ChiMerica 1 10 July 2019.

There are real grounds for alarm over China.[1]  Many economists believe that the continuing growth of the Chinese economy will lead it to supplant that of the United States as the world’s largest by 2030 or 2035.  Moreover, China is a dictatorship with apparent ambitions to push the United States out of its dominating position in the Far East and perhaps to exert Chinese influence more broadly.  China has been imprisoning he numbers of Uighurs (Muslims) in Xinjiang province.  Some people suspect that, under Xi Jinping, China has chosen a new course.   Abandoning a “liberalizing” path, the Chinese want to spread modern authoritarianism to other countries in the same way that the United States has been trying to spread democratic capitalism.

The Obama Administration saw the challenge in China.  However, it became mired in peripheral issues (the Middle East, Ukraine).  It never managed to mount an effective response to the central problem of China.  The “Trans-Pacific [Trade] Partnership” treaty fell victim to the populism of the right and the left.  It would not have been implemented even if Hillary Clinton had won the election.

Since 2017, the Trump Administration has pursued a different course.  In December 2017, the White House issued a “National Security Strategy” paper that claimed that China and Russia “want to shape a world antithetical to U.S. values and interests.”  In June 2018, Secretary of State Mike Pompeo said that “China wants to be the dominant economic and military power of the world, spreading its authoritarian vision for society and its corrupt practices worldwide.”  The head of the State Department’s Policy Planning Staff[2] said “This is a fight with a really different civilization and a different ideology, and the United States hasn’t had that before.  The Soviet Union and that competition, in a way, it was a fight within the Western family.”

So far, the struggle has been waged purely on the trade front.  For many years, China has been running a huge trade surplus in trade with the United States.  That is, it sells far more to the United States than it buys from the United States.  However, much of that production is done by American companies who have off-shored factories to cut costs.  If they have to charge higher prices to their American consumers because of the tariffs, then why make the stuff in China?  There’s Vietnam, the Philippines, and Indonesia.  In 2018, President Trump began slamming tariffs (taxes on imports) on Chinese exports to the United States.  Then, Trump tightened the screws with sanctions on the Chinese tech giant Huawei.  It has urged other countries to boycott Huawei and to refuse to participate in China’s “Belt and Road” infrastructure project.  Supply chains are going to start to move.

Because of the huge trade imbalance, China can’t exert much direct pressure on the United States by imposing tariffs of its own.  It can look for substitute suppliers for American exports, like soy.  It has started running lots of old Korean War movies (in black and white) in which China battles American aggression.

At the same time, neither side has pulled out all the stops.  For example, the U.S. has not made much of a deal about China imprisoning many Uighirs

However, we are in the early days of a huge struggle.  It is difficult to see yet how it will shake out.  Weak ending, I know, but true.

[1] Edward Wong, “U.S. vs. China: Why This Power Struggle Is Different,” NYT, 27 June 2019.

[2] See: https://en.wikipedia.org/wiki/Kiron_Skinner

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The Worst President Ever 5 July 2019.

Typically, the popular understanding of American history is that the Revolution gave rise to the Articles of Confederation (the first government of the United States); then that ramshackle arrangement soon proved unsatisfactory to many people; and then the present Constitution created the legal framework for subsequent American history.  In fact, there existed deep divide over several issues.  First, federalism (a union of sovereign stares) versus nationalism (a union of states under a strong central government).  Second, the divide—which would only grow until our own time—over who got to be a full “American.”  Those arguments had to be fought out over many presidential administrations.

Many of the contentious issues that would shape American society down to the present day became evident in the administration of Andrew Jackson (1767-1845).  Jackson served as the seventh president of the United States (1830-1838)

He believed that the final interpreter of the Constitution was the President, not the Supreme Court or the individual states.  It is in this light that one must see his opposition to John Calhoun’s doctrine of “interposition,[1] rather than in some doctrine of general federal supremacy.

He believed in the forced removal of the Native Americans to lands west of the Mississippi.  In 1830, he signed a federal law, the Indian Removal Act, which ordered the rapid evacuation of Native Americans from the Southeastern United States.[2]  He defied the Supreme Court to do so.

He opposed the Second Bank of the United States.  The Bank sold government bonds to finance the deficit; it issued a “sound” paper currency that allowed the economy to expand; and it provided credit for business.  In this sense, it served as a predecessor for the Federal Reserve System.  He believed that the Bank endangered American democracy and prosperity by concentrating excessive wealth and power in a few hands.  He vetoed the renewal of its government charter.

Jackson then began shifting federal funds from the Bank to a number of “pet” banks in the state.  Many of the “pet” banks were located in the West.  The principal use of credit in the West was land speculation.  This led to easy credit from the “pet” banks and much speculation in land.  At the same time, Eastern banks found themselves with declining reserves, so they raised interest rates.  In 1836, in an effort to rein-in speculation, Jackson issued a requirement that federal lands sold to the public be paid for in gold or silver, rather than in the inflated paper currency issued by state banks.  This “Specie Circular” was one, important, factor among several causes of the “Panic of 1837.”   The resulting recession dragged on into the 1840s.

A pre-Keynesian, he eliminated the deficit and paid off the national debt.

He appointed Roger B. Taney to be Chief Justice of the Supreme Court.  In the “Dred Scott Decision” (1857), Taney and the majority held that a) African-Americans could not be citizens, and b) that slavery could not be prohibited in the territories.

So, arguably, America’s worst president.

[1] “Interposition” meant that individual states could block the local enforcement of federal laws which the state government considered to be unconstitutional.

[2] See: https://en.wikipedia.org/wiki/Indian_Removal_Act.  Enforcement of the Act resulted in the “Trail of Tears.”  See: https://en.wikipedia.org/wiki/Trail_of_Tears

My Weekly Reader 20 June 2019.

If you don’t like the Donald Trump Presidency, then there are some questions you need to address.  First, is Trump what the Brits call a “one off,” or is he the leading edge of a new wave in American politics?[1]  Second, what led to Trump’s election?  No, it wasn’t the Russians.  No, it wasn’t Hillary Clinton’s incompetence as a politician.  Both are real, but the decisive factors lay elsewhere.  On the one hand, Donald Trump decided to target the grievances of white, working-class men.  On the other hand, Donald Trump decided to run as a Republican, rather than in his natural home as a Democrat.  Like “Bud” White, “he’s not as stupid as he seems.”

The grievances of white working-class men are real.  Once upon a time, they were the mainstays of the “New Deal Coalition” that put Democrats into the White House from 1932 to 1952, from 1960 to 1968, and from 1976 to 1980, along with various majorities in Congress.  Unionized working-class jobs gave blue-collar workers middle-class incomes.  Then they fell by the wayside for complex reasons: mostly mechanization, but also the two successive oil “shocks” of the 1970s, organized labor’s attack on struggling employers in the 1970s, foreign competition, and ideological shifts in the two major parties.  Then, in the 1990s, China’s accession to the World Trade Organization (WTO) under favorable terms compounded the problems of American industry.

As a result, men’s industrial employment declined, new jobs shifted to other geographic areas;[2] new jobs required “college” rather than “vocational” education; and the social world of the “left behind” disintegrated (single motherhood, alcohol and drug use, general demoralization).[3]

No one in either party had bothered to address those grievances.  The suburban base of the Republicans lives in blue oxford-cloth shirts and Dockers (or the female equivalent).  The Democrats have embraced “identity politics,” which excludes the identity of the white working class.  These are “post-industrial” societies.

As a result Trump’s campaign could drag into the ranks of the Republicans a bunch of normally Democratic voters or non-voters.  The opened the possibility of a Republican presidential victory that must have seemed far-fetched if any of the other munchkins running for the nomination won in the primaries.  Republicans lined up behind Trump and they will do so again in 2020.  They get to pack the federal courts for the lifetime of the appointees.  They get to stall and roll-back the imperial decrees of Barack Obama.

Are we—as a country—better for it?

[1] That’s a disturbing thought.  In twenty years we could be talking about John Carpenter’s “Trump Tower: Power Outage.”  In 2025, radical environmentalists (but I repeat myself) sabotage the federally-mandated coal-fired generating plants that power New York City.  Suddenly, the nightlight of the city-that-never-sleeps go dark.  The elevators (and escalators) and AC and cable-television stop working.  Chaos breaks out in the streets below, but atop Trump Tower a “celebrity roast” of former members of the Trump Administration is underway.  Comments by Jim Mattis, Reince Priebus, H.R. McMaster, Hope Hicks, Sarah Saunders, Jim Comey, Jeff Sessions, Rex Tillerson, Nancy Pelosi, Mike Pompeo, John Bolton, etc.  I suppose the deranged killer haunting Trump Tower could wear a Robert Mueller hockey mask.

[2] Try selling your house if you live in Erie, PA.

[3] See: Isabel Sawhill, The Forgotten Americans (2019) and Oren Cass, The Once and Future Worker (2019).  If this is what happened to white Americans, then what are we to make of the impact of “liberal paternalism” on African-Americans since the 1960s?

My Weekly Reader A 19 June 2019.

In traditional societies, people found their identity within and as members of groups.  In the Medieval and Early Modern West, for example, the Christian churches taught morality and sponsored religious confraternities.  The peasant agricultural societies portrayed by Pieter Breughel involved much group labor and existed within the framework of village life.  European cities were governed by professional groups (guilds) and had purchased various group “privileges” from local lords or more distant kings.  People belonged to hereditary “orders” like Commoners and Aristocrats.  These societies existed within belief systems and economic systems that offered little individual choice.

Then things changed.  It took hundreds of years, but intellectual, political, and economic systems all changed.  The Scientific Revolution and the Enlightenment created a skepticism about all received wisdom.  The Voyages of Discovery and the Agricultural Revolution began an economic revolution that spurred rapid growth in both population and wealth.  Rising distrust of received beliefs, an absolute confidence in the power of human Reason,[1] and the growth of a complex middle class then rocked the political system with an Age of Revolutions.[2]

A central feature of all these changes was the rise of Individualism.  Essentially, people aren’t Lego blocks.  Each person is different—if only in subtle and minor ways–from every other person.  Only the Individual person knows what is best for that person: strength and weaknesses, and hopes and fears.  Hence, society and government should seek to maximize the opportunity for Individual fulfillment.  This Individual freedom should be limited only by the requirement that one Individual’s freedom do no harm to the freedom of other Individuals.

This belief system gave rise to Nineteenth Century Liberalism and, by way of reaction, to Nineteenth Century Socialism.  Political Liberalism espoused individual equality before the law, individual rights guaranteed by law, governments answering to elected legislature, and freedom of the press and of thought.  Economic Liberalism espoused economic individualism, free markets, competition, free trade within and between nations, and a small government that concentrated on the essential functions of law and order and national defense.  What Liberals didn’t believe in was either equality or democracy.  Competition—between producers, political parties, and ideas—produced both winners and losers according to the informed choices of consumers.  The whole of society benefitted from competition even when individuals lost.  Similarly, people without the education necessary to understand the competition of ideas and parties, and people with no material stake (property) in the outcome of the debates should have no voice (vote) in the outcome.

Reacting against this position, Nineteenth Century Socialism called for co-operation over competition, planning instead of the market, collective ownership of the “means of production” in place of private property, and democracy with vote for all adult males.  After a while, revolutionary Marxism dominated Socialist thought.

The success of industrialization created immense wealth and immense numbers of industrial workers who were excluded from the political system while living in misery.  Something had to give.  Beginning in the late Nineteenth Century, it did.

[1] See Carl Becker, The Heavenly City of the Eighteenth Century Philosophers (1932).  Hilarious.

[2] I stole that from Eric Hobsbawm, Age of Revolutions: Europe, 1789-1848 (1962).  Remarkable.

Just typing out loud here 12 June 2019.

You challenged me on my enthusiasm for Joe Hill’s “Rebel Girl.”  https://www.youtube.com/watch?v=e_tz3wPgLUw  Didn’t have a good response at the moment, but it got me thinking.  My mind works slower than do those of most people.  Hence the delay.

To my mind, the Democrats are generically anti-business.  Sure, they talk about income inequality and anti-monopoly and this, that, and another New Deals.  But what they mean to apply is an anti-business policy that will fall on all businesses, great and small.  Taxes.  Regulations by decree.  You never see Democrat candidates who have ever worked in/for a business.  You never see ones who have had their own business.  Barack Obama was a “community organizer.”   (George McGovern’s post-presidential experience is instructive here.)  They’ve all spent their lives as lawyers or “in public service.”  Public service is just another way of saying “public employment.”  You don’t get laid off in a recession and you get good benefits.  For following an elaborate set of rules.

They have a fantasy of returning to the Fifties: a few big industries that don’t have any global competition; high wages and good benefits achieved through government-sponsored union-bargaining; owners who inherited their wealth from their rough-and-ready ancestors who actually created it; and a horde of professional managers who deploy B-School-certified skills in return for a generous, but socially-acceptable, salary.  That—at best—is what the Democrats want to recreate.  Basically, Rudolf Hilferding seventy years on.   (See: https://en.wikipedia.org/wiki/Rudolf_Hilferding )

None of this has anything to do with contemporary reality.  It has been one, but only one, of the factors that have driven the American economy—and society—into the ground over the last fifty years.

Yes, there is a lot to criticize in Republican policies.  Mostly, to my mind, it is the starving/shrinking of the necessary regulatory functions of the Federal bureaucracy.  To take some examples: the IRS can’t audit; the FAA has shifted airline safety to the plane manufacturer (singular); the FDA can’t keep up with the companies trying to poison us for fun and profit.  Theodore Roosevelt theorized that only a strong government could mediate the conflicting demands of Capital and Labor.  Republicans are gutting the system projected by their second-greatest president.  The reduction of the corporation tax to international (i.e. Canada) norms seems to me a good idea.  All the tax cut-spend-elect stuff to counter Democrats’ tax-spend-elect stuff is wrong, but wrong for both parties.  And wrong for the American voters who gobbled it up.   Maybe “snorted” would be better?

As for “bigness,” see Ellis Hawley, The New Deal and the Problem of Monopoly.  Yes, we’ve been down this road before.

In the end, what I’m fighting for is my Dad and all the people like him.  He didn’t want to work for the government and he didn’t want to work for a giant business.  He had done both (Army, Shell Oil).  He just wanted his own show.  Win or lose, it was on him.   What’s wrong with that?  He provided a service that people wanted.  He paid his employees the best he could.  Wasn’t great money, but it was the same deal for them that he made.  They weren’t working for the government or big business.  There weren’t procedures to deal with.  Just people.  He and my Mom did a lot of unpaid work to make the business run.  I guess I don’t see much difference between my Dad and an artist: they’re both self-actualizing and creative.  Along the way, he put a roof over our head and food in our mouths and paid his taxes.  Some of those taxes went to pay for public competition with his private business.  Why?  Because not all high-school teachers wanted to coach, so some of them would rather work extra as driving instructors.  Teachers had a union, but private business did not.

 

 

In the Nineteenth Century, the United States prided itself on being the land of “Go-Getters.”[1]  A vast continent packed with natural resources awaited exploitation.  At the same time, American entrepreneurs felt a grievous need for labor to transform those riches into “riches.”  Partly the country satisfied that need through massive immigration.  Partly the country satisfied the need by technical innovation to substitute machines for men.  Partly, the “professional” standards were lower then.  People—men mostly—could try their hand at whatever caught their fancy.

Yet, with all the problems of using what the United States already possessed, there were people who wanted to expand the “Empire of Liberty” still more.  As the term “Manifest Destiny” began to buzz about, people began to ask in which directions that destiny lay.  For most, it meant expansion westward to the Pacific Ocean.  For others though, such notions reeked of reticence, even cowardice.  Everywhere one looked to the South of the United States one saw the same conditions: vast natural wealth going to waste, the “rule of ignorance and superstition” (a common term for the Catholic Church); and the brutal oppression of the many by the self-enriching few.  These were the hall-marks of mid-century Mexico, Spanish-ruled Cuba, and—worst of all—Central America.  By 1836, Texas had gained independence from Mexico; by 1848, California.  The Mexican-American War had ended with a definitive boundary between the two countries.  Still, why stop there?  Why not add southern lands or Pacific islands?

At the same time, the issue of slavery began to tear savagely at America.  All the political compromises banned slavery “north of” some line.  What if the United States—or some one acting on behalf of the United States—conquered foreign lands where slavery already existed or had recently existed?  The sectional “balance” might be restored in an enlarged United States.

It is against this background that we might see the career of William Walker (1824-186o).[2]  The Southern-born Walker tried to set-up an independent state of Sonora and Baja California (1853-1854).  He next invaded Nicaragua, where he made himself President (1855-1857).  In Nicaragua, Walker reinstated slavery, made English an official language, and encouraged immigration from the United States.  Kind of like Texas in the 1820s-1830s.  In the end, an army of understandably-nervous Central American oligarchs drove out Walker.  So, no Santa Ana.  In 1860 Walker took another swing at Central America by trying to invade Honduras.  He wound up having a last smoke in front of a pock-marked adobe wall as a dozen sweating soldiers fiddled with their weapons.

As a thought experiment, consider what would have happened if Walker had succeeded in adding Nicaragua and Honduras and a chunk (or all) of Mexico to the Estados Unidos.  Perhaps the Americans would have wiped out the “colonial legacy” from Spain.

Perhaps the new territory would have ended up like Texas and California.  Leaving aside the Democrat-Republican split, they are both big states with diverse populations, and are states with lots of natural resources and lots of industry.  Same might have happened to Central America if it had become part of the United States.  Perhaps everyone would have been better off?

[1] Not to be confused with the drag performer Carmen Geddit.

[2] Scott Martelle, William Walker’s Wars (2019).

American Opinion in June 2019.

According to a recent poll, ten percent of Americans believe that Donald Trump is the best president of their lifetime.[1]  Trump’s support was concentrated among older, white, men.  In particular, according to a Pew Trust analysis, “49 percent of those aged 30‒49 feel warmly toward him, 60 percent of those aged 50‒64 do, as did 56 percent of those over 65 years of age.”[2]  So, the enthusiastic ten percent may come from older voters.

In contrast to most voters, both Trump supporters and Trump opponents have some historical basis for judging “best” and “worst” presidents.  If someone was 50 in 2016, then they were born in 1966; if someone was 60 in 2016, then they were born in 1956; if someone was 70 in 2016, then they were born in 1946.  If we postulate that people start to become politically aware at age 20, then 2016 Trump voters became politically aware between 1966 and 1986.

What do they have to work with in terms of historical experience of the presidency?  They have late-stage Lyndon Johnson (Vietnam, the social turmoil associated with the “Great Society”); Richard Nixon (Vietnam, Watergate); Gerald Ford (the first “oil shock” and inflation); Jimmy Carter (second “oil shock,” inflation, Iran hostage crisis); Ronald Reagan (Paul Volker wringing out inflation, defeat of the “evil empire,” Iran-Contra); George H. W. Bush (Preppy in the White House, first Iraq War, “read my hips”); Bill Clinton (Eddie Haskell in the White House); George W. Bush (Frat Boy in the White House, 9/11, the flunked war in Iraq, Hurricane Katrina); Barack Obama (Affordable Care Act, but also the Stimulus bill, rule by decree).

Experienced voters might be forgiven (although they will not be forgiven) for thinking that in their lifetime American government has run amuck and that the quality of presidents has deteriorated.  This ignores the reality that we have lived through very turbulent times that demanded government responses.  Many of these problems found no easy solution.  Still, is it possible that the typical voter follows the meta-narrative, rather than the micro-narrative?

Polls also showed that Trump appealed most to those with only a high-school education, but least to those with a college BA or more.  Well, auto-workers and steel-workers and a bunch of other workers used to be able to earn a middle-class income walking off the graduation stage and into an industrial job.  These people used to be a) Democratic voters, and b) the salt of the earth in Democratic discourse.[3]  Why did they stray, assuming it was the voters, rather than the party, that strayed?  Then, how does the educational profile of Trump voters compare with the educational profile of African-Americans?  Data suggest that educational attainment among African-Americans, measured in terms of BAs, is about two-thirds that of whites.[4]  How different is this from the educational profile of Trump voters?

The Pew poll also showed that core Trump voters believed—correctly—that free trade had harmed their own interests.  They believed that he would address illegal immigration, which they regarded as a serious problem.  They thought he was an awful person who might get things done.  “Those who sow the wind shall reap the whirlwind.”

[1] “Poll Watch,” The Week, 14 June 2019, p. 17.

[2] See: https://www.thoughtco.com/meet-the-people-behind-donald-trumps-popularity-4068073

[3] See: Norman Rockwell, “Freedom of Speech.”  https://www.periodpaper.com/products/1945-print-norman-rockwell-vermont-man-freedom-of-speech-open-forum-oil-painting-126405-xaa5-061

[4] See graph: https://www.usnews.com/news/blogs/data-mine/2015/01/28/us-education-still-separate-and-unequal