“When it comes time to hang the capitalists, they will vie with each other for the rope contract.” Attributed to Vladimir Lenin.
Lenin may or may not have said exactly that (there’s a more boring version in his writings). But the prediction was a little off anyway.
We capitalists aren’t selling the rope. We’re buying it — literally — only from the Communist Chinese.
For the record, according to the United Nations, China exported $237 million in rope-type products 2017. The U.S. imported $91 million of those goods. American rope output imported by China: $1.09 million.
Our mutual trade posture writ small.
It seems logical, given America’s $419-billion 2018 trade gap with chronic, unrelenting trade cheaters, intellectual property thieves, global hackers, totalitarian torturers, patrons of pariah proliferators and state terror sponsors, developing world debt enslavers, and flaunters of international law, that some president might finally stand up to them.
Logical everywhere except for the realms Ronald Reagan termed “puzzle palaces on the Potomac.” And equally bent baronies on Wall Street and in Corporate America.
Emanating from those debased domains, “trade war” has become the new “climate change.”
The former became the catchall explanation for every weather phenomenon from droughts to floods to fires to cold snaps to hurricanes. Now, “Trump’s trade war” is the whipping boy for any negative economic news, anywhere, anytime.
Looming European recession and slowing global growth? “Trade war.”
Inverted yield curve (supposedly signaling a future U.S. downturn)? “Trade war.”
Market volatility? “Trade war.”
Softer job numbers? “Trade war.”
Slowing factory production and business investment? “Trade war.”
American farmers under pressure? “Trade war.”
This very week, in fact, the Wall Street Journal reported that farm-state Republicans, prompted by “anxiety among farmers and manufacturers about the economic fallout from the tariffs Mr. Trump has imposed,” are teaming with Democrats to take back some trade authority.
Senator and presidential kinda-candidate Amy Klobuchar’s whined at last week’s Democratic debate about President Trump’s — wait for it — “trade war … treating our farmers and our workers like poker chips in one of his bankrupt casinos.”
Lamented the Minnesotan, “There is soybeans (sic) that are mounting up in bins all over the Midwest.”
Hm. Let’s apply some simple math.
Last year, farm exports to China dropped from $15.9 billion to $5.9 billion. A pretty tough hit, eh?
Until you consider that agricultural income is forecast at $425 billion in 2019 — stable, says the government, since 2016 — and exports around $137 billion. Lost exports to China, while not inconsiderable, are still basically a rounding error.
Meanwhile — looky here! — farm aid will nearly double this fiscal year from $9.4 billion to more than $17 billion thanks to a $9.8 billion in trade assistance sop to Iowa caucus-goers. According to one farm trade publication, “the total could go even higher if Congress, as expected, authorizes a new round of disaster aid.”
Shed me a tear.
Another new meme: “300,000 jobs lost to Trump’s trade war,” a figure thrown out by a Hillary Clinton supporter at Moody’s Analytics with a terrible track record — that nevertheless is bouncing around the media and Democratic talking points like a superball in a vacuum chamber.
Never mind, as Jack Hellner points out at the American Thinker, that exports, imports and business investment continue to outpace the Obama years (not to mention job and overall economic growth).
Or that Eurosclerosis, the product of social overspending and birth dearths, has been a reality for decades — to the point that even once-inconceivable negative interest rates can’t stave it off.
Or that America’s own entitlement binging and advancing demographic winter portend long-term secular stagnation only interrupted, not interdicted, by recent regulatory and tax reforms.
Or that the farm sector has been concentrating since, oh, the 1930s.
Or that market volatility and business cycles have been a feature, not a bug, of the system since before the Tulip Wars.
To recapture the initiative on his trade policy, however, the president and his allies can’t simply tick off economic arguments one-by-one.
They must elevate the discussion by substituting, for the term “trade war,” another once-familiar concept familiar: “Cold War.” Because like it or not, that’s the true current global state of affairs.
The president has the world focused on a “deal” with China. But clear thinkers at the Pentagon laid out the Xi Jinping dynasty’s true objectives in their latest defense strategy: to “pursue economic and military ascendance, asserting power through an all-of-nation long-term strategy … undermining the international order from within the system by exploiting its benefits while simultaneously undercutting its principles and ‘rules of the road.’”
In other words: we’re playing trade tiddlywinks. The Chinese are playing for keeps.
With Corporate America’s acquiescence, they’re bastardizing the global trade regime to purposely hollow out the West’s economy and steal our technology, so that we capitalists simultaneously finance, enable and make ourselves victims of their quest for worldwide hegemony.
It’s high time that our Art of the Deal president stops talking about table stakes and clearly tells Americans what’s really at stake: winning a global competition with a re-ascendant Middle Kingdom that is both selling, and readying, the rope.
Note to Readers: Issues & Insights is a new site launched by the seasoned journalists behind the legendary IBD Editorials page. Our mission is to use our decades of experience to provide timely, fact-based reporting and deeply informed analysis on the news of the day.
We’re doing this on a voluntary basis because we think our approach to commentary is sorely lacking both in today’s mainstream media and on the internet. If you like what you see, feel free to click the Tip Jar over on the right sidebar. And be sure to tell your friends!
