The Asian Century 1 11 July 2019.

Much of our understanding of the contemporary world is essentially historical.  (OK, you wouldn’t know this from watching the news on the devil-box.  Still,…)

“Manifest Destiny” = “An Obvious Fate.”  It’s a term in American history, but it applies to China as well.  Both countries believe themselves to be “bound away” to greatness.  Historically, China was the “middle kingdom,” an axis around which the rest of the world revolved, and where civilization and good government prevailed.[1]  From this point of view, China’s degradation at the hands of the “Southern barbarians” is but a speed-bump in History.

Since the economic reforms launched by Deng Xiaoping, China has become the center of world manufacturing.  Literally hundreds of millions of people have been lifted up out of an abject poverty of a kind most Western progressives cannot imagine.

Industrial power transforms into military power.[2]  China’s potential for a military build-up and its effort to shoulder-aside other claimants to various reefs and islets in the South China Sea have alarmed many observers.  What if China tries to seize Taiwan or test America’s will to back its traditional allies like the Philippines, Japan, or South Korea?

If we did an audit of China’s problems, what would we find?  First, state-owned firms are gigantic and powerful.  They’re also inefficient and deep in debt.  Second, Communist China has not regained the high level of creativity that characterized much of the history of Imperial China.  As a result, it depends on the massive theft of intellectual property from the West.  Third, the income inequality and environmental degradation have begun to arouse resistance.  (There are as many as 180,000 demonstrations each year.)  Fourth, the lack of well-established legal norms is scaring people.[3]  There is a grave danger of an elite “brain drain”: one report says that up to half of the wealthiest citizens want to move abroad within the next five years.  A Gallup poll recently estimated that 120 million Chinese would like to move to America.[4]

Then, “off-shore China” has done best of all.  Places where traditional Chinese values have been combined with Western legal codes—Hong Kong, Singapore, Taiwan—have done even better than has mainland China.  Yet the current Chinese leadership seems not to take the obvious, if uncomfortable, point.

For a long time, American policy has been to encourage the liberalization of trade and economic management in other countries, China included.  The underlying theory holds that economic liberalization will lead to the growth of a middle-class.  A growing middle-class will demand political liberalization.[5]  This “long game” will then lead to the spread of economically and politically congruent societies.  Wars will end.  Prosperity will flourish.  Well, “Scotch verdict” on that.

[1] Michael Auslin, The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region (2017).

[2] See: Germany, 1865-1945.

[3] It looks very much like the long-running “anti-corruption campaign” is directed chiefly at rivals and opponents of the current leadership.  If you’re a “FOX” (“Friend of Xi”), you’re probably safe.

[4] It seems at least reasonable to think that many of the would-be migrants are people who have already been to the US.  In 2015, there were just over 300,000 Chinese students in American universities and colleges.  See: https://foreignpolicy.com/2015/11/16/china-us-colleges-education-chinese-students-university/

[5] That’s what happened in 19th-Century Europe.

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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

Summer 2016 2 10 July 2019.

In the many days ago, some people suspected that FIFA (International Federation of Football Associations—i.e. the organization that ran the “beautiful game”) was as crooked as a dog’s hind leg.  When the British Football Association contemplated trying to get the World Cup venue in 2018 or 2012, it hired Christopher Steele’s firm to investigate FIFA.  He learned a lot.  In 2011, when the FBI opened its own investigation into corruption in soccer, agents talked to Steele.  The FBI group conducting the soccer investigation, was the “Eurasian Organized Crime” group.  It was based in the New York field office, rather than in Washington.  The FBI group’s leader at that time may have been Michael Gaeta.  Gaeta later moved to the American embassy in Rome.[1]

In the first week of July 2016, Steele asked Gaeta to come to London.  Gaeta got the meeting approved by Victoria Nuland, the Assistant Secretary of State for European and Eurasian Affairs, then met Steele in London on 5 July 2016.  Steele gave the agent 2-4 pages highlighting his information gathered so far.  It has been reported that Gaeta said “I have to show this to headquarters.”[2]  Was that the answer Christopher Steele hoped to hear?

To whom did Michael Gaeta report?

On the one hand, Gaeta reported back to Assistant Secretary Nuland, sending the papers he had been given by Steele.  Nuland later stated that “our immediate reaction to that was, ‘This is not in our purview.  This needs to go to the FBI, if there is any concern here that one candidate or the election as a whole might be influenced by the Russian federation. That’s something for the FBI to investigate.”[3]  Unless Nuland was using the “royal we,” who were the people with whom Nuland discussed the information sent by Gaeta?  Did it go as far up as Secretary of State John Kerry?  Then what did Nuland do?  Did she forward the report to FBI headquarters or did she tell Gaeta to tell Steele to tell the FBI himself?

On the other hand, another account says that Gaeta also sent the reports to the Eurasian Organized Crime team in the FBI’s New York field office.  There it sat until mid-September 2016.[4]  Gaeta had been, or still was, the boss of the Eurasian Organized Crime team.  So, he sends this stuff to the outfit and they go “meh, fan-mail from some flounder”?  Or do they cable/email him back, going “WTF Mike?”  IDK, maybe the FBI does run like the Post Office.

In September 2016, a frustrated Steele shared some of his materials with Jonathan Winer, previously the deputy assistant secretary of state for international law enforcement, and before that an aid to Senator John Kerry, now the Secretary of State.  Winer took the stuff to Nuland, “who indicated that, like me, she felt that the secretary of state needed to be made aware of this material.”[5]

[1] Mark Hosenball, “Former MI-6 spy known to U.S. agencies is author of reports on Trump in Russia,” Reuters, 12 January 2017.

[2] Michael Isikoff and David Corn, Russian Roulette: The Inside Story of Putin’s War on America and the Election of Donald Trump (2018).

[3] Emily Tillett, “Victoria Nuland Says Obama State Dept. Informed FBI of Reporting from Steele dossier,” CBS News, 4 February 2018.

[4] Mike Levine, “Trump ‘dossier’ stuck in New York, didn’t trigger Russian investigation, sources say,” ABC News, 18 September 2018.  https://abcnews.go.com/Politics/trump-dossier-stuck-york-trigger-russia-investigation-sources/story?id=57919471

[5] Jonathan Winer, “Devin Nunes is investigating me. Here’s the truth,” Washington Post, 9 February 2018.

Summer 2016 9 July 2019.

I’m 65 years old.  I’ve been reading some version of “History” since I was—IDK–ten years old?  I’ve been teaching History for 30+ years.  I’ve concluded that Human Error plays a vastly larger role in explaining events than does Human Conspiracy.  Still, there is enough strangeness in the Trump-Russia investigation to give someone other than me a suspicion.  We’re gonna have to lance this abscess somehow.  I hope that Michael Horowitz and John Durham do the job.  For the sake of the American Republic.

In April 2016, Marc Elias, of Perkins, Coie, hired Fusion GPS to conduct opposition research on Donald Trump on behalf of the DNC and the Hillary Clinton campaign.[1]

Then either nothing happened for a month or so, OR journalists have not yet discovered what did happen at Fusion GPS, OR I haven’t tracked down the reporting.[2]

In June 2016, the Russians began publishing the “hacked” e-mails from the DNC.

At some point in June 2016, Fusion GPS hired Christopher Steele to investigate Donald Trump’s Russians affairs.[3]  Glenn Simpson and Peter Fritsch, the owners of Fusion GPS, “gave [Steele] no specific marching orders beyond this basic question: ‘Why did Mr. Trump repeatedly seek to do deals in a notoriously corrupt police state that most serious investors shun?'”[4]

Fusion GPS billed Perkins Coie for $1.02 million in fees and expenses.  Fusion GPS then paid Orbis $168,000.[5]  Steele didn’t pay his sources.[6]  According to one source, “Steven L. Hall, former CIA chief of Russia operations,” said that ‘Steele spied against Russia to get info Russia did not want released; ….’”[7]

It is just now reported that Christopher Steele has testified to the IG of the Department of Justice.  They find his statements “credible.”[8]  But what did he say?

[1] See: http://cdn.cnn.com/cnn/2017/images/10/25/fusion.perkins.coie.pdf  and https://www.cnn.com/2017/10/24/politics/fusion-gps-clinton-campaign/index.html, CNN, 25 October 2017.

[2] May and June 2016 are the months when Alexander Downer’s report on what George Papadopoulos had told him about the Russians having “dirt” on Hillary Clinton was not shared with the Americans, either formally or informally.  “Alas, and Alack, and Alaska.”  I’ll try to keep on it.

[3] Scott Shane, Nicholas Confessore, and Matthew Rosenberg, “How a Sensational Unverified Dossier Became a Crisis for Donald Trump,” NYT, 11 January 2017.  https://www.nytimes.com/2017/01/11/us/politics/donald-trump-russia-intelligence.html  NB: Here the chronology is not clear because the witnesses are not clear in their public statements.  Perhaps John Durham will sort out my confusion?

[4] Glenn Simpson and Peter Fritsch, “The Republicans’ Fake Investigation,” NYT, 2 January 2018.  https://www.nytimes.com/2018/01/02/opinion/republicans-investigation-fusion-gps.html  NB: Who formulated this question?  Snark: As opposed to doing deals in China, India, Brazil, or the Republic of South Africa?  Kleptocracies.

[5] See: https://www.reuters.com/article/us-usa-trump-russia-dossier/ex-british-spy-paid-168000-for-trump-dossier-u-s-firm-discloses-idUSKBN1D15XH

[6] See: https://www.cnn.com/2017/11/15/politics/russia-investigation-fusion-gps-glenn-simpson-dossier/index.html

[7] See: https://thehill.com/blogs/blog-briefing-room/news/357602-ex-cia-russia-chief-unlike-trump-dossier-russia-wanted-to-give  NB: So, people in the Russian government decided to give Steele information for free that Vladimir Putin didn’t want released?  Really?  See: Sergei Skripal https://en.wikipedia.org/wiki/Sergei_Skripal, Alexander Litvinenko https://en.wikipedia.org/wiki/Alexander_Litvinenko, and Boris Berezovsky https://en.wikipedia.org/wiki/Boris_Berezovsky_(businessman), and a bunch of other people.  In contrast, “[Aldrich] Ames received $4.6 million from the Soviets.” https://en.wikipedia.org/wiki/Aldrich_Ames#Espionage.  Can’t tell how much /Robert Hanssen got, beyond a basic $100K.    See: https://en.wikipedia.org/wiki/Robert_Hanssen

[8] See: https://washingtonmonthly.com/2019/07/09/dojs-inspector-general-report-on-russia-delayed-as-steele-found-credible/

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

Iran Amuck 2 30 June 2019.

In the judgement of one expert,” the “Iranian economy has long been riddled by endemic mismanagement, corruption, cronyism, and brain drain.  Sanctions make all these problems worse.”[1]  However, the flaws are innate to the regime, rather than springing from the sanctions.[2]

American economic sanctions against Iran have a long history.  They began with President Jimmy Carter; were tightened by President Ronald Reagan; were greatly strengthened by President Bill Clinton, then were slightly eased by Clinton after the election of an Iranian president seen as “moderate” in the West; then were renewed under President George W. Bush.

In 2005, Iran announced that it would begin enriching uranium for its nuclear program.  At the behest of the Bush administration, the United Nations began imposing international economic sanctions.  In 2010, the Congress passed and President Barack Obama signed a law greatly strengthening sanctions.  Eventually, the pressure from the sanctions forced Iran to negotiate with an American-led coalition.  In 2015, the negotiations produced an agreement on delaying Iran’s march towards nuclear weapons in return for relief from some of the sanctions.

The agreement aroused controversy.  On the one hand, Iran remained under sanction for other actions.  Incomplete relief from sanctions continued to hamper improvements in the living conditions of ordinary Iranians.  Iranian hard-liners could argue that the sanctions relief hasn’t been worth giving up the chance at nuclear weapons.  On the other hand, Iran remained an active opponent of the United States and its regional allies.  Conservative critics of the Obama Administration could argue that only limiting Iran’s nuclear program, without addressing its other behaviors, hasn’t been worth sanctions relief.[3]

The Trump Administration falls heavily into the latter camp.  It has sought to re-open the negotiations with Iran with the intention of getting a better deal.  On 8 May 2018, Trump .withdrew the United States from the agreement.  Trump also announced that the United States would re-impose the previous sanctions and sanction any European companies that traded with Iran.  Within a year, Iran’s oil exports had declined by more than 50 percent.

On 8 April 2019, Trump designated the Islamic Revolutionary Guards Corps as a terrorist group.[4]  The designation carried with it further economic sanctions.

On 5 May 2019, after Iran had designated the U.S. Central command as a terrorist organization and after the U.S. had discerned Iranian preparations for action against American forces, a carrier battle-group and bombers were ordered to the region.

On 8 May 2019, the US increased sanctions on Iran’s exports and ended “waivers” granted to some countries to continue buying Iranian oil.

On 12 May 2019, four oil tankers were attacked in the Persian Gulf.  The Trump Administration claimed that Iran had attacked the tankers.  Iran soon .announced that it would return to enriching uranium.

On 13 June 2019, external explosions badly damaged two tankers in the Gulf.

The 2003 Iran War suggests a need for caution in all long-term projections.

[1] Helene Cooper, “How the U.S. Ratcheted Up Pressure on Iran and How Iran Responded,” NYT, 16 June 2019.

[2] The parallel to Venezuela is striking.

[3] See: https://waroftheworldblog.com/2018/07/24/iran-and-we-all-should-run/

[4] The IRGC handles terrorism abroad.

The Origin of the Russia investigation.

In May 2016, a Trump foreign policy adviser, George Papadopoulos, told the Australian High Commissioner in London, Alexander Downer, that he had heard that the Russkies had “dirt” on Hilary Clinton.[1]  Downer immediately informed the Australian foreign ministry.

Six or seven weeks followed, during which time the Australian government did not inform anyone—officially or unofficially—that a hostile foreign power had breached the security of an American presidential candidate.

Christopher Steele had served in important positions in the British Secret Intelligence Service (MI-6), then had opened a private business intelligence company.  He had served in Moscow and had been the head of the “Russia desk” for MI-6.  In June 2016,[2] the Democrats had hired his company to conduct opposition research on Donald Trump.  Steele began investigating Trump’s Russian connections.  Between June and December 2016, Steele wrote 17 memos.  Steele’s memos suggested that a “well-developed” conspiracy linked Trump with the Russian government.  The Russian would help get Trump elected; President Trump would then end the economic sanctions imposed on Russia for its actions in Crimea and Ukraine.   Furthermore, the Russian possessed compromising personal information on Trump.

However, at this time, the FBI had no knowledge of Steele’s memos.

On 22 July 2016, Wikileaks began publishing the Democratic National Committee e-mails provided to them by the Russkies.  At this point, the FBI learned from the Australian government of the report on Papadopoulos.  [So, the FBI knew that the Russians had hacked the computers at the Democratic National Committee, that Russia was releasing stolen information through Wikileaks, and now had a report that the Trump campaign may have had fore-knowledge.]  On 31 July 2016, the FBI opened an investigation of Trump-Russia collusion: “Operation Crossfire Hurricane.”  The operation was conducted in great secrecy, with no leaks to the press.

After the launching of “Crossfire Hurricane,” the FBI sought a FISA warrant to surveil the communications of Paul Manafort,[3] Michel Flynn, Carter Page,[4] and George Papadopoulos.[5]  All four had varying degrees of prior contact with Russia.  [The warrant application was denied as “too broad.”]

In September, Steele shared his memos with the FBI.

[In late September, Michael Isikoff reported that a Trump campaign adviser was being investigated over contacts with the Russians.  The report was based on leaks.]

In October 2016, the FBI obtained a FISA warrant to surveil the communications of Carter Page.  A part of the supporting evidence for the warrant application came from the “Steele dossier.”

Thus, William Barr’s investigation isn’t likely to turn up compromising information.

[1] “The origins of the Russia investigation,” The Week, 28 June 2019, p. 13.

[2] Apparently at the time when the Australian government was not informing the American government of the remarks by Papadopoulos.

[3] The FBI had begun an investigation of Manafort after his candidate, the pro-Russian Ukrainian Yanukovich, had been ejected from power in early 2014.

[4] Page had been investigated by the FBI in 20013-2015 and found blameless.

[5] But not Jared Kushner or Donald Trump Jr. or Donald Trump Sr.  Why not?