Bernie, not a peep from women's organizations round the world involving the threat to their gender in Sweden. (See 1 below.)
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Newt writes Mueller wants it both ways. (See 2 below.)
AND:
I too raised the issue of why Mueller pressed forward after he knew much of the attack on Trump was based on the fake dossier. (See 2a below.
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Defunding sanctuary cities? (See 3 below.)
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A thoughtful explanation why this op ed author's concludes he no longer worries about Trump's Chinese Trade confrontation. (See 4 below.)
AND:
Another Chinese trade analysis from an investment counselor friend of mine. (See 4a below.)
Finally:
Why China is likely to dominate the world when it comes to trade, military strength and, over time, supplant America's rule of the commercial sea lanes.
No one can deny the schism that has developed in our political arena, our decaying infrastructure, and worst of all, the under education of our progeny which has directly led to the current flirtation with socialism and rejection of capitalism.
China is not without its own formidable challenges such as their demographic problem, their fragile political control of citizens who will eventually seek more freedom and a host of other problems.
That said, if Chinese leadership can thread the narrow needle eye of a Communist political system sitting atop a trending capitalistic freer economic model, China's sheer size should work in their favor.
Obviously I hope I am wrong but our weakened financial state, propensity to spend rather than save, the unfunded pension issue, failure to spend on technology research at the level needed and the decline in the power and commitment to do likewise by Europe should be of serious concern.
I know my views disturb the "lefties" who find nothing to like about Trump and cannot get beyond his "un-presidential" behaviour. So be it. Time will tell, it always does.
Meanwhile,time is approaching when various critical investigations of the investigators will be released pertaining to what Trump dubbed "The Mueller Witch Hunt."
Apparently, the Steele Dossier became the central document used to spread false information connecting Trump to collusion and to obtain false FISA warrants. If this fraudulent behavior is factually proven, somewhere between 7 and 10 senior persons from State, Intelligence, The FBI and The Executive Department (including Obama) are in trouble. Why? Because their fingerprints are all over various documents, including questionable money flows, illegal listening, tampering, destruction of evidence, outing, leaking documents and other potential law breaking activity.
These collective reports possibly will evidence of efforts to smear Trump who won an election the opposition could not bring themselves to swallow because of their contempt for an "ill behaved,"man whose 2016 victory threatens the "Establishment's "way of conducting national affairs.
Were this a movie script it would be entertainment, perhaps a blockbuster Netflix Series.. Because it might, prove factually it threatens those who have enjoyed immense power therefore, it's believability must be attacked.
The Kabuki Dancing goal is
a) Smear Barr claiming he is acting on behalf of Trump by engaging in a false cover up so voters will ignore the real cover up regarding the genesis of The Steele Document.
b) Should anti-Trumper's accomplish their nefarious goal they will undercut legitimate investigations. Another white wash will occur. Various Democrats believe impeachment diminishes Trump's prospects for re-election . I think otherwise because further pursuit of collusion that never occurred followed by a politically driven impeachment for obstruction of uncommitted crimes will prove a turn off, the kiss of death Pelosi fears.
c) Consequently, another nail will be driven into the coffin supporting America's theoretical principle no one is above the law. Another permanent stain will have weakened our faith in our republic.
d) Lamentably, retention of power and monetary benefits drives far too many Democrats not allegiance to what is best for the nation and therein lies a greater tragedy because we have a president the opposition loves to hate, cannot abide because he is not one of them.
e) We need strong presidents and Congresses working in unison. Regardless of Trump's abrasive personality, his re-election is critical at this juncture. Not because he is cuddly and like-able but because he has demonstrated a willingness to touch third rails and seeks to resolve issues that have been ignored by predecessors and critically need re-dressing..
Time will tell.
https://heartlanddiaryusa.com/
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Dick
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1) Sweden's Self-Inflicted Mess: The Scared Girls of Uppsala, Children of ISIS Terrorists
by Judith Bergman
- According to an Amnesty International report, in Sweden, rape investigations are under-prioritized, there are "excessively long waiting times for the results of DNA analyses", there is not enough support for rape victims and not enough work is done for preventative purposes.
- In 2017, a Swedish police report, "Utsatta områden 2017", ("Vulnerable Areas 2017", commonly known as "no-go zones" or lawless areas) showed that there are 61 such areas in Sweden. They encompass 200 criminal networks, consisting of an estimated 5,000 criminals. Twenty-three of those areas were especially critical....
- "I cannot bear to see children faring so badly.... There should be no doubt that the Government does what it can for these children [of ISIS terrorists] and if possible they should be brought to Sweden." — Swedish Foreign Minister Margot Wallström.
- Unfortunately, the horrific fate of enslaved Yazidi children does not appear to be something that Wallström "cannot bear".
According to the latest National Safety Report, published by the Swedish National Council for Crime Prevention, four out of 10 women are afraid to walk outside freely. According to an Amnesty International report, "In a 2017 study, 1.4% of the population stated they had been subjected to rape or sexual abuse, corresponding to approximately 112,000 people." (Image source: iStock)
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In the picturesque Swedish university city of Uppsala, 80% of girls do not feel safein the city center. One 14-year old teenager, who is afraid to reveal her identity, told the Swedish media that she always wears trainers so that she can 'run faster' if she is attacked:
"I sat down on a bench and immediately guys came and sat next to me on both sides. Then more guys came and stood in front of me. They began to grab my hair and my legs and said things to me that I did not understand. I became so terrified and told them many times to stop, but they did not listen... Everything is so horrible. This is so wrong. I want to be able to feel safe", she said about taking the bus home.
A recent survey from Region Uppsala shows that only 19% of girls in high school feel safe in the inner city of Uppsala. In 2013, the number was 45%. The men and boys in the gangs that engage in the sexual harassment of Swedish girls in Uppsala are frequently newly-arrived migrants.
In response, officials from Uppsala apparently told the Swedish press, "We usually encourage girls who feel insecure to think about what they need to do to feel safe, such as not walking alone, making sure they get picked up and anything else that can reduce their sense of insecurity." In other words, the authorities are leaving the responsibility for dealing with this critical security issue to the girls themselves.
The scared girls in Uppsala are only a small part of the entire picture. According to the latest National Safety Report, published by the Swedish National Council for Crime Prevention (Brottsförebyggande Rådet or Brå), four out of 10 women are afraid to walk outside freely. "Almost a quarter of the population chooses a different route or another mode of transportation as a result of anxiety about crime... Among women aged 20-24, 42 percent state that they often opted for another route or another mode of transportation, because they felt insecure and worried about being subjected to crime. The corresponding proportion among men in the same age group is 16 percent..." according to Brå.
Nevertheless, the government is cutting down on the police's resources. In the government's new spring change budget, the police are facing a reduction of 232 million Swedish kroner (US $24.5 million). "The proposals in the spring change budget will have consequences for the police's activities, but what effects it will have it is too early to respond to at present. We will now analyze how we will handle the new economic conditions," the police said in response to the proposed budget costs, with police chief Anders Thornberg criticizing the cuts.
As it is, the police are already drowning in tasks they cannot perform properly, such as solving rape cases. A recent Amnesty International report, "Time for Change: Justice for rape survivors in the Nordic countries", released in April, harshly criticized Sweden for not dealing properly with rape cases. According to the Amnesty report, among other problems, rape investigations are under-prioritized, there are "excessively long waiting times for the results of DNA analyses", there is not enough support for rape victims and not enough work is done for preventative purposes.
The Amnesty report states:
"In 2017, the Swedish police received 5,236 reports of rape involving people aged 15 or over: 95% of victims were women or girls. The preliminary statistics for 2018 show 5,593 reports of rape of which 96% of victims were women or girls. However, under-reporting of rape and other sexual crimes means that these figures do not give a realistic picture of the scale of the problem. In a 2017 study, 1.4% of the population stated they had been subjected to rape or sexual abuse, corresponding to approximately 112,000 people. The vast majority of rape victims will never report the crime to the police. Of those who do, few will see their case heard in court. In 2017, prosecutions were initiated in 11% of cases involving children aged between 15 and 17 and in 6% of cases involving adults".Sexual crimes are not the only crimes that Swedish authorities find themselves unable properly to confront. In 2018, Sweden experienced a record high number of lethal shootings; 45 people were killed in them nationwide. Most of the shootings took place in the Stockholm area, and most deaths occurred in Region South, where Malmö is located. "It is at a terribly high level," Stockholm's police commissioner , Gunnar Appelgren, said about the shootings. Previously, 2017 held the record with 43 shot to death. The number of reported shootings overall did, however, decrease slightly: from 324 in 2017, to 306 in 2018. The number of people who were injured was also slightly lower: 135 people in 2018, compared to 139 in 2017.
According to the police, many of the shootings are linked to criminal conflicts and so-called "vulnerable areas" (utsatta områden, commonly known as "no-go zones" or lawless areas). In the first six months of 2018, according to police, almost every other shooting took place in a "vulnerable area". In 2017, a Swedish police report, "Utsatta områden 2017" ("Vulnerable Areas 2017") showed that there are 61 such areas in Sweden. They encompass 200 criminal networks, consisting of an estimated 5,000 criminals. Twenty-three of those areas were especially critical: children as young as 10 had been involved in serious crimes there, including ones involving weapons and drugs. Most of the inhabitants were non-Western, sadly mainly Muslim, immigrants.
To add to these problems, Foreign Minister Margot Wallström appears to be planning to bring back children of Swedish Islamic State (ISIS) terrorists who are living in refugee camps in Syria. "It is complex and that is why it has taken time to develop a policy and a clear message, but we are working on this every day. I cannot bear to see children faring so badly", she recently said. In an April 12 Facebook post, Wallström wrote:
"The government is now working intensively to ensure that children with links to Sweden who are in Syria receive the help they need. There should be no doubt that the government does what it can for these children and if possible they should be brought to Sweden. Each case must be handled individually. The children are in different situations, some perhaps orphans, others with parents arrested for acts they committed for ISIS. Identifying Swedes who can have been born in [Syria or Iraq] is difficult. In the largest camp there are about 76,000 people. We are in contact with International Red Cross in the camps. It is of the utmost importance that the children's situation is handled with legal certainty and with the best interests of the children. International actors, Swedish authorities and Swedish municipalities, who can be recipients of children, must cooperate..."Unfortunately, the horrific fate of enslaved Yazidi children does not appear to be something that Wallström "cannot bear".
Additionally, 41 out of 290 Swedish municipalities could be forced, or are already being forced, to accommodate returning ISIS terrorists in the near future, according to a recent report by SVT Nyheter. The ISIS terrorists are either still in Syria or already on their way back to Sweden. To "prepare" the municipalities, the Swedish Center Against Violent Extremism invited them to a "knowledge day" about ISIS returnees on April 24. The purpose was to "provide support to the municipalities that have received or will be receiving returning children and adults from areas previously controlled by the Islamic State". The municipalities involved are those where the ISIS terrorists had lived before being recruited to ISIS.
In total, 150 male and female ISIS members are expected to return to Sweden, as well as 80 children who are travelling with their parents.
According to Prime Minister Stefan Löfven, returning ISIS terrorists have a "right", as Swedish citizens, to return to Sweden. Löfven claimed that it would be against the Swedish constitution to strip them of their citizenship, but that those who had committed crimes would be prosecuted. Swedish terrorism expert, Magnus Ranstorp, though, has warned Sweden against taking back not only ISIS terrorists, but also their wives and children, who, he said, also pose a security risk:
"The women are not innocent victims, and there is also a large group of ISIS children... From the age of eight or nine, they have been sent to indoctrination camps where they have learned close combat techniques and how to handle weapons. Some of them have learned how to kill... their identities will forever be linked to their time with ISIS, and the fact that they have an ISIS father or an ISIS mother."Sweden seems intent on importing even more problems.
Judith Bergman, a columnist, lawyer and political analyst, is a Distinguished Senior Fellow at Gatestone Institute.+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
2) Dick: Mueller Wants it Both Ways
On Wednesday, Robert Mueller tried to have it both ways.
When he said, “if we had confidence that the President clearly did not commit a crime, we would have said that,” he overstepped his bounds as a prosecutor. Mueller was insinuating that President Trump has not been exonerated of wrongdoing while refusing to explicitly declare the President guilty of any crime.
As Alan Dershowitz noted in The Hill, FBI Director James Comey was “universally criticized” for attempting a similar political dance during the Hillary Clinton email investigation. At the time, Comey had said that there was no clear evidence that Clinton intended to break the law, but there was evidence that she was “extremely careless” in her handling of classified information (which can be ruled a crime).
In Mueller’s case, it was much worse. Dershowitz rightly pointed out that Mueller “went beyond the conclusion of his report and gave a political gift to Democrats in Congress who are seeking to institute impeachment proceedings against President Trump.” Mueller’s report said there was no evidence President Trump broke the law. Mueller’s mouth said there was no proof he didn’t.
The problem is, Mueller’s verbal statement distorted the role of a prosecutor and flipped a core concept of the American justice system on its head – the idea that people are innocent until proven guilty. Dating back to John Adams’s principled defense of British soldiers against an incensed public after the Boston Massacre, Americans have held that proving the burden of guilt falls on the state. The American system does not assume you are guilty until the state proves they are innocent – the government must prove guilt.
And the bottom line is: After a two-year investigation consisting of 15 professional lawyers, many millions of taxpayer dollars, and interviews of more than 500 witnesses, everything in Mueller’s 448-page report leads to the conclusion that President Trump is not guilty of any crimes. Like Ken Starr, who declared in his report that there was “substantial and credible evidence” that President Bill Clinton was guilty of 11 separate counts of criminal activity (including obstruction of justice), Mueller could have concluded that President Trump obstructed justice without citing any formal charges. He declined to do so.
Sean Davis for The Federalist also pointed out that Robert Mueller’s politicization of his investigation was self-refuting. Mueller had said, “it is important that the office’s written work speak for itself,” but then he kept talking.
As Davis wrote:
“Mueller’s report was released to the public by Attorney General William Barr nearly six weeks ago. The entire report, minus limited redactions required by law, has been publicly available, pored through, and dissected. … If it’s important for the work to speak for itself, then why did Mueller schedule a press conference in which he would speak for it weeks after it was released?”
Mueller is making the political suggestion that the President should be impeached on allegations of obstruction of justice for which Mueller and his team of hot shot lawyers found no proof. This is a clear example of a prosecutor who is trying to get an outcome regardless of evidence. In desperate pursuit to keep the bogus Russia collusion narrative alive, Mueller is turning to Soviet-style tactics.
The foundations of our justice system have served us well for 243 years. We should not abandon them now. Robert Mueller should follow his own advice and let his report speak for itself.
Your Friend,
Newt
Newt
2a) Mueller Tried to Entrap Trump
Robert Mueller knew there was no collusion the first time he read the Steele dossier, which reads as if it was written by a high school sophomore who spent most of his time huffing inhalants behind the gym. “Hey Dude, let’s get some more gas at the Lukoil…”
At the latest, the indictment of 12 Russians on 02/16/2018 should have been the end of his “collusion” investigation. Why did Mueller keep going? To entrap the president into obstructing justice, of course.
Mueller had a plan. He would use his witchhunt to anger the president enough that he would try to stop the investigation and if he didn’t, compile as much information that could be painted as obstruction for his report, which could then be used as a template for impeachment, where the threshold is lower because the House decides what are “high crimes and misdemeanors.” Attorney General William Barr put a stop to that.
Prior to the report’s submission, Barr ordered Mueller to highlight the 6e (grand jury material) that by law could not be publicly released.
Mueller disobeyed that order, thinking it would force a delay in releasing the report because redaction would take time. This would impel Barr to release Mueller’s summaries if he didn’t want to be accused of a cover-up, thus allowing Mueller to set the narrative for the Democrats’ push (putsch?) to impeach.
Instead, Barr created his own summary. Hence, Mueller’s subsequent letter (which Barr called “snitty”), written to be leaked and promptly leaked, was a means of regaining control of the narrative. In the letter, the special counsel complained about Barr’s four-page memo, which incidentally, he refused an offer to review.
He didn’t expect his old friend Barr to call him and ask him directly whether there were any inaccuracies in the summary, to which Mueller was forced, multiple times, to admit that there were not. We know this because Barr testified to it under oath.
On Wednesday in front of the press, a visibly shaken Robert Mueller (Sean Davis called him “doddering”) resigned from the DoJ, smeared the president as probably guilty, said he wouldn’t take questions, and if forced to testify in front of Congress, would only reiterate what was in his report. Since when does a witness get to decide which questions he will answer?
Highlights include:
“The appointment order directed the office to investigate Russian interference in the 2016 presidential election. This included investigating any links or coordination between the Russian government and individuals associated with the Trump campaign.”
I’m sorry, but didn’t Hillary pay her lawyers, Perkins Coie, to pay Fusion GPS, to pay Christopher Steele to pay Russian agents for information to compile a dossier that her campaign could use to steal a presidential election?
When talking of the indictment of the 12 Russians Mueller said,“Every defendant is presumed innocent unless and until proven guilty.” He added in Clintonesque fashion, “if we had had confidence that the president clearly did not commit a crime, we would have said so. We did not, however, make a determination as to whether the president did commit a crime.” (emphasis mine)
A prosecutor does not exonerate. In America, we have the presumption of innocence. A prosecutor either indicts or he doesn’t indict. Yet, according to Mueller, the Russians deserve their presumption of innocence, but the president is presumed guilty until proven innocent.
Mueller stated that because of Justice Department guidelines, “Charging the president with a crime was, therefore, not an option we could consider.” While that may be true, it doesn’t preclude him from determining a crime had been committed in his report, which was his job; and leave it to the attorney general as to whether to indict, which is his job.
What’s more, Mueller told Barr three times that Justice Department guidelines were not the reason he didn’t make a decision on obstruction. We know this, once again, because Barr testified under oath that he did.
Mueller knew indictments for obstruction of justice would never hold up in court. An innocent man screaming. “I’m innocent and this is a witchhunt,” is no more committing obstruction than a guilty man screaming the same thing. Also, an innocent man screaming, “I want that SOB fired” but then who doesn’t fire him is not obstructing either. In addition, the president allowed Mueller to interview any executive officer, never declared executive privilege, or attorney-client privilege, and submitted 1.4 million requested documents.
Failing at entrapping Trump, and because Barr’s summary was controlling the narrative, he had to get the conversation back to impeachment, which is what he did Wednesday. An added benefit was getting Nadler off his back to testify -- he’s betting on the Republicans being too weak-kneed to subpoena him.
It has been pointed out that in smearing Trump while not charging him, Mueller did the same thing Comey did to Hillary Clinton. The difference, however, is that she was guilty of everything Comey said she would not be charged with and Trump is guilty of nothing.
Mueller’s shaky demeanor, refusal to take questions, and declaring that his report would serve as his testimony shows Mueller is afraid to testify; he certainly looked afraid.
It’s possible that with the leaks, the prosecutorial misconduct, the destruction of evidence, the entrapment, he could face indictment himself and it would be a good bet the “determination” he committed crimes will be made with “confidence.”
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3) Senator proposes defunding sanctuary jurisdictions
Sanctuary policies pose a threat to public safety, Sen. Pat Toomey (R., Pa.) thinks; his new legislation would block them from receiving some federal funds to try to change their minds.
"We've historically relied on common sense and a common sense of duty to protect the public from dangerous criminals," Toomey told the Washington Free Beacon in an interview Wednesday. "Unfortunately, that expectation no longer applies to these cities. So, we've got a bill that would withhold funding that the cities very much like, with the hope that that would begin to change their mind."
Toomey's bill, reintroduced last Thursday, would deny federal grant money to sanctuary jurisdictions, either cities or states. Toomey floated the proposal last year, when it was denied cloture as part of a series of votes on immigration taken by the Senate in a single whirlwind session.
The goal of the proposal, Toomey explained, is to "create a powerful disincentive so that the sanctuary cities would no longer be sanctuary cities." In his view, sanctuary policies endanger the public by permitting illegally resident offenders to roam the streets, rather than deporting them to their home countries.
Immigration enforcement is a federal responsibility, overseen by a bevy of agencies mostly under the umbrella of the Department of Homeland Security. Under federal law, however, immigration officials can delegate their enforcement authority temporarily to state and local law enforcement, permitting them to help with deportation. Federal officers can also issue detainers, asking local law enforcement to hold on to and eventually hand over individuals whom they have already arrested and subsequently ascertained to be illegally resident.
Sanctuary jurisdictions are those cities and states which refuse to coordinate with federal law enforcement on these immigration functions. An estimated eight states, as well as dozens of cities, fit the bill. Those include a number of counties in Toomey's state of Pennsylvania, as well as the largest city, Philadelphia. (Second-largest city Pittsburgh is not officially a sanctuary city, although Mayor Bill Peduto (D.) has signaled sympathy to the idea.)
"Pennsylvania has seen what happens with sanctuary cities," Toomey said. "They become a magnet for dangerous criminals who are in this country illegally."
He argued that illegally resident criminals flock to sanctuary jurisdictions because they know that if they are apprehended, they will not face deportation—that in a sense, city or state officials are on their side in a way that they would not be in non-sanctuary cities or states.
"Why in the world do they want to protect these people when among them are violent criminals?" Toomey said. "That's what we're talking about here: We're talking about people who are being picked up by local law enforcement for a reason. … The idea that we've got to protect these criminals from the consequences of their own prior criminal acts is just unbelievable to me."
Sanctuary jurisdictions have been a subject of debate in Pennsylvania, pitting the state's Republican-controlled legislature against liberal areas like Philadelphia. State legislators floated a bill last year to withhold funds from sanctuary cities in the state; the proposal was subsequently amended to make the cities legally liable for any individuals "adversely affected" by their failure to enforce federal immigration laws.
Such individuals would include the victim of Juan Ramon Vasquez, an illegal immigrant detained and then released by the Philadelphia police who subsequently sexually assaulted a five-year-old girl.
"It wasn't the police department's choice in the matter, it was what the politicians in Philadelphia forced on them. So they had to just release this guy back on to the streets, and a short time later he raped a young girl," Toomey said. "I mean that's just how horrendous this can be. This is not just a hypothetical; this has actually happened in Philadelphia."
Importantly, some conservative-leaning Pennsylvania counties are also ignoring immigration detainers. This is not out of principled opposition, but legal cautiousness—they fear that if their officers accidentally enforce an immigration detainer against the wrong person, they, rather than the federal government, would be held liable.
This caution is in response to recent court rulings which suggest cities and states can be held liable. Toomey—who said he does not "entirely agree with" the rulings—therefore also included language in his bill to make sure that the federal government would be liable in such circumstances.
"And that's the way it should work," he explained, "because in this context, the local police are really effectively being deputized by federal immigration officials, for a very brief period of time, until the feds can come and make the apprehension."
Although Toomey is focused on sanctuary policy, there is clearly a much larger immigration debate brewing in Washington. The border crisis continues to boil over with few fixes in sight, while the White House simultaneously pushes for merit-based immigration reform. Toomey did not give that proposal a full-throated endorsement; while "there are constructive elements in it," he believes that both high- and low-skilled immigration is needed, and that "we can welcome far more people that come to this country as legal immigrants."
While Toomey was not for the more restrictionist proposals of his Republican caucus colleagues, he was against something else more: Democrats' leniency on illegal immigration. When asked about this bigger picture, Toomey said that the Senate needs to find a "consensus," but thinks that will be hard, given the attitude of Senate Democrats.
"When our Democratic colleagues think that violent criminals should be allowed to stay and wander our streets freely without federal authorities being able to deport them, it's a little difficult to find common ground," he said.
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4) How I learned to stop worrying and love Trump’s trade war
China’s importance to domestic US industry has been exaggerated
Alarmist news reports and panicky stock sell-offs. A threat to impose tariffs on US goods in retaliation for President Trump’s threatened levies. You’d think that Beijing had just ruthlessly shut down a major engine of American growth. But the truth is that tariff fear-mongering reveals the gulf between America’s financial markets and its real economy that provides everyday goods and services.
The Chinese economy has grown spectacularly since Beijing turned away from Maoism in the 1980s. It’s true that major American industries from aircraft to agriculture have profited handsomely from supplying Chinese demand. The offshoring model supercharged by China’s admission to the World Trade Organization (WTO) in 2002 has been especially lucrative. When Beijing’s wide-ranging predatory economic practices received international legal protection from unilateral American counter-moves, American multinational manufacturers rushed to set up factories in the People’s Republic. Their main aim was not, as they claimed, to sell more easily to the Chinese, however richer so many in that country were becoming. The big draw for American companies was supplying the higher-priced and much larger American market from low-cost Chinese factories. This strategy also enabled American companies to exploit currency manipulation and other predatory subsidies offered to all producers in the People’s Republic, and with full WTO protection.
What was good for America’s multinationals was far from good for America’s producers and workers. After 2002, the trade and investment boom grew already immense trade deficits, further depressing American economic growth, employment, and wages. These shortfalls also undercut the quality of American economic growth, by increasing our reliance on borrowing and spending, and reducing reliance on investing and producing.
As the increasingly frequent and bitter complaints voiced during Xi Jinping’s rule show, betting on China has backfired on the multinationals too. The China earnings of American corporate giants are reduced by intellectual property theft, forced technology transfer, and government procurement and subsidization policies that discriminate against foreign-owned companies. These brazen violations of commercial norms undermine the global competitiveness of American companies while creating powerful Chinese rivals. Unsurprisingly, the WTO merely shrugs. But then, the WTO is dominated by economies enjoying big trade surpluses with the United States, and largely via similar tactics.
The financial and political tremors caused by trade tensions with Beijing and the prospect of tit-for-tat tariffs suggest that President Trump’s China policy critics want to continue pre-2016 policies towards China. They seem to believe that Americans’ wellbeing urgently requires the kind of access to Chinese markets available before the Trump era.
Of course, Trump prizes the Chinese market. He also wants to level the playing field both inside China for US exporters to China, and for companies seeking to supply China from outside. When it comes to understanding American leverage with the People’s Republic of China, we should look at the numbers — because they tell the opposite story to the American economy.
As a share of the total American economy, American goods exported to China jumped from 0.18 percent in 2001, right before WTO admission, to 0.61 percent by 2010, the first full year of the current American economic recovery. By 2016,(the last year of the Obama administration, this share had only inched up to 0.62 percent. Since then, however, this figure has actually dropped, to 0.59 percent. Even better, in 2017 and 2018, the economy grew at a faster pace than over the previous six years, 4.77 percent annually in 2017 and 2018 versus 4.13 percent between 2010 and 2016.
Between 2001 and 2010, manufacture exports to China more than tripled as a share of American manufacturing output, to a far from trivial 3.24 percent, according to the value-added gauge. By 2016, this figure had risen to 3.74 percent. But since then, and through 2018, it’s risen only to 3.76 percent. And even though the growth rate of manufactures exports to China slowed dramatically during 2017 and 2018, domestic American manufacturing output grew more than twice as fast, from 2.67 percent to 5.98 percent annually.
Even these manufacturing numbers, however, exaggerate China’s importance to domestic US industry. A major share of American manufacturers’ exports to China consist not of finished goods like airplanes, autos, and computers, but of ‘intermediate exports’: the parts, components, and materials used in finished goods. A large share of these intermediate exports aren’t consumed in China. They’re assembled into finished goods in Chinese factories and then re-exported. When these re-exports are sold back to the United States, their American-made intermediate components aren’t counted as net additions to America’s domestic manufacturing output, and hence as additions to overall economic growth. Instead, these re-exports are supplying factories in China that used to be located in the United States, and whose presence abroad represents a shrinkage of domestic industrial output and overall output.
President Trump has bragged repeatedly about record Wall Street highs during his administration. If he really was the president of the stock market, he would respond to investors’ China jitters, and pressure from firms and industries burned by overreliance on China. But Trump knows that the rest of the economy, which is a net loser from trade expansion with China, is much bigger than the stock market, and much more important to his reelection chances. The trade conflict with China is about both good policy and good politics. And a trade war won’t change that.
Alan Tonelson is Founder of RealityChek, a public policy blog focusing on economics and national security, and the author of The Race to the Bottom.
4a) We are emailing to comment on the trade negotiations between the US and China. Media coverage has been extensive, but mostly focused on the short-term stock market fluctuations. Less has been said about the lasting economic impacts.
Background
Last week, the negotiations reached an impasse, and then fell apart. Issues included:
· The fact that the US would not agree to remove tariffs until the Chinese had demonstrated adherence to the agreement.
Since then, the US announced increasing tariffs of 25% on $200 billion worth of imported Chinese goods. The Chinese retaliated by announcing tariffs of varying degrees on $60 billion worth of imported US goods. Most recently, the US has gone ahead with steps against the Chinese technology company Huawei.
The upcoming G20 economic summit (June 28-29) is the most likely next opportunity for the US and China to resume negotiations. Should these not progress, additional tariffs on Chinese imports would be imposed. The Chinese would likely retaliate again.
Impact
Should negotiations stall indefinitely, US GDP would slow by something in the range of 0.25%-0.50% over the upcoming year. The effect on the Chinese economy would be greater, with growth slowing by about twice that rate. US Inflation should rise by about 0.50%, putting it back above the 2.0% rate the Fed has been targeting, but not materially so.
Other possible issues that are not easily quantifiable include:
· The impact on consumer and business confidence. Should confidence levels begin to fall materially, our GDP growth would slow by more than 0.50%, perhaps materially so.
· The impact on the US Treasury market. As owners of over $1 trillion worth of US Treasury bonds, the Chinese are our largest creditor. A change in Chinese policy regarding holding our bonds would be mutually destructive, but so too are tariffs.
Looking Forward
The consensus is that an agreement will be reached in the relatively near future, and the recent stock market rebound reflects this. We believe that optimism is at least somewhat misguided. Economically, China has benefited tremendously from the terms under which it was admitted to the World Trade Organization in 2001. Therefore, unless or until their economy is clearly impacted, they have every incentive not to sign off on a new, revised agreement.
With the US stock market only slightly below its all-time high, and the Chinese stock market still up 15% year-to-date, lack of further progress may cause more near term volatility. We are expecting this. However, we think the chances of a severe market rout are low. The quantifiable effects on GDP growth and inflation are simply not enough to change the intermediate term trajectory of economic conditions. The chances of a full-blown global trade war are low given the reports of trade progress with Canada and Mexico, and the six-month delay on European automobile tariffs.
As a result, we have not taken action in the past week to reduce equity exposure in client portfolios. As always, we will be monitoring the situation carefully and will take action in portfolios should things change. We will be most closely watching for indications of failing confidence or a change in China’s position on US Treasury bond holdings, either of which could lead to more serious economic and market consequences.
4b) China’s Brilliant, Insidious Strategy
Slowly but steadily they build up their economic, military, and technological superiority at our expense
The Chinese Communist government does not have so much a strategy to translate its economic ascendance into global hegemony as several strategies. All of them are brilliantly insidious.
On matters of trade, China is always flexible in responding to critics of its asymmetrical, 30-year mercantilism. In the initial stages of Westernization, China was exempted from criticism over serial copyright and patent infringement, dumping, and espionage. Western elites assumed that these improprieties were just speed bumps on the eventual Chinese freeway to liberalism. Supposedly the richer China got, the more progressive it would become. Huge trade deficits or military technological appropriation were small prices to pay for an evolving billion-person Palo Alto or Upper West Side.
After a time, the now-worrisome huge trade deficits and Chinese cheating were further contextualized as “our fault.” The Tom Friedman school of journalism chided our clumsy republican government as lacking Chinese authoritarian efficiency that could by fiat connect new planned utopias by high-speed rail and power them with solar-panel farms. The Wall Street–investor version of this school saw flabby, pampered Americans getting their just deserts as more productive and deserving Chinese workers outhustled and outproduced us. In such tough-love sermonizing, the more Michigan or Pennsylvania rusted, the quicker culpable Americans would either emulate China or die. China of course again agreed.
Then there came a third phase of Chinese contextualization — one of Western arrogance that confused China’s emulation with supposed admiration. We were not to worry about China, because they love buying our rich homes, visiting Stanford, and going to Disneyland. In short, they love being us.
Somehow, we forgot that nations that copy the West do not do so out of empathy or veneration. More often, they pick and choose what to buy, steal, or copy, entirely in their own interest. They often see superior Western science arising despite, not because of, Western freedom, and therefore they think it can be improved upon when grafted to a properly authoritarian or totalitarian root.
Trump has been an unlikely truth-teller. But as a disrupter who screamed about Chinese mercantilism, he made it acceptable even for liberals to do an about-face and now fault China for human-rights abuses and religious persecution of minorities.
As long as such new Western critics do not mention the word “Trump,” they feel empowered suddenly to say about China what heretofore they have repressed.
It was Trump, remember, who challenged the gospel that even asymmetrical free-market exchanges were a national advantage. Even the most flagrant Chinese cheating supposedly had benefits for Americans, who “rented” free stuff from stereotyped sweatshop-toiling Chinese. Cheap imported consumer goods were lapped up by the strapped American middle classes and poor, allowing them to obtain things that their stagnant wages would not.
Chinese state subsidies, we were told, would in the long run bankrupt China long before they bankrupted us. And insidious Chinese commercial cheating would force Americans to recalibrate, creatively destroy and rebuild, and in the end become more competitive, productive, and streamlined. China again oddly agreed — ostensibly dismissing the importance of trade deficits as long as they ensured that Americans, not Chinese, would have them.
China is patterning its neocolonialist agenda after both the British Empire of the 19th century (without the pretensions of a Western nation’s paternalistic “burden” of spreading civilization) and the Pacific expansionism of Japan’s Greater East Asia Co-Prosperity Sphere of the 1930s and 1940s (this history might explain why Japan, of all its Asian neighbors, knows all too well what China is up to).
As the British did with their coaling stations, which dotted the globe and served British warships and commercial vessels in the 19th century, China is buying up leases on dozens of ports in key strategic areas from the Piraeus to the Horn of Africa.
In theory, in time the Chinese could pressure such countries to deny entrance to hostile military or commercial rivals. Or in periods of crisis, they could empower supposed merchant ships with all sorts of advanced weaponry — sort of like the stealthily armed German merchant-marine raiders of early World War I. The strategic advantages of linking such ports to facilitate a nexus of Chinese military and commercial ships allow the imagination to run wild.
That these massive investments in ports and infrastructure might seem to be bad financial deals makes their acquisitions even more astounding and strategically germane. Beijing is not at all sure that China will ever receive, in the short term at least, a good return on the trillions it is investing to update cargo terminals and transit routes in and out of foreign port facilities. China, recognized as a more or less global commercial renegade, might have a hard time collecting its investment debts in the event of defaults. Short of using military power, what would China do to coerce a debtor? Appeal to multilateral trade and banking oversight institutions, whose protocols it has so commonly ignored with impunity?
It also has no major alliances or pacts that might allow it to pressure nations in arrears. Who collects for China its $50 billion investment in a collapsing Venezuela? If Greece defaults on the multibillion-dollar Chinese investment in the Piraeus, will the Chinese use the European Union or NATO to coerce Greece?
Like the Japanese of the 1930s and the Russians of the 1960s and 1970s, but unlike the British of the 1870s, the Chinese are not very good imperialists. To know their colonial agents is to distrust them — given the authoritarian, and often racialist, presumptions of the Chinese government.
In military terms, China’s naval strategy is somewhat reminiscent of the ideas of Nazi admiral Karl Dönitz, the sometime genius of Hitler’s U-boat fleet, who argued with varying degrees of success that it was idiotic to repeat imperial Germany’s former failed and bankrupting efforts to match the battleships of the superior British navy ton for ton, when German submarines more cheaply and effectively could tie up the Royal Navy’s assets and deny its ships easy transit in the Atlantic.
The threat of China is not that it will in the near future match America’s eleven carrier battle groups, but that it will, in an effective cost-to-benefit manner, deploy small and more numerous submarines, frigates, and shore-to-ship batteries to create storms of sophisticated anti-ship and anti-aircraft missiles that would ensure that key areas of the South China Sea were no-go zones for the fossilized multibillion-dollar flagships of the American navy.
More insidious is the Chinese effort to send hundreds of thousands of students to the West in general, and in particular the United States.
Again, in theory it is a brilliant strategy. Like the madcap effort of late-19th and early-20th-century Japan, following the Meiji Restoration, to place a quarter-million students in Britain, France, and Germany to soak up everything from army organization to nautical engineering, China has appropriated trillions of dollars in sophisticated Western technology through espionage, well apart from the legitimate Chinese expatriate mastery of Western science, technology, and engineering.
Arrogant Westerners assume that Chinese investors, owners of American real estate, and legions of students will be eventually overwhelmed by American popular culture, liberality, affluence, and freedom, and that they will therefore repatriate to China as subversive agents of change.
More likely, Chinese expatriates will return to China in the fashion of early-20th-century Japanese residents, attachés, and students in the United States, whether a future admiral Isoroku Yamamoto or foreign minister Yōsuke Matsuoka. They equated their experience of Western affluence with license and decadence and, as a result, were determined to marry Western engineering expertise with superior Asian discipline, nationalism, and patriotism to nullify the United States as a great Pacific power.
China is not Russia. It differs in underappreciated ways that transcend its obviously vastly greater population, far-larger economy, and ascendant military. China brilliantly plays on the fact that its expatriates are temporarily part of the American “other.” As marginalized peoples, by feigned surrogate empathy with Asian Americans, they can cite grievances against prior “yellow peril” racism — at least anytime Chinese students are caught spying or engaging in protests against Chinese dissidents.
Recently at a colloquium Kiron Skinner, director of policy planning at the U.S. State Department, tried to point out some of these paradoxes in outlining the totality of the Chinese threat, but she was quite unfairly demonized for an impromptu exchange in which she used the politically incorrect “Caucasian” to emphasize aspects of the Chinese challenge (“So in China we have an economic competitor, we have an ideological competitor, one that really does seek a kind of global reach that many of us didn’t expect a couple of decades ago, and I think it’s also striking that it’s the first time that we will have a great-power competitor that is not Caucasian”).
Aside from the fact that imperial Japan was a great-power Asian competitor during the lead-up to World War II, Skinner’s general implications were nonetheless valid: China, not Russia, can more easily pose as a historical victim of Western oppression by its status as an Asian nation. And it can more easily both bully and entice dynamic Asian countries. Its message, like Imperial Japan’s earlier narrative, is that European powers and indeed the United States itself are themselves tired, spent, and increasingly impotent in Asia and the Pacific, and either cannot or will not challenge the inevitable Chinese ascendency to hyperpower status.
Skinner’s implication is that central to the Chinese government’s sense of confidence is both its racial and its cultural chauvinism — an unspoken reality that is not so easily appreciated when our own diplomatic elite is often neither culturally nor politically diverse and may exaggerate the European Russian threat and in either condescendingly or politically correct fashion ignore the far greater Chinese challenge. As bad as Russian absorption of Crimea was, there were at least long historical and cultural ties between the two nations and a shared bloody history of resisting foreign conquests at iconic sieges such as Sevastopol.
In contrast, China simply stole the far more strategically important Spratley Islands, ignored its neighbors’ claims, created military bases, and may soon adjudicate traffic in the South China Sea — and face no pushback of the sort accorded Putin.
We also see the effects of multipronged Chinese financial, cultural, and political influence in popular culture. Hollywood remains in deathly fear of negatively portraying Chinese characters, or the Chinese government in particular. Is it apprehensive of the power of Chinese markets and money, and attuned to the delicacy of portraying supposedly “nonwhite” characters in a negative light?
Contrast that touchiness with the graphic portrayals of Russians, who are action cinema’s most common 21st-century villains. They are ad nauseam usually cast as evil oligarchs, cartel thugs, assassins, or die-hard Soviet fossils, appearing on screen with shaved heads, creepy tattoos, often dotted with czarist and Orthodox runes, and speaking in harsh guttural accents.
No wonder: Hollywood producers do not fear offending Vladimir Putin, or a few hundred Russian students in southern California, or the domestic politically correct Twitter lynch mob. In our superficial identity-politics-obsessed culture, who would speak out against Russian bashing and stereotyping? Russians are seen by Hollywood as the perfect heavies, akin to other common villains such as southern hillbillies and diehard South African racists. Do any social-justice warriors know that the number of those interned in Chinese reeducation and detention camps for incorrect thoughts, religiosity, or minority racial status constitutes a vast archipelago that dwarfs Putin’s decaying gulag?
China understands the often blame-itself-first Western mind (and there is such a thing) far better than Westerners themselves do. It assumes that it will not really suffer blanket criticism for its inhuman treatment of religious minorities and dissidents, or its ruthlessness in Africa. Instead, it figures that many will side with it as victims of a Western racism that supposedly prevents Western liberals from appreciating genuine Asian efforts to join the family of nations. The old myth of missing the bus on a supposed Lincolnesque Ho Chi Minh, or the Jeffersonian Mao, has until Trump been updated to give a soon-to-be-Westernized China a pass on the sorts of human-rights abuses and regional aggressions that earn Putin’s Russia (with a far greater nuclear arsenal) sanctions and threats.
In the end, China is confident that it now knows the U.S. only too well, and it is mastering the political, economic, cultural, and military methods of nullifying American advantages. And it may be right.
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