Friday, April 21, 2017

That's Not How It's Supposed to Work. The Great Trump Giveaway.

Republican stalwart, Kevin Phillips, in his 2005 book, "American Theocracy," explores the dynamics of how a globally dominant empire essentially empowers its successor's ascendancy.  Phillips notes that, at each succession in recent centuries, the dominant power reaches a point where it gives up the engine of its greatness, industry, and shifts to a FIRE (finance, insurance, real estate) economy, while it invests its wealth and transfers its industrial base to its successor. He describes it as a country using its wealth to grow its rival's economy.

Enter Donald Trump. The Bloat had no sooner parked his backside behind the Resolute desk when he took pen in hand and cancelled the controversial, Trans Pacific Partnership. Most people were either wildly in favour of the move or at least partially pleased. A few weren't at all pleased. That's because the TPP was a globalized trade deal but it was also a geopolitical pact to anchor American hegemony in Asia Pacific. It can be said that killing off the TPP was the greatest gift an American president ever handed China.

The TPP was envisioned by former U.S. President Barack Obama as the primary tool with which the Washington would retain the strategic initiative to lead in the Pacific region. In many ways, it was more than a trade deal; it was a key strategic maneuver. Clyde Prestowitz, founder and president of the Economic Strategy Institute, said that the essence of the TPP is “‘geopolitics’: that many of our friends in Asia were feeling neglected in America, and that it was being pushed aside in the region by China. Without a sign of American strength in the area, China might step into the vacuum.” Indeed, Obama often spoke of the TPP as a tool that will prevent China from writing the rules of trade in the near future. However, Donald Trump announced that the United States would withdraw from the TPP on his first day in the White House, effectively creating a leadership vacuum in the Pacific region — including Latin America.

The Pacific Alliance, a free-trading group comprising of Chile, Colombia, Mexico, and Peru, lost no time in replacing the TPP. In mid-March, ministers and high-level representatives from nations that have signed on to the TPP, as well as China, Colombia, and South Korea, met for the first time since the United States’ withdrawal from the trade accord. According to Heraldo Muñoz, Chile’s foreign Minister, the signal from Viña del Mar, where the meeting took place, was clear: with or without the U.S., “multilateral trade and Pacific integration [is] alive and kicking.”

So as the United States withdraws from Pacific trade leadership, countries are turning to China. Peru’s president, Pedro Pablo Kuczynski, made his first foreign trip last year to China, not Washington. This is hardly surprising since China is now Peru’s number one trading partner. It is also not surprising, then, that on March 23, Peru was admitted as one of 13 new members of the China-led Asian Infrastructure Investment Bank. Whatever the United States intentions, countries like Peru are drifting further into China’s orbit.
Chinese companies are busy embarking on new projects in South America. Shandong Gold, a state-backed Chinese company, recently agreed to pay almost $1 billion for half of Barrick Gold’s Veladero mine in Argentina. The Veladero mine is expected to produce as much as 830,000 ounces of gold this year, making this a major victory for China’s economy.

Even politically, the United States seems to flirt with avoiding leadership, an alarming development from the putative leader of the free world. The Trump administration informed the Washington, D.C.-based Inter-American Human Rights Commission that it would not participate in three hearings on March 21 about Trump’s executive orders on immigration, as part of a review of human rights cases in countries across the hemisphere. The highly unusual step of boycotting several sessions was a bad mistake that will weaken U.S. efforts to condemn Cuba, Ecuador, and other systematic human rights abusers.

The ground that Trump has given away, the influence and hegemony thrown out with the garbage, probably won't be coming back. What incentive would China possibly have to give back Trump's gifts? Asia, Africa, even America's back yard, South America, have gone or are going over to China's side. Aircraft carriers won't woo them back.


Purple library guy said...

The TPP could have been envisioned by ex-president Barack Obama as "fried chicken", but it was in fact just one more example of precisely the shift to a FIRE (and "intellectual property") based economy that Phillips is talking about. Obama could envision it as something else because he wears the blinkers of economic orthodoxy very carefully, never seeking to peer around them, and so could imagine a deal that hands yet more rights to footloose corporations to move production elsewhere and dictate national policies as being an instrument for American hegemony.
The fact that it wasn't designed to shift production specifically to China is pretty much irrelevant in the larger scheme of things. It doesn't really matter much to Americans whether their jobs and production capacity moved to China tout court or to the entire Asia-Pacific region as long as they're gone.

I don't think Trump has either the competence or the motivation to reinstitute some degree of protectionism combined with an industrial policy capable of taking advantage of that to create a renewed import-substitution oriented economy. In fact I am certain he does not, and even if he did he would be highly unlikely to succeed.

But that doesn't make nixing the TPP a bad thing. It's the height of credulity to imagine that the TPP, unlike all the globalizing "free trade" agreements before it, would be the saviour of the American imperium.

Purple library guy said...

As a side note, the TPP, which would have been bad not only for the United States but for the people of all the other countries involved, would, above all, without a doubt have been terrible for the environment, giving corporations yet more veto power over any regulation that might threaten to reduce the environmental costs they get to unload on the rest of us for free. Given that, I'm somewhat surprised to see MoS talking it up.

Anonymous said...

The fact that the "global cop" is taking a step back is a good thing.

"U.S. efforts to condemn Cuba, Ecuador, and other systematic human rights abusers." Huh?
Human right abuses of Cuba and Ecuador pale in comparison to death and destruction brought by U.S. around the world - of course brought in the name (only) to punish systematic human rights abusers...

Purple library guy said...

Oh, yeah, I missed that bit. Oh no, where would we be if the US weren't in a position to condemn the likes of Cuba or Ecuador? Why, their support for stalwart (if mass-murdering) "good guys" like Honduras or Colombia might waver next, and then where would we be? US foreign policy assumptions are, as usual, pukeworthy.

e.a.f. said...

the U.S.A. is not in a position to be involved in discussions regarding human rights in other countries. We have to look no further than the shootings of African Americans and then what Jeff Sessions is going around suggesting. Of course there are the American wars abroad, and of course the execution of 11 men in one state in a matter of days. No the U.S.A. is no better than those they condem.

Perhaps Trump simply isn't going to any conferances because he doesn't have people who are smart enough to attend and participate.

Anonymous said...

Trump was right to kill the TPP. Give credit where credit is due, is my philosophy.

But this article really exposes the fallacy of Deep State shadow government above the fray of democracy. The establishment wanted the TPP for three reasons and one excuse:

1) Outsource looting: bypass first-world wages and regulations to make easy profits cutting costs.

2) To further reduce the powers of democratic government and expand the domain of the plutocratic global oligarchy. (POS of the world: unite!)

3) To tackling the elephant in the room: the internet and the social media. What if the people organize en masses over the social media and challenge their Deep State control over "democratic" government? Then there's no more looting, no more overthrowing foreign governments to loot their resources, no more everything that's wrong with the world.

This might sound like Alex Jones, but as Gen-X I watched the establishment destroy New Deal democracy over the past 40 years. Instead of flying cars we got post-modern decay. (I liked reading about this kind of thing is cyber-punk literature. But living it: not so much.)

So my guess is that the establishment has to drop the hammer some time. They created democracy back in the late 18th century as a pretext to overthrow the monarchs who were looting their wealth and interfering in their businesses. They never meant democracy to be democracy. So the corollary is the pretense can get much more pretending than it already is.

First they crack down on internet freedoms. Next civil liberties. Next thing you know you're living in a police state that still calls itself a democracy (and can disappear any trouble-making dissidents they want at will.)

You can't have a free global society connected over the internet and a global plutocratic tyranny. The tyrants are well aware of this and they are working on it. (Like cracking down on 'fake news' over YoutTube, Facebook, etc. Which is just the beginning.) Do the people realize how much trouble they are in? How much trouble the world is in?

Northern PoV said...

"Do the people realize how much trouble they are in? How much trouble the world is in?"


Apart from a few Cassandras out here.