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The International Order is Broken
We know this because the world’s politicians are using military means to solve what are essentially political problems they don’t know how to solve.
As the Syrian crisis rolls into its 8th year no clear winner has emerged, other than ISIS has been degraded by Western and Russian forces operating throughout Syria.
Not that Russia and the West are working together to destroy ISIS, rather, Western countries are working to destroy the evil entity to prevent it from spreading across the Middle East and the Western world, while the Russians are tearing ISIS apart because it represents an internal threat to Syria, its longtime ally.
Which are reasonable and noble goals.
But at any time since the Syrian conflict began in 2010, Western, Russian and Syrian diplomats could’ve worked out a plan to solve the terrorist problem inside Syria and could’ve wrapped up the whole mess within 24 months with relatively few civilian casualties. But they didn’t. Or they couldn’t.
The very definition of broken-ness, right there.
“No problem can be solved by the same level of consciousness that created it.”
Why Are We Broken?
When the interests of several countries align — and they still can’t put together a unified coalition — it’s a textbook case of a broken international order.
Which is how we stumbled into WWI, WWII, the Cold War, the Korean War, the Vietnam War, the Gulf War, the Iraq War, the Afghan War, and several other conflicts, such as the Rwanda genocide that killed 800,000 people in a matter of days. And we know how those wars turned out, and we know how many people were killed in total in those 20th-century conflicts.
The failure of politicians and their diplomats to find better solutions and thereby prevent those wars is appalling beyond any scale that humans can understand.
“All war represents a failure of diplomacy.”
Sometimes, very complicated problems can stem from a very simple problem.
FOR EXAMPLE: The neighbourhood’s troubled teen filling your car’s fuel tank with water overnight — although a simple act in itself — can cause serious problems after the car is driven the following morning. Such a simple act can cost a vehicle owner hundreds of dollars to repair and cause major inconvenience.
And likewise, every war fought in the 20th-century was caused by an astonishingly simple misunderstanding of human psychology by the world’s politicians and diplomats.
We are broken because those politicians believed that employing ‘Win-Lose’ thinking to solve problems was the preferred path, instead of realizing that ‘Win-Win’ thinking is a higher form of thinking that only humans can employ to solve problems.
Every war since 1900 is the direct result of employing ‘Win-Lose’ thinking to solve political problems. Another way to say it, is that every single death and injury caused by war in the 20th-century is 100% on the heads of the people who practiced politics and diplomacy in that century — because their thinking wasn’t up to the task.
Never in human history had anyone seen bungling on the scale of 20th-century world leaders.
Therefore, as the ‘default mode’ for politicians in the 20th-century was to employ ‘Win-Lose’ thinking, every serious disagreement inexorably turned into war and mega-millions died as a result.
Because the politicians of the day resorted to their animal instincts, over 250 million people were killed in war and in famines caused by war in the 20th-century. Some might call that number a conservative estimate of the total death toll.
Sobering, isn’t it?
Aren’t We Better Than That?
Apparently not. Because even today we’re still using bombs to solve the problems we’re not smart enough to solve. Problems that humans created aren’t being solved, because we’re not using the right methods to solve our problems.
So we bomb our way out of problems.
Using ‘Win-Win’ Thinking to Solve Our Problems
There are few examples of the world’s politicians using ‘Win-Win’ thinking to solve our very human psychological problems.
Ending the Cold War is the stellar achievement for diplomats in the 20th-century. And just in time, because the civilization that humans built over thousands of years came dangerously close to annihilation many times during the Cold War.
Another example of ‘Win-Win’ thinking occurred when the world’s politicians and scientists came together to sign the Montreal Protocol to eliminate chlorofluorocarbons from our supply chains; chemical compounds that were rapidly destroying the Earth’s ozone layer. The Montreal Protocol has been called ‘the most successful accord in history’.
Yet another example of ‘Win-Win’ thinking occurred when the Allied Powers joined forces after World War II to rebuild Europe using the Marshall Plan to fund food aid, reconstruction of damaged infrastructure, and to help establish a fairer world order based on peaceful relations. In postwar Japan, the Allied Powers facilitated the country’s rebuilding by purchasing billions of dollars of Japanese goods which benefited the Allied Powers as much as it benefited the former Axis Power.
Without the assistance of these, the most brilliant minds that ever lived, humanity may have become extinct long before the year 2000.
The ‘Win-Win’ thinkers who ended the Cold War, the ‘Win-Win’ thinkers who ended the use of chlorofluorocarbons, and the ‘Win-Win’ thinkers who invested in the former Axis Power economies during the postwar era, changed our world for the better (at the very least) and may be responsible for saving all life on the planet (at best).
Those examples prove ‘Win-Win’ thinking can work to solve our problems and that we don’t need to retain ‘Win-Lose’ thinking as our default problem-solving method.
Regardless of the Method we Choose, we Must Stand Up for Our Principles
President Donald Trump today authorized 3 military strikes inside Syria to hit suspected chemical weapon sites and chemical research and development facilities ostensibly used by the Syrian military.
The president cited Article 2 of the U.S. Constitution in his justification for the attack saying that Syria represented an area of strategic importance to the United States. However, there almost isn’t a place on Earth that is of less strategic importance to the U.S. and its allies, as Syria.
It may be the president misread his teleprompter — because Syria isn’t a strategic place from the U.S. viewpoint — and if he sticks to that view he will spend days or weeks defending this military action to members of the Congress and Senate.
What is of strategic importance to the United States (and what would work for members of Congress charged with upholding the U.S. Constitution) is that preventing the proliferation and use of chemical weapons is of strategic importance to the United States, and therefore, President Trump’s authorization of use of force is justified and necessary, and in the best interest of the United States.
In that way the president’s use of force is legal and justified under the U.S. Constitution, and may also serve as a deterrent to a Syrian regime that seems bent on destroying significant numbers of its population and has refused any chance to allow them escape to another country.
Choosing Humanity vs. Hubris: Why We Fight
Exterminating your own citizens because they have a different political view isn’t acceptable and no doubt President Trump is privy to images and videos from Syria that are marked classified because they’re too horrific for U.S. television viewers to see.
And let’s be honest, seeing those images hastened his decision to veer hard towards military action rather than continuing to employ so-called ‘Soft Power’ to bring about a diplomatic solution to the Syrian debacle.
It may be that punishing Syria each time it uses chemical weapons against civilians or terrorist entities will serve as an effective deterrent. However, Syrian forces may become more adept at hiding such attacks from Western eyes and ears.
“We cannot allow the use of chemical weapons to become normalized.”
Syria’s plan seems to be to kill every terrorist, every non-combatant family member of terrorists, or anyone stuck in areas known to contain terrorist entities.
While this may seem normal to dictators, it is highly offensive to civilized people. Even Syria’s ally Russia, abhors attacks on civilians and non-combatants — and Russian citizens seem extremely offended when chemical attacks are used to solve what are, in the final analysis, human problems for which the diplomats haven’t yet found solutions.
Short-term Deterrence or Long-term Mutual Success?
Whether Tomahawk missile attacks act as a deterrent to Syrian chemical weapons attacks inside Syria, or not — at least President Trump can say that America and its allies didn’t stand idly by and let it happen without challenging it.
Yet, the long-term way to solve this crisis is to show these heinous acts on every television in the world, to explain what is actually occurring there, to make chemical weapons use anywhere unacceptable to everyone, and to use ‘Win-Win’ thinking to save our broken, but still human, civilization.
When we finally adopt ‘Win-Win’ thinking as our default option to deal with human-caused problems, that will be the day that human beings finally surpass the animal kingdom in every way on this planet. And if we don’t, our short break from the threat of Cold War-style Mutually Assured Destruction (MAD) will soon be over.
As the debate heats up over President Trump’s 25 per cent steel tariffs and 10 per cent aluminum tariffs (some countries are exempted by Presidential Order) it’s interesting to look at other scenarios that might play out better for the United States — and for other countries too.
First, let’s look at the scale of the American trade deficit problem, then we can compare different methods to adjust trade flows to help the United States avoid a projected $880 billion trade deficit with the rest of the world by FY 2019. No country, not even the mighty United States of America can withstand annual trade deficits of that magnitude.
At the moment, America’s biggest trade deficit is with China ($215 billion/yr) followed by Japan ($68 billion/yr) and Mexico ($65 billion/yr) while many other countries run double-digit trade deficits against the United States. In totality, such trade deficits are simply unsustainable for the U.S. and President Trump is right to address the issue, however, there’s always more than one way to accomplish a thing.
The Nature of the Problem
America’s trade deficit is an astonishingly simple problem that has developed over four decades — because when a thing evolves without proper guidance and oversight, eventually it becomes the thing that eats you — which is what’s happening to the United States in the 21st century.
Because policymakers allowed this monster to grow, it means the U.S. will import $557 billion more than it exports in 2017, instead of maintaining a normal balance of trade like other countries. And 2018 is projected to produce an $880 billion trade deficit for the United States, with a $1 trillion trade deficit sure to arrive by FY 2020 if action isn’t taken to address this catastrophe.
President Trump claims that the American trade negotiators of previous decades were ‘weak’ and got ‘out-negotiated’ by other countries and blames them for the present (uncomfortable) moment. But that isn’t accurate. However, it plays well with voters, and media outlets especially, thank Donald Trump for that characterization.
What happened is that America opened trade with China and other developing nations beginning in earnest in 1974, allowing generous trading terms to add impetus to America’s trade liberalisation goals. American policymakers assumed that once those developing nations got a real economy going, citizens of those countries would then purchase billions of dollars of American goods and the gamble would pay off handsomely. And therein lies the problem. Not every country reciprocated America’s largesse.
China, Japan, and other countries simply grabbed the Americans by their largesse and began exporting evermore billions of dollars worth of goods and services to America without buying much of anything from the United States.
Note: In Japan’s favour, the country’s carmakers aggressively lobbied Washington to be allowed to build factories throughout the United States and Canada which provided thousands of jobs across North America every year since 1987. Also, Japan bought hundreds of billions of dollars worth of U.S. Treasury Bills to help maintain the American economy. These wise actions ameliorated the concerns of U.S. legislators about Japan’s trade imbalance with the United States from 1987-2017.
Which should qualify Japan for a ‘Free Pass’ from all steel and aluminum tariffs IMHO, as Japan was led to believe by American legislators that their actions neatly covered any trade negatives in the U.S. / Japan relationship.
Asleep at the Switch?
If someone in America had been ‘on this’ it would have never gone this far. But someone in America was asleep at the switch and that’s why we are where we are, in 2018.
The problem, therefore, isn’t that America got ‘out-negotiated’. The problem is that certain countries took advantage of America’s generous trade terms but were reluctant to accept imports from the United States.
Whoever was in charge of international trade in the U.S. from 1990 until 2018 should have Fried in Hell for not raising the alarm and writing some appropriate ‘fair trade’ legislation that would serve as a check and balance against such one-sided trade flows.
The $10 Billion Tripwire Method
Countries that run trade surpluses of less than $10 billion/yr with the U.S. shouldn’t face American tariffs as those numbers typically go up and down many times over the course of a decade and can even reverse direction to America’s benefit, and in any case, rarely become double-digit or triple-digit trade imbalances.
But once a country hits the $10 billion trade deficit threshold with the United States, it should trigger alarm bells from Alaska to Maine and appropriate tariffs (like Donald Trump’s high-ish steel and aluminum tariffs) should automatically apply on exports to the U.S. from any country that surpasses the $10 billion tripwire.
It’s such a good idea that every country should do it.
The 5% Method
If the United States charged a truly nominal 5 per cent tariff on every foreign good and service it would raise $150 billion per year which is a substantial amount of money for any country, even a superpower.
The U.S. could use that money to subsidize American companies hit hard by low-priced imports since 1990 (maybe by providing financing assistance to allow them to build newer, more energy-efficient factories for example), to improve transportation corridors throughout the country (especially near America’s seaports), to upgrade the actual port facilities to allow for faster and more efficient throughputs of American products being shipped overseas, and to enhance security at every single U.S. port of entry.
This too, is such a good idea that every country should do it.
Balancing an Unbalanced Equation
If the United States adds a nominal 5% tariff to all foreign goods and services, and then on top of that tariff penalizes (with industry-specific tariffs) only the countries that run more than $10 billion trade deficits with the U.S., the entire problem will be solved within 5 years and the American economy will boom like never before.
Also, in a booming U.S. economy, countries like China will find that orders from America will increase and any losses felt now will be recovered within a year or two.
‘Corrective’ Tariffs Need to Replace ‘Punitive’ Tariffs
The only way to conduct international trade is with respect, with proper checks and balances, with mild tariffs designed to make corrections to uneven trade flows resulting from poor policy in previous decades, and none of it needs to be confrontational or nasty.
For the sake of its hard-working citizens, American policymakers must address these imbalances in a businesslike way — not to punish other countries — but rather, to ensure that every country that trades with the U.S. is doing so in a fair and transparent manner.
There seems to be only one man in all of America who thinks the NAFTA agreement between the three North American economies is a bad deal for the United States. Which would be a very ordinary thing except that man happens to be the president of the United States of America. At least for now.
The one great thing about the American electoral system is that U.S. presidents can serve only two concurrent terms in office, so no matter how bad or popular a U.S. president is, he or she can stay in office for a maximum of 8 years. Although nothing prevents them from running for their old job once another president has served, other than the fact that American voters have never returned a previous two-term president to office.
That law is a tiny part of what makes the United States exceptional in the world. The most meritorious or most popular presidential candidates rise to the top — but unlike other countries where leaders can serve several terms in office — the American system is refreshed by new leadership every 4 or 8 years. And that’s what makes America great.
‘New blood’, a ‘new vision’, a ‘breath of fresh air’, or however you wish to describe it, occurs at regular intervals. No wonder America is exceptional! It’s too bad they don’t do the same thing with members of the Senate and Congress — and yes, even the office of Mayor in every U.S. city. If they did, the United States would be twice as exceptional on account of all that new blood and fresh enthusiasm.
Alas, because only one office in the land is refreshed regularly, America is great from the top down only — not up and down and in the middle — at least where governance is concerned.
Where Donald Trump is Wrong
President Trump arrived on the scene 13 months ago and with no particular government experience behind him, declared that many things are wrong with America and he’s just the man to fix it. And he may be that man, but only time will tell.
Yet, we’re seeing a man who sees symptoms and sincerely wants to treat the symptoms instead of wanting to solve the underlying condition that created the symptoms in the first place.
Certainly no one can fault Donald Trump for being enthusiastic about America, about America’s history in the world, and no one can deny he’s a breath of fresh air to the Oval Office.
But we need to have a conversation about the present symptoms in order to ascertain what the underlying condition may be in present-day America, and for that, we must travel back in time to see how America lost its way.
When Henry Ford was right: Creating the American middle class by filling a transportation need
Henry thought that ‘everyman’ should own an automobile, instead of only railway barons with their obscene personal wealth able to afford motorized transportation. During a downturn in Ford company fortunes, Henry decided to increase the pay of his workers to $5.00 per day, and was thereafter able to cherry-pick whatever workers he wanted from Louis Chevrolet, Buick, General Motors, Cord, Packard, and others.
Once Henry had created a whole new economic classification which later came to be called ‘the American middle class’ so many people bought Ford vehicles that 16.5 million Model T’s were produced in less than 20 years of production.
The moral of this story? Paying higher wages created ‘the middle class’ — a growing cohort of workers earning good wages and able to afford a car, which catapulted Ford’s fortunes into the stratosphere.
The Post-war Boom
Early in the 20th-century, the U.S. became the most powerful manufacturing nation in the world and surpassed even longtime patent leader Germany as the country that received the most annual patent applications.
This occurred only because of strong patent law in the United States. Any inventor with a worthwhile invention brought their idea to America for one reason — because out of all the countries in the world only the U.S. offered the maximum level of legal protection for their idea, design, system, or machine.
Even German scientists brought their ideas to America to have them registered with the U.S. Patent Office!
For countries other than America, the existence of a strong U.S. Patent Office created a ‘brain drain’ in their own countries, meaning that all their scientists and inventors headed to America instead of registering their contraptions in their home country.
Having received their patent protection in the United States, it was a natural step to have their inventions manufactured in America. Although not its primary mandate, the U.S. Patent Office was often excellent at matching inventors with such suppliers or manufacturers as they required.
It was a clear case of the American government passing the right legislation at the right time to attract the best and brightest in the world.
The moral of this story? Not a tariff in sight!
Because the postwar economy was booming and expectations were high, the Baby Boom generation went on a buying spree that is unparalleled in history
All of which worked to make all those patent-holders and their manufacturing companies obscenely rich. And good for them! When you work hard, you should see a positive return for your effort.
The favourable consequence of powerful U.S. patent protection combined with a huge and growing manufacturing base, created a booming economy and concomitant high consumer confidence which provided an unexpected result — usually about 9 months later.
Yes, during the boom times when one family member earned enough to support an entire family, the birthrate in America skyrocketed, creating even more demand as Americans began to have more children per fertile woman.
The moral of this story? When one breadwinner could support a spouse and up to 4 children, afford a new car every 3 years, a couple could own their own home via a 10-year mortgage and enjoy a refreshing vacation every year, the American economy was operating at full output!
American Foreign Policy in the Postwar Era
In the 41 years leading up to 1974, the Saudi government had been selling their oil to America for only the price of production (sans profit) as their contribution to the Cold War effort.
Interestingly, they were allowed to reinvest their cost of production payments in crude oil deliveries and refined oil products — so although they made zero profit on the crude oil as it came out of the ground — they were able to amass considerable wealth by speculating on oil stocks.
But that ended when it was perceived by the Saudis in 1973 that America was favouring Israel, a country that had never delivered billions of barrels of free oil to America.
When America’s oil supplier felt slighted, they decided that they wanted to get paid for their oil after all. ‘Oh, and, we’re pulling back on our Cold War commitment too.’
Which is why the Soviets thought they could successfully invade Afghanistan and tone the world’s opium supply down to almost zero.
When the Saudis suddenly wanted to be paid for their oil and they simultaneously lowered their Cold War commitment to America, the U.S. economy slowed.
With 20/20 hindsight, the ensuing economic disaster was only a symptom of a bungled foreign policy that caused a dramatic increase in new car registrations of foreign cars (with their better gas mileage) moving from 4% of all U.S. new car registrations in 1970 to 65% of new car registrations by 2017. Not only that, but up to 75% of the parts used in today’s American cars are made in Asia.
Therefore, the problem clearly isn’t NAFTA which came into effect in January 1994.
Here’s how that looks expressed as a math equation:
America -10 trillion dollars ∴ Japan +10 trillion dollars
(If you’re not into math, the symbol ∴ means ‘therefore’)
It could be argued that the United States took a highly principled stand on account of the people of Israel, but it was America’s decision alone, and it cost America 10 trillion dollars and poisoned relations with their oil-producing and Cold War ally, Saudi Arabia.
The moral of this story? The problem of offshoring American manufacturing jobs began in 1973 due to an American foreign policy decision which took place long before NAFTA had been created. Blaming Japan for American capital flight since 1974, or blaming NAFTA (which wouldn’t be created for 20-years) is disingenuous.
Social problems in 1960’s and 1970’s America: Racism, weak civil rights for women, and the Vietnam War worked to reverse America’s earlier gains
A lost generation occurred in the 1960’s where The People lost faith in their elected representatives, but they didn’t lose faith in the institutions of government.
President Carter worked to restore the faith the American people felt toward the executive branch of government by working on some very noble causes and meeting with some success. President Reagan moved things forward by strengthening the U.S. economy, infusing Americans with newfound confidence by offering loan guarantees to struggling American automobile manufacturers and dramatically increasing military spending.
The moral of this story? President Carter and President Reagan didn’t fix America by blaming other countries — they did it by empowering American citizens with tax changes and supporting American industry with loan guarantees to at-risk corporations, with huge defense spending increases, and plenty of positive exhortations about what made America great in the first place.
Every American, Canadian, or Mexican captain of industry wanted NAFTA back in 1994
If NAFTA was so grievous to be borne, why did almost every CEO in North America want NAFTA?
But some American Congressmen and Senators were nervous on account of the many U.S. job losses since 1974 and were concerned that even NAFTA could go wrong. And let’s face it, some members created a negative stir so that new U.S. president Bill Clinton would feel compelled to direct more federal funding to their districts in case NAFTA failed.
In reality, the only U.S. and Canadian companies that lived in fear of NAFTA were ones that didn’t keep up with the times. In the booming 1980’s and 1990’s economy, some companies decided they wouldn’t modernize and consequently continued to spend millions per month on electricity costs (for example) instead of reinvesting their (then record) profits in newer, energy-efficient factories or foundries.
For other corporations in the mergers era, it seemed a time to slow capital spending in order to maintain high profit margins and pay record-high dividends to their shareholders. But when the bull market finally came to its end, many businesses were suddenly cash poor and couldn’t afford a new, energy-efficient factory or foundry. Which was brilliant tactical thinking, but abysmal strategic thinking.
So… the question is; If corporations employ poor strategic thinking, should taxpayers be forced to bail them out?
Why should U.S. taxpayers bail out industries that choose high shareholder returns over sound financial management?
In the 1970’s and 1980’s, some American automakers needed the federal government to subsidize them with billions of taxpayer dollars to save them from implosion. That’s only one example out of thousands of U.S. companies that accepted or have lobbied for federal subsidies. Canada is just as bad as the United States on this point. Governments in both countries spend more on corporate welfare than they do on citizen welfare — times two!
Now in 2018, President Trump wants American taxpayers to pay even more for their cars (and anything else made of steel or aluminum) via a 25% tariff on steel imports and a 10% tariff on aluminum.
For one example, Trans Canada Pipeline will be forced to pay the tariff on the steel pipe for the proposed Keystone XL pipeline. Although steel is a small part of the overall cost of building a pipeline, the cost of the multi-billion dollar project will now rise by 5% or more. Just for comparison, 5% on 10 dollars is 20 cents — but 5% on 5.4 billion dollars adds 270 million dollars to the overall project cost.
The moral of this story? While Donald Trump’s motives are obviously ultra-pure, tariffs are simply a de facto form of taxation that U.S. citizens will pay because a few American corporations preferred high profits/high shareholder returns over competitiveness
Is there ever a good case for tariffs?
In a word, yes. Everything that’s imported into the U.S. (or any country) should face a globally standardized 5% tariff because every government needs money to improve port facilities, to streamline customs, and to maintain the transportation corridors that are essential to trade flows.
Even countries with free trade agreements like the NAFTA countries should institute a standardized 5% tariff on every good that crosses their border — and be required by legislation to use that money to improve transportation corridors and border security.
Consumers would find that presently high tariff items would drop in price, and zero tariff items would rise by 5%, but the trade-off would be astonishingly better roads, bridges, tunnels, rail links, airports and seaports, complete with better security. Every citizen would like to spend fewer hours per week stuck on congested highways, in airports, and enjoy faster and more secure delivery of goods.
Suddenly we wouldn’t be talking about ‘trade wars’ we’d be talking about improved trade, improved infrastructure, and a complete standardization and levelization of tariffs between every country.
And instead of heated rhetoric from politicians, we’d become more efficient throughout our countries and less efficient corporations wouldn’t continue getting rewarded for not re-investing in their businesses.