As a Canadian, I have my doubts about American intensions. The U.S. under Trump slapped a tariff on Canadian aluminum and steel in the name of "National Security". No one in the U.S. Government challenged this. The U.S. under Trump and Biden prevented companies from selling Covid vaccines to Canada. No one in the U.S. Government challenged this.
So looking at this subject from Canada's point of view, "decoupling" means we can't depend on the U.S. to be a supplier of any strategically important items. It also means Canadian companies are foolish to expand and depend on the U.S. as a customer of any strategically important items.
It appears that because of "decoupling", Canada can't depend on access to the U.S. market. Thus, it seems we must "deglobalize" the production of any strategically important items, so we don't find ourselves left high and dry by the U.S. in the future.
Texas Instruments announced it will build an $11 billion semiconductor plant in Lehi, Utah.
And Salt Lake City residents are exposed to toxic heavy metals that precipitate out of the shrinking Great Salt Lake and are carried by the wind. Sure, why not stick another semiconductor straw in the rapidly declining water resources in the Southwest, wasting more than 100 million gallons of fresh water (this is assuming Texas Instruments will claim, like Intel, that it recycles 95% of the water used by the average Fab).
The government should have attached conditions to the billions it’s giving these corporations, requiring the new chip fabs be built in the Great Lakes Area/Rust Belt. There are a hell of a lot of unemployed blue-collar workers there than in sparsely populated Utah.
Before we fix a "problem" it is important to understand from whence the problem originated, why we took or why we want to take certain actions, and what the end game is -- this is the only way to ensure the "solution" gets us to the prize.
1. American companies wanted to access cheap labor and weren't initially squeamish as to whether it was child labor, prisoners, environmentally dangerous, abusive, or unfairly priced.
We allowed this to happen and, thus, jobs left Greenville, SC to never return.
Cheap labor created corporate profits -- talking to you Apple and your ilk -- and left the American workers to fend for themselves. The US companies exported their American jobs to China.
2. These American companies still sold back into America -- the biggest prize in the game -- and wanted the protection of American law, stock exchanges, currency, and executive compensation.
They just didn't want to employ American labor. They wanted all the benefits of being a US company except they wanted cheap labor.
3. Until Trump, the Chinese/American manufacturers making their products in China enjoyed unfettered access to the American market. We charged zero entry fee.
Like Germany/Russian NordStream I/II, Trump nailed this one.
It was like going to DisneyLand without having to pay an entry fee.
So, why do we want to change now?
1. American production in China and Chinese production creates an untenable national security risk as shown clearly during the Pandemic China forbade American companies to send their PPE wares to the US.
There are a number of strategic materials that are sourced from China that cannot easily be sourced from other places in the event of a military confrontation.
2. China has a clear plan of gaining military and economic superiority over the entire world, but particularly displacing American power wherever it can, which is expensive and is funded by their economy.
We are helping China build an economy and military that will make war on America and our allies.
3. The Chinese are longstanding bad actors in commerce and the military. In commerce, they steal intellectual property and compel companies doing business in China to surrender their IP.
Militarily, they openly plan to take Taiwan by brute force and openly wargame these actions, all while the West is supposed to treat this renegade nation as if they were civilized and peace loving. Why?
The US must think strategically and act tactically.
1. There are certain industries that are essential to a nation at war that must be sited in places in which they cannot be disrupted in time of war -- steel is an example. Semiconductors. Ammunition. Airplanes.
These industries have to be returned to the US and we must compete globally in such a manner that the global market makes these industries strong and technically proficient.
2. We have to charge an entry fee to the American market and, perhaps, deny entry based on national security grounds.
A perfect example of this today is the total disregard for Russian Baltic Birch plywood (best cabinet plywood in the world) still pouring into the US uninterrupted whilst we finally came to ban Russian crude.
3. We have to harness the power of the market to motivate American companies to embrace some or all of these ideas. They exported jobs because they wanted cheap labor, so perhaps they need to pay some penalty that trues this up?
If we can embrace this history and these principles, what we need to do becomes clear. What words we use to describe it are not nearly as important as actually taking the actions.
The end game has to be a China that cannot economically or militarily threaten its neighbors, the US, and world peace.
For a good number of reasons, I do not believe the current administration is capable of pulling this off starting with the inane utterance of Chmn of the Jt Chiefs Milley: "China is not our enemy."
Yes, China is our enemy. That is fine because we are two countries who embrace and live under different value systems. It is OK to have enemies because that means we stood for things -- in our case good things.
If we keep our eye on the results the rest of it is much easier.
I do not understand why economic values take precedence over human values. The U.S. affords the rule of law, enlightenment values such as freedom of speech, democracy, et al. Yet we should have a cost neutral approach to that of the human means of productions, such that the quantifiers if economic production, e.g. which country can produce the most steel, is the overarching metric for valuing economic systems?
Has the whole world gone mad? Have we simply prioritized economic production over liberty, freedom and Western enlightenment values?
Might as well argue for communistic values since they produce more tons of steel per capita.
What a sorry state of affairs if U.S. economists solely metric the goods and services produced without measuring that value of the respective economic systems that produce said values.
I entered a career in software in the mid-1980s after a decade of construction work. Before construction work, I was close to a PhD in classical Chinese history.
The rise of China as a capitalist force did not surprise me in the least.
The coupling between capitalism and democracy is very loose. A minimum of autonomy is all it takes to foster entrepreneurship; markets can be closely regulated and still promote competition. Greed as a motivator crosses all political lines. Democracy's strength is in self-correction and resistance to corruption. Eventually, the idiots and the bums get thrown out.
The first decades of the 21st century were a sort of golden age in tool stores. Tools manufactured in China were a step up in quality and innovation, and prices were moderate. Equipping a toolbox in 2015 was relatively cheaper and better quality than the equivalent in 1975. I was envious. That benefited the American middle and blue-collar class, although it may not have been evident to economists.
Noah is right: we're seeing globalization re-jiggered, not ended. I intuit that this will be bad for the authoritarians devoted to losing battles (see Ukraine), cronyism, and self-dealing.
The reason that China is so powerful is because of certain economic theories, particularly the theory of globalisation. Provided China kept her head down and undercut western wages all was well. This was an extremely naive idea, based on economic theories where people are units of production and the only thing that matters to countries is comparative advantage.
Opposition to it was characterised as economically innumerate at best, racist at worst. Trump’s America First campaign was denounced not just as bad economics but white supremacy. I’m old enough to remember 2016 so I remember this well.
Most economists have since, with regards to globalisation divided into 3 camps.
1) continuing as before, as in the economists in this article. It’s a Good Thing.
2) to totally change sides and pretend you were always like this. Matt Ridley is an example.
3) to argue for a different globalisation policy. This is Noah. It’s still globalisation.
Number 3 is intellectually the most justifiable. On the other hand China wasn’t much less dangerous in 2016. It’s good that people change their mind when the facts change, not so good that it takes so long.
This is a very important discussion because I witness many fellow Americans that do not understand the basic definitions of globalization and decoupling.
Globalization is natural free trade. Recent technological and logistical advancements have energized global free trade from its historical roots of camel caravans and wooden ships. Just as spices and tea imported from Asia and the Americas enriched the lives of our ancestors (both East and West), increased flow of goods and knowledge greatly enrich our lives today worldwide.
Decoupling is just jingoist nationalism under another name. In an interconnected world economy, it makes no logical sense to decouple and isolate from the rest of the world and assume an outcome of greater prosperity and security. Trade is agnostic. It knows no borders. It is a free flowing river of goods, energy, and information that can either benefit all or an elite few. Decoupling is a racist act designed to benefit an "exceptional" few rather than benefiting all.
A recent example of the danger of decoupling is the USSR embracing Soviet communism at the end of WWII and cutting itself off from the rest of the world behind an Iron Curtain of nuclear armed military might. Without the nourishment of free flowing trade, investment, and social dynamism, the nation collapsed exposing a deeply deteriorated economic core unable to compete in the modern world. The resurgence of rabid Russian nationalism is leading them back into the corner they recently escaped from. By decoupling from the West, Russia is bleeding talent and economic investment needed to thrive in today's globalized world. While Russia is busy killing Ukrainians, it is also shooting itself in the foot.
Globalization works by loosening barriers to trade and expanding prosperity more widely. By attempting to hinder the growth and economy of others leads us back into brute, racist nationalism and destructive economic and military clashes of 'us' against 'them' in a world where there no longer are such designations. The U.S. cannot hurt or deter China without harming itself. "Do unto others as you would have then do unto you..." is the golden rule both figuratively and actually. We are truly all in this together and we have no option but to figure out how to get along and play nice.
Judging by the long arc of history, I don’t see the trend toward globalization reversing. Realigning supply chains is inflationary, Mohammed el-Erian, et alia have pointed out. Given that it’s inflationary, it’s all the more reason to get a better bang for the buck, shifting manufacturing sources to allies. There are many capable PAC-Rim countries already manufacturing high-end electronics, from South Korean to Malaysia. In fact, Mexico is quite capable. Many medical devices/technologies are manufactured in Mexico. ENPH five years ago shifted manufacturing of its micro-inverters from China to Mexico. Given its biggest markets are California and Brazil, the logistical cost savings are significant. Given the souther border problem is, to a great extent, and economic problem, why not shift some manufacturing to Mexico, maybe even Central America in the long term? No one thing is dispositive for solving globalization, but globalization isn’t going away. There are too many benefits for multiple developed countries and the Third World in the long run.
My colleague also published an insight paper on this topic of "decoupling". You could "decouple" one layer deep (e.g. direct imports) but still have massive indirect trade ties if your allies get core energy or material inputs from the nation you in theory are trying to decouple from.
I don't think anything is really changing. We have always wanted to pursue global capitalism. I think we have just come to the realization that, as hard as we try, places like China, Russia, and most of the Middle East don't want to be a part of it. Now we are just realizing we need to undo all of the economic ties we made in the nineties and the aughts because we are realizing that we created national security issues for ourselves. We were naive and greedy. Now we have to go through a painful breakup and court places like India and Viet Nam to be our new partners. I hope we don't make the same mistakes this time.
Isn’t “decoupling” from China just diversifying sourcing with a bunch of geo-politics and bullshit ancient arrogance of the Chinese and Conservative fear of actually relying on democracy to see us through thrown into the mix?
I recommend “The Dawn of Everything,” by David Graeber and David Wendgrow and “Dirt: The Erosion of Civilizations,” by David Montgomery. These authors undertook an extensive reading of millennia of empirical data in the archaeological record. Too many authors of books such as “Guns, Germs, and Steel” and “Sapiens” make assumptions that aren’t evidenced-based. The desertification of land in multiple states (salts precipitating hot of irrigated water) and exhausting soil horizons is nothing new. Darwin spent the last 20’years of his life studying earthworms and creation of souls — for good reason. It took millennia to create underground aquifers and only a few decades to deplete them. It takes hundreds of years to create an inch or two of soil.
This is assuming the underground acquifers are being replenished. They’re not. If one studies the dendrochronology record, which goes back centuries past when the U.S. Weather Service first recorded rainfall data (1865), the entire southwest is much drier than it is today. The last few 100 years was an anomaly, an unusually wet period. The Glen Canyon Dam was doomed to fail from the start. Ironically, the science of dendrochronology was begun at the University of Arizona (under the football stadium, which still has a world-class dendrochronology lab and program. But why listen to the scientists and check centuries of empirical data? Shortly after the Civil War, when Powell, the first director of the USGS, explored the entire length of the Colorado River, examining the geological record, he unequivocally stated: “The southwest should not be developed.” It’s an open secret that can be read in his exploration journal and USGS reports. The Glen Canyon Dam will fail to produce hydropower within 10-15 years. Engineers will be forced to shut down the turbines to prevent them from the grinding of silt/sand. And oxygenation will begin to degrade the metal.
Noah, I was checking out the graph of American steal production and I saw this event:
The U.S. steel industry blames Russia, Japan and Brazil for its troubles.
Steel imports for the first seven months of the year have grown 130 percent from Japan, 93 from Korea, and 19 percent from Russia, compared to year-ago levels, according to collected data.
Most of those shipments are sold far below market value at prices that violate established U.S. trade laws, and in some cases at prices below the cost of production in their native countries, the coalition of steel makers argue, making it impossible for them to compete.
Noah writes “We need to...offer Japan and Korea full access to the U.S. market, including all the same tax credits that we give to domestic producers. Otherwise it will look like the U.S. is the kind of country that hangs its key allies out to dry. And that is an image we absolutely can’t afford.
Why is this something we cannot afford?
And this “Even in the cases when allies are intervening to keep their currencies cheap, they’re often doing it in order to stay competitive with China…We should want our allies and friends to stay competitive with China. That strategic concern should override worries about the small current account imbalances that we have with small allies like South Korea and developing-country friends like India.
This is the same thing we did with China, which Noah now admits was a mistake. Why is it more important for our allies to remain competitive with China that it is for the US?
He concludes “That’s no way to fight a Cold War. The economic benefit of…protectionist policies would be miniscule…while the strategic losses of looking like a country that punks its own allies would be enormous.”
He notes “In the first Cold War, we wisely realized that when allies like South Korea and Japan and France got rich, it made the U.S. and the world more secure.” And argues we should so the same again.
But the situations are not the same. The policy of the first Cold War was created by men whose worldview had been shaped entirely in a pre-nuclear world where Great Power competition could always be settled in a great power coalition war (and routinely was, every fifty years as Quincy Wright documented in 1942). Great Power competition was built into their cultural DNA.
But that world ended in 1945. What’s Noah’s excuse for thinking the same way?
As a Canadian, I have my doubts about American intensions. The U.S. under Trump slapped a tariff on Canadian aluminum and steel in the name of "National Security". No one in the U.S. Government challenged this. The U.S. under Trump and Biden prevented companies from selling Covid vaccines to Canada. No one in the U.S. Government challenged this.
So looking at this subject from Canada's point of view, "decoupling" means we can't depend on the U.S. to be a supplier of any strategically important items. It also means Canadian companies are foolish to expand and depend on the U.S. as a customer of any strategically important items.
It appears that because of "decoupling", Canada can't depend on access to the U.S. market. Thus, it seems we must "deglobalize" the production of any strategically important items, so we don't find ourselves left high and dry by the U.S. in the future.
Texas Instruments announced it will build an $11 billion semiconductor plant in Lehi, Utah.
And Salt Lake City residents are exposed to toxic heavy metals that precipitate out of the shrinking Great Salt Lake and are carried by the wind. Sure, why not stick another semiconductor straw in the rapidly declining water resources in the Southwest, wasting more than 100 million gallons of fresh water (this is assuming Texas Instruments will claim, like Intel, that it recycles 95% of the water used by the average Fab).
The government should have attached conditions to the billions it’s giving these corporations, requiring the new chip fabs be built in the Great Lakes Area/Rust Belt. There are a hell of a lot of unemployed blue-collar workers there than in sparsely populated Utah.
Before we fix a "problem" it is important to understand from whence the problem originated, why we took or why we want to take certain actions, and what the end game is -- this is the only way to ensure the "solution" gets us to the prize.
1. American companies wanted to access cheap labor and weren't initially squeamish as to whether it was child labor, prisoners, environmentally dangerous, abusive, or unfairly priced.
We allowed this to happen and, thus, jobs left Greenville, SC to never return.
Cheap labor created corporate profits -- talking to you Apple and your ilk -- and left the American workers to fend for themselves. The US companies exported their American jobs to China.
2. These American companies still sold back into America -- the biggest prize in the game -- and wanted the protection of American law, stock exchanges, currency, and executive compensation.
They just didn't want to employ American labor. They wanted all the benefits of being a US company except they wanted cheap labor.
3. Until Trump, the Chinese/American manufacturers making their products in China enjoyed unfettered access to the American market. We charged zero entry fee.
Like Germany/Russian NordStream I/II, Trump nailed this one.
It was like going to DisneyLand without having to pay an entry fee.
So, why do we want to change now?
1. American production in China and Chinese production creates an untenable national security risk as shown clearly during the Pandemic China forbade American companies to send their PPE wares to the US.
There are a number of strategic materials that are sourced from China that cannot easily be sourced from other places in the event of a military confrontation.
2. China has a clear plan of gaining military and economic superiority over the entire world, but particularly displacing American power wherever it can, which is expensive and is funded by their economy.
We are helping China build an economy and military that will make war on America and our allies.
3. The Chinese are longstanding bad actors in commerce and the military. In commerce, they steal intellectual property and compel companies doing business in China to surrender their IP.
Militarily, they openly plan to take Taiwan by brute force and openly wargame these actions, all while the West is supposed to treat this renegade nation as if they were civilized and peace loving. Why?
The US must think strategically and act tactically.
1. There are certain industries that are essential to a nation at war that must be sited in places in which they cannot be disrupted in time of war -- steel is an example. Semiconductors. Ammunition. Airplanes.
These industries have to be returned to the US and we must compete globally in such a manner that the global market makes these industries strong and technically proficient.
2. We have to charge an entry fee to the American market and, perhaps, deny entry based on national security grounds.
A perfect example of this today is the total disregard for Russian Baltic Birch plywood (best cabinet plywood in the world) still pouring into the US uninterrupted whilst we finally came to ban Russian crude.
3. We have to harness the power of the market to motivate American companies to embrace some or all of these ideas. They exported jobs because they wanted cheap labor, so perhaps they need to pay some penalty that trues this up?
If we can embrace this history and these principles, what we need to do becomes clear. What words we use to describe it are not nearly as important as actually taking the actions.
The end game has to be a China that cannot economically or militarily threaten its neighbors, the US, and world peace.
For a good number of reasons, I do not believe the current administration is capable of pulling this off starting with the inane utterance of Chmn of the Jt Chiefs Milley: "China is not our enemy."
Yes, China is our enemy. That is fine because we are two countries who embrace and live under different value systems. It is OK to have enemies because that means we stood for things -- in our case good things.
If we keep our eye on the results the rest of it is much easier.
JLM
www.themusingsofthebigredcar.com
I do not understand why economic values take precedence over human values. The U.S. affords the rule of law, enlightenment values such as freedom of speech, democracy, et al. Yet we should have a cost neutral approach to that of the human means of productions, such that the quantifiers if economic production, e.g. which country can produce the most steel, is the overarching metric for valuing economic systems?
Has the whole world gone mad? Have we simply prioritized economic production over liberty, freedom and Western enlightenment values?
Might as well argue for communistic values since they produce more tons of steel per capita.
What a sorry state of affairs if U.S. economists solely metric the goods and services produced without measuring that value of the respective economic systems that produce said values.
I entered a career in software in the mid-1980s after a decade of construction work. Before construction work, I was close to a PhD in classical Chinese history.
The rise of China as a capitalist force did not surprise me in the least.
The coupling between capitalism and democracy is very loose. A minimum of autonomy is all it takes to foster entrepreneurship; markets can be closely regulated and still promote competition. Greed as a motivator crosses all political lines. Democracy's strength is in self-correction and resistance to corruption. Eventually, the idiots and the bums get thrown out.
The first decades of the 21st century were a sort of golden age in tool stores. Tools manufactured in China were a step up in quality and innovation, and prices were moderate. Equipping a toolbox in 2015 was relatively cheaper and better quality than the equivalent in 1975. I was envious. That benefited the American middle and blue-collar class, although it may not have been evident to economists.
Noah is right: we're seeing globalization re-jiggered, not ended. I intuit that this will be bad for the authoritarians devoted to losing battles (see Ukraine), cronyism, and self-dealing.
The reason that China is so powerful is because of certain economic theories, particularly the theory of globalisation. Provided China kept her head down and undercut western wages all was well. This was an extremely naive idea, based on economic theories where people are units of production and the only thing that matters to countries is comparative advantage.
Opposition to it was characterised as economically innumerate at best, racist at worst. Trump’s America First campaign was denounced not just as bad economics but white supremacy. I’m old enough to remember 2016 so I remember this well.
Most economists have since, with regards to globalisation divided into 3 camps.
1) continuing as before, as in the economists in this article. It’s a Good Thing.
2) to totally change sides and pretend you were always like this. Matt Ridley is an example.
3) to argue for a different globalisation policy. This is Noah. It’s still globalisation.
Number 3 is intellectually the most justifiable. On the other hand China wasn’t much less dangerous in 2016. It’s good that people change their mind when the facts change, not so good that it takes so long.
This is a very important discussion because I witness many fellow Americans that do not understand the basic definitions of globalization and decoupling.
Globalization is natural free trade. Recent technological and logistical advancements have energized global free trade from its historical roots of camel caravans and wooden ships. Just as spices and tea imported from Asia and the Americas enriched the lives of our ancestors (both East and West), increased flow of goods and knowledge greatly enrich our lives today worldwide.
Decoupling is just jingoist nationalism under another name. In an interconnected world economy, it makes no logical sense to decouple and isolate from the rest of the world and assume an outcome of greater prosperity and security. Trade is agnostic. It knows no borders. It is a free flowing river of goods, energy, and information that can either benefit all or an elite few. Decoupling is a racist act designed to benefit an "exceptional" few rather than benefiting all.
A recent example of the danger of decoupling is the USSR embracing Soviet communism at the end of WWII and cutting itself off from the rest of the world behind an Iron Curtain of nuclear armed military might. Without the nourishment of free flowing trade, investment, and social dynamism, the nation collapsed exposing a deeply deteriorated economic core unable to compete in the modern world. The resurgence of rabid Russian nationalism is leading them back into the corner they recently escaped from. By decoupling from the West, Russia is bleeding talent and economic investment needed to thrive in today's globalized world. While Russia is busy killing Ukrainians, it is also shooting itself in the foot.
Globalization works by loosening barriers to trade and expanding prosperity more widely. By attempting to hinder the growth and economy of others leads us back into brute, racist nationalism and destructive economic and military clashes of 'us' against 'them' in a world where there no longer are such designations. The U.S. cannot hurt or deter China without harming itself. "Do unto others as you would have then do unto you..." is the golden rule both figuratively and actually. We are truly all in this together and we have no option but to figure out how to get along and play nice.
Judging by the long arc of history, I don’t see the trend toward globalization reversing. Realigning supply chains is inflationary, Mohammed el-Erian, et alia have pointed out. Given that it’s inflationary, it’s all the more reason to get a better bang for the buck, shifting manufacturing sources to allies. There are many capable PAC-Rim countries already manufacturing high-end electronics, from South Korean to Malaysia. In fact, Mexico is quite capable. Many medical devices/technologies are manufactured in Mexico. ENPH five years ago shifted manufacturing of its micro-inverters from China to Mexico. Given its biggest markets are California and Brazil, the logistical cost savings are significant. Given the souther border problem is, to a great extent, and economic problem, why not shift some manufacturing to Mexico, maybe even Central America in the long term? No one thing is dispositive for solving globalization, but globalization isn’t going away. There are too many benefits for multiple developed countries and the Third World in the long run.
My colleague also published an insight paper on this topic of "decoupling". You could "decouple" one layer deep (e.g. direct imports) but still have massive indirect trade ties if your allies get core energy or material inputs from the nation you in theory are trying to decouple from.
https://www.nature.com/articles/s41560-022-01053-2
I don't think anything is really changing. We have always wanted to pursue global capitalism. I think we have just come to the realization that, as hard as we try, places like China, Russia, and most of the Middle East don't want to be a part of it. Now we are just realizing we need to undo all of the economic ties we made in the nineties and the aughts because we are realizing that we created national security issues for ourselves. We were naive and greedy. Now we have to go through a painful breakup and court places like India and Viet Nam to be our new partners. I hope we don't make the same mistakes this time.
Isn’t “decoupling” from China just diversifying sourcing with a bunch of geo-politics and bullshit ancient arrogance of the Chinese and Conservative fear of actually relying on democracy to see us through thrown into the mix?
I recommend “The Dawn of Everything,” by David Graeber and David Wendgrow and “Dirt: The Erosion of Civilizations,” by David Montgomery. These authors undertook an extensive reading of millennia of empirical data in the archaeological record. Too many authors of books such as “Guns, Germs, and Steel” and “Sapiens” make assumptions that aren’t evidenced-based. The desertification of land in multiple states (salts precipitating hot of irrigated water) and exhausting soil horizons is nothing new. Darwin spent the last 20’years of his life studying earthworms and creation of souls — for good reason. It took millennia to create underground aquifers and only a few decades to deplete them. It takes hundreds of years to create an inch or two of soil.
This is assuming the underground acquifers are being replenished. They’re not. If one studies the dendrochronology record, which goes back centuries past when the U.S. Weather Service first recorded rainfall data (1865), the entire southwest is much drier than it is today. The last few 100 years was an anomaly, an unusually wet period. The Glen Canyon Dam was doomed to fail from the start. Ironically, the science of dendrochronology was begun at the University of Arizona (under the football stadium, which still has a world-class dendrochronology lab and program. But why listen to the scientists and check centuries of empirical data? Shortly after the Civil War, when Powell, the first director of the USGS, explored the entire length of the Colorado River, examining the geological record, he unequivocally stated: “The southwest should not be developed.” It’s an open secret that can be read in his exploration journal and USGS reports. The Glen Canyon Dam will fail to produce hydropower within 10-15 years. Engineers will be forced to shut down the turbines to prevent them from the grinding of silt/sand. And oxygenation will begin to degrade the metal.
Noah, I was checking out the graph of American steal production and I saw this event:
The U.S. steel industry blames Russia, Japan and Brazil for its troubles.
Steel imports for the first seven months of the year have grown 130 percent from Japan, 93 from Korea, and 19 percent from Russia, compared to year-ago levels, according to collected data.
Most of those shipments are sold far below market value at prices that violate established U.S. trade laws, and in some cases at prices below the cost of production in their native countries, the coalition of steel makers argue, making it impossible for them to compete.
https://money.cnn.com/1998/11/04/companies/steel/
Noah writes “We need to...offer Japan and Korea full access to the U.S. market, including all the same tax credits that we give to domestic producers. Otherwise it will look like the U.S. is the kind of country that hangs its key allies out to dry. And that is an image we absolutely can’t afford.
Why is this something we cannot afford?
And this “Even in the cases when allies are intervening to keep their currencies cheap, they’re often doing it in order to stay competitive with China…We should want our allies and friends to stay competitive with China. That strategic concern should override worries about the small current account imbalances that we have with small allies like South Korea and developing-country friends like India.
This is the same thing we did with China, which Noah now admits was a mistake. Why is it more important for our allies to remain competitive with China that it is for the US?
He concludes “That’s no way to fight a Cold War. The economic benefit of…protectionist policies would be miniscule…while the strategic losses of looking like a country that punks its own allies would be enormous.”
He notes “In the first Cold War, we wisely realized that when allies like South Korea and Japan and France got rich, it made the U.S. and the world more secure.” And argues we should so the same again.
But the situations are not the same. The policy of the first Cold War was created by men whose worldview had been shaped entirely in a pre-nuclear world where Great Power competition could always be settled in a great power coalition war (and routinely was, every fifty years as Quincy Wright documented in 1942). Great Power competition was built into their cultural DNA.
But that world ended in 1945. What’s Noah’s excuse for thinking the same way?
BTW, this is an excellent treatment of the issues involved. Bravo and well played.
JLM
www.themusingsofthebigredcar.com