Posts Tagged ‘ China ’

Knowledge Capital Writedown: Wind Turbines

Wednesday, December 15th, 2010
Michael Mandel



Michael Mandel is the chief economic strategist at the Progressive Policy Institute and the founder of Visible Economy LLC, a New York-based news and education company.

by Michael Mandel

On the front page of the NYT this morning, Keith Bradsher gives a perfect example of a knowledge capital writedown, in his story about wind turbine technology being transferred to China by a Spanish company, Gamesa:

Nearly all the components that Gamesa assembles into million-dollar turbines here, for example, are made by local suppliers — companies Gamesa trained to meet onerous local content requirements. And these same suppliers undermine Gamesa by selling parts to its Chinese competitors — wind turbine makers that barely existed in 2005, when Gamesa controlled more than a third of the Chinese market.

But in the five years since, the upstarts have grabbed more than 85 percent of the wind turbine market, aided by low-interest loans and cheap land from the government, as well as preferential contracts from the state-owned power companies that are the main buyers of the equipment. Gamesa’s market share now is only 3 percent.

With their government-bestowed blessings, Chinese companies have flourished and now control almost half of the $45 billion global market for wind turbines. The biggest of those players are now taking aim at foreign markets, particularly the United States, where General Electric has long been the leader.

The story of Gamesa in China follows an industrial arc traced in other businesses, like desktop computers and solar panels. Chinese companies acquire the latest Western technology by various means and then take advantage of government policies to become the world’s dominant, low-cost suppliers.

It is a pattern that many economists say could be repeated in other fields, like high-speed trains and nuclear reactors, unless China changes the way it plays the technology development game — or is forced to by its global trading partners.

Because of Gamesha’s transfer of knowledge capital to China, GE’s knowledge capital has become less valuable, which eventually will affect wages and employment.   Gamesha’s knowledge capital has been less valuable as well, which affects the Spanish standard of living.

The correct policy prescription is for the U.S. to dramatically up our investment in knowledge capital and physical capital.  Dramatically. That may require less support for consumption now so that our children can be better off in the future.

This article is cross-posted at Innovation and Growth

Photo credit: Bonnie Tsang

China’s Growing Naval Power

Tuesday, December 14th, 2010
Michael Chase



Michael S. Chase is an associate professor in the Strategy and Policy Department at the U.S. Naval War College and a fellow with the Truman National Security Project. The views expressed here are his own.

by Michael Chase

Read the entire memo

It’s clear that China’s Navy is growing in size and quality. Not only does China have the largest navy in East Asia, it has an increasingly modern and capable force of imported and indigenously produced destroyers, frigates, missile patrol craft, and submarines. Beijing is even planning to deploy its own aircraft carriers, a development sure to alarm neighbors such as Japan, Vietnam, and India.

But what does it mean for American policy makers? Should the United States increase its own maritime power in response to Beijing’s growing strength? Are there diplomatic levers that Washington might pull to forestall potential Chinese aggression? Below, I explore these issues, first by giving a brief history of China’s evolving naval strategies since the People’s Republic began in 1949. (It’s critical that U.S. policy makers understand the evolution of China’s thinking about the roles and missions of its navy.) Then, I provide a full accounting of recent Chinese naval hardware developments. Finally, I draw policy recommendations designed to help American policy makers manage the challenges that have arisen as a result of China’s improving capabilities, regional assertiveness and expanding global interests.

In short, the U.S. will need to strengthen its ties to key countries in East Asia and develop strategic and tactical military concepts and capabilities that would allow it to counter China’s growing military power. Meanwhile, U.S. policy makers must seek collaboration with the Chinese military in an effort to highlight the benefits of being a global stakeholder to Beijing.

Read the entire memo

Labor Backs Trade (Yes you read that right)

Monday, December 13th, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

Last Friday the AFL-CIO and several big unions came out against the U.S.-Korea free trade deal.  As news, this was strictly “dog-bites-man” stuff.  The bigger story is the appearance of cracks in Labor’s usually monolithic opposition to trade pacts.

Several unions, namely the United Auto Workers and the United Food and Commercial Workers, endorsed the agreement after President Obama wrung concessions from Seoul on cars and U.S. beef earlier this month. Ford Motor Company, which strongly opposed the original deal negotiated by the George W. Bush administration on the grounds that it didn’t do enough to pry open South Korea’s auto market, is also on board.

The unusual split in Labor’s ranks makes it easier for Congressional Democrats to back Obama.   Although voting treaties up or down is the exclusive prerogative of the Senate, it’s significant that the deal also has the support of Rep. Sandy Levin (D-Mich), a tireless defender of the U.S. auto industry and long the House’s leading skeptic of free trade agreements.

If the Senate approves the treaty next year, it will be a major boost for Obama’s pledge to double exports over the next five years. It may also signal a shift in trade politics within the Democratic Party. As a candidate, Obama played to his party’s anti-trade gallery, even pledging to re-negotiate the 1994 North America Free Trade Agreement. Now, as President, he recognizes that opening overseas markets is integral to economic recovery. With consumers still winding down their debts, and businesses hoarding cash, a good part of the economic demand we need to create jobs must come from abroad.

In fact, the Commerce Department reported Friday that U.S. exports rose to their highest levels in more than two years. The U.S. trade deficit (in goods and services) fell to $38.71 billion, a more than 13 percent drop over the previous month and considerably less than the $44 billion economists had predicted.  Best of all, U.S. exports to China grew nearly 30 percent to reach a record high of just over $9 billion. Along with a slight decrease in Chinese imports, that narrowed the monthly U.S. trade deficit by 8 percent, to $25.52 billion. This was the best economic news we’ve had for some time, and it sent stocks soaring.

South Korea has the world’s 12th largest economy. By lowering its high tariffs and dealing with non-tariff barriers to U.S. communications and financial services firms, the deal could boost U.S. exports to South Korea by $10 trillion annually, the administration says. Crucially, thanks to Obama’s success in getting South Korea to modify its auto provisions, it exempts up to 25,000 U.S. vehicles from Seoul’s environmental and fuel economy standards, and builds in safeguards against a surge of imported cars from South Korea.

That was enough to satisfy the UAW and Ford though not, it seems, the rest of organized labor. Intriguingly, the automakers’ union also parted company from the AFL-CIO in backing another controversial Obama deal: his tax-cut compromise with Republicans. It’s another sign that, even within the progressive camp, arguments for spurring job-creating growth are prevailing over class warfare themes.

South Korea is more than a major trading partner. It’s also a key U.S. ally. North Korea’s recent artillery attack on one of its islands – and China’s refusal to condemn it – seems to have made Seoul more tractable about negotiating changes in the treaty.  In any event, the free trade pact also offers the United States an opportunity to cement relations with an prosperous market democracy that increasingly shares our apprehensions about Beijing’s propensity for throwing its weight around in the Asia Pacific.

The U.S.-South Korea free trade agreement would be worth ratifying on foreign policy grounds alone. But unlike several previous bilateral trade pacts with small nations, this one will deliver real benefits to America’s struggling economy.

What China’s Strong Arm Tactics Don’t Buy

Thursday, December 9th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

Beijing has arm-twisted nineteen countries to not send representatives to tomorrow’s Nobel Peace Prize ceremony in Oslo.  At issue is the honoree, Liu Xiaobo, a Chinese political prisoner whose views on human rights and democracy don’t jive particularly with the Chinese Communist Party’s.  Imagine that.

On the surface, Beijing’s deft deployment of “soft power” seems impressive: to keep nineteen countries from attending supporting democratic movements is impressive. “Soft power,” as Harvard professor Joe Nye explains in an October Washington Quarterly article, is an area where Beijing is just coming into its own.

But Nye also points out that Chinese soft power has limits:

It is not easy for governments to sell their country’s charm if their narrative is inconsistent with domestic realities. In that dimension, except for its economic success, China still has a long way to go.

Such is the case with the Nobel event.  Let’s examine the nineteen no-shows, and their political and press rankings from 2009 by Freedom House, the NGO that tracks these sorts of things:

Country Political Status Freedom of the press status
Afghanistan Not Free Not Free
China Not Free Not Free
Colombia Partly Free Partly Free
Cuba Not Free Not Free
Egypt Not Free Partly Free
Iran Not Free Not Free
Iraq Not Free Not Free
Morocco Partly Free Not Free
Pakistan Partly Free Not Free
Russia Not Free Not Free
Saudi Arabia Not Free Not Free
Serbia Free Partly Free
Sudan Not Free Not Free
The Philippines Partly Free Partly Free
Tunisia Not Free Not Free
Ukraine Free Partly Free
Venezuela Partly Free Not Free
Vietnam Not Free Not Free

Yikes.  Only two unfettered “free”’s in the lot. In other words, as Nye acutely observes: ‘[I]f the authoritarian growth model produces soft power for China in authoritarian countries, it does not produce attraction in democratic countries. In other words, what attracts in Caracas may repel in Paris.”  How spot-on.

And if you’re interested in hearing it straight from the horse’s mouth, come see Joseph Nye, Under Secretary Michele Flournoy, Senator Chris Coons (D-DE) and a host of others talk about these issues at a PPI panel discussion on China, next Tuesday, December 14th in DC.  Click here to see the invite and RSVP.

Photo credit: Adam

A New Approach for STEM Education

Thursday, December 9th, 2010
Steve Norton



Steve Norton is communications director at the Information Technology and Innovation Foundation and a former journalist and speechwriter.

by Steve Norton

Most Americans appreciate the fact that the world is a very competitive place.  Policy makers and parents have long known that our kids, from grade school through college, need to step up their skills and understanding of science, technology, engineering and math – know in education circles as STEM studies – if they are going to compete successfully with their counterparts in China, India, Korea, and many European countries.  For this reason, for nearly 40 years there has been a lot of interest in improving STEM education.  While it is laudable that we are focusing on STEM education, we are running the risk of tethering ourselves to assumptions that might be a little faulty and outdated.  We can’t be truly innovative as a nation if we are not innovative in our thinking about STEM education.

The current assumption driving STEM education is that all students should get at least some STEM education at every step of their educational journey.  Supply students with high standards, great teachers and get as many kids excited about STEM as possible.  Call this the “some STEM for all” approach.  It sounds appealing, right?  Universal tech literacy for the 21st century.

Well, one problem with this is that most of us are not destined to be scientists and engineers – maybe five percent.  Some of us simply don’t have the acumen and the economy only needs so many engineers and scientists and actuaries.  So why should state and local governments, many of which are in deep financial peril, lavish resources on the “Some STEM for all” approach?  The answer is that they shouldn’t.

Another problem with this approach is that it wants to push young people into studying what might not necessarily interest them and deny the real STEM stars the resources they need to excel.  This is destined to fail.  A successful education experience begins with motivated, excited students pursuing what truly interests them and going where their talents can shine.  Forcing all students to take on AP physics or chemistry is going to have disappointing results during high school and beyond since these fields aren’t necessarily where the jobs are going to be.  Ironically, over 80 percent of the STEM jobs are in engineering and information technology but there is a paucity of courses in these fields at the high school level.  Therefore, the kids with the inclination are not getting access to what excites them – nor acquiring skills that employers actually need.

The time has come to try a more efficient and effective approach.  Flip the paradigm around.   Call it “All STEM for Some.”  It is based on identifying the kids with the most promise and interest in STEM areas early on and giving them the challenging, exciting educational experience. This  will allow them to move into advanced studies and then into the working world ready to contribute to a more dynamic U.S. economy.  Not everyone is going to be Bill Gates.  We don’t need everyone to be Bill Gates.  But we have to make sure we have at least a few Bill Gateses in the years ahead.

Gates’s case actually provides a good example of the wisdom of this approach.  As many of us have learned in the popular book “Outliers” by Malcolm Gladwell, Gates is a product of brains and hard work.  But just as important, he had the luck to go to fine private high school where a parent with vision and resources provided a computer lab.  This was a time when most universities had not computer lab.  For a kid like Gates, it was heaven.  He spent hours there.  And the rest, as they say, is history.

ITIF fleshes out the idea of “All STEM for Some” and offers up ideas that should be embraced as part of a broader education reform effort in a new report Refueling the U.S. Innovation Economy: Fresh Approaches to Science, Technology, Engineering and Mathematics (STEM) Education. Among the ideas in the report is placing a greater emphasis on making sure students can demonstrate skills rather than merely memorize content.  In addition, it would make sense to allow STEM-oriented students to spend more time in those courses and less time on other subjects.  Also, we need to make sure the resources are there beginning freshmen year so we don’t lose the kids who were STEM-inclined but instead nurture them with greater opportunities right away.

In addition, the report urges policy makers to get serious about creating entirely new institutions – STEM specialty schools – and develop the infrastructure to identify and recruit the most promising students to pursue their passions in exceptional world-class educational environments.

We should also revise how we incentivize schools to make their STEM programs more effective.  The report explains this could be done with a combination of federal grant money, as well as corporate or philanthropic efforts.  Bolstering STEM education should be part of needed national strategy to make our national labs, universities and private employers act in a more coherent fashion when it comes to preparing students and workers in critical new fields.

We are not going to be able to develop the game-changing advances in biotechnology, robotics, energy and other fields unless we nurture the talent of our students effectively.  Many of us will want to become artists, teach history, develop real estate, or run our own small business.  That is fine.  But we should get serious – immediately – about how we educate those students who show the keenest interest in the emerging growth fields of the future.  Giving a smattering of science and math to them along with the aspiring novelists is not going to work.  We only have about ten years to make changes in our STEM education so we will have the talent to create the STEM jobs so and therefore compete globally in the years ahead.  The time to get started is now.

This article is cross-posted at Innovation Policy Blog

Photo credit: Michael Surran

Why a Stable Korean Peninsula is in China’s Best Interests

Tuesday, December 7th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

Taking its cues straight from Will Marshall’s keyboard, no doubt, the Obama administration  correctly labeled China as an “enabler” of North Korea over the weekend.  If Pyongyang is the crack addict in the alley behind my house, Beijing keeps it high.

Beijing’s unwillingness to curtail the Hermit Kingdom’s frustrating bellicosity falls within its national interest.  Well, in the short term, anyway: As North Korea continues to cause headaches in Washington, Beijing is probably quite content to let a distracted DC spend time and energy containing the North and placating the South. Further, China alone maintains significant diplomatic leverage over the Kim dynasty, and a mischievous Pyongyang reinforces Beijing’s position as regional powerbroker.

Consider the flip side: If North Korea starts to behave itself, China not only loses that pivotal position, but Washington can spend more time focusing the basket of issues it would prefers keeping front and center: currency valuation and debt, trade, improving military ties, freedom of international waterways, and India’s UN Security Council seat, amongst others.

But as the Korean situation continues to deteriorate, it should be dawning on the Chinese that an escalation isn’t in their interests, either.  With each Northern provocation–the Cheonan sinking, the Yeonpyeong Island shelling, and the consistent threat of another nuclear test launch–the South Korean public loses patience with diplomatic responses.  Should the day arrive when a military response is unavoidable, the egg will ultimately end up on Beijing’s face: it will be drawn into full-blown crisis-control mode if for no other reason than to manage the inevitable refugee catastrophe awaiting on its boarder.

In talks with the Chinese, the Obama administration must highlight these facts: allowing a rambunctious Kim to needle Washington’s eye is fine for today, but it serves no one’s interest to allow such behavior continue.  This is the choice China faces: regional broker or global stakeholder — it’s very difficult to be both over the long term.

If you want to learn more, you should check out PPI’s All-Star panel on US-China relationship next Tuesday, December 14th, featuring UnderSecretary of Defense Michele Flournoy, new Senator Chris Coons (D-DE), Harvard professor Joe Nye, writer James Fallows, and Naval War College professor Mike Chase.

China’s Free Rider Syndrome

Tuesday, November 30th, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

There may be no method in North Korea’s madness, but the world’s response to its episodic outrages has settled into a familiar pattern. It’s a dangerous pattern, and one likely to recur as long as China keeps enabling Pyongyang’s belligerent behavior.

First comes an utterly unprovoked attack on South Korea. Seoul reacts angrily and threatens unspecified consequences. Washington firmly backs its ally, and solicits global censure of North Korean aggression. The Chinese, however, decline to assign blame and instead urge resumption of direct talks with Pyongyang. South Korea eventually backs away from confrontation, on the perfectly rational premise that living with the North’s occasional spasms of violence is preferable to an all-out war that would devastate both countries.

The latest crisis began last week when the North shelled a South Korean island. South Korean President Lee Myung-bak called the attack, which killed two civilians and wounded 16, a “crime against humanity” and warned that Seoul would not tolerate a direct attack on its soil. The United States dispatched an aircraft carrier, the George Washington, while China called, irrelevantly, for a resumption of the long defunct six-party talks aimed at dismantling the North’s nuclear weapons program. And yesterday, Seoul moved to dampen war fever by canceling live-fire artillery drills on the stricken island.

Essentially the same cycle played out last spring, when North Korea sunk a South Korean patrol boat, the Cheonan, killing all 46 sailors aboard. Pyongyang paid no price for this act of war, either.

Pyongyang’s behavior may look like a classic case of winning through intimidation, except that it’s not clear what it gains from such brutal tactics. The North is as isolated and poverty-stricken as ever, and, with dictator Kim Jong il preparing to hand off power to his son, no relief is in sight for its thoroughly regimented society.

One explanation is that the regime from time to time must manufacture external threats to justify the extreme sacrifices it demands of its people. Another is that its assaults are part of an elaborate shake-down racket meant to get the world’s attention – along with bribes for good behavior.  Except that it seems to be having the opposite effect. Last week’s shelling, along with the Cheonan incident, have driven the final nail in the coffin of the South’s “sunshine policy” of economic and humanitarian aid to the North. Nor is Washington eager to reward Pyongyang’s bellicose conduct by rushing back into the six-party talks.

This latest outrage throws a spotlight on China’s role as North Korea’s enabler. Not only does Beijing shield Pyongyang from the consequences of its disruptive behavior, it also helps to keep the regime afloat by supplying fuel and other economic assistance. Perhaps it’s too facile to assume – as Republicans like John McCain and Lindsay Graham do – that China can bring the mercurial Kim regime to heal just by threatening to shut down oil shipments or cross-border trade. But is it really too much to ask of China that it at least not cover up the North’s crimes and collude in its ludicrous lies?

Beijing wants very badly to be accorded the respect that its growing wealth and power implies. It wants a seat at the table where global decisions are made. Yet on issue after issue, China is proving to be a free rider. Beijing takes maximum advantage of an open world economy while contributing little to strengthening the system that has made it rich. Instead, it pursues a mercantilist policy that creates enormous imbalances in world trade and investment flows, while keeping its currency artificially high to make discourage imports from the U.S. and elsewhere. Instead of trying to tamp down tensions on the Korea peninsula, it feeds them by shielding its delinquent ward in Pyongyang from accountability. Instead of throwing its weight behind international efforts to restrain rogue regimes from Khartoum to Tehran, it seeks commercial advantage while hiding behind the supposedly sacrosanct principle of non-interference in other nation’s internal affairs.

China’s amoral and selfish behavior increasingly engenders doubt and fear, not respect. Its failure to accept the responsibilities that accompany its growing power undermines global cooperation and stability. It’s time for the Obama administration to move China’s free-riding to the center of its engagement with Beijing.

Photo credit: Kok Leng Yeo

Obama’s Chance to Lead on Trade

Wednesday, November 10th, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

President Obama is in Seoul today for what promises to be a contentious meeting of the world’s leading economic powers. He probably won’t mollify China, Germany and other critics of the Federal Reserve’s plan to pump more money into the U.S. economy. But the President does have a chance to further his goal of doubling U.S. exports by bringing home an improved trade agreement with South Korea.

In addition to attending the G-20 summit, Obama is slated to meet with South Korean officials to finalize a bilateral free trade pact negotiated by President Bush. Congress has not ratified the treaty, which is snagged by concerns about U.S. auto exports to South Korea, as well as lawmakers’ eroding faith in the benefits of free trade.  The president said in June that he had instructed the U.S. Trade Representative to have all the outstanding issues “lined up properly” before he arrived for this week’s visit, so he could close the deal with Korea and present the agreement to Congress again in the coming months.

South Korea isn’t just a major trade partner, it’s also a key strategic ally and a counterweight to China’s growing heft in the Asia-Pacific. Since its tariffs traditionally have been much higher than ours, there’s little doubt that the agreement would spur U.S. exports and help offset weak economic demand at home. It requires South Korea to lower its high taxes on U.S. farm goods and open markets for insurance and other services to American firms.  As the treaty has languished in Congress, however, Seoul has been busy on other fronts, deepening economic ties with China and finalizing an important trade pact with the EU last month.

Although President Obama sounded an ambivalent note at best on trade during the 2008 presidential campaign, he understands that expanding U.S. exports is crucial both to creating jobs and shrinking America’s outsized trade deficits.  Now that he’s made the Korean deal a top priority, we’ll find out if the newly Tea Party-infused GOP will be more amenable to passing the treaty than Congressional Democrats were.

The agreement would lower tariffs on auto imports on both sides. South Korea’s are higher — 8 percent compared to 2.5 percent here. (The United States also would gradually lower a 25 percent tariff on imported pickup trucks.) Nonetheless, U.S. auto makers, especially Ford, have argued that the treaty would not bring down cultural and non-tariff barriers that have confined their sales to a sliver of South Korea’s lucrative auto market.

They have a point.  Seoul exports more than 400,000 vehicles (mostly Hyundais and Kias) to the United States each year, while manufacturing an additional 200,000 cars at U.S. plants. According the U.S. Commerce Department, U.S. auto makers sent a paltry 5,878 vehicles to South Korea in 2009. Ford’s Stephen Biegun notes that more than 70 percent of the cars made in South Korea are exported, while imports account for less than 10 percent of sales, well below the average of 40 percent in other economically advanced countries.

As an auto industry representative explained in testimony before Congress, Korea has an extensive web of non-tariff barriers that make it harder for foreign car makers to penetrate the Korean market.  Some of these are technical regulations like emissions standards and even license plate size. Establishing a clear link between such policies and the small U.S. market share in Korea isn’t always easy. But there’s no doubt that some of Korea’s policies reflect a well-entrenched hostility toward imports. For example, until recently anyone in Korea who bought a foreign car would automatically have their income taxes audited—a policy that chilled demand even after it was officially ended.

Ford, America’s healthiest car maker, sees itself as the chief victim of South Korea’s import-unfriendly policies. That’s because General Motors, through its Daewoo subsidy, makes cars in South Korea, selling more than 100,000 locally and exporting hundreds of thousands more elsewhere (including to the United States).

What can President Obama do to resolve the impasse over autos and get the U.S.-South Korea agreement through the Senate? He can’t reopen negotiations, but he can use the presidential jawbone to win binding side agreements with Seoul to remove non-tariff barriers to U.S. auto exports.  He could, in short, bring pressure on South Korea to fully liberalize its auto markets and embrace the reciprocal obligations that come with free trade.  Much like his powerful message in New Delhi that “India has emerged,” the president needs to make the case that South Korea has also fully emerged as a mature economy, and it can no longer justify the kind of protectionist and mercantilist trade policies that are more typical of poorer developing countries.

A more aggressive stance would show that the President is serious about doubling U.S. exports. But there’s a complicating factor: the global spread of auto production, design and supply chains. That makes it hard to say just how “American” any given car really is, or how many U.S. jobs are engaged in making cars.

Nonetheless, as long as the answer is “greater than zero,” the President has an obligation to ensure that major U.S. trade partners offer as much access to their domestic markets as we do to ours. And the Korean pact presents him with an opportunity both to restore U.S. global leadership on trade liberalization and to integrate America more deeply into the world’s fastest-growing markets in East Asia.

Photo credit: South Korea

A Dear Jon (Stewart) Letter

Friday, October 29th, 2010
Lee Drutman



Lee Drutman is a senior fellow and the managing editor for the Progressive Policy Institute.

by Lee Drutman

Dear Jon:

I’m looking forward to attending your rally this Saturday, but like many, I’m not sure whether you are intending to simply produce a Daily Show-esque send-up of the whole rally-on-the-Mall concept, or whether this is the moment when you give the genuine rallying cry of “moderate!”

I know a lot of your fans are hoping you don’t undermine your hip satire with the mawkishness of actually caring.  But I, for one, sincerely hope that you are actually serious here, and that you have every intention of giving voice to “the people who think shouting is annoying, counterproductive, and terrible for your throat,” as you call them.

We need you Jon. You may be our last best hope.

As you know and well understand, political debate in this country is actually nothing at all like debate. The two parties and their loyal acolytes keep yelling right past each other. They effectively inhabit two separate unbridgeable worlds, drifting further and further apart.

The activist bases of both parties have been spending the last 30 or so years trying create a black-and-white world where you are either with us or against us. Increasingly, they hold the key to elected offices, especially on the Republican side, by being the source of campaign resources and energy. Meanwhile, a media culture drawn to sharp conflicts always zooms in on angry yelling over possible consensus for a simple reason: the schoolyard knife fight makes better TV than the debating society, and every attention-seeking pundit and politico now knows this.

And yes, this has excited and energized the most extreme elements on both sides, who by dint of personality are attracted to moral clarity these Manichean struggles offer. But it has turned off those who are prefer compromise and open-mindedness, who don’t see the world in such stark terms, who, as you put it: “who feel that the loudest voices shouldn’t be the only ones that get heard.”  Fewer and fewer Americans choose to identify themselves with either of the two major parties, and the plurality of Americans now think that neither party has “a clear plan for solving the country’s problems.”

The problem for political moderates is that there are so few leaders to turn to for inspiration.

But Jon, you know all this. It’s the basis for your satire. It’s why millions of viewers, especially those supposed disaffected young people who vote at significantly lower rates than their forebears, watch your show. You are the one who they trust.

I suspect that you are slightly uncomfortable with this power. You are, after all, a comedian at heart, the funny man who sits on the sidelines and says: you silly politicians, how you contradict and contort yourselves and say ridiculous things. Let us find the laughter in tragedy and thusly ease our sorrow over the sad fact that while we endlessly debate Christine O’Donnell’s latest gaffe, China is building a new city every sixteen seconds.

But sitting on the sidelines must also be frustrating. How can you curate the modern tragedy of American politics, day after day, and not think: why, the more I call attention to the idiocy, the more it metastasizes?

You have at your disposal the goodwill of millions of Americans. If you throw yourself into the political fray (as you may be about to, if this rally is indeed serious), you have the potential to make a major and I think quite positive impact on American political discourse. You are poised to be the leader of new moderate movement, one that rests on the premise of civil discourse, openness to reason, and an eagerness to actually solve problems.

I say, go for it. Make the most full-throated, heart-felt, call-to-reasonableness you can. Set up the moderate majority, or whatever you want to call it. Use your show and your brand to mobilize the millions of citizens who would pledge to support candidates who will adhere a platform of civility and open-mindedness and a spirit of pragmatic problem-solving – and who might even make it cool once more to solve problems instead of simply firing up the base. Be an explicit force for counter-polarization.

I know it’s a big task. But look around you. Glenn Beck and his merry band of truth-benders at Fox News are mobilizing the armies of cranky crazies to the right, and the loudest voices on the left are those complaining that Obama is a sell-out.  This country faces major, generational challenges of transitioning to a 21st-century economy and solving a looming deficit and entitlement crisis. We’re not going to solve them by shouting slogans past each other.

Gates Demands Open Seas in South Asia in Rebuff to Chinese Anti-Access Strategy

Wednesday, October 13th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

Secretary of Defense Robert Gates used his turn at the podium at a conference of Asian defense ministers yesterday to insist on “freedom of navigation” in international waters, a sharp rebuke to Beijing’s creeping attempts to control the South and East China Seas. China’s recent clashes with Vietnam and Japan over shipping issues highlights Beijing’s intention to assert a sphere of maritime influence.

Regional dominance is a top priority on China’s long-term plate as a part of an “anti-access/area denial” strategy. Though it may not be able to compete with, say, the U.S. Navy in a straight-up force-on-force battle, by “owning” waters off its coasts, China can make Washington think twice about getting involved in, say, a conflict over Taiwan.

PPI has an in-depth look at China’s “anti-access/area denial” strategy thanks to Naval War College Professor Mike Chase. We released Chase’s paper on the topic just last week, which makes for timely reading following Gates’ trip. Click here to read it, and here’s a synopsis:

  • How and why did China’s approach shift in this new direction?
  • What are the most potent anti-access and area denial capabilities in Beijing’s arsenal?
  • And what are the implications for U.S. interests in the Asia-Pacific region?

Chase concludes:

Beijing responded by increasing its defense budget, deploying conventional ballistic missiles across from Taiwan and working on a variety of capabilities intended to target American aircraft carriers. In short, Beijing embraced technologies designed to limit America’s access to critical battlefield areas.
[...]
An AA/AD strategy has limits. Though AA/AD raises the barrier on a decision to use force, once a decision to use force is made, China could not count on prevailing quickly or at low cost.

Then, he offers the following recommendations for U.S. policymakers:

  1. Developing new military capabilities like long-range carrier-based unmanned aerial vehicles and new operational concepts like “Air Sea Battle”—an emerging concept that the military is studying to sustain power-projection in AA/AD environments.
  2. Ongoing diplomatic attention to decreasing tensions within the U.S.-Sino relationship over the Taiwan and South China Sea issues.
  3. Increased attention to the global commons of cyber and space. America must continue to develop defensive and offensive capabilities to ensure network continuity in case of an information offensive, and practice operating without the full range of cyber and space assets.
  4. Sensitivity to China’s sensitivities. Perhaps most important, attempts to strengthen deterrence must be carefully calibrated so that they will not inadvertently fuel China’s worst fears about U.S. intentions, which would only risk further exacerbating the mutual strategic suspicion that is already threatening to make one of the most important bilateral in the world a rocky one.

Photo credit: U.S. Air Force Master Sgt. Jerry Morrison

Will This Call For High-Speed Rail Spending Be Ignored?

Thursday, October 7th, 2010
Mark Reutter



PPI Fellow Mark Reutter is the former editor of Railroad History and author of Making Steel: Sparrows Point and the Rise and Ruin of American Industrial Might (2005, rev. ed.).

by Mark Reutter

America’s transportation infrastructure is enfeebled, Washington’s transportation policy is broken, and we need to start building fast trains.

While that might be old news to readers of Progressive Fix, what is news is who’s saying it this week: Samuel Skinner, Secretary of Transportation under George H.W. Bush, and Norman Mineta, DOT Secretary under George W. Bush, were co-chairs of a conference at the University of Virginia behind a new report making this case. Mary E. Peters, Mineta’s successor under Bush, and a smattering of ex-DOT undersecretaries filled out the roster of 80 transportation experts.

Describing government spending on transportation as woefully underfunded, the report estimated that between $134 billion and $267 billion more is needed each year from now to 2035 to make U.S. roads, rail, and air transportation competitive with other countries.

The report lamented the “pork and political opportunism” in the current transportation reauthorization act, SAFETEA-LU, and advocated the setting up of core national priorities for transportation such as high-speed rail networks.

“High-speed rail has the potential to provide a fast, efficient and integrated alternative to driving and flying,” the report said. The best approach for genuine high-speed rail would be rights of way separate from existing freight lines – a policy strongly advocated by PPI (see here and here).

A major increase in the federal gas tax, which has remained unchanged at 18.4 cents a gallon since 1993, would help pay the bill for getting America’s transportation systems back to state-of-the-art standards.

Derailing High-Speed Rail

The group’s “call for action” comes at a time when Republican leaders have steered the GOP in a completely different direction. Extending the Bush tax cut has become their top national priority. The White House’s plan last month for $50 billion in infrastructure spending on highways and rail was met with open contempt by House Republican Leader John Boehner.

Several state races are shaping up as tests of whether President Obama’s higher-speed rail initiative can survive Republican hostility. In Wisconsin and Ohio, Republican candidates for governor have called federal stimulus money awarded for train improvements a major waste of taxpayer funds.

Scott Walker, the Republican candidate for governor in Wisconsin, has launched a website called notrain.com. He’s ahead in the polls, as is John Kasich, the former House Republican who vows to kill a $400 million federal stimulus project to link Cleveland, Columbus and Cincinnati by rail if elected the next governor of Ohio.

The anti-rail contagion has spread to New Jersey, where Republican Gov. Chris Christie is threatening to scuttle a train tunnel to Manhattan – and forfeit $6 billion in pledged funds from the federal government and the Port Authority of New York and New Jersey – citing concerns of large cost overruns.

Christie yesterday postponed his announcement of whether he will back out of the agreement to build the tunnel – which would create 6,000 long-term construction jobs – in part so that he could campaign for other Republicans in the Midwest.

In California and Florida, where full-scale high-speed train networks have been awarded federal stimulus grants, GOP candidates are suggesting that they would delay or disrupt the projects.

Meg Whitman, running as the Republican candidate in California, says the state cannot afford “at this time” the costs associated with new high-speed rail. Rick Scott, Republican candidate for governor in Florida, has jumped on the same bandwagon, questioning whether the state can afford a rail line between Orlando and Tampa that has been awarded $1.25 billion in federal stimulus money.

Ironically, the current governors of California and Florida, Arnold Schwarzenegger and Charlie Crist, gained office as Republicans and have been big rail supporters. “To say ‘now is not the time’ shows a very narrow vision,” Schwarzenegger’s communications chief told the New York Times in response to Whitman’s tepid support for California’s rail investment.

The Eisenhower Model

“We’re going to have bridges collapse. We’re going to have earthquakes. We need somebody to grab the issue and run with it,” Mineta told reporters on Monday.

His earnest tone, delivered at the Rayburn House Office Building, was at odds with the anti-tax, anti-government vitriol coming from those of the same political stripe occupying nearby offices.

Advocates of infrastructure spending must offer specific data and concrete examples of the damage that continued underfunding of transportation projects could inflict on America’s standard of living and economic security. A starting point would be America’s dangerous overdependence on gasoline coming from unstable or hostile foreign countries. Add to this the lost productivity for U.S. drivers stuck in traffic jams, which the Mineta-Skinner report estimated at $87 billion in 2007, or $750 for every driver.

And consider that our population is expected to grow by 90 million in the next 40 years. These citizens will need to move, and high-speed rail is cheaper to build and causes much less environmental damage than new highways and airports.

A role model for such educational outreach is Dwight Eisenhower. The Republican president launched the Interstate Highway System by articulating a vision of top-quality roads benefiting all citizens and secured bipartisan support in Congress. It was part of his crusade to win the Cold War.

There’s a new battle out there – in the form of competition from emerging economic powerhouses like China, which plans to spend over $1 trillion in the next 10 years on a comprehensive 220-mph train system. While China builds its future, many of our politicians welcome gridlock as a way to wrest short-term partisan gains.

Photo credit: aussiegal

How to Understand the Chinese Military

Thursday, October 7th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

Next week, Secretary of Defense Robert Gates will sit down with his Chinese counterpart, General Liang Guanglie, in Hanoi.  Relations between China and the US – at least militarily – have been frosty recently after the US inked an arms deal with Taiwan. This meeting would suggest that no matter how upset either side becomes, each realizes that their long-term interests are better served by dialogue, not confrontation.

The talks take place as China is attempting to consolidate a sphere of influence over the South and East China Seas. It’s likely that China views these areas as part of an “anti-access/area denial” strategy.  Beijing realizes that its military couldn’t prevail in a conflict against the United States, but by controlling these strategic bodies of water, it could deny American access to them in the event of conflict over Taiwan.

The good news is that your buddies at PPI are all over it.  We’ve teamed up with Mike Chase, a professor at the Naval War College and fellow at the Truman National Security project, to produce a policy memo on China’s anti-access/area denial strategy.

He seeks to answer the following questions:

  • How and why did China’s approach shift in this new direction?
  • What are the most potent anti-access and area denial capabilities in Beijing’s arsenal?
  • And what are the implications for U.S. interests in the Asia-Pacific region?

He concludes:

Beijing responded by increasing its defense budget, deploying conventional ballistic missiles across from Taiwan and working on a variety of capabilities intended to target American aircraft carriers. In short, Beijing embraced technologies designed to limit America’s access to critical battlefield areas.
[...]
An AA/AD strategy has limits. Though AA/AD raises the barrier on a decision to use force, once a decision to use force is made, China could not count on prevailing quickly or at low cost.

Then, he offers the following recommendations for US policymakers:

  1. Developing new military capabilities like long-range carrier-based unmanned aerial vehicles and new operational concepts like “Air Sea Battle”—an emerging concept that the military is studying to sustain power-projection in AA/AD environments.
  2. Ongoing diplomatic attention to decreasing tensions within the U.S.-Sino relationship over the Taiwan and South China Sea issues.
  3. Increased attention to the global commons of cyber and space. America must continue to develop defensive and offensive capabilities to ensure network continuity in case of an information offensive, and practice operating without the full range of cyber and space assets.
  4. Sensitivity to China’s sensitivities. Perhaps most important, attempts to strengthen deterrence must be carefully calibrated so that they will not inadvertently fuel China’s worst fears about U.S. intentions, which would only risk further exacerbating the mutual strategic suspicion that is already threatening to make one of the most important bilateral in the world a rocky one.

But don’t take my word for it, read the whole enchilada here.