Obama is not going away. He remains a threat. Contrast him with any former living president. Carter tried to interfere and remain relevant but he failed. Clinton raised a lot of money making speeches, robbed Haiti blind but never made much impact beyond enriching himself and his family. Both Bushes basically retired, kept quiet and did some things of a personal nature . 41 refused to engage in second guessing, 43 became an accomplished painter and eased his own pain of Iraq by helping those he sent to fight in a questionable war.
You can even go back to Eisenhower who became president of Columbia University and payed golf, Truman read books in his living room, Nixon avoided the public, Johnson did pretty much the same. Ford went on some corporate boards. Reagan worked around his beloved ranch as long as he could.
Tragically, Kennedy never got his chance.
Only Obama, one of the worst and most dangerous presidents ever, continues to stir the pot in the shadows. (See 1 below.)
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Hysteria increasing among Democrats. The era of judge made law is about to end and their world is falling apart.(See 2 and 2a below.)
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With respect to a level playing field: You go to Canada or Mexico and stay in a Ritz Carlton Hotel, twin beds on the 6th floor and pay $1000/per night. A Mexican or Canadian comes to America, stay at The Ritz Carlton on the 6th floor and pay $200/night. For those who cannot add that is due to an uneven paying field based on tariff disparities. Capiche?
Another way of looking at it as it relates to China: An American Company spends billions on developing something technological. They sell in China forcibly partnering with a Chinese partner and two years later the Chinese partner is making the product, stolen the technology and the American Company is highly taxed and no longer competitive. That is called theft of property.
You may think this is not worth correcting but Trump does. Because he is doing something about it and he meets resistance from those who hate him and blame him for starting a trade war. (See 3 below.)
If you lived in a neighborhood with a community pool and every time your kids went to swim they had to pay a high entry fee and your neighbor's kids swam for nothing, I assume you would suck it up and not say a word and if another neighbor began to complain you would hate him for stirring things up and challenging the inequity. Capiche?
Finally, when you looked in the mirror every morning as you shaved with a foreign razor and blade I also assume you would feel proud for being meek. If so then you are nuts. Capiche?
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Dick
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1) Is Obama Quietly Plotting to Overthrow Trump?
As liberals lament former President Barack Obama’s seeming silence about President Donald Trump’s policies, and conservatives no longer see him as a threat, the lifetime radical organizer is only growing more dangerous.
New York Post opinion columnist Paul Sperry delved into Obama’s recent activities, and found the former Commader-In-Chief is quietly organizing a political army to overthrow Trump.
Sperry writes, in part:
From his sprawling DC office not far from the White House, where he oversees a full-time staff of 20, Obama has held regular meetings with Democratic lawmakers, as well as DNC chief Tom Perez, whom he personally helped install to run the Democratic Party. Obama has also met with his attorney general, Eric Holder, to craft a strategy to redraw congressional district maps in Democrats’ favor, according to Politico. Holder now runs the National Democratic Redistricting Committee, which Obama helped his old friend launch.
But it’s Obama’s political group, Organizing for America, that poses the biggest threat.
Sperry calls OFA “the organizing and training hub of the anti-Trump resistance.
He writes:
OFA helped stage rallies across the country against the administration’s border policies, which it has decried as “cruel and inhumane.” OFA describes itself as a “nonpartisan grass-roots-driven organization,” but it clearly has a pro-Obama agenda. In fact, it’s run almost entirely by alums from Obama’s campaign and White House, including Jon Carson and Jim Messina, who co-chair the group, and Katie Hogan, who serves as its executive director, according to recent tax filings by the nonprofit.
While Obama no longer has an official role in OFA, he continues to sign emails for the group, run strategy and speak on their behalf.
This “behind the scenes” strategy allows Obama to mastermind “The Resistance” while avoiding attracting the attention that would come with having an official title.
Obama’s OFA has a budget of as much as $14 million, and deploys liberal activists to campaigns in key states.
“Obama has skillfully kept his distance from recent anti-Trump protests and politicking. But behind the scenes, he really may be coordinating the resistance — and acting as its organizer in chief,” Sperry writes
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2) Trump Blows Away a Penumbra
Liberals are hysterical because a long era of judge-made law may be about to end.
By Daniel Henninger
Michael Moore, who somehow has kept his name afloat since he made a movie about George W. Bush 14 years ago, says he wants to surround the U.S. Capitol with a million protesters so the Senate won’t be able to vote on President Trump’s Supreme Court nominee. He asks: “What would you give your life for?”
The day after Justice Anthony Kennedy resigned, the New York Times’s editorialists addressed “those who face the future in fear after Wednesday.” Lest anyone miss the point, the Times said: “It is a dark moment in the history of the court and the nation, and it’s about to get a lot darker.”
All this panic is supposed to be about the future of Roe v. Wade, the 1973 decision establishing abortion as a right. In fact, the threat to Democratic political rule is even bigger than Roe, which was about just one thing. What is at risk is the rationale for judicial overreaching that was created in the court’s 1965 decision,Griswold v. Connecticut.
Supreme Court decisions don’t often produce phrases that enter the vocabulary of political life, but Griswold did. The phrase is “penumbras formed by emanations.”
Griswold is worth recalling because it established a right to privacy, though the Constitution says nothing about any such right. Justice William O. Douglas famously explained how this could be, arguing that “specific guarantees in the Bill of Rights have penumbras, formed by emanations from those guarantees that help give them life and substance.”
Douglas’s “penumbras” decision, though ridiculed, defined the post-’60s era of “judge-made law,” in which achieving a result that reflected liberal values or policy goals mattered more than the legal reasoning to justify it. This results-driven view is what routinely sent Justice Antonin Scalia into eloquent and volcanic dissents.
Though capable of rigor in his reasoning, Anthony Kennedy was willing to swing toward decisions that simply affirmed what he thought were ascendant cultural mores. With the Trump Supreme Court nominations, this long era of judge-made law is at risk, if not over.
First with Neil Gorsuch and now with Justice Kennedy’s successor, Donald Trump is putting a stop to ruling by penumbra. It’s a historic shift, and Mr. Trump’s opponents are going absolutely crazy.
As the Times editorial suggests, the left seems to believe the Supreme Court will virtually cease to exist as a branch of government. That puts liberals in a tough spot, because they had already thrown in the towel on the legislative branch.
From the 1970s onward, modern liberalism increasingly came to rely on filing lawsuits to effect policies that couldn’t survive passage through representative bodies like the House and Senate. Or they deployed executive mandates—which reached an apotheosis with Barack Obama.
Former Senate Majority Leader Harry Reid ended the filibuster for appellate-court nominees so his party could pack the D.C. Circuit with judges who would affirm the Obama regulatory orders that covered vast swaths of American life.
Having all but abandoned the legislative branch to achieve their goals, progressives now think the Trump Supreme Court nominations will close off the judiciary as a policy tool. Thus, the hysteria.
In the Carpenter case this term, Justice Gorsuch wrote a long dissent, which didn’t mention “penumbras,” but it’s clear he knows exactly when the trouble started: “From the founding until the 1960s, the right to assert a Fourth Amendment claim didn’t depend on your ability to appeal to a judge’s personal sensibilities about the ‘reasonableness’ of your expectations or privacy. It was tied to the law.” Justice Gorsuch calls judging rooted in law “the traditional approach.” I’m for it.
Our confusing culture could itself kill penumbral legal reasoning. One can imagine the high court struggling to adjudicate cases based on ever more arcane claims for self-identity, diversity and privacy. Contorting itself even further to accommodate incomprehensible rights could discredit the court with a strong majority of the American people.
Despite his reputation as the swing vote on cultural issues, Justice Kennedy appeared to understand that we have arrived at a crossroads. In several opinions this term, he essentially issued statements of belief.
Here, in Nifla v. Becerra, is the co-author of Planned Parenthood v. Casey explaining why pregnancy-service agencies should not be compelled to issue a state’s abortion notification: “It is forward thinking to begin by reading the First Amendment as ratified in 1791; to understand the history of authoritarian government as the Founders then knew it.” He is saying to his liberal colleagues in the judiciary: Enough is enough.
Some argue that Mr. Trump filled the Scalia seat with Justice Gorsuch and now is obligated to fill the Kennedy “swing” seat with another Kennedy. He is under no such obligation. What President Trump should do is complete his already stellar Gorsuch bench. That would mean a justice who respects the law’s traditions and understands its limits.
2a) The Left’s Drumbeat of Hysteria Is Leading Toward Violence Against Conservatives
Because of the ever-descending moral and intellectual state of the mainstream news media, there has been no outcry against the leftists who call President Donald Trump and all Americans who support him Nazis. Indeed, members of the media now regularly do so.
Without that outcry, this labeling will only increase; and this steadily increasing drumbeat of hysteria is likely to lead to one result: violence against conservatives.
It is not plausible to foresee any other outcome of left-wing normalization of the terms “Nazi” and “white supremacist.”
The American left has put itself in a moral quandary: Either it doesn’t mean it when it calls the president and his supporters Nazis, in which case it is merely guilty of cheapening—and, as I explained in my previous column, actually denying—the Holocaust, or it does mean it, in which case morality demands it take violent action against Trump supporters.
The liberal Left continue to push their radical agenda against American values. The good news is there is a solution. Find out more >>
For at least a decade, I have been saying that America is fighting a second Civil War. But I have always added that unlike the first Civil War, this one—thank God—is nonviolent.
It’s getting harder and harder to assume it will stay that way.
A Senate intern shouts an obscenity at the president of the United States in the halls of Congress and the U.S. senator for whom she works does not fire her.
Left-wing mobs yell and chant “No justice, no sleep” in front of the homes of administration officials.
A Democratic congresswoman, Maxine Waters, foments such action. “Let’s make sure,” she tells Democratic mobs, “we show up wherever we have to show up. And if you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd. And you push back on them. And you tell them they’re not welcome anymore, anywhere.”
The Democratic Party labels political opposition to the president “Resistance,” the term used to describe the opposition to the Nazis during World War II.
All these are only the beginning. Few violent movements begin with violence. And when the left sees that these tactics do not undo the last presidential election, some morally consistent leftists could quite possibly take the obvious next step and start targeting Republicans—as the shooter of Republican Rep. Steve Scalise and four others did.
As one liberal writer, Peter Beinart of The Atlantic, asked nearly a year ago, “If you believe the president of the United States is leading a racist, fascist movement that threatens the rights, if not the lives, of vulnerable minorities, how far are you willing to go to stop it?”
When conservatives—even one as critical of the president as Ben Shapiro—need the protection of bodyguards and police officers in riot gear when speaking on an American college campus, it is clear where we are headed.
You can get an idea by watching what students did to biology professor Bret Weinstein, perhaps the only decent faculty member at Evergreen State University, because he refused to cooperate when left-wing students demanded that all whites leave the university campus for a day. Some months later, Weinstein was told by the left-wing university administration it “could no longer guarantee his safety.” Weinstein then left Evergreen State for good.
In March 2017, Charles Murray’s scheduled speech at Middlebury College was pre-empted by a violent left-wing mob, resulting in police escorting him off the campus. In the process, his interviewer, professor Allison Stanger, was injured by enraged leftist thugs, and she later ended up in a neck brace.
The New York Times recently reported that left-wing intellectuals regret the historic liberal defense of free speech. There is no question that if the left were to have its way, many, if not most, conservative opinions would be legally banned and those expressing them arrested.
I pray violence does not erupt in America. But if, God forbid, it does, let’s be clear it was the left that started it, just as surely as the South’s firing at Fort Sumter started the first Civil War.
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3) How to Meet the Strategic Challenge Posed by China
By David P. Goldman
David P. Goldman is a columnist for Asia Times. He also writes regularly for PJ Media and the Claremont Review of Books and is the classical music critic for Tablet magazine. He has directed research at investment banks and served as a consultant for the National Security Council and the Department of Defense. A senior fellow of the London Institute for Policy Studies, he is the author of How Civilizations Die (And Why Islam Is Dying Too). In 2017, he was a Pulliam Distinguished Visiting Fellow in Journalism at Hillsdale College.
The following is adapted from a speech delivered on February 21, 2018, in Bonita Springs, Florida, at a Hillsdale College National Leadership Seminar.
China poses a formidable strategic challenge to America, but we should keep in mind that it is in large part motivated by insecurity and fear. America has inherent strengths that China does not. And the greatest danger to America is not a lack of strength, but complacency.
China is a phenomenon unlike anything in economic history. The average Chinese consumes 17 times more today than in 1987. This is like the difference between driving a car and riding a bicycle or between indoor plumbing and an outhouse. In an incredibly short period of time, this formerly backward country has lifted itself into the very first rank of world economies.
Over the same period, China has moved approximately 600 million people from the countryside to the cities—the equivalent of moving the entire population of Europe from the Ural Mountains to the Atlantic Ocean. To accommodate those people, it built the equivalent of a new London, plus a new Berlin, Rome, Glasgow, Helsinki, Naples, and Lyons. And of course, moving people whose ancestors spent millennia in the monotony of traditional village life and bringing them into the industrial world led to an explosion of productivity.
Where does America stand in respect to China? By a measure economists call purchasing power parity, you can buy a lot more with $100 in China than you can in the United States. Adjusted for that measure, the Chinese economy is already bigger than ours. In terms of dollars, our economy is still bigger. But the Chinese are gaining on us, and in the next eight to ten years their economy—unlike the economies of our previous competitors—will catch up.
China, on the other hand, is an empire based on the coercion of unwilling people. Whereas the United States became a great nation populated by people who chose to be part of it, China conquered peoples of different ethnicities and with different languages and has kept them together by force. Whereas our principle is E Pluribus Unum, the Chinese reality is E Pluribus Pluribus with a dictator at the top.
China once covered a relatively small geographic area. It took about 1,500 years for it to reach its current borders in the ninth century. These borders are natural frontiers. China can’t expand over the Himalayas to India, while to its extreme west is desert and to its east is the ocean. So China is not an inherently expansionist power.
Nor is China unified. It has a written system of several thousand characters that takes seven years of elementary education to learn, working four hours a day with an ink brush, ink pot, and paper. Learning these characters well enough to read a school textbook or a newspaper is how the Chinese are socialized. The current generation is the first where the majority of Chinese understand the common language, due to the centralization of the state and the mass media. But the Chinese still speak very different languages. Cantonese and Mandarin are as different as Finnish and French. In Hong Kong, you’ll see two Chinese screaming at each other in broken English because one speaks Mandarin and the other speaks Cantonese and they don’t have a word in common.
China is inherently unstable because all that holds it together is an imperial culture and the tax collector in Beijing. It is like a collection of very powerful, oppositely charged magnets held together by super glue—it looks stable, but it isn’t.
Within the living memory of older Chinese, China underwent an era of national division, warlordism, civil war, starvation, and degradation. The Century of Humiliation, as the Chinese call it—which began with the opium wars in 1848 and ended with the success of the Communist Revolution in 1949—was a century in which civil war claimed untold millions of lives, and the terror of a return to those conditions is a specter that haunts the Chinese leadership.
China, like Russia, responds to its past humiliation by challenging American power. It would be naïve to expect the Chinese or the Russians to be our friends; the best we can hope for is peaceful competition and occasional cooperation in matters of mutual concern. But it is also important to recognize that American policy errors exacerbate their suspicion and distrust. For example, our decision to impose majority rule in Iraq created a Shi’ite sectarian state now allied to Iran, and it left Iraq’s Sunni minority without a state to protect them. This drove the Sunnis into the hands of non-state actors and unintentionally helped al-Qaeda and ISIS. Sunni jihad is a serious security threat to Russia and China, and Russia’s intervention in Syria is, in part, a response to our mistakes.
The Chinese live a double life. If you walk down the street in Beijing, you see people who dress very drably, who show little emotion and do their best not to draw attention to themselves. But if you go to a Chinese wedding or a restaurant where families gather, the same people are loud and bumptious. Their real existence is a family existence. During the Lunar New Year, the Chinese have the largest migration in history—three billion long-distance journeys are undertaken—because all Chinese will travel long distances to be with their family.
Here in the West, we have a concept of rights and privileges that traces back to the Roman Republic—we serve in the army, we pay taxes, and the state has certain obligations in return. There is no such concept in China. Beijing rules by whim. The Chinese do whatever the emperor—or today, the Communist Party—asks, hoping they will be rewarded. But there is no sense of anything deserved. The idea of the state held together by a common interest as in Cicero, or by a common love as in St. Augustine, is unknown in China. The imperial power is looked on as a necessary evil. The Chinese had an emperor for 3,000 years, and when they didn’t have an emperor they killed one another. It’s all very well to lecture the Chinese about the benefits of Western democracy, but most Chinese believe they need the equivalent of an emperor to prevent a reprise of the Century of Humiliation.
From the standpoint of most Chinese, the Communist Party dynasty that took charge in 1949 has brought about a golden age. It’s the first time in Chinese history when no one is afraid of starving to death or of a warlord coming through and raping the women and burning the crops. So for the time being, the regime has a great deal of support, even though it is more comprehensively totalitarian than Hitler or Stalin could have imagined. As deplorable as the regime looks to us, the prospects for transforming China’s way of governance are for now negligible.
China’s Communist Party government is a merciless meritocracy, which is one reason the Chinese have difficulty understanding American politics. If you’re in the Chinese leadership, you made it there by scoring high on a long series of exams, starting at age twelve—which means you haven’t met a stupid person since you were in junior high school. The fact that democracies can frequently advance stupid people—we are entitled to do that if we wish—doesn’t make sense to the Chinese. The one thing President Xi Jinping cannot do is get his child into Peking University unless that child scores high on his exams. Here in America, you can buy your way into Harvard. You can’t do that in China. So while the Chinese Communist Party is not a particularly efficient organization, and is certainly not a moral one, it has a lot of incredibly smart people in it.
Along with ensuring internal stability at all costs, China’s leaders are determined to make China impregnable from the outside. We hardly hear the term South China Sea these days, because that sea has become a Chinese lake. It has become a Chinese lake because the Chinese have made it clear they will go to war over it. There’s a Chinese proverb: “Kill the chicken for the instruction of the monkey.” China has an even greater concern over Taiwan. The Chinese Communist Party is terrified that a rebel province like Taiwan can set in motion centrifugal forces that the Party will be unable to control. So the adhesion of Taiwan to the Chinese state—the imperial center—is for the Chinese government an existential matter. They will go to war over it. By demonstrating their willingness to fight over the South China Sea, they are demonstrating that they will fight all the more viciously over Taiwan
Turning back to our two economies, consider the three graphs above. China does something that Japan, Korea, and other Asian nations do—it massively subsidizes capital investment in heavy industry. From the Chinese standpoint, a steel mill or a semiconductor fabrication plant are public goods—the Chinese look at these things the way we look at highways and airports. And as a result of Chinese subsidies for heavy industry, America has been pushed out of any major capital-intensive manufacturing. Thirty years ago the Japanese were doing this, which is why the Reagan administration took steps to force the Japanese to build car plants in the U.S. But Japan’s economy was very small compared to ours. Because China’s economy is roughly the same size as ours, the impact of Chinese subsidies is huge.
The first graph shows the capital intensity of the companies in the major Chinese stock index (MSCI) versus their return on equity. The more capital-intensive, the higher the return. In the United States, on the other hand, if you look at the S&P 500 on the second graph, the slope is in the other direction. More capital-intensive industries are less profitable. This distortion of global investment by Chinese subsidies for heavy industry has led to a stripping out of capital from American heavy industry. It’s not that Americans prefer financial assets to real assets—it’s that the Chinese have pushed us out. That’s why we’ve lost so much ground in terms of industry.
As the third graph shows, China’s share of high tech exports has risen from about five percent in 1999 to about 25 percent at present, while America’s has plummeted from about 20 percent to about seven percent. That’s not a sustainable situation. What it means in practical terms is that America can’t build a military aircraft without Chinese chips. That’s a national security issue.
China’s “One Belt, One Road” policy, announced by President Xi in 2013, is a plan to dominate industry throughout Eurasia—both by land (belt) and by sea (road).
As a rule, so-called developing economies don’t develop, because 40 percent of the people are outside of the formal economy—they’re in the “underground” economy, mostly in small villages, and they live relatively unproductive lives. What the Chinese have done is to rip out the social structure of village life.
China’s economy is nothing like Japan’s, because Japan wanted to maintain its social structure. The Japanese protected agriculture, small retail, and small business. So in Japan we see a few great companies with global capacity sitting on top of a protected, inefficient economy. In China, which moved the mass of people from the villages to the cities, their equivalent of Amazon—Alibaba—will manage labor back in the villages. The Chinese have broadband everywhere, so as entrepreneurs figure out what villages can make, the villages will work for them.
The Chinese intentionally dismantled their social structure to avoid Japan’s constraints. And what they propose to do with “One Belt, One Road” is repeat that experiment throughout all of Asia—to Sinofy every country from Turkey to Southeast Asia.
A couple years ago, I visited the headquarters of Huawei, China’s telecommunications company—the biggest in the world—which hardly existed a dozen years ago. It has a campus that makes Stanford look like a swamp. Today it has 70 percent of the world market in telecommunications. How did Huawei do that? It cut prices and got massive subsidies from the government. After a three-hour tour, the Chinese sat the Latin Americans I was with down in a little amphitheater and said, “If you turn your economy over to us, we will make you like China. We’ll put in telecommunications. We’ll put in broadband. We’ll bring in e-commerce. We’ll bring in e-finance. You’ll be advanced like we are.” The Latin Americans didn’t take the deal, but the Turks have taken it.
Turkey plans to be a cash-free society in five years. Chinese telecommunications companies are rebuilding the Turkish broadband network. Turkey has given up on the West and is becoming the western economic province of China.
The impact of what China is doing is felt all over the world. Former allies of the U.S., including former NATO members, are orienting towards China. Russia—which has become totally dependent on China—has quadrupled its energy exports to China, providing China with land-based energy imports in case the U.S. tries interfering with seaborne energy traffic.
China has an extensive high-speed rail network, with trains going 200 miles an hour. This has had huge productivity effects, and the Chinese are proposing to build these trains all over Southeast Asia. Thailand, an agricultural country, sees that with high-speed trains built by China, it can become the source of fresh fruits and vegetables for China. So Thailand—which used to be an American ally—is being absorbed into the Chinese economy. And so on.
One of the most dangerous misconceptions Americans have about the Chinese is that they can’t innovate. Who do you think invented gunpowder, the magnetic compass, the clock, and movable type? Yes, China’s culture is much more conformist than ours. And on average, Chinese are less likely than Americans to be innovators. But there are 1.38 billion Chinese, and their research and development (R&D) spending is quickly catching up with ours. They’re producing four times as many science, technology, engineering, and mathematics (STEM) bachelor’s degrees and twice as many STEM Ph.D.s as the United States. Granted, some of them are of low quality—but many are excellent.
The single most troublesome deficiency we have in the United States is not the industrial base, which is relatively easy to deal with. It is the lack of scientific and engineering education. Six or seven percent of U.S. college students major in engineering. In China that number is 30-40 percent. That’s our biggest problem. Second to that is the fact, already mentioned, that there is a massive distortion of the global economic system caused by Chinese industrial policy.
The Chinese play very dirty. One of the issues raised in the Trump administration’s recent National Security Strategy is forced technology transfer. That is, if Intel wants to get access to the Chinese market—the biggest chip market in the world—China requires Intel to divulge everything it knows. From the standpoint of Intel stock price over the next five to ten years, that’s a pretty good deal. But it is bad from the standpoint of America’s national interest. If the U.S. government prohibits the transfer of technology to China, the Intels and the Texas Instruments of the world will scream, because it will hurt their stock prices. I’m a free trader, but national security sometimes supersedes the free market. This would be such a case.
Virtually all of American investment in R&D today goes to software. This means that we’ve conceded to Asia, and especially China, the actual manufacturing, to the point that—this bears repeating—we can’t put a warplane in the air without Chinese chips.
So what do we do about China? The answer is not to adopt an industrial policy. As Americans, we believe in individual liberty. We are not good at being collectivists. China and Germany have industrial policies. Culturally they can deal with it. We cannot. If we’re going to compete with China, we’ve got to do it the American way. And what we are best at is innovation.
In the 1970s, all the smart people thought Russia was going to win the Cold War. Economists at the CIA and in the universities believed that Russia had a great economy. But by 1989, we realized that the Russian economy was a piece of junk. It actually had a negative worth, because the cost of environmental cleanup exceeded the value of whatever Russia was producing.
What happened in the interim was the greatest wave of industrial innovation in American history. We invented fast, light, small, inexpensive microchips. We invented sensors that didn’t exist before. We invented the semiconductor laser. And we did virtually all of this through the Defense Advanced Research Projects Agency and NASA, in cooperation with the great corporate laboratories.
The U.S. turned the Russian economy into junk by creating an economy that hadn’t existed before. That was the Reagan economy. During this creation, the Fortune 500 lost employment. The monopolies were all ruined. New companies no one ever heard of sprang up to commercialize the new technologies, and corruption declined because we had challengers taking market share away from the entrenched interests.
In 1983, I wrote a memo for the National Security Council arguing that the Strategic Defense Initiative would pay for itself—that the impact of the new technologies we were researching, once they were commercialized, would generate more tax revenue than we’d spent on R&D. When you do R&D, you don’t know the outcome. Manufacturing using CMOS chip technology came about because the Pentagon thought it would be great for fighter pilots to have a weather forecasting module in the cockpit. The semiconductor laser came about because the Pentagon wanted to light up the battlefield during nighttime warfare. These technologies produced unforeseen consequences that rippled in unimaginable ways through our economy.
We have failed to continue this innovation in recent decades. Starting with the Clinton administration, we came to believe we were so powerful that we didn’t have to invest in national defense and new technologies. Investment went into the Internet bubble of the 1990s, as if downloading movies was going to be the economy of the future.
I’m a free marketer. But the one thing markets cannot do is divorce themselves from culture. It is when we have a national security requirement, forcing us to the frontier of physics to develop weapons that are better than those of our rivals, that we get the best kind of innovation. So the government has a role—a critical role—in meeting the Chinese challenge.
If the Chinese are spending tens of billions of dollars to build chip fabrication plants and we come up with a better way of doing it, suddenly they’ll have a hundred billion dollars’ worth of worthless chip manufacturing plants on their hands. But you can’t predict the outcome in advance. You have to make the commitment and take a leap of faith in American ingenuity and science. We can meet the strategic challenge of China, but we have to meet it as Americans in the American way.
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