinkmanship didn’t work. If anything, it had the opposite of the intended effect.

President Trump knows that the status quo has to change. We have to start giving our allies some tough love so that they stand on their own and give us relief for a change. What Trump did in his meeting with Merkel was necessary. No, he did not kill NATO, as his critics insist. Instead, he reinvigorated it by insisting NATO become a more European endeavor (in other words, a more German and French-powered alliance). Trump made clear his intention to protect American interests—and taxpayer dollars—with at least as much zeal as Merkel and Macron protect their interests and money.

Going back to the 1990s, French and German policymakers have sought to create a world where there were many powers to rein in America’s perceived “hyperpuissance.” Well, they have may have finally succeeded in crafting that multipolar world.

Be careful what you wish for, Frau.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit:  by Alex Wong/Getty Images

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America • Americanism • China • Defense of the West • Donald Trump • Foreign Policy • Greatness Agenda • Immigration • Obama • Post • Russia • The Left • The Media • the Presidency • Trade • Trump White House

Don’t Be Misled by the Media, Cuba Isn’t Changing

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After the nominal change in Cuba’s leadership, the New York Times managed to come out with the most New York Times headline ever: “More Black Officials in Power in Cuba as Leadership Changes.” The Los Angeles Times demanded that as Castro era “ends” in Cuba, so should the U.S. embargo. NPR followed hopefully, and Buzzfeed provided a romanticized photo spread.

Reading such affectionate and hopeful portrayals might make one want to believe that Cuba really is currently undergoing a transformation that will define its future. I hate to shatter that optimism, but Cuba isn’t changing, and American policymakers and media really shouldn’t be so naïve and optimistic about it.

After a 12-year run, Raul Castro, brother of Fidel stepped down as the president of the Cuban Council of State and Council of Ministers. Miguel Diaz Canel, Castro’s former bodyguard and minister of state will now rule instead of Raul Castro, as he moves back to his former position out of the limelight. Raul Castro was always uncomfortable in the limelight, and it was inevitable that his failing health would push him back to his former position. Nevertheless, Raul remains the head of the Cuban military, as well as of the Communist party—the two biggest institutions of the state. Put simply, de facto power remains in the hand of the Castro family.

Raul’s son heads the armed forces and domestic intelligence, as a colonel in the interior ministry. And while Raul Castro is often portrayed as a Cuban Deng Xiaoping, for allegedly opening up the Cuban economy, and pursuing a détente with the United States, in reality, this was mere window dressing. There was no “opening”; the Cuban economy remains a rut, Cuba remains a police state, with deep ties with quasi-dictatorships like Venezuela, and the Castros used a gullible and idealistic Obama as a photo opportunity.

Diaz Canel is supposed to carry on the same policies. The new leader is known, apparently, for his simple tastes and is likely to continue the alleged opening up of Cuban markets in accord with “Raulista” economic reforms. These market-oriented policies are expected, as well as more structural reforms that will appeal to foreign investment. But don’t be fooled. Since 1959, the Cuban economy has never undergone major changes. Diaz Canel, though himself an economic liberal who, in recent years has championed internet and LGBT rights, within hours of his nomination,  said that there’s no capitalist restoration in Cuba, and the one-party state will continue. His first meeting was with Venezuela’s Nicolas Maduro.

Cuba remains in heavy debt. The geopolitical situation that led to the Cuban revolution has changed over the years,  but Cuba, due to its geographical position, is pivotal to great power relations. Cuba’s major financial backers were the Soviet Union, and after that Venezuela. The Soviets are long gone, and Venezuela is now on the verge of collapse. So now what?

With Obama’s presidency, the major geopolitical confrontation seemed to be thawing. And it should come as no surprise that those who are voicing skepticism over Trump and North Korea, cheered when Obama announced his surprise opening up of the Cuban market, and discontinued the practice of giving political sanctuary to every Cuban who washed up on American shores.

Obama’s policy was, needless to mention, a disaster. The Castro regime benefited from increased investment, as well as heavy tourism while continuing with their program of oppression, and maintaining a police state. Added to that, American diplomats posted in Cuba started to suffer from a mysterious sickness, attributed to the Cuban government.

But more importantly, Cuba has an uncanny knack for siding with America’s adversaries. Russian President Vladimir Putin, for example, also called Diaz Canel, showing his willingness to take the opportunity of the Cuban market opening up and looking to renew the Cuban-Russian ties, now that confrontation with the United States is heating up. As late as in 2017, Russia was considering reopening its former military base in Havana. In the future, this might take geopolitical color, as the United States and Russia are increasingly hostile.

Cuba has also recently opened up to China. In August 2017, Cuba and China signed five cooperation and legal agreements, and China provided major humanitarian support after Hurricane Irma, including relief materials like tents, generators, mattresses, blankets, water, and lighting. China remains one of Cuba’s biggest trading partners with bilateral trade reaching around $2.5 billion, and the Chinese Navy recently visited Cuba looking for future cooperation (arguably against Uncle Sam). The idea that market can solve geopolitical problems is embedded in the liberal worldview of “liberal peace theory,” wherein more trade inevitably means less geopolitical competition. That is historically wrong. Britain and Germany were each other’s biggest trading partners immediately prior to World War I. Over the years trade didn’t dampen Russian and Chinese geopolitical competition with the United States and it is highly unlikely to do so with Cuba. Cuba is and remains a sore spot on America’s southern border, and President Trump and his administration shouldn’t harbor any false hopes, nor should the American public be misled by the liberal media.

Photo credit:  STR/AFP/Getty Images

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America • Americanism • China • Donald Trump • Economy • Foreign Policy • Post • Trade • Trump White House

Trump Should Give No Quarter to the Chinese

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Recently, President Trump tweeted: “President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”

The upbeat, conciliatory tone of the President’s message surprised many observers, since the media is trumpeting a looming “trade war” with China, and Trump himself has condemned abusive Chinese trade practices in very strong terms.

I respectfully submit that the president’s tweet may be counterproductive to his aims. His goal is to pressure China to make meaningful concessions on trade. That is, China needs to open its market. It needs to stop strong-arming U.S. companies into surrendering their proprietary technology and know-how as a cost of doing business in the world’s largest emerging market. Beijing needs to stop using punitive tariffs and other, more subtle measures to freeze out American manufactured goods. It needs to stop violating U.S. patents, trademarks, and copyrights with impunity. It needs to stop subsidizing and sheltering many of its industries. It needs, most of all, to stop putting Americans out of work, as a result of all of its other trading shenanigans.

These are not minor adjustments in our relationship with China. They are not concessions that it will be easy to extract. And yet they should be non-negotiable demands for U.S. trade representatives. If they were met, the U.S. trade deficit with China, which currently stands at $375 billion a year, would contract rapidly. It has not fallen in a long time. On the contrary, it has grown inexorably—and previous U.S. presidents have sat idly by as it happened.

It seems as though President Trump is trying to reassure the Chinese, the markets, and the American people that we will not, in fact, have a trade war with China. He has directed his secretary of agriculture to make sure that U.S. farmers do not suffer if we do. He has promised President Xi his friendship no matter what. He has also threatened, however, to levy the biggest set of tariffs in history against the Chinese. These are mixed messages, at best.

As a negotiator, Trump must know that to extract maximum concessions from a negotiating partner, you need to apply maximum pressure. In fact, you need to be willing, and you need to be seen to be willing, to walk away from the negotiations entirely. Your adversary must believe that he needs you more than you need him.

By telegraphing his reasonableness, and by reassuring all parties that real pain and conflict will be avoided, President Trump may make it impossible for the U.S. to “win.” Perhaps his goal in threatening China with tariffs is to obtain incremental changes—to win on a small scale and claim victory. That would be unfortunate, because a $375 billion trade deficit, compounded over years, even decades, equals millions of American jobs. It means that our economy is bleeding freely, and, if any body bleeds long enough, it dies.

The president should take the opposite tack. Instead of reassuring the Chinese, the markets, and the American people, he should tell them that a trade war really is coming. I suggest that he give a primetime address to the nation, and that he spell out the seriousness of China’s trade violations, and the horrendous human cost in terms of unemployment and economic dislocation in this country.

He would do well to declare, too, that America demands radical, permanent changes in Chinese trade practices. He might instruct his foreign affairs and national security teams to assemble a coalition of nations around the world to join with us in a broad-based effort to punish China for its trade manipulation. Most of all, President Trump should ask the American people to ready themselves for sacrifice, which a trade war would surely require.

The Chinese believe that they can win a trade war, for the simple reason they believe Americans are weak, selfish, decadent, and incapable of sacrifice. They are wrong.

The media may be unwilling to contemplate paying a few cents, or a few dollars, more for certain products, to save the American economy and the American worker from a slow but inexorable decline. The American people, however, will gladly take on this burden—if they understand why the burden is worth assuming. The cause is just—the cause is America itself.

President Trump made righting the wrongs of unfair trade deals a central theme of his campaign. But that can only be accomplished by risking a bona fide trade war, which would inevitably hurt many Americans—at least in the short term. Hopefully, a united front and a strong negotiating position will cause the Chinese to back down quickly. If not, they will soon learn that the “sleeping giant” of America, once roused, can defeat any foe.

Photo credit:   NICOLAS ASFOURI/AFP/Getty Images

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Americanism • China • Economy • Europe • Foreign Policy • Germany • Post • Silicon Valley • Technology • Trade

The Baguette Shop: A Parable About Trade

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You own an artisanal bakery that makes the best $2 baguettes in town. Business is booming. In fact, business is so good that a German bakery opens up across the street. You’re not worried: their $3 baguettes are good, but not that good. You’re sure you can outcompete them in good ol’ American fashion—and let’s be honest, who’s ever heard of German baguettes?

A month later you notice baguette sales are down. Why? You walk across the street to compare sales with the German bakery, and you see a sign: “Baguettes Now $1.” How could they possibly afford to bake such cheap baguettes? The lederhosen-clad owner tells you that the government is now paying for his flour—that’s why his baguettes only cost $1. “That’s not fair!” you exclaim. He just shrugs and says, “What can I say?”

A few months pass. Baguette sales are down, and you’ve done everything you can to cut costs: you’ve switched flour providers, fired staff, and worked longer hours. But the cheapest baguette you can bake still costs $1.50—it’s cheap, but not that cheap. No matter what you do, you cannot compete with the German bakery. The government’s pockets are too deep. Reluctantly, you close shop.

A few months later you’re buying a baguette at the German bakery. You see a sign: “Baguette’s Now $3.” Excuse me, what happened to the cheap baguettes? The owner says that since there’s no competition, he can raise prices and make big profits.

Later that night you tell your family what happened over dinner. Your son, an economics student at Harvard, advises you to reopen your bakery. You wince—as if you hadn’t thought of that. “I can’t,” you say, “I don’t have enough savings to reopen the bakery. It’s too expensive to start from scratch.”

Your son smiles and shrugs, “That’s the free market, Pop. Don’t you know what’s good for you?”

The Butcher, the Baker, the State-Backed German Candlestick Maker
Like all good stories, this one has a moral—and no, it’s not something trite like the government should not pick winners and losers. In fact, it’s precisely the opposite: the American government has an economic, political, and moral duty to ensure American businesses triumph over foreign rivals.

In our story, you represent America’s businesses, who produce high-quality goods at reasonable prices—the best $2 baguettes in town, as well as the best cars, computers, and airplanes. In fact, data from the Brookings Institute show that America’s advanced industries (aeronautics, pharmaceuticals, information technologies, etc.) are the second most productive on earth, behind only Norway’s. Further, they are fully 50 to 70 percent more efficient than their primary competitors in Western Europe. This is important because these industries generate the majority of America’s economic growth.

The takeaway: America makes the best stuff at the best price.

Back to our story. You bake the best $2 baguette, while it costs the German bakery $3 to bake an equivalent baguette. In a fair world, you would outcompete the German bakery, and steal their customers. But life’s not fair. The government stepped in and bought the German baker’s flour, so he could make baguettes for $1. The government tipped the scales, making it impossible for you to compete. As a result, you were forced to close shop.

Essentially, this is what happens when America trades with foreign nations: American businesses compete against foreign, state-backed businesses and inevitably lose—regardless of whether they are more efficient or produce better products. Remember, efficient American factories are the ones moving to China, not relatively inefficient German factories.

Trade asymmetries destroy American industries. Consider that Chinese firms can operate in America, but American firms cannot generally operate in China unless they partner with a Chinese firm. This is exceedingly common in the IT industry, where American technology companies trade technology for access to Chinese consumers—only to face insurmountable competition from Chinese copycat companies months later. Tied to this is the fact that Chinese companies (with the government’s tacit blessing), steal more than $500 billion worth of American intellectual property every year.

How can American businesses compete against China’s monolithic government? They can’t. Those who demand free international trade must recognize that tariffs are not the only impediment—different legal structures, business models, and economic philosophies preclude free trade and guarantee that liberal “free traders” will get screwed.

The Ol’ Switcheroo
At the end of our story baguettes cost $3, and you cannot afford to reopen your bakery. Everyone loses—everyone except the German baker. There are two lessons worth mentioning here.

First, monopolies are bad for consumers because they increase prices. That’s why everyone except monopolists hates monopolies. We must remember, however, that monopolies are good for producers. In a domestic market, the harm to consumers often outweighs the benefits to producers—but this is not always true in a global context. Net-exporters of a product (whether good or service) unequivocally benefit from high prices.

For example, oil-exporting nations like Saudi Arabia benefit far more from high oil prices than their domestic consumers are hurt by them. As a result, it is in Saudi Arabia’s best interests to monopolize oil production as much as possible, so as to ensure prices are high. Likewise, high potash prices help Canadian potash producers far more than Canadian consumers are hurt by high potash prices—it all depends on the balance of trade. Because of this, monopolies are often desirable in global markets.

Once you understand this, China’s push to monopolize global semiconductor production makes sense: they don’t want to give the world cheap semiconductors, they want to monopolize the industry, and then leverage their market power into higher prices. They are likewise doing this in other high-value industries. Further, we have already seen China do this with various industries in South America and Africa: they kill domestic industries by dumping cheap products, then jack-up prices in the aftermath.

Our story’s second lesson is that once an industry is dead, it’s dead. In the same way that you cannot simply reopen your bakery, it is very difficult to rebuild an industry once it has been completely offshored. This flies in the face of what liberal economists and political parrots like Ben Shapiro claim. They say that magical “free market” will open the door for American competition if foreign monopolists raise prices too high. This simply isn’t true. There are three reasons why.

First, because economic development is path-dependent, nations often lose the human capital to resurrect an industry. Specifically, after about a decade (or less, depending on the industry), not enough skilled workers remain to rebuild the industry—and those who do will likely have outdated knowledge.

Can you imagine if all of America’s aerospace industry moved abroad? Do you really think that two decades from now we would be able to design and manufacture cutting-edge aircraft? Of course not. We’d become like Iran: at best we’d be able to build outdated aircraft, and we certainly wouldn’t be at the cutting edge of innovation. It takes decades, sometimes centuries to play catch-up. This is why it’s better never to leave the race—no matter how “inefficient” it seems at the time.

Second, building an industry from scratch is prohibitively expensive, and recreating the vanished supply lines is almost impossible. The economy is a complex system, much like a coral reef: just as removing the wrong coral may harm the whole reef, so too may offshoring the wrong industry harm the whole economy. We don’t know how all the pieces fit together, and we cannot assume that relocating a particular industry to China will not have adverse unforeseen consequences—how badly will ancillary industries be disrupted? Can they survive without their anchor industry?

The Brookings Institute notes that every advanced industrial job supports roughly two other jobs in an asymmetrical, yet symbiotic relationship. The advanced industry is the coral in our reef, upon which the anemones and fish (supply chains and the service sector) depend. Remove the coral, and the reef dies. So, too, with the anchor industries.

For example, offshoring America’s automobile factories (the anchor) will likely kill America’s automobile engine, tire, and windshield manufactures, too. All the service jobs that depended upon the industrial jobs would collapse as well. The ramifications would be felt by accountants, hairdressers, lawyers, artists—everyone. This is basically what happened in the Rustbelt, and the results have been disastrous: joblessness led to socialism, hopelessness led to drug addiction, poverty led to urban decay.

Re-building an industry from scratch is so difficult that the developmental economist Mehdi Shafaeddin notes that no country has ever industrialized without government investment or protection. The input costs are simply too high.

This ties into the third reason why American producers could be locked out of our own market: manufacturing is subject to increasing returns on investment, rather than diminishing returns. The more product a factory produces, the cheaper each unit of production becomes. This is the opposite of what many classical economic models assume, and it’s part of the reason that the Austrian School of economics is wrong about global free trade. Consider the ramifications: if China can outcompete American industries that are subject to increasing returns (manufacturing), then they need not jack-up prices to reap monopolist profits (although they could) since their profit margins will naturally improve as they grow in scale. This locks out new competitors, who lack the scale to compete with lower prices.

The free market is not God, and worshipping it will not make Americans prosperous. Instead, we need to abandon our ideological presumptions and re-examine the evidence with new eyes—only then will we be able to truly make America great again.

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America • Americanism • Conservatives • Defense of the West • Donald Trump • Europe • Foreign Policy • History • Immigration • Middle East • military • North Korea • Obama • Post • Russia • Terrorism • The Culture • The Media • Trade

Trump is Cutting Old Gordian Knots

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The proverbial knot of Gordium was impossible to untie. Anyone clever enough to untie it would supposedly become the king of Asia. Many princes tried; all failed.

When Alexander the Great arrived, he was challenged to unravel the impossible knot. Instead, he pulled out his sword and cut through it. Problem solved.

Donald Trump inherited an array of perennial crises when he was sworn in as president in 2017. He certainly did not possess the traditional diplomatic skills and temperament to deal with any of them.

In the last year of the Barack Obama Administration, a lunatic North Korean regime purportedly had gained the ability to send nuclear-tipped missiles to the U.S. West Coast.

China had not only been violating trade agreements but forcing U.S. companies to hand over their technological expertise as the price of doing business in China.

NATO may have been born to protect the European mainland, but a distant United States was paying an increasingly greater percentage of its budget to maintain NATO than were its direct beneficiaries.

Mexico keeps sending its impoverished citizens to the United States, and they usually enter illegally. That way, Mexico relieves its own social tensions, develops a pro-Mexico expatriate community in the U.S. and gains an estimated $30 billion a year from remittances that undocumented immigrants send back home, often on the premise that American social services can free up cash for them to do so.

In the past, traditional and accepted methods failed to deal with all of these challenges. Bill Clinton’s “Agreed Framework,” George W. Bush’s “six-party talks” and the “strategic patience” of the Obama administration essentially offered North Korea cash to denuclearize.

American diplomats whined to China about its unfair trade practices. When rebuffed, they more or less shut up, convinced either that they could not do anything or that China’s growing economy would sooner or later westernize.

Europeans were used to American nagging about delinquent NATO contributions. Diplomatic niceties usually meant that European leaders only talked nonstop about the idea that they should shoulder more of their own defense.

Mexico ignored U.S. whining that our neighbor to the south was cynically undermining U.S. immigration law. If America protested too much, Mexico usually fell back on boilerplate charges of racism, xenophobia, and nativism, despite its own tough treatment of immigrants arriving into Mexico illegally from Central America.

In other words, before Trump arrived, the niceties of American diplomacy and statecraft had untied none of these knots. But like Alexander, the outsider Trump was not invested in any of the accustomed protocols about untying them. Instead, he pulled out his proverbial sword and began slashing.

If Kim Jong Un kept threatening the United States, then Trump would threaten him back and ridicule him in the process as “Rocket Man.” Meanwhile, the U.S. would beef up its own nuclear arsenal, press ahead with missile defense, warn China that its neighbors might have to nuclearize, and generally seem as threatening to Kim as he traditionally has been to others.

Trump was no more patient with China. If it continues to cheat and demand technology transfers as the price of doing business in China, then it will face tariffs on its exports and a trade war. Trump’s position is that Chinese trade duplicity is so complex and layered that it can never be untied, only cut apart.

Trump seemingly had no patience with endless rounds of negotiations about NATO defense contributions. If frontline European nations wished to spend little to defend their own borders, why should America have to spend so much to protect such distant nations?

In Trump’s mind, if Mexico was often critical of the United States, despite effectively open borders and billions of dollars in remittances, then he might as well give Mexico something real to be angry about, such as a border wall, enforcement of existing U.S. immigration laws, and deportations of many of those residing illegally on U.S. soil.

There are common themes to all these slashed knots. Diplomatic niceties had solved little. American laxity was seen as naivete to be taken advantage of, not as generous concessions to be returned in kind.

Second, American presidents and their diplomatic teams had spent their careers deeply invested in the so-called postwar rules and protocols of diplomacy. In a nutshell, the central theme has been that the U.S. is so rich and powerful, its duty is to take repeated hits for the global order.

In light of American power, reciprocity supposedly did not matter—as if getting away with something would not lead to getting away with something even bigger.

Knot cutters may not know how to untie knots. But by the same token, those who struggle to untie knots also do not know how to cut them.

And sometimes knots can only be cut—even as we recoil at the brash Alexanders who won’t play by traditional rules and instead dare to pull out their swords.

(C) 2018 TRIBUNE CONTENT AGENCY, LLC.

Photo credit: Art Media/Print Collector/Getty Images

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America • Economy • Energy • Post • taxes • Technology • The Media • Trade

Why Tariffs Will Benefit American Consumers

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In a recent piece for the Washington Post, former CNN correspondent Heather Long and her colleague Andrew Van Dam contend that President Trump’s tariffs will hurt Trump voters the most. Their conclusion is unsurprising, as the mainstream media’s raison d’être is to rebuke the president and gaslight his supporters into thinking they have cause to abandon him.

Don’t let them fool you. Tariffs are in America’s best interest, and they will help precisely the people Trump says they will: the working class.

The “Truth” is a Lie
Long and Van Dam argue that tariffs are bad because they increase prices and could cause a trade war. Higher prices are bad for American consumers, and will disproportionately hurt America’s poor “Walmart shoppers,” they contend. This sounds reasonable, but only because it ignores the other side of the equation.

In reality, every consumer is also a producer, and therefore what harms producers invariably harms consumers down the road.

A common sense example illuminates this point. The year is 1993. You work at an automobile factory in Michigan. Life is good—you can support your wife and three kids on a single income. Then President Bill Clinton signs NAFTA, a free trade agreement between Canada, the United States, and Mexico. Suddenly, your factory must compete directly with another factory in Mexico. It’s hardly a fair fight: not only does the Mexican government subsidize American automakers who relocate their factories, but Mexico’s environmental laws are lax, and Mexican workers earn just one-fifth of what you do.

Needless to say, the factory moves to Mexico and you lose your job.

Bill Clinton said NAFTA would make goods cheaper. But they’re not cheaper for you—you don’t have a job. The same is true for everyone else who lost his job. The lesson here is that free trade doesn’t benefit everyone—there are winners and losers. Winners save a minimal amount on their goods; losers lose everything, their jobs, their independence, and their dignity. Since 2001, when China joined the World Trade Organization (WTO) and America’s market barriers fell, we have lost a net 5 million manufacturing jobs. That’s bad, but it doesn’t tell the whole story.

Manufacturing is an anchor industry upon which predicate industries depend. A factory is like an oil field or a mine: it brings wealth into a community, and this wealth supports an ancillary service sector that otherwise would not exist. Hairdressers, waitresses, and accountants depend upon miners and factory workers—not vice versa. The Bureau of Economic Analysis estimates that each dollar of manufacturing output supports $1.48 in additional spin-off output. Therefore, one manufacturing job supports roughly 1.5 additional jobs. This is called a multiplier effect. And no, manufacturing’s multiplier effects are not subject to the broken windows fallacy critique because manufacturing is an anchor industry that generates new wealth.

In fact, manufacturing’s multiplier effect may be even higher. A study from a consulting firm working out of the University of Maryland found that one manufacturing job supports 1.92 additional jobs. Regardless of whether or not we can tether an exact figure to this proposition, the fact remains that when America loses a factory, it doesn’t just lose a factory—it loses an anchor, and therefore everything tethered to that anchor. In the end, those 5 million lost manufacturing jobs likely led to an additional 7-10 million jobs evaporating.

This is part of the reason why America’s unemployment rate is so high: based on data from the U.S. Bureau of Labor Statistics, I estimate that the real unemployment rate is roughly 13 percent, or almost three-times the “official” figure. This means some 23 million Americans are currently unemployed. The trade deficit, and America’s deindustrialization, is largely to blame for these high numbers. Likewise, according to the Federal Reserve Bank, America’s labor participation rate is at 62.8 percent (down 5 percent from 2001, when China joined the WTO). This is the lowest it’s been since 1977, before the age of deindustrialization. Although these feedback loops are well-understood, the free trade brigade (an unholy alliance of media pundits like Ben Shapiro, government bureaucrats, and tenured academic economists) refuse to recognize them. Instead, they demand ever more “free trade” with China’s communist dictatorship.

Life Imitates Art
Back to our story. After three months of searching, you finally find another job, waiting tables at Lindy’s Deli. The pay’s not very good, but at least you have a job—unlike many of your buddies from the factory. A month later your friend Joe gets a job at another restaurant, making even less than you. The same thing happens to Frank the next month. That makes sense: all those unemployed factory workers are competing for jobs, which gives bosses leverage to reduce wages. You’re one of the lucky ones.

Remember when Bill Clinton said that NAFTA would make goods cheaper? Well, they’re not cheaper for you, since waiting tables pays less than building automobiles. Nor are they cheaper for anyone else in your town, since more competition for jobs means lower wages. This brings me to the second lesson: the nominal cost of goods (sticker price) doesn’t matter, what matters is their real cost (how much you can buy relative to your income).

Pretend NAFTA reduced prices in your town by 5 percent, but wages also declined by 5 percent because of offshoring. Now what? An economist could truthfully say that NAFTA benefited American consumers by reducing prices—but that truth is also a lie, since NAFTA reduced wages by the same amount. In the end, NAFTA had no effect on prices in real terms. Bill Clinton was wrong. NAFTA was a sham.

In 2011, an economist at Princeton University found that the average wage cut for those American workers displaced by offshoring was 17.5 percent—and that does not include the millions of people who dropped out of the labor force altogether. Further, the job loss caused by globalization has caused American wages to stagnate. According to data from Pew Research, the median hourly wage in 1973 was $22.07 (in 2014 purchasing power), whereas the median hourly wage in 2014 was just $20.74. Essentially, the median American is economically worse off than he was nearly 50 years ago (technological improvements aside).

The American dream is dying, and free trade is to blame.

Filling the Gaps
Long and Van Dam’s second point is that Trump’s tariffs may start a trade war. Specifically, they note that China is targeting American pork and soybean producers with retaliatory tariffs. Let’s hope we do get a trade war—it may be the only way to force Congress to take Chinese neomercantilism seriously. Nevertheless, Long and Van Dam’s claim is absurd.

To begin with, raw commodities like soybeans and pork are fungible. That is, American pork is indistinguishable from Canadian or Brazilian pork. As such, these retaliatory tariffs would have no effect on American pork producers: the Chinese will simply buy more Canadian and Brazilian pork, and America will sell more pork to Canada and Brazil—we will “fill in the gaps.” Unsurprisingly, America’s hog farmers realize this, and most aren’t concerned. According to a 2017 report in the National Hog Farmer:

China imported additional 3 million tons by the end of April 2017, making it the No. 1 pork importer last year. As a result, Hayes says it kept the European Union and Canada busy while the United States backfilled pork to the remaining countries. “We (U.S.) are getting the benefits of China without actually shipping a whole lot of product there,” notes Hayes.

China will not hurt America’s pork industry with tariffs because pork is fungible. The same goes for soybeans. Long and Van Dam should know better.

Now suppose that China imposes retaliatory tariffs on non-fungible goods, like American aircraft components. Won’t this hurt American producers? Sure. But remember, in 2017 American companies sold China $130 billion worth of goods; meanwhile, Americans bought $505 billion worth of Chinese goods, according to the U.S. Census Bureau. As such, Chinese producers benefit far more from trade than do American producers, and on balance, American producers are actually harmed by trade with China. In the event of a “full-scale” trade war, American producers would benefit by reclaiming American market share more than they would be harmed by losing access to China’s markets.

Likewise, this imbalance gives us leverage over China. Rather than skulking about crying about tariffs, the mainstream media, pundits like Ben Shapiro, and the effete husk that is the GOP should be thinking of ways to use tariffs to force China to pay for the $500 billion in intellectual property it steals from America annually. If China honored America’s property rights—just as we honor theirs—we would actually have a trade surplus. Tariffs can help redress this issue.

America holds all the cards. It’s time we played our hand.

Photo credit: iStock/Getty Images

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2016 Election • America • American Conservatism • Americanism • Center for American Greatness • civic culture/friendship • Democrats • Donald Trump • Economy • Greatness Agenda • Political Parties • Post • The Culture • the Presidency • Trade • Trump White House

The Political Economy of Trump’s Tariffs

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President Trump’s decision to impose tariffs on steel and aluminum imports has been roundly attacked from all sides. Tariffs are so beyond the pale that even the politically diametrical editorial boards of the New York Times and Wall Street Journal have condemned them. This unholy alliance of Left and Right merely demonstrates just how central the idea behind the tariffs is to Trump’s philosophical challenge to elite orthodoxy.

The very idea that Trump has a philosophy at all may strike many readers as odd. The president is notoriously transactional when it comes to policy, changing his mind on a host of issues with startling speed. Unlike past presidents like Ronald Reagan or even George W. Bush, Trump is notably unable or unwilling to comprehensively explain where he wants to take this country. These deficiencies in communication, however, do not mean that he lacks such a vision.

Pride and Dignity

Trump’s vision rests on an idea of community and nation that has fallen into disfavor among elites on both the Left and Right. Americans, in Trump’s view, are not simply individuals whose value is determined by market transactions. They are our fellow citizens, people to whom we have an obligation that is separate from their ability to persuade or compel the owners of capital to invest in their lives. When their dreams cannot be fulfilled or their lives are harmed because other Americans make decisions that directly or indirectly harm them, then we must act through our government to set things right.

This view carries with it a less materialistic and more spiritual view of what it means to be human. The American who can produce something of value produces far more than the value of the goods or services he produces. That person produces pride and dignity. Earning enough through one’s one efforts to support one’s life vision is the most basic source of pride. The great or talented may take pride in other things, such as the ability to best others in competition or build something outside themselves like a business or a work of art. But these more recognized sources of pride-inducing achievement ultimately rest on the most common and basic ability to produce enough of sustenance to support one’s self and one’s family.

Proud people also want to live in proud communities. They take care of their surroundings, both their personal homes and the collective they share. They want clean and safe streets, attractive buildings and open spaces, and even perhaps some expressions of communal pride and aspiration, such as those found in monuments, buildings, or common spaces. No upper-income suburbanite wants their child going to a school whose windows are broken or wants to shop in a place where shops are boarded up. The same holds true for everyone.

Winners and Losers

In Trump’s view, our political economy has been hurting millions of Americans for far too long. International trade agreements allow Americans who own capital—intellectual, physical, or monetary—to contract with foreigners to produce goods or services at vastly lower prices.

This means American factories close or move and the good paying jobs that come with those factories dry up. The owners of capital benefit enormously—that is what is behind the dramatic increase in incomes among the most educated Americans over the last 30 years. Americans as consumers benefit too from the cheaper goods and services this system creates. But millions of Americans are net losers—their losses as former producers far exceed their gains as consumers.

These Americans are also suffering spiritually. As they lose their jobs through no fault of their own, their sense of pride suffers. As too many of them lose their jobs all at once, their communities suffer too. They may find other work that pays less and make do, but their sense of being part of a common endeavor dims. As their communities decline into neglect and disrepair, their belief that America isn’t working for them grows.

Current intellectual orthodoxy treats these losses as the necessary, perhaps unfortunate, byproducts of an ever growing—dare one call it, progressive—society. The global increase of wealth is valued more by this orthodoxy than the loss of income and pride suffered by their fellow citizens. The dramatic increase in income and life opportunities foreigners obtain through this system is touted by elites as a great achievement. The loss of both by their fellow Americans is ignored.

“Makers” and “Takers”

This arises because elites on the Left and Right no longer believe that community or citizenship hold enough value to give rise to legitimate political claims. To even ask for protection—of jobs, of income, of the ability to pursue one’s dreams—is unacceptable. This is true especially on the Right, where to be called a “protectionist” is slander almost on par with being called a “racist.” Society progresses through the limitless increase in wealth: don’t you understand?

The Left and the Right disagree somewhat on how to address these losses, to be sure. Those on the right tend to ignore any request for redress as improper. If you ask for a subsidy to maintain your standard of living, say through food stamps or Medicaid expansion, many on the Right label you a “taker.” If you’re not building a business or going to college to improve yourself, you’re just not worth enough for us to take notice.

It’s no accident that the very people who flocked to Donald Trump turned their backs on the Romney-Ryan ticket.

The Left tends to fail by looking at the problem as merely material. To them, increased government subsidies and enforced minimum wage hikes solve the problem. But neither solution confers the pride that comes from a job, nor does either solution address the system that places these people under a continual competition that they simply cannot win. They are palliatives that ease the suffering of the body but ignore the suffering of the soul.

Spread the Wealth

Trump’s solutions—tariffs and immigration restriction—ring true to many Trump voters because they directly address what they perceive as the causes of their problem. Such direct action has the additional, perhaps the decisive, benefit of telling these voters that they matter. Just as one derives pride from living in a well-kept community, so one also derives pride from living in a country that exalts your values as its own. For many of these people, that more than any immediate or tangible increase in their income is what will “make America great again.”

Tariffs may not produce the desired results in increasing job numbers. Shrinking international trade may very well produce a shrinking global economy that causes Americans to lose jobs and become poorer. On the other hand, tariffs may simply be a precursor to a deal that spreads the gains from increasing wealth more evenly between foreign labor, capital, and American labor. That’s what the Reagan-era trade restrictions did. But in a very important sense, economics is not their point or even how their success solely should be measured.

So-called populist movements around the world are gaining strength because their voters no longer feel like valued members of their nations. They do not believe their worth should decline because the owners of capital say so, nor do they think their life dreams or values should be denigrated simply because the most educated have different visions.

Populists like Trump address this spiritual yearning and fulfill the deepest need every human has, to be valued and to belong to a group that values you. In this, and perhaps in this need alone, all men are truly created equal. Tariffs are simply an economic means to fulfill this spiritual need. Tariff opponents can only win if they first recognize this need and promise a more effective way to fulfill it.

But if Trump’s elite opponents do this, then he has already won, as they will have come to adopt the more holistic view of human nature that his challenge at its heart embodies.

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Photo credit:  NICHOLAS KAMM/AFP/Getty Images

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America • Asia • China • Donald Trump • Economy • Foreign Policy • Post • Trade

Trump’s Hardball Trade Tactics Are Working

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When President Trump recently announced new tariffs of $50-60 billion on Chinese exports, to punish China for stealing U.S. intellectual property and coercing U.S. companies into revealing their technological secrets, the media’s reaction was, to say the least, negative. The reaction to Trump’s tariffs designed to protect U.S. steel and aluminum producers from unfair foreign competition was no better.

A sampling of headlines underscores and highlights the point: “Trump Tariffs Undermine Trust . . . ,” “Trump Tariffs on Chinese Imports Could Raise Prices for Shoppers,” “Trump’s Trade War is Stupid, and It’s Bad News for Virtually Everyone in the U.S.,” “Trump’s China Tariffs Risk ‘Tit-for-Tat Protectionism’ That Threatens World Economy,” “China Slams Trump’s ‘Reckless’ and ‘Arrogant’ Tariffs, Warns of Retaliation,” “Trump Tariffs . . . Could Make Your Next Phone or Laptop Cost More,” “5 Reasons Trump’s Steel and Aluminum Tariffs Are Stupid,” “Trump’s Tariffs Won’t Protect U.S. Jobs, But They May Start a Trade War,” “’Straight-Up Stupid’, ‘Incompetent’, and ‘Misguided’: Economist . . . Rips Trump’s Tariffs,” “More Pain is Coming from Trump’s Tariffs,” “EU Official’s Response to Trump’s Tariffs: ‘We Can Also Do Stupid,’” “Imposing Tariffs is Stupid Policy,” “Trump Orders Huge Tariffs . . . Raises Trade War Worries,” “Trump’s Idiotic Trade War is Tanking the Stock Market,” “Larry Summers: Trump’s Tariffs ‘Crazy, Dumb.’”

As you can see, if there’s a theme here, it’s that Trump’s tariffs are not merely unwise—they are destructive and foolish. Even a dunce, we are told, could see that Trump’s policies could not possibly lead to anything good.

Well, at the risk of exposing myself as a dunce, I would draw the reader’s attention to some important new developments that prove Trump’s instincts as a businessman and a negotiator were, in fact, spot on.

First, China did announce retaliatory measures. They were feeble, by all accounts. Trump is proposing to slap tariffs on Chinese exports that will add $50-60 billion to their costs (the value was calculated based on the losses that American companies face because of abusive Chinese trade practices). The Chinese, in reply, are proposing to target $3 billion in U.S. exports with tariffs of 15-25 percent—implying an aggregate value to their tariffs of less than $1 billion. Does this sound like the clarion call of an earth-shattering trade war to you? On the contrary, it sounds as if the Chinese are thoroughly spooked.

The Chinese also indicated—contrary to the headlines above—they agree with the premise of President Trump’s sanctions. They agree that their market is closed to many U.S. goods and that major changes would be necessary in Chinese trade policies to enhance their fairness, transparency, and openness to foreign competition.

“With regard to trade imbalances, China and the United States should adopt a pragmatic and rational attitude, promote balancing [i.e. reduction of the U.S. trade deficit] through expansion of trade, and stick to negotiations to resolve differences and friction,” said Chinese Premier Li Keqiang. While hardly endorsing Trump’s tariffs, the Chinese clearly are signaling their openness to further talks, and they have already demonstrated, by previous concessions, a willingness to meet the United States halfway.

There is, however, a much bigger sign that Trump’s forceful trade strategy is paying dividends. The United States and South Korea on Tuesday announced a revision of their free-trade deal (the one President Trump had threatened to cancel), and it involves major South Korean concessions. South Korean steel exports will be cut 30 percent, and U.S. access to the South Korean auto market will expand. This should go a long way to closing the $17 billion trade gap between us while expanding opportunities for American workers—which is precisely what President Trump was elected to do.

Far from causing a breakdown in U.S.-South Korean relations, Trump’s hardball tactics have resulted in meaningful progress, and will likely produce greater prosperity for the American people.

All along, the key assumption made by the media on trade—that any policy that confronts bad actors overseas with their unfair trade practices will produce conflict and economic cataclysm—has proven to be false. For years, in fact, establishment politicians, corporate leaders, and journalists have been so committed to the shibboleth of supposed “free trade,” to internationalism, and to politically correct platitudes, that they refuse to question the fairness and rationality of existing trade deals and relationships, even while record trade deficits bleed many factory towns white.

President Trump is proving that the establishment’s scaremongering is baseless, and that standing up for American workers, and for U.S. economic interests, is not only possible—it works.

It’s too bad we didn’t learn this lesson sooner.

Photo credit: Fred Dufour/AFP/Getty Images

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America • Center for American Greatness • Democrats • Donald Trump • Economy • Education • Foreign Policy • Greatness Agenda • Post • Progressivism • Technology • Trade

Economic Nationalism Helps Workers and Strengthens the Nation

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Among the many malapropisms of Donald Trump during the campaign, one in particular rankled the credentialed class. After his primary victory in Nevada, Trump intoned, “We won with young. We won with old. We won with highly educated. We won with poorly educated. I love the poorly educated. . . . So I’m very proud of you, this is an amazing night. I love the country, I love the country.” While fat shaming is out, education shaming has been in for a very long time. Commenters at the time were aghast at Trump’s offering this kind word for a fairly large part of the electorate. By contrast, Hillary Clinton smugly described her voters as coming from places “that are optimistic, diverse, dynamic, moving forward.”

The Middle Class and the Middle of the Country Are Suffering
The Midwest and the Rust Belt have been coterminous for a long time. These places were admittedly not very optimistic or dynamic prior to Trump’s election. They were moving backward. The people were hurting. And this hurt stems from a broader problem in the economy: it has become unbalanced. And this problem is creating cascading stress to family life, health, and safety in the affected communities.

Since the early 1990s, the economy’s rewards increasingly go to the technology sector, which produces neat gizmos, but few jobs, as well as the finance sector. Incidentally, both of those sectors are the place where the really smart kids end up. They siphon talent from the Harvards and Stanfords of the world, and they make a ton of money for their companies, their shareholders, and their top level talent. These sectors do not, however, create jobs among those who used to work in steel mills, auto plants, refineries, and other places where “dirty, dangerous, and difficult” work takes place.

The decline of the manufacturing sector has gone on a long time and has occurred for many reasons, including automation, stricter environmental controls, and the crippling short-sightedness of labor unions. But the decline has particularly accelerated since the 1990s when China’s large, low-wage, high-IQ workforce became available to the world. Labor and environmental regulations at homemade domestic manufacturing less attractive. At the same time, the American financial sector grew to a remarkable 7.5 percent of the U.S. economy, even as its investments in capital goods increasingly occurred overseas. Things got messy. After lackluster wage and income growth for all but the top earners, the economy essentially blew up in 2008. In the Obama years, following this debacle, the economic picture was mixed. Jobs grew at an appallingly low pace, wages remained flat, but those at the top, on the eve of retirement, or with positions in technology and the finance sectors, benefited tremendously as the stock market rose through a combination of earnings growth and artificially low interest rates.

Republicans and Democrats each treated the decline of the manufacturing sector as a fact of life. Obama callously declared, as if he were a mere observer, “some jobs aren’t coming back.” Jeb Bush said he wanted more millionaires, this at a time when many would settle for $40,000 a year.

The most famous cheerleader for these anxiety-inducing changes to our country’s economy is Tom Friedman, whose contempt for workers is only matched by his love of name-dropping. He excitedly quoted an expert who declared “the high-wage, medium-skilled job is over.”

Friedman says the solution is education and training. “In a world where average is officially over, there are many things we need to do to buttress employment, but nothing would be more important than passing some kind of G.I. Bill for the 21st century that ensures that every American has access to post-high school education.”

Friedman, Hillary, Jeb, Wall Street, and Silicon Valley forgot that average gets to vote. Average liked the way things were before. And average ain’t so average that they can’t figure out when a system is rigged against them.  

Enter Trump and Economic Nationalism
The centerpiece of Trump’s policies of economic nationalism is immigration restrictions and protective tariffs. Contrary to Friedman’s advice to get training and be prepared to job hop until you somehow retire, Trump’s proposals are substantially more realistic and find strong historical examples of success in America’s phenomenal growth as an industrial and world power during the 19th Century.

Under Trump, manufacturing jobs have grown nicely—171,000 in 2017—and he has reiterated his support of this sector with the recent call for tariffs.

Coming back to Trump’s offending remarks, it rankles because it reveals an important truth about life that undermines the deus ex machina solution of education and training: half of the people are, by definition, below average. Yet, somehow in the past they found jobs. When Trump says “Make America Great Again,” he recalls an era when the merely average (or below average) could have decent lives, intact families, home ownership, high trust communities, and economic progress.

The key to this equitable and rising tide was not merely free markets and limited regulations at home—although that was part of it—but also a limited labor pool, which encourages capital investment, which increases the average productivity per worker, and ultimately leads to an increase in wages. If you permit the natural limits of the labor pool (through sensible immigration limits) and if you discourage capital flight and pure wage competition (through protective tariffs), the result is a more productivity and investment at home. And thus, high wage manufacturing, as well as services that cannot be outsourced, reward the hard-working, but not necessarily high IQ or dynamic, cohort to earn a decent living.

Lake Wobegon We are Not
With all of the gnashing of teeth regarding the Bell Curve and its alleged implications for America’s commitment to racial equality, commenters missed out on two important insights for the future. First, that education can do little to enhance the prospects of those of middling intellect. That is, IQ tends to be stable, heritable, and mostly immutable. And, two, that our system increasingly rewards a “cognitive elite,” which intermarries at a greater rate than ever, and that this elite has replaced the more intellectually diverse, hereditary WASP elite of yesteryear, which was animated in part by an ethic of noblesse oblige and patriotism, values not necessarily restricted to the brilliant. As the authors observe, “The cognitive elite has pulled away from the rest of the population economically, becoming more prosperous even as real wages for the rest of the economy stagnated or fell. The divergence has been most conspicuous in the lowest skill jobs.”

America’s free trade policies served it well after World War II. The rest of the world was in shambles, and America had the capacity to sell its goods far and wide. As the rest of the world rebuilt, however, competition became fierce. Other countries developed policies to favor their own manufacturers and through various policies shut out American exports. Following the post-World War II script in the 1990s, China obtained “most favored nation” status, and its economic power was unleashed. Americans could buy low priced Chinese goods if they remained employed and had disposable income, even as others sunk from middle class to destitute status.

The promise of opening China’s markets was that they would liberalize over time through contacts with the West. Further, their interconnectedness with the rest of the world would create conditions for international peace and prosperity. Instead, they have built a first-class navy on America’s dime, and products that we used to make at home are now imported from China, while millions of jobs and communities have been crippled in the process. Their growth would be of little moment when G.I. Joe dolls, iPods, and trinkets are involved. But the focus of Trump’s tariffs—steel and aluminum—are essential to national independence and national defense, as well as being a source of high-paying jobs. You can’t build cars, skyscrapers, planes, guns, tanks, and aircraft carriers without them, and when the industry sinks below a certain level thousands of years of experience and know-how can be lost. When that happens, not only the jobs but the ability of the nation to remain independent is jeopardized.

Trump’s immigration and tariff policies are part of a unified policy of economic nationalism. The two components of this policy—immigration restrictions and tariffs—are designed to strengthen the nation as a whole, as well as to address the extreme and destabilizing imbalances in the economy. Any realistic economic policy must deal with people as they are, which includes the fact that many are “poorly educated.” Instead of imaging they can all become computer scientists and verbally facile “knowledge workers,” we must instead capitalize on the fact that they are willing to work and are finite in number, but the skills required must match their abilities. In other words, we need a robust, high-paying manufacturing and services sector.

Open borders, whether for goods or people, do not allow this cohort to benefit from the one thing they traditionally can trade upon: their work ethic and their scarcity. Instead, they must compete with the 7 billion people worldwide who are willing to do what they can do much cheaper, whether in factories abroad or in the shadows here at home. So long as they face this kind of competition, their wages will become decoupled from their increasing productivity, as demonstrated in the chart above. Restoring their prosperity and dignity is essential to national greatness.

Even someone who is poorly educated can see that.

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America • Americanism • Deterrence • Economy • Foreign Policy • Greatness Agenda • Immigration • Post • Progressivism • The Culture • Trade

Compassionate Nationalism

One might think that President Trump’s frequent references to “America First” would be palatable to all Americans, especially since Trump takes every opportunity to assure foreign leaders that he fully expects them to put the interests of their own nations and citizens first as well. But given the virulent opposition Trump seems to attract, particularly with respect to policies that embrace the principle of America First, it would be helpful to try to explain some of its moral foundations.

Just as conservatism often suffers a rhetorical disadvantage when pitted against liberalism, nationalism suffers a rhetorical disadvantage when pitted against globalism. With measured success, conservatives have risen to the challenge, offering up versions of compassionate conservatism based on principles of prosperity, freedom, opportunity, liberty, and so on. So how might one define compassionate nationalism?

America Can’t Help the World Unless America is Strong
The crucial moral argument in favor of nationalism is that America cannot be a force for good in the world unless it is internally cohesive and economically strong. Ironically, this is a globalist argument, but it differs from liberal globalism insofar as it asserts that America’s way of life is more effective than that of most other nations in delivering freedom and prosperity to its people. Therefore protecting the American way of life is a prerequisite to America helping the rest of the world achieve that way of life.

This is an arrogant claim. It makes people uncomfortable. But it’s true. Standing up for American values, and more generally, for Western values and traditions, is a nationalist sentiment. But it isn’t ugly, it’s beautiful. It isn’t jingoistic, it’s compassionate.

America and the West have given the world nearly everything that gives individuals hope for the future—democracy, technological revolutions, capitalism, social welfare, equality of opportunity, individual freedom, environmental stewardship. Parliaments. Railroads. Medicine. The Internet. The list of wondrous innovations that make life better for everyone, everywhere, is endless—and nearly all of them came from Western societies. This should be boldly proclaimed because it is the moral basis for why immigrants who come to America must be assimilated to American values, not impose their values or demands upon America.

One of the most contentious elements of the Greatness Agenda is changing America’s immigration policies. But if current policies are not changed, America as we know it will cease to exist. America needs to restrict immigration primarily to individuals who are highly skilled in professions where there are shortages of American workers. Moreover, priority needs to be granted to immigrants from cultures that are fundamentally compatible with our own. This means cultures that respect individual freedom, cultures that do not accept corruption as a given, cultures that embrace religious freedom and women’s rights.

The moral argument against this, of course, is that America should rescue the impoverished refugees and offer them safe haven. The problem with that argument is simple—the numbers don’t work.

America Cannot Possibly Accommodate the World’s Poor
America currently has a population of 330 million people. According to the UNICEF, more than 3 billion people—10 times the U.S. populationlive in poverty. Over 1.3 billion peoplefour times the population of America—live in extreme poverty. But it doesn’t end there, as if we could actually transport more than billion people to our shores.

According to the United Nations, the population of India will increase by another 353 million people in just the next 20 years. Similarly, in only 20 years, Nigeria is projected to add 122 million people to its population, Pakistan will add 97 million, Indonesia, 69 million, Congo, 65 million, Egypt, 47 million.

In fact, according to the latest projections from the United Nations, not including China, the 50 nations in the world with the greatest projected increases to their population include only two developed nations: America and Great Britain. America is projected to add 55 million people to its population in the next 20 years. Great Britain, another 11 million. The other 48 nations? They are projected to add 1.7 billion people to their population in the next 20 years.

Here’s more irony: Already living within these 48 nations are nearly all of the world’s 1.3 billion people who live in extreme poverty. So as the United States adds 55 million people to their population in the next 20 years, with more than half of that increase due to immigration, it has a choice. Will we import people who contribute to society, such as doctors and engineers, or will we choose to import unskilled economic refugees who will drain our wealth and further undermine national cohesion?

There is an argument to be made that unskilled immigration still constitutes a net economic gain for the host nation. But even those who still make that argument concede that there is a greater economic gain to be had via entry of highly skilled immigrants. And these arguments miss the point, which is that even if America admitted millions of economic refugees, there would still be billions of people who will continue to live in desperate poverty in the nations those relative few who escape leave behind.

Foreign Aid Costs Less and Helps More than Mass Migration
Put another way, if the liberal globalists want open borders for moral reasons, what they are basically doing is acknowledging that mass migration of unskilled people is a form of foreign aid. And if so, the vastly more effective way to offer foreign aid is to remain economically strong, and then offering actual foreign aid to these struggling nations. In nearly all iterations, direct foreign aid helps more people, more effectively, if it is spent over there. A good example is the case of displaced war refugees, where at least five times as many can be supported in relative comfort in areas close to their country of origin, when compared to the lifetime cost of resettling and supporting these refugees in the United States.

The moral argument in favor of favoring direct foreign aid over mass immigration of destitute, unskilled people is magnified if one examines the challenges that could be addressed for a fraction of the funds that would be necessary to resettle millions of immigrants. The situation in Sub-Saharan Africa provides searing examples of need. According to the United Nations, the sub-Saharan’s 800 million population is projected to rise to 1.5 billion by 2050. It has the highest fertility rate in the world—and the lowest life expectancy. It has 90 percent of the world’s malaria cases, with well over 100 million cases per year. Similar rates of affliction apply in sub-Saharan Africa for diarrhea, tuberculosis, intestinal worms, and other infectious diseases. These illnesses not only kill millions each year but almost invariably leave survivors with permanent cognitive impairment.

Aggressive programs of foreign aid can solve many of these problems. Malaria was nearly wiped from the earth in the 1950s. Diarrhea and intestinal worms could be eliminated largely through basic hygiene and proper sanitation. Tuberculosis could be eliminated by identifying and treating casesbefore they spread via contagionthrough a comprehensive national health service.

What about violence, civil strife, domestic violence, child sexual abuse, female genital mutilation? What about malnutrition, iodine deficiency, iron deficiency, pollution, illiteracy? All these problems can be alleviated with foreign aid. Often foreign aid is exposed as ineffective. But mass immigration would cost much more, to accomplish even less. As a form of foreign aid, mass immigration is the least practical way to help the destitute of the world, yet that is the core moral argument for open borders.

The Moral Path
If America is economically strong, with skilled, capable immigrants who have left behind a diverse assortment of poverty-stricken nations, foreign aid isn’t the only way to help those nations. Direct investment in infrastructure and industry are also ways to quicken these nations’ rise to prosperity, especially if they are practical. Here again, the conventional liberal globalist wisdom is flawed, because these nations don’t need wind farms and solar panels, they need cost-effective natural gas and nuclear power plants. They need dams and aqueducts. They need to drain swamps, refurbish and expand their railroad network, become net food exporters, engage in sustainable forestry, and build universities, hospitals, roads, cities, industry
they need to join the 21st century.

Instead, the liberal globalist sends them just enough medicine and food aid to ensure a burgeoning population, demands nothing of their governments in return, and pretends that a few solar panels will somehow power their economies to prosperity. It’s virtue signaling that is oblivious at best, maliciously opportunistic at worst.

Embracing compassionate nationalism is the moral path towards making America great again. If America truly recovered the energy and vision of the nation it was a century ago, Americans would invest in mega-projects in developing nations. They would invest in projects to green the Sahel by diverting water from the Ubangi River into Lake Chad, or by planting a trillion drought tolerant trees along the latitude of 15 degrees north, from Mauritania to Sudan. Projects to make the desert bloom, and expand the forests. It was done in Israel. It took about 70 years. Where’s the difference? If the will was there, Americans could lead this effort, and other great works, and truly help midwife the emergence of a global civilization.

If we could see 500 years into the future, we probably wouldn’t recognize much. It will probably be a transnational civilization, populated by transhuman beings. But in the meantime, and to ensure we survive the present, America must be strong. Whatever globalist future is in store for us, it is best served by exercising compassionate nationalism, not virtue signaling nihilism.

America • Donald Trump • Elections • Immigration • Political Parties • Post • Republicans • The Media • The Resistance (Snicker) • Trade

Immigration and Tariffs: Keys to Victory in ’18

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Donald Trump is under siege. He is being hounded by a dogged, partisan special counsel intent on leading a witch hunt. Trump’s own party is lukewarm about his presidency (and many are looking for the exits). The Democrats, obviously, are out for his blood. Trump’s staff keeps shifting at light speed. And, of course, the media is adding fuel to all of these fires, in order to get ratings and satisfy their own ideological interests.

Currently, President Trump’s approval ratings are at historic lows when compared to several of his predecessors at similar points in their administrations. Also, we must keep in mind, Trump did lose the popular vote in 2016 by a substantial margin.

As I have argued repeatedly, the 2018 midterms could be the make-or-break moment not only for President Trump but also for America’s future.

Currently, the Democrats believe they are leading a wave election akin to the one Republicans led in 2010. Whether true or not, one thing is apparent to even the most casual political observer: the Democratic Party’s base is energized. In January, I argued that the Democrats may need to reassess their hopes for 2018, based on the success of Trump’s tax cut. It is now clear that the strategy of Democrats to redouble their incessant efforts to shout down the president is galvanizing the party faithful. Regardless of how obnoxious their campaign may seem to those on the Right, the fact is the Democrats are making considerable headway in their attempts to turn-out-the-vote in 2018.

Republican consultants (yes, yes, I know) are debating whether the president should take an active role in campaigning for candidates this year. At the moment, it appears after the outcome of the special election in Western Pennsylvania, the president will keep a low profile on the campaign trail (though we’ll see how long that lasts).

Run on What Works
In reality, the best thing President Trump could do to bolster the GOP’s chances in the midterms is 
double-down on the issues that won him the presidency.

The talk is cheap. Also, forget about the tax cuts. They did some good, but they didn’t go far enough—and the voters likely aren’t going to focus on that issue, since the media is intent on making this a popularity contest. Trump is going to need to turn out significant numbers of the coalition of blue-collar voters that showed up for him in 2016.

Midterms notoriously are elections where the party in power suffers turnout problems. The average presidential election sees only around 60 percent of the voting population turn out to vote. The numbers are halved for most midterms. Thus, the key to winning for either party is to do a better job of galvanizing their bases.

Right now, the Democrats are far more inspired and encouraged to show up and vote against Donald Trump than Republicans are willing to turn out and vote for Trump. The issues, such as illegal immigration and tariffs, are what will get the vote out for Trump and the GOP in most contests. Trump’s greatest strength is that he appeals not only to Republicans but also to blue-collar workers who usually vote Democratic.

In 2016, Trump focused on matters that concerned America’s blue-collar working-class communities. Resisting open border anarchy, free trade wrongheadedness, and combating the opioid epidemic—these were all issues that pushed Trump over the finish line.

Don’t Lose Your Nerve
President Trump has already initiated the tariff program. Although
 a trade war remains possible, as I’ve written for the last two years, protectionism itself is not the problem (the world’s most successful economies are protectionist). In fact, protectionism is the only thing that will defend critical American sectors from foreign usurpation. Whatever happens with America’s manufacturing communities in the long-term, the reality is that America’s steelworkers “will not forget” how Trump went to bat for them. Ditto for most of the other forgotten men and women in America.

But, the president cannot stop there. And now that China is unleashing its former anti-corruption tsar, President Xi Jinping’s so-called “firefighter,” Wang Qishan, on Sino-American trade disputes, Trump will need to hold fast to his protectionist stances and hold firm against a tough Chinese backlash.

Yet, the most important issue that Trump fixated on in 2016—immigration, illegal and legal—remains relatively unchanged. Yes, illegal immigration into the United States has declined since Trump took office. No, it has not stopped. Neither has the flow of illicit narcotics into the country. What’s more, the wall is a long way off. And Trump’s travel moratorium keeps meeting stiff resistance in the courts. Unless Trump visibly breaks ground by building the wall (both metaphorically and literally), the blue-collar worker who made Trump’s election a possibility will be disinclined to turn out again. Why support tariffs if blue-collar jobs will end up with cheaper foreign-born workers?

Trump could help to ensure a Republican victory in 2018 (even if he chooses not to campaign actively for candidates) by pushing his nationalist-populist agenda. That is the only way he will galvanize his supporters to come out in droves and vote for the GOP candidates, despite his name not being on the top of the ticket as it was in 2016.

If Republicans cannot achieve a solid victory in 2018, then the Democrats might just get the votes they need to impeach the president. (Remember: impeachment is a quintessentially political act.) That would not only be bad for Trump personally, but it would be a disaster for the United States.

For the GOP to win, Trump had better return to the core themes that won him the presidency, no matter what the damned establishment says.

Photo credit: Nicholas Kamm/AFP/Getty Images

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America • American Conservatism • Americanism • Donald Trump • Greatness Agenda • Post • the Presidency • Trade • Trump White House

Man of Steel

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If the American Dream was flat-lining, the Trump administration may be acting as a defibrillator. Against furious opposition from within and without, President Trump is taking a step in line with the Republicans who made the GOP America’s Party.

“I think there’s been an awful lot of advice,” said Sen. Ron Johnson (R-Wis.) “this president doesn’t seem to be taking it.” After Trump approved the tariffs, House Speaker Paul Ryan said, “I disagree with this action and fear its unintended consequences.”

Is it any wonder that a partisan who reveres Atlas Shrugged as gospel would fear sacrilege against free trade? By contrast, our first president kept Cato, a Tragedy and a Bible close to heart. Egoism versus virtue, greed against God.

Establishment Republicans present a cheap simulacrum of their former glory and are America’s Party no more, they are Wall Street’s party, wittingly or otherwise. The GOP is largely disconnected from the hearts and minds of Middle America, a consequence of a Republican establishment that has enshrined free trade—pro aris et focis be damned—as the singular sacred cow of our republic. Even as the president prepares to perform a long overdue tauroctony and although Americans are not thoroughly ignorant of economics, Republicans don’t get it. They cannot fathom why Middle Americans have chosen to rally in favor of tariffs or in favor of economic nationalism.

And rally Americans have. Ed Goeas of Tarrance Group found 88 percent support for products “Made in America” to be taxed less than products made overseas. In January, Rasmussen showed nearly 50 percent of Americans believe the federal government should “place tariffs on goods from countries that pay very low wages to their workers,” compared to just 26 percent of Americans against tariffs on foreign countries. Most recently, Morning Consult showed 59 percent of Americans believe it is “important” that the United States place tariffs specifically on China. Still, Republicans have proven profoundly tone-deaf against this myriad of grievances.

Beyond the economics petri dish, the impact of exporting of blue-collar jobs has resulted in a decrease in marriage and fertility, an increase in single-mother households, and an increase in the number of children raised in poverty. Free trade fundamentalists might attempt to divert attention away from the plight of your citizen-neighbors, by pointing to the expansion of the service sector as testament to the universal good of free trade. Does that really compensate for all of the middle class jobs we have hollowed out? No, it doesn’t. Lee Spieckerman points out, “the services sector entails a much smaller proportion of well-compensated middle income jobs than does manufacturing.”

“Services include Wall Street banks and financial firms,” Spieckerman adds.

As corporate media—with its endless supply “free trade conservatives,” pundits, “libertarian Republicans,” professors, and economists—intensifies its attacks, consider that so-called experts have consistently turned out for doomsaying ahead of the president’s successful policy implementations. Larry Summers, former advisor to Bill Clinton and Barack Obama, and past president of Harvard, predicted that “10,000 will die per year due to tax reform.” It’s getting more and more difficult to tell the difference between The Weekly Standard’s, “Trump’s tariffs punish consumers,” and the New York Time’s claim that words are violence.

Widescreen televisions are probably cheaper than they’ve ever been, and we have supplanted well-compensated work with part-time and seasonal employment in the service sector. Never mind that real wages of Middle Americans were just 5 percent higher in 2013 than they were in 1979, while the lowest-earners in America were paid 5 percent less in 2013 than they were in 1979. Pay not a pittance of concern to the problematic social and cultural phenomena associated with the hollowing out of Middle America which has correlated with historic suicide, depression, and addiction rates. What matters are all the trinkets, knickknacks, and novelties you can consume for a bargain price, as the praises for free trade continue to linger on our lips.

Americans will no longer be cowed into acquiescing their economic annihilation. Republic Steel in Ohio and Granite City Steel in Illinois are already preparing to fire up the furnaces in anticipation of Trump’s tariffs. Republic President and CEO Jaime Vigil said the company is “more than prepared to support market demand that has been previously supplied by imports. We maintained our Lorain facility while it’s been idled waiting for the opportunity to restart and it appears that time is finally here.”

American manufacturing has been “in a trade war the last 15 years and they’ve been savaged and they’re losing,” says Duff Shea, president of San Antonio-based steel supplier Alamo Iron Works. Nucor CEO John Ferriola says Trump is “simply leveling the playing field, treating [other countries] the way that they have been treating us for over 30 years.” Nucor, the largest steel producer in the United States, plans to invest $240 million into a new rebar mill in Florida that will employ 250 people and pay an average annual salary of $66,000. Magnitude 7 Metals announced the opening of a smelter in Missouri that will employ 450 people (and up to 900) at an average annual salary of $64,000. And this is just the beginning.

“We know that if we’re given a level playing field, we can go toe-to-toe with anybody in the world,” said Tim Timken of TimkenSteel Corporation. “What I can’t do is compete with foreign governments. That is what we’ve been doing over the last couple of years.” The attacks against the president at the hands of Beltway partisans in the pockets of Wall Street may be legion, but they belie the economic nationalism that still roars in the heart of American industry.

Despite the hubbub over doomsday price increases on everything from cars to six-packs, high-profile automobile manufacturers would like to assure you that the sky isn’t falling. Florida-based Pacific Boat Trailers has announced that they will not hike up the price of their products in response to tariffs, because “loyalty to the American metal workers and to our Country was more important.” This is what economic nationalism looks like, real patriotism.

It has been especially disappointing see popular right-wing commentators misinform Americans. As Spencer P. Morrison points out, countries with large trade surpluses are richer than those with large trade deficits on average.

But perhaps the biggest lie of all is that free trade has ever been an actual thing. Thirty European nations impose a value-added tax (VAT) as high as 27 percent on U.S. imports. Among our top four European trading partners, the VAT is 19 percent in Germany, 20 percent in Great Britain, 22 percent in Italy, and 20 percent in France. Our European trade partners slap a tax on our imports, then rebate it on exports to the United States. The VAT is a tariff, only not in name.

China maintains a 25 percent duty on U.S. car imports. Also, it is a nation that denies its people basic freedoms and rights. If the Chinese government is one that enslaves and tortures millions, then there is very little freedom behind that “Made in China” label, beside the freedom of the “consumer” to look the other way from up high on their “shining city on a hill.”

While there is little we can do for the plight of the Chinese, we can help our own. Americans are witnessing their factories roar back to life in the Rustbelt, they’re seeing the return of jobs they were emphatically and condescendingly told “are just not going to come back.” The president’s defiance of an establishment that has long forsaken the forgotten man has sent him striding far out in front all others in the Beltway. “Steel matters as a symbolic issue, it’s connected in people’s minds with trade, and jobs,” says John Green, a political analyst at University of Akron.

In his bold move, Trump might just take America through a boundary no establishment Republican has had the courage to cross, and if successful, he will let drip away the “free trade” illusion once and for all to the great benefit of this nation. Trump, his constituents, and the captains of American steel and aluminum understand sacrifices must be made in the short-term to secure America’s future and rebuild America’s engine of prosperity, the middle class.

What Americans stand to regain in the long run by means of economic nationalism, is sovereignty itself.

Photo credit: Saul Loeb/AFP/Getty Images

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America • Economy • Elections • Foreign Policy • Greatness Agenda • Post • Republicans • taxes • Technology • The Media • Trade

Ted Cruz, Free Trade, and the Future GOP

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This is a very different Ted Cruz than I remember.”

That was correspondent Kasie Hunt’s assessment on “Morning Joe” as the Republican senator from Texas told the crew about his good relationship with Senate Majority Leader Mitch McConnell (R-Ky.) and newfound ideological crossover appeal.

“Right now in the Senate, I am in a fairly unusual position, because I’m able to speak with real credibility to conservatives, but also able to speak to moderates, to leadership, to the president, to the administration and to try to bring everyone together,” Cruz said.

It’s certainly early, but it all looks a little familiar.

After running to the right of John McCain as the conservative champion in 2008, Mitt Romney was suddenly back in 2012 as the establishment candidate. The gambit worked. Romney had just enough credibility with the conservatives that, when combined with his new establishment support, he came away with the nomination.

Though temperamentally opposites, Ted Cruz appears to now be running from the Romney playbook. Last week while Cruz was laughing it up on the Morning Joe set, he was also shifting from his campaign conservatism back into establishment good graces.

On the topic of Trump’s new tariffs, Joe Scarborough invited him to criticize the president. “I’m sure you lit him up on the campaign trail about sounding like a Democrat when it came to tariffs,” Joe said.    

Cruz passed on the opportunity to correct the record, but the truth is he took great efforts to hide his deep free trade roots during the campaign. In 2014, Elaina Plott explained that Cruz’s opposition to the Trans-Pacific Partnership (TPP) “easily aligns him with the conservative-populist voters who’ve helped fuel his meteoric rise through the ranks of the GOP…” In the heat of the Wisconsin primary, his campaign released an ad in which Cruz said, “I’m going to stand up for fair trade and bring our jobs back from China.”

Last week, he was back to being Free Trade Ted.

“I think tariffs on steel and aluminum are a mistake,” Cruz told “Morning Joe” viewers. “I think there are a lot more jobs in this country that are dependent on steel and aluminum as inputs, and we are going to end up costing more jobs because of the tariffs than will be saved.”

Cruz appears ready to back the establishment bet that Trump is an anomaly, and the GOP will return to the trade policies of the Bushes, Romneys, and Kristols once Trump is gone. But is that the case?

When a lifelong free trader like Cruz starts running ads saying, “I’m going to stand up for fair trade,” it would seem an acknowledgment that the ground has shifted. What was obviously a powerful sentiment against unfettered free trade during the primaries has likely grown stronger.

As Trump has made his case, former free trade advocates have begun to rethink their own positions. In a recent column at Townhall, free-trade supporter Kurt Schlichter had a change in tone: “I like free trade—I just don’t like snooty ideologues who won’t take their own country’s side in a trade fight.”

Along with Cruz’s tacit nod to a shift in party principles, add Jeff Flake’s explicit statement in a March 11 appearance on “Meet the Press.” After the U.S. senator from Arizona admitted he wasn’t seeking re-election because he couldn’t win a Republican primary in his home state, Flake was asked directly if the Republican Party is still the party of free trade.

“You know, it’s tough to make that case right now, really,” Flake said. “Free trade is rarely popular out on the stump, you know, in a campaign, but usually after the campaign the Congress gets together and says, ‘Alright, let’s pass Trade Promotion Authority or let’s pass this trade agreement.’” This is precisely true. And part of the problem. Congressional Republicans are simply out of step with their voters. A new Morning Consult poll this week, for example, found 70 percent of Republican voters support Trump on tariffs.

Cruz is a shrewd politician who came closer than most figured to pulling off the nomination last time. Shedding his street-fighter image and moving into establishment good graces may well be good politics. But when it comes to trade, Cruz, and his fellow Republicans might also consider the oft-quoted assessment of British statesman Lord Salisbury: “The commonest error in politics is sticking to the carcass of dead policies.”

Photo credit: Mark Wilson/Getty Images

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America • China • Defense of the West • Economy • Foreign Policy • Israel • Post • Technology • Trade

Why China Will Fail

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This is not a happy time to be an entrepreneur seeking to list your firm on one of China’s stock exchanges. Nor is your situation better if you’re one of the Securities Commission members charged with approving listing applications.

Chinese companies aren’t doing very well, and Beijing thinks it’s because the standards on initial public offerings (IPOs) weren’t strict enough in the first place. A better winnowing process is needed to ensure that only the crème de la crème of Chinese companies gets listed. Those not making the grade are viewed as “locusts that must be killed,” or as viruses, with the commissioners’ mission being to “prevent diseases from entering the body via the mouth.” That kind of thinking would put a dampener on an entrepreneur seeking seed capital no matter how great he thinks his idea is.

In China, the only way to obtain seed capital is first to get regulatory approval. That’s a process that can take years. And the commissioners aren’t inclined to view applications benignly, for they will be held “accountable for life” for each IPO they approve. Only last month, Chinese authorities swooped down to seize a large private insurer deemed to have become too risky. One would not want to be one of those who approved its application.

Is there any wonder, then, that the Chinese are widely regarded as not being creative? Yes, they file a lot of patents, but the quality isn’t great, with the state news agency Xinhua complaining, “China owns very few patents featuring originality and high or core technology.” In fact, Chinese innovation relies on the modification of existing technologies, like putting together a cell phone and a cigarette case. These creations are fun, but they lack depth according to a Chinese writer who prefers to remain anonymous.

Israel, on the other hand, is a tiny country of about 8 million people that’s been called the “Start-up Nation.” Israelis have created, among many other technologies, the Waze app used by 50 million drivers worldwide, a technology that’s allowed blind people with intact optic nerves to see (OrCam), and a lithium car battery that’s tripled the mileage for electric cars (Phinergy). These are more than mere trinkets. They will have a lasting effect on future technology.

The difference is that Israel encourages risk-taking. Israelis are innately risk-takers or they wouldn’t be living in a country that’s surrounded by 17 hostile Arab countries with 46 times its population.

Creativity, like entrepreneurship, thrives in an environment that welcomes risk, not in one where risk-taking is punished. By its very nature, creation is risky. This is why I’m amused when I hear people sneering at Donald Trump’s bankruptcies, as if failing when taking big risks is a cause for shame. Gary Shapiro, author of two best-selling books on innovation, explains the innovative success of the United States and Israel: “Both countries share the unique view that entrepreneurial failure is an education rather than a badge of dishonor. They don’t punish risk-taking the way many other nations do.”

Billionaire Mark Cuban explains it this way. “Failure is part of the success equation.” You don’t succeed unless you take risks. And when you take risks you sometimes fail. When that happens you pick yourself up and start over again. Except that doesn’t happen when failure means you get a visit from your friendly local commissar.

China has aspirations to become a world power equal to the United States, and many American declinists believe this is inevitable. I don’t share their view. So long as the Chinese people lack the freedom to fail, China will remain weak. The country that today funds its failing companies is running out of money, and the international community is running out of patience, as can be seen from the tariffs President Trump is levying on Chinese steel.

China’s response is to try to strong-arm its companies into succeeding. It will have the opposite effect.

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America • Conservatives • Economy • Education • Foreign Policy • Immigration • Libertarians • political philosophy • Post • taxes • The Media • Trade

Tariffs: An Allegory

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Suppose you run a company with lots of employees. For a long time, among your employees have been a couple of your nephews. If you’re being honest, they are not your favorite workers. There’s always pressure to raise their wages and they are now up to $25 per hour each, which is more than they are worth. They even side with the union against you and are not generally grateful to you for employing them. Plus they are crude: they tell jokes you don’t like, drink beer, and are often just a pain in the rear.

One day you decide you are going to replace them. For just $10 an hour each you can hire three others to do their jobs, dropping your wage to $30 an hour.

At first, you are relieved. You are pocketing more money for yourself and it’s time your nephews make their own way in the world, anyway. Tough love.

But then your sister calls crying and tells you the boys aren’t doing well. Next thing you know your nephews are living in your basement and eating out of your fridge. Already, your plan to save money and avoid aggravation is a bust.

On top of this, you now start to notice problems with your new employees.

You trained Guy A and all of a sudden you realize that his cousin is starting a new company and is launching what looks like a copy of your latest design. Just a coincidence, your employee says. But now it develops that even though you hired one of theirs, his family won’t even let you sell to them anymore. They are going to buy from the cousin, even if his product isn’t the best or costs more. It’s a cultural thing, you have to understand.

Guy B has brought his whole family to your town and even though you are only paying him $10 an hour, the rest of his family is getting free services and your taxes are going up. Plus the whole family is voting against you and changing your town.

Guy C takes the money you pay him and hands part of it over to his religious leaders who regularly complain about you. One of his cousins is threatening a terrorist attack.

Wait . . . It Gets Worse
So now your town wants to hire increased security. You don’t want to to have to get involved in that effort and you don’t want your sons, who are actually contributing to your business, to have to interrupt their lives for this, either. But what about your nephews? They are still unemployed, why don’t they take on that job?

When one of them finally does you are happy to see him out of the house. But, again, the government is still sending you the bill for him. A year later he gets injured and comes back to live with you. Maybe your tough love thing was a little too much. He’s injured and now he’s hooked on pain meds. In fact, your other nephew, who didn’t go off to fight, has discovered that the only work he can find is making and dealing some of these same meds. Yep, this is working out great.

Way back when, you thought your nephews were crude, drank too much beer, and were a pain in your rear. But now you look back and that time looks positively idyllic by comparison. You have new employees who are petitioning to silence the church bells in your neighborhood because their own religious sensibilities are offended by the sound. Some are linked to terrorism and there are whole districts in your town that you know are too dangerous even to visit. Your town just doesn’t seem the same anymore.

Price Isn’t Everything
See how much money you are saving? See how your bottom line is, and should be, your one and only concern?

Sure, if the free market price were your only concern, buying from the lowest bidder would be good. But this is ridiculous. We routinely think that single issue voters are myopic, but then somehow the narrowest definition of free trade is supposed to be our single issue and if we don’t fall over on the wisdom of the elite’s purist definition we are ignorant of economics and have sold out our principles. I’m sorry, price is not the only economic concern and economics is not the only social concern. Would you go and live for decades in Pakistan just because they’d pay you 25 percent more?

I used to fall for the free trade line. I even sold it myself. I was wrong. Most of the free traders in the Beltway aren’t free traders at all. They have their hands in the cookie jar somewhere else. If we are going to live in a quasi-socialist state where we are just going to pay the rust belt in welfare what we took from them in wages, we are not saving a dime.

And then when you factor in the intellectual-property theft from China, the markets they close off to us, the fact that we have to turn to the rust belt to get our soldiers to fight the Islamists we made rich by buying their oil, the anti-American unassimilated voters we are importing. None of this is working out in the way it was sold to us.

The free traders say that whatever you tax you get less of. Well, then let’s stop taxing income. We didn’t have an income tax from 1787 until 1913. We had tariffs. Why are tariffs worse than income taxes? And please don’t bring up Smoot-Hawley, where the government double-dipped and had income taxes and tariffs, which was a huge change from the policies of the 1800s.

Libertarians and NeverTrumpers will say we have sold out our principles. In truth, we have wised up to a bigger game and we are maturely adjusting our actions where our theory didn’t work as planned.

They are stuck with failed policies, still buying into the con.

Photo credit: iStock/Getty Images

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America • Congress • Conservatives • Donald Trump • Economy • Greatness Agenda • Political Parties • political philosophy • Post • Republicans • taxes • The Media • Trade

Tariffs, Trade, and Patriotism

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President Trump’s recent decision to impose tariffs on steel and aluminum in response to what he (and most Americans) view as the routinely unfair trade practices of China and other foreign powers has upset more than a few Beltway apple carts.

It has also triggered a lot of heated criticism from the Right—much of it amusing, some of it more thoughtful, but most of it simply wrong-headed.

For constitutionalists, this fascinating policy kerfuffle represents a rare, not-to-be-missed opportunity to review a few forgotten fun-facts about our Founders’ “original intent” on the matters of trade and taxes.

So let us examine the criticisms of NeverTrump conservatives of the president’s pro-tariff trade policies, consider what our Founders had to say about trade and in particular the policy of a protective tariff, examine where Free Traders really get their ideas about global political economy, and finally explore what “free trade” correctly conceived looks like from a truly constitutionalist perspective.

First, let’s hear the critics.

In Which the “True Conservative” Laments
Mark Levin is an honest, pro-free-trade, libertarian-leaning, one-time NeverTrumper whom many conservatives rightly admire for his animated articulation of oft-forgotten constitutional principles.

He was, until now, slowly warming to the president, on account of Trump’s mostly-conservative policy successes and the unsettling deep state sabotage that has at least partly disrupted his young presidency, and aims to end it.

But in response to this tariff policy announcement—yet another fulfilled Trump campaign promise, as it happens—“The Great One” got a bit unhinged, going so far as angrily accusing President Trump of imposing an “unpatriotic tax” on all Americans.

In this Levin merely trades his “constitutionalist” mantle of truth for his libertarian robes of righteousness. As I’ll explain shortly, both can’t be worn at the same time, at least not on this semantically sublime issue of tariffs and trade.

Speaking of “semantically sublime,” Sen. Ben Sasse (R-Neb.) used the occasion to grandstand on the issue, saying “If you own a steel mill, today was great for you. If you consume steel—and every American family bought something at the store tonight with metals in it—today’s a bad day for you.”

As if that analysis wasn’t reactionary enough, he went still further. “This is leftist economic policy and we’ve tried it a whole bunch of times over the last two centuries and every time, American families have suffered,” he asserted.

The only NeverTrumper who has ever said anything measurably dumber is Kevin Williamson, who famously opined that declining Rust Belt communities weren’t in any way victims of foreign interference in our economy permitted by a corrupted national politics, but instead deserved on their own moral merits “to die.” Trump’s talk about tariffs and other measures to help these communities are not sincere, he argues, but are just demagogic attempts to soothe and sedate ignorant people in the heartland.

Have any of these leading lights of Conservatism, Inc., these self-appointed guardians of GOP ideological and constitutional purity, ever bothered to study what our Founders really believed about trade? Or even what the first Republican president actually advocated about tariffs, and why?

Sadly, it seems not, because if they had, they’d realize to their embarrassment that Trump has more in common intellectually with those towering historical figures than they ever will.

The Founding Fathers Were “Leftists”
To Sasse’s not-so-subtle assertion that the tariff is a failed leftist policy tried repeatedly over the last couple centuries, resulting always and only in misery for American families, a few dispositive quotes are in order.

Sasse was certainly on to something, and in fact, may have inadvertently uncovered one of the most hidden-in-plain-sight Left-wing conspiracies of all time!

First, we’ll start with that famous Marxist agitator, George Washington:

A free people… should promote such manufactures as would render them independent on others for essentials. I shall give every encouragement in my power to the manufactures of my country.

And then there’s the crypto-Nazi, Alexander Hamilton:

Let the thirteen states be bound together in a strict and indissoluble union, concur in erecting one great American system superior to all transatlantic force or influence.

And the Trotskyite community organizer, Thomas Jefferson:

The prohibiting duties we lay on all articles of foreign manufacture which prudence requires us to establish at home, with the patriotic determination of every good citizen to use no foreign articles which can be made within ourselves, without regard to difference of price, secures us against a relapse into foreign dependency.

And that subversive anarchist who penned the Constitution itself, James Madison:

In its (Congress’) first act, a national revenue must be obtained; but the system must be such a one, that while it secures the object of revenue, it shall not be oppressive to our constituents. Happy it is for us that such a system is in our power; for I apprehend that both these object may be obtained from an impost on articles imported into the United States.

Next up, that Stalinist Henry Clay:

Poverty befalls any nation that neglects and abandons the care of its own industry, leaving it exposed to the action of foreign powers… There is a remedy, and that consists in adopting a genuine American system accomplished by the establishment of a tariff…. The cause is the cause of the country, and it must and it will prevail.

And the Bolshevik Daniel Webster:

My object is, and has been, with the protective policy, the true policy of the United States, that the labor of the country is properly provided for. I am looking not for a law such as will benefit capitaliststhey can take care of themselvesbut for a law that shall induce capitalists to invest their capital in such a manner as to occupy and employ American labor.

And then, finally, the tax-and-spend Bernie Sanders socialist, Abraham Lincoln:

The tariff is the cheaper system. By the direct-tax system the land must be literally covered with assessors and collectors going forth like swarms of Egyptian locusts. By the tariff system the whole revenue is paid by the consumers of foreign goods. By this system, the man who contents himself to live on the products of his own country pays no tax at all.

In other words, the tariff was the original “flat tax,” with an opt-out for anyone who wished instead to “Buy American” or invest in American labor! Who knew?

Wherever these “conservative” and “constitutionalist” NeverTrumpers got their ideas about global free trade (and open immigration, for that matter), it clearly wasn’t from our Founders or from the celebrated statesmen who arose during the first 150 years or so of American history.

Conservatism, Inc.’s Very Foreign Policy Principles
The thing is, we do know where they get their ideas about trade and taxes. They get them from the libertarian and European neo-liberal philosophical traditions, among whose most articulate advocates today are those from the Austrian school, notable for their principled defense of free trade not merely as an economic policy, but as a political doctrine.

The Austrian economists are, in fact, worthy of admiration and respect, mainly for their intellectual rigor. For them, the philosophical battle is between statism and freedom. Their “methodological individualism” is unique and thoughtful in its approach to economic theory that contrasts favorably with the “macroeconomic” approaches of most statist schemers, such as Keynes, at least for anyone who thinks freedom is a good idea.

Whereas leftists and statists prefer a command-and-control global system (so-called “fair trade”), the Austrians argue philosophically for a global system based on contractual or “free market” principles (i.e., “free trade”).

But—and this is the critical point—they both pine for a global system.

There is no place for national self-determination or republican self-rule, much less even the concept of the nation-state itself in the cosmology of either’s globalist doctrines. They merely disagree on the particulars of implementing their respective global systems.

And this is the false dichotomy into which Conservatism, Inc., has fallen, mainly out of bad intellectual habit and lack of curiosity. Global capitalism versus global socialism is not the only option. And this is the paradigm from which Trumpian conservatism is seeking to escape.

Only leftists speak of “arcs of history” or “inevitable” future realities, a point to bear in mind next time a NeverTrumper tells you we can’t “retreat” to “Fortress America” or put the global economy genie back in the bottle lest we be “left behind” in the “global economy of the future” and so forth.

Certainly, the current international trading regime is a real thing today and it is something with which we must contend wisely. But it is important to remember that political systems are all empty abstractions only made real—or undone—by deliberate policy implemented intentionally over time. The only thing that is inevitable is the march of time, and we make more or less of that time by the degree to which we consciously shape our future by choice instead of by accident.

What delicious irony, then, that the very same Austrians, with their insights properly divided between their philosophical contributions, on the one hand, and their economic contributions, on the other, are the key to our escape from these false choices—and to contemplate the brilliance of the American system as conceived by our Founders!

A Tale of Two Mises
In his seminal treatise, Human Action, Ludwig von Mises, Austrian economist extraordinaire, makes an important distinction between philosophy (the “science of ends”) and economics (the “science of means”). The latter, he maintains, never has anything to say critical about the former, other than whether, given some goal and resources on hand to achieve it, it is feasible according to stated time constraints, or must be reconsidered or rejected.

But free traders violate this rule all the time, conflating the goal with the means to achieve it, so that any other goal than “free trade” itself is seen as “not economic.” All pure nonsense to anyone who really gets what Mises is really saying. If your goal is national economic independence, as ours at least used to be, global “free trade” is the last policy an economist would advise; but a “free trader” would tell you that you’re just not thinking economically to seek national independence in the first place.

So, setting aside the usual sophisms that make free trade both the means and the end itself, the adult question here for those who seek national independence is this: through which economic policies can we intentionally become independent and self-sufficient (dare I say “great”?) again? Or are we no longer free to do so, and if not, why not?

Behold none other than Ludwig von Mises, during a rare moment when he was speaking strictly as a free-market economist and not a globalist philosopher:

The average standard of living is in [the United States] higher than in any other country of the world, not because the American statesmen and politicians are superior to the foreign statesmen and politicians, but because the per-head quota of capital invested is in America higher than in other countries . . . Capital is more plentiful in America than in other countries because up to now the institutions and laws of the United States put fewer obstacles in the way of big-scale capital accumulation than did those foreign countries.

That’s from his famous 1952 talk, “Capital Supply and American Prosperity,” which Mises delivered before the University Club of Milwaukee. He doesn’t attribute this observation to any particular founding policy, but his conclusion is even more Trumpian (never mind Lincolnian, Jeffersonian, and Washingtonian):

No party platform is to be considered as satisfactory that does not contain the following point: as the prosperity of the nation and the height of wage rates depend on a continual increase in the capital invested in its plants, mines and farms, it is one of the foremost tasks of good government to remove all obstacles that hinder the accumulation and investment of new capital.

Our Founders’ genius was to use tariffs, not in the way of the mercantilists (i.e., to pick winners and losers in various industries) , but rather for national revenue as the least-oppressive alternative to the confiscatory income tax, which they consciously rejected; and to define the boundaries of our system, for the purpose of increasing the power and riches of our nation (in the old Adam Smith sense). They didn’t just “not hinder” capital investment; they actively promoted it.

Tariffs had the effect of encouraging continual accrual of new capital in our domestic labor, and this, not “free trade” either as an ideology or a policy, is how and why we became a wealthy nation. Indeed it is no surprise that during the present era of free trade we have reversed our fortunes, and become the largest debtor nation in history, shipping most of our capital supply and industrial infrastructure overseas in exchange for cheap goods, as Jefferson feared.

All of this leads to an important insight: There is a difference between “free trade” as a loose confederation of nations sharing labor and capital freely, and genuine union of the serious sort our Constitutional republic is intended to ensure. We tried the former with the Confederacy. It failed. So far, the latter has succeeded for nearly 300 years. There’s a reason for that.

Now let’s discuss how critical and interconnected political union is to economic union. The path for any country wishing to have “free trade” with us has always been clear since 1789, in the form of the Constitution itself.

Free Trade vs. True Political and Economic Union
Inasmuch as “free trade” is really just division of labor between members of a system masquerading as some new doctrine, and not “trade” between separate systems in a purely economic sense at all, any argument for “free trade” between the United States and another country is, according to our founding perspective, really just an argument for statehood. That is, free trade is and must be in accord with a positive and mutually beneficial argument for political and economic union.

For the states already in the union, the Austrian economic criteria for such proposition would be the degree to which the proposed new state would contribute or attract greater capital investment relative to the combined per-head quota of capital investment of the whole society after the merger.

If that math doesn’t justify it, or political union of this kind, with the responsibilities it entails between the other states in the Union and another country, is not desirable for any other reason under the sun (language, fundamental cultural differences, or the practical impossibility of defending it), neither, then, is economic union an appealing option.

Put another way, “free trade,” like “free love,” seeks to have the benefits of physical union with none of the responsibilities of cultural or political marriage, and that is the formula for cultural and systemic disaster. We have seen it wreak havoc on our dying industries and their declining communities.

The combination of falling wages resulting from the law of equilibrium performing its inexorable leveling function, and an income tax regime made necessary because tariffs were eliminated in the interest of global division of labor is the truly “unpatriotic tax” levied on all Americans by ideological free trade, Mr. Levin.

You can’t be a libertarian free trader and a constitutionalist at the same time on this issue, unless you adopt our Founders’ understanding of the need both to regulate trade and to encourage national unity and self-sufficiency as critical to the wellbeing of the country and the freedom of our citizens.

Subverting national borders is truly a “leftist” utopian policy that never works, at least not for any national good, no matter how often it’s tried—all due respect to Senator Sasse.

Religious pursuit of free trade as an abstraction against the interests of American industry is what has starved our Rust Belt communities of life-breathing capital supply, precipitating systemic cultural failure and widespread individual despair remedied only by hiring a U-Haul, Mr. Williamson.

Unless we are willing to bring in other countries as new states into our Union (and no one is making a practical argument for doing that), the idea of an assumed “free trade” between us and them is absurd.Any other relationship than shared statehood and nationhood is just trade of surplus production. It is, therefore, subject to the dictates of prudence.

It has ever been thus in the real world that even clear-thinking classical liberals like von Mises once upon a time inhabited. That it is no longer so is a testament to how far Conservatism, Inc., has drifted from the moorings of constitutional first principles.

“Free trade” as it has come to be understood today is a globalist ideology and is *not* conservative (in the sense of “conserving” the American way of life), but radical in that it is a departure from it. Nor is it an economic doctrine but a political one. In the crudest terms: It is to political union what free love is to marriage.

Free trade the economic phenomenon is just “division of labor’ by another name, and no free market supporter opposes it. Understanding the context is vital. You can’t have a division of labor between members of disparate systems; that is ”trade” in the economic sense, and negotiated between nations based on surplus.

The idea we can’t be independent and self-sustaining is not an economic idea, but a philosophic one, one that is entirely at odds with the system the Constitution was designed to guarantee.

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