Tag Archives: foreign policy

Tariffs and Economic Disaster

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There has been, so far, no economic disaster. In fact, Gerald Baker, in his Monday Wall Street Journal op-ed, put his finger on the longer term outcome of tariffs insofar as they lead to a decrease in the globalization of trade. Here’s his penultimate paragraph:

What difference does it make? An important one: If we see deglobalization not as a catastrophic act of self-harm but as a choice—even a rational one—we can position ourselves better to deal with its consequences. We know the costs of throwing sand in the gears of frictionless trade, but there are opportunities too: more-secure supply chains, a chance to nurture high-end domestic manufacturing and reduce our financial dependency on the rest of the world, and new attention to reducing the vast economic inequalities in the U.S. that globalization, with its incalculable rewards for the most advantaged, has exacerbated.

That’s on the right track. Also needed, though, is [ahem] some necessary parallel actions:

requirement that the “protected” industry companies use the large majority (60%-75%, say, just to have a starting point for discussion) of the increased revenues accruing from the increased sales at their immediately pre-tariff prices to achieve the following:

 

    • increase market share via their largely unchanged price
    • increase spending on innovation
    • increase spending on capital plant maintenance, improvement, and expansion
    • increase spending on line worker wages
    • increase spending on line worker hiring

And one more fillip: a hard expiration date of the protectionist tariff, in the range of 5-10 years, that cannot be extended except by Congressionally enacted statute.

Occupying Gaza

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Israel has developed a plan to do this as a necessary step to finally destroying Hamas. Israel had done that some decades ago, but it was an incomplete occupation, and so it ultimately was a failure. One of the reasons for the failure  was that Israel intended only on controlling Gaza with no intent to destroy Hamas, hence it was an incomplete occupation.

The current plan has that as the goal and purpose of the planned occupation. I think the plan could work and not even be very long-term, if a couple of additional factors are included (and I have no idea whether they are or are not).

The IDF would need to completely isolate Gaza along its borders and seacoast to keep the terrorists from escaping out the sides and back. If they can do that, then occupying successively seized territory, whether contiguously seized or in separate chunks as the tactics and real-time situation require, then the Israel wouldn’t need to maintain the occupation of all of Gaza for any longer than it would take to satisfy themselves that all the arms and supply caches have been seized, the tunnels plugged, and Hamas functionally exterminated rather than leaked away.

The other factor is the formation of an Abraham Accord collection of Arab states plus Egypt that would emplace a governance function in Gaza. At that point, Israel could withdraw from the strip.

A New US International Trade Regime

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As thought of by me.

The beauty of it, if I do write so myself, it that it’s wholly independent of tariffs, whether foreign policy or protectionist.

The idea, at a level of generality, is this. Congress, the President, and his Cabinet Secretaries develop a list of all goods and services critical to our national defense. The list must necessarily include dual use goods and services, those items that can serve both the private economy and our defense systems.

Then Congress and the President draw a hard line and require that 15% (to pull a number from the æther) of everything needed for production of those critical goods and services, from ore through intermediate components to the last components needed for final assembly or service provision, be produced entirely domestically. This would serve two purposes. One is that it would relieve our dependence on other nations, particularly enemy nations, for any of those goods or services, the denial of any one of which would stop our economy and our ability to defend ourselves beyond stocks already in place—a few weeks to a couple of months worth in an active shooting conflict.

The other purpose is that it would give us an extant production core from which we could surge production and expand production facilities much more quickly than if we had to attempt to start from scratch just to begin to surge.

The last step is to require a review of the list of goods and services every five years, de novo, adding to/removing from the list as necessary to keep it current. Every five years to relieve the review cycle, at least a little bit, from political cycles while keeping the update rapid enough to keep up with evolving technologies.

Of course, this will cost more than a classical Ricardian free trade, Smithian free market environment, but that’s the cost of national security. If we can’t protect a capacity for self defense, we’ll pay a far higher price.

There’s the Problem

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In an article centered on President Donald Trump (R) centralizing foreign policy in his office, Richard Haass, former president of the Council on Foreign Relations and staffer at State, NSA, and Pentagon, had this to say:

This is the most top-down administration in recent memory. This isn’t a staff-driven administration.

And there it is, in so many words. In the particular case, the President of the United States is, by Constitutional design, our nation’s foreign policy chief. The foreign policy-influencing centers in the Executive Branch—State, NSA, et al.—all work for him. And so do those centers’ staffers, albeit through their Department and agency Secretaries and Directors.

More broadly, this is a career government staffer (before joining the left-leaning think tank) decrying the reduction in control exercised by the deep state/bureaucratic state/staffers. He’s an echo of Fiona Hill’s angry objection that earlier-President Trump wasn’t listening to and obeying her ad hoc committee regarding Ukraine.

There should be No Question

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SecState Marco Rubio thinks Iran could have peaceful, energy-producing nuclear reactors so long as Iran uses only imported uranium already enriched for the purpose. Iran insists on doing its own enrichment.

There should be no discussion of this.

For Iran, not having its own enrichment capability is a deal breaker. For us, Iran having that capability should be a deal breaker. Iran has shown itself wholly untrustworthy with its enrichment program, rapidly enriching already to 60%, despite the fact that the 2015 accord expressly limited Iran to 3.7%-ish, and that accord remains in effect. Our withdrawal from it is irrelevant; all the other signatories, including Iran, remain nominally within its confines. Iran, despite its obligations under that accord, continues to deny inspectors access to facilities those inspectors want to see, and it demands untenable advance notice for those few facilities to which it has allowed access.

For all that, apparently unaddressed is what to do about the plutonium that lots of peaceful energy-producing uranium-fueled nuclear reactors produce. Plutonium can be recycled through peaceful energy-producing plutonium-fueled nuclear reactors, but critically, plutonium also can be used separately in nuclear bombs.

It’s rapidly approaching time for a kinetic solution to the Iranian nuclear problem.