Category: Trade

A 2020 Policy Platform Proposal

It’s election season so it’s time to start talking electoral politics again. The Trump administration has been particularly successful in ignoring policy discussions in favor of political point scoring. This isn’t too surprising given Trump’s lack of consistent ideology, apart from perhaps opposition to free trade and immigration. Impeachment has also helped focus attention on Trump’s political situation rather than his policies or lack thereof. Don’t get me wrong, I think there is a strong non-policy case against Trump, and I think in particular Congressman Justin Amash has done an excellent job in articulating why Trump’s behavior is concerning.

However, I think there is also a policy-based critique of Trump. In order to properly make that case and compare Trump’s policies to Biden’s or other candidates, we must establish a foundation declaring which problems are most important, and what policies could be used to implement them. Criteria for these policy ideals include some utilitarian calculus, i.e., how to improve the lives of the most people in the largest way. Thus, the first of these policies is actually a meta-policy, a way to improve congressional power to pass laws and run the state. Changing the way we make policy can affect all of our future policy making.

Countering this interest in utilitarian idealism is a preference for some political feasibility; in other words, while I might prefer to emphasize revolutionary changes that significantly improve the country (changing all of our voting systems to approval voting or quadratic voting or switching taxation to be based on land value), I’ve left them off this list because they are not just unpopular, but in fact virtually never discussed. If you find a particular policy interesting, please follow the links in that section for additional policy discussion and details.

Finally, there is uncertainty here, and I’ll mention other policies that didn’t make this list at the end. Trying to filter major talking points out of a broader range of political ideas is difficult. Policies and political philosophies are interconnected, and where I’m drawing boundaries must be arbitrary. Nonetheless, these ideas should form a good basis for uniformly judging candidate policies.

Congressional Power

Any policy platform has to address the fact that our current system for governance, for crafting and enacting policy, is deeply flawed. We have uncompetitive and broken elections, we have bad ways of choosing candidates, and we have too much power in the executive branch. Executive authority compounds our problems by making each election a stark singular choice between polarized sides instead of a well rounded government built on a legislature with many interests represented. I can’t fix all of these in this policy platform, so improving the balance between the president and Congress seems like a good place to start.

The entire budget for the legislative branch, including congressional staff, offices, and congressional agencies like the GAO and CBO, is about $5 billion. Congress is then responsible for oversight and legislative action for the entire $5 trillion federal government. The CBO has a mere 250 person staff, and it can’t even research and score all Congressional bills. This is absolute insanity.

Congress needs to be able to wield its muscle. It should not be relying on executive branch bureaucracies as unbiased experts evaluating their own performance. It should have a better staffed research arm which can oversee all aspects of the massive American bureaucracy. Congressmen also need to have more and more policy-focused positions on their own staff, along with fewer committee assignments. National Affairs has an excellent in depth discussion of the thinking behind this brief overview. Legislators are currently underpaid amateurs who spend half their time outside of Washington focused on other things besides governance. This does not allow for knowledgeable congressional oversight of the federal government.

Cato also has some excellent ideas for strengthening Congress such as having a standing committee to review executive overreaches from statutory law, and forcing votes on major rules as implemented by regulators or bureaucrats. Other ideas include expanding the congressional calendar, making a new Congressional Regulatory Service to oversee the regulations made by independent and executive agencies, and requiring all civil asset forfeitures to be deposited into the Treasury to be spent by Congress, not the executive.

Unfortunately, even despite a recent impeachment trial this is simply not a major political issue in this year’s campaign, and no candidate is running with strengthening Congress as a priority. In fact, there are essentially no meta-policy ideas being floated. Yet ideas are not hard to come by!

Liberalizing Immigration

The U.S. immigration system is terrible (see section 8 here). It is esoteric, slow, and requires a complete overhaul. It should have a focus on a merit-based system rather than nation-of-origin and family ties as it does now. It should be simpler for high-skilled workers to be hired by American companies and it should definitely be easier for young workers, educated at excellent American colleges, to be hired by American companies and remain in the United States where they can pay tax dollars for decades.

Why is this so high up on the list?

This is a matter of national security. China is a growing power, but crucially, it cannot expand its influence or economy through immigration. The Chinese state has largely decided that ethnicity matters, and China is not seeking to create a multicultural amalgamation to improve the world, but rather a nationalist state. The U.S. isn’t restricted in this way; anyone can be an American. Immigrants are also more likely to start businesses and take risks. That means the most creative and ambitious people in the world can come to the United States and contribute to our culture, knowledge, technology, and wealth. Moreover, these remarkable people already want to come here. Increased dynamism and economic growth also makes the rest of our geopolitical challenges easier; it means the national debt is less of a burden, and national defense spending can be higher in absolute terms while costing less of a percentage of GDP.

This is also perhaps the best and simplest way to improve the world quickly. It’s extremely difficult to improve nations with poor institutions, yet people who struggle in developing nations can be immediately more productive if they are transplanted to the U.S. And of course many are quite willing to do so, uprooting their entire lives for a chance at the American Dream. We can pursue limitations on their access to public money, or a simple tax upon immigrating, but nonetheless we should be voting to improve the world in the most altruistic and nationalistic way possible: expanding legal immigration in order to make more Americans!

Federal Incentives to Build More Housing in U.S. Cities

This is a specific policy taken from the Niskanen Center’s Will Wilkinson. Cited on this blog before, he suggests giving federal money to urban areas that add large amounts of new housing stock. Why? Because American cities are absurdly expensive to live in, yet new housing is extremely difficult to develop due to overregulation and zoning laws.

The impact of our poor housing policy is enormous. Economists suggest housing constraints have lowered U.S. GDP by as much as a third over the last 50 years. Think about that. We could be missing a third of GDP because millions of people who wanted to move somewhere for a better job couldn’t find a place to live. It’s clear that the most productive areas in the U.S., especially cities like New York and San Francisco, are prohibitively expensive, keeping out potential new productive workers.

Wilkinson’s suggestion isn’t the only possible policy solution; another is to change zoning to be hyper local, composed by residents of a single street or city block. This would allow experimentation and innovation, instead of immovable local land interests which keep out future non-residents who can’t vote in today’s elections.

While the viable solutions are still up for the debate, the impact is clear: the lack of housing development in U.S. cities due to overregulation may be the single greatest barrier to economic growth, thus earning its inclusion on this short list of policies.

Decriminalization of All Drugs

Ever since Pete Buttigieg announced his support for this policy, I’ve had it circled for inclusion on this list. The War on Drugs has been a colossal failure, has not reduced drug use, and has radically increased prison populations. There have been extraordinary costs to the taxpayer in both civil liberties and assets. Massive application of state force has helped to give a monopoly in funding to the most bloodthirsty and gruesome organized criminal elements in the world, including terrorists. There have even been spillover effects as governments crack down on prescription pain killers, leaving patients in agony.

This policy is wrong morally, practically, and economically. It is not the place of the state to determine what substances informed adults can consume or inject. It is also abundantly clear the state has zero capability to halt the trade or consumption of drugs. Rather, enforcement of drug laws have bolstered a black market where information is asymmetric and scarce, endangering all involved. The only thing the state has succeeded in doing is making organized crime more financially viable. The resulting conflict in Mexico has killed over 150,000 people, making it one of the largest conflicts of the 21st century behind only the Iraq War, Syrian Civil War, and Darfur. It is this monstrous loss of human life as a result of changeable government policy that places this item so high on this list.

And of course it goes without saying that this massive assistance to organized crime is occurring at great financial cost. Estimates for enforcement, prosecution, incarceration, and military interventions are as high as $50 billion a year. State prohibition of private mutually consensual transactions also requires erosion of our rights in ways that frustrate measures of concrete financial cost. The ACLU notes extensive surveillance has been justified under the guise of drug enforcement while increasingly militarized police forces have abused their power to break into homes unannounced or preemptively shoot victims all in the name of stopping transactions among consenting adults. It’s time to end this failed policy.

Catastrophic Risk

It’s clear today that the federal government does not respond well to large disasters. Perhaps too much relies upon the whims of the executive who happens to be in power, but it seems likely that we could institutionalize better responses to catastrophic events. Yes, this includes pandemics, but also major earthquakes, solar flares, artificial intelligence, and even plans for averting nuclear war (for a more detailed analysis, read Toby Ord’s recent book, The Precipice).

This is a highly neglected problem and thus one of the highest impact policies we could undertake (climate change could go here, but it has not been quite as neglected a topic as other risks, so I’ve detailed it later). At the beginning of 2020, I would not have included this in the list of top policies, not because it was low impact, but simply due to the fact that it was not discussed as a major political issue. The failings of the federal government to respond to a deadly virus have pushed catastrophic risks into the mainstream. While the likelihood of any given catastrophe is low, it is the enormous impact of the tail-risk that should concern us; preparing now will mean the difference between devastation and mere hardship.

We should look to create public commissions to investigate our preparedness for various catastrophic events, identify what can be done now for relatively small budgets with larger payoffs when a disaster comes, and then pass legislation that enshrines this knowledge institutionally in ways that do not rely on the whims and competence of whomever happens to be president. It is vital that any commissions include our preparedness for other challenges besides pandemics; preparedness for unexpected events is not selected through democratic pressures, and perhaps this has resulted in our current difficult situation with COVID-19. It would be wise to use this opportunity to prepare not just for the next viral outbreak, but for other unlikely events as well.

Other Topics

There are arguments for inclusion of a lot more policies. I’ll run through several more quickly.

It matters a lot who the president appoints to the Federal Reserve, and that they are extensively qualified and independent. I’ve left it off of this list mostly because we’ve lucked out and it seems Trump’s appointments haven’t been that different from normal. When odd choices were floated, they were largely quashed. Independence is obviously still at risk with the president tweeting criticism of his own appointees, so this issue shouldn’t be overlooked, but given that I treat it like a pass/fail grade, we can reasonably hope this will be a “pass” for all candidates in 2020. I wish I could say that more definitively, but I can’t.

Healthcare is a huge part of the federal budget and has an outsized impact on the economy. We also don’t have great solutions, but this is another issue that could easily have made the list. The most important aspects are stopping reliance on employers providing health insurance (which makes it much harder for workers to take risks and switch jobs), and expanding coverage for the least well-off. How we do that is difficult to answer in such a small space, but I’m wary of radical changes that seek to quickly re-imagine the U.S. healthcare industry from the top down.

Climate change is a potentially expensive disaster waiting to happen. If the past months have taught us anything, waiting for disasters to happen is not the correct strategy. Instituting a small carbon tax seems like a good place to start. It can be refunded to taxpayers equally, or even made to incentivize carbon sequestration programs with refundable tax credits for carbon taken from the atmosphere.

Free trade has had a massive impact on reducing poverty worldwide, while also improving the economies of all countries around the world. There’s also some evidence for reduced chances of wars between important trading partners. Aligning American and Chinese commercial interests through trade will be a vital part of avoiding a war between these world powers. Free trade is also a vital vehicle for continuing the pattern of global poverty reduction seen in the last 30 years.

U.S. interventions in the Middle East have been one of the largest contributors to excess deaths from U.S. policy. Obviously there is high uncertainty over whether many conflicts would have continued even without American intervention, but that seems unlikely in at least a couple large instances (the Iraq War being the biggest one). U.S. support of regimes like Saudi Arabia also seems to show negative payoffs from a humanitarian calculus. It also does not seem that larger 21st century goals like opposing authoritarianism in China and avoiding large scale wars are served through Middle Eastern interventions.

Candidates’ Priorities Matter Too

While this is a nice policy platform, ultimately the goal is to judge candidates by their relationship with these policies.

A major problem for this approach of separating out policies isn’t that most people running for office oppose these positions, but that they might be indifferent or even positive on these high impact policies while still focusing on other completely radical ideas. Elizabeth Warren’s many proposals come to mind here. There are some meritorious critiques in Warren’s proposals; competition is vital to a well functioning market, and some of her ideas could enhance competition. But many are far more radical with, at best, unknown effects on competition and the economy generally. These include the eradication of private equity, the changing of corporate boards, and an unprecedentedly large wealth tax which could significantly curtail investment. If Warren scored highly on the top policies put forward here (she does alright on immigration, housing, and drug policy), how do we balance that with the relatively radical (and I’d argue unhelpful) economic proposals she made the centerpiece of her campaign?

Unfortunately, we have to take those points seriously and note that while I have tried to rank these policies in a somewhat utilitarian, impact- centered way (policies within the Overton Window that help the most people by the greatest amount), radical policies that backfire could have very high impacts that shove aside the ideas proposed here.

And that goes for both parties. If Trump did well on these policies (unlikely, yes), but then also centered his campaign on radical ideas like defaulting on the national debt, shutting off the internet, or throwing away nuclear arms control treaties, then not implementing those policies might become the highest impact.

There is a lot of uncertainty that remains; some of these policies could be higher on the list, and I’ve likely excluded some that are high impact that have not yet occurred to me. Major policies could matter in the future that we just haven’t encountered. And of course these are only policy preferences; as noted in my last post, simple competency is an important factor as well. Despite all of these caveats, this an important step in laying a foundation of policy discussion and analysis against which we can measure candidates. Electoral politics is messy and tribal; discussions confound concise and consistent frameworks, but when they do swerve towards policy, these points should help form the questions that need to be asked.

A Twitter Digression on Trade and China

This week I saw an absolutely horrendous take on Twitter by Chris Arnade and felt compelled to discuss it. This is partially because the positions are incorrect, but also because his discussion itself was in bad faith and actively worsens our dialogue. Are there bad takes on Twitter every minute? Yes, but hey, I saw this one.

Here is the thread:

https://twitter.com/Chris_arnade/status/1181524435163058176

First, let’s start with the object-level fact that hundreds of millions of people were lifted out of poverty in China. The intentions of the advocates of free trade isn’t relevant to this fact, what’s relevant is whether a particular policy improved the well being and life expectancy of millions of people. This is equivalent to claiming Jonas Salk was only in it for the name recognition, and therefore, we shouldn’t have used the polio vaccine.

Next, Arnade is simply wrong about the intentions of his political opponents, claiming they only support free trade because of greed. He then obfuscates the target of his accusations by using the ever popular term “elites”. Free traders have been talking about the moral benefits of trade forever. Friedman wrote Capitalism and Freedom in 1962, 10 years before Nixon’s visit to China, and The Economist was founded to repeal the Corn Laws in 1843. Saying Milton Friedman was defending free trade just to make money off of China’s market liberalizations decades later is just lazy argumentation.

So Arnade is wrong about their intentions, but are these even the “elites”? As far as I can tell Chris doesn’t have a good definition of elites. I noted in the past:

He claimed on his interview on EconTalk, that while elites are abandoning faith, it remains an important aspect of life to more everyday people. This divide is not borne out by the data. Income doesn’t predict church attendance, and according to Gallup, the difference in church attendance between college educated and non-college educated is within the margin of error. If you want things that predict church membership, you should use age (young people are less religious) or political ideology (those identifying as “conservative” are far more likely to go to church than those calling themselves “liberal”).

If Arnade doesn’t have a good definition of elites, then it seems pretty duplicitous to then claim “elites” have any particular position since we can’t identify who he is talking about. Even if such a group existed, surely there would be many different positions and ideas within this group. Not for Chris though, everyone in this group is one in the same. And it seems especially malicious to then claim that not only does this group with no definition exist, but they have specific stated incorrect claims! In fact, Arnade has identified these claims from an imaginary group as fake and then reveals the “true” beliefs which are, of course, simply greed. This is not just a strawman, ladies and gentleman, but indeed strawwomen and strawchildren too.

It’s plausible that someone could have disagreements with free traders, but just ignoring their arguments and claiming they’re only after money is a terrible way to learn and improve our understandings of the world. We should be engaging with each other’s ideas sincerely, not attributing hidden values to people we disagree with. I guess I find this especially upsetting because EconTalk, Russ Roberts’ podcast, does such a good job of emphasizing those values of charity and understanding, and Arnade was recently a guest on that podcast. To see someone who was treated very charitably turn around and be so underhanded on Twitter is quite disappointing.

Let’s return to China. Arnade discusses a “deal” where the U.S. allowed human rights abuses hoping that democracy would follow. I know of no one who has ever said that. In fact, the opposite occurred: the Cultural Revolution killed 500,000 people, ending in 1976 and following the Great Leap Forward which killed some 18 million people in the lowest estimates. Since trade liberalizations began, nothing on that scale has occurred again.

The interest in China from Nixon was as a tool in the Cold War against the Soviet Union. Democracy was really not the goal. Moreover, the U.S. didn’t dictate to China to liberalize its economy, the market liberalizations were largely from within Deng Xiaoping’s government. In fact, I’m not really sure the U.S. would even be able to extract human rights improvements through protectionist policies. What is the model we would base it on? Cuba? Iran? North Korea? Venezuela? All have become wonderful bastions of human rights following American sanctions.

Also, I should bring up the simple libertarian critique that even if you have the perfect policy, the perfect knowledge of exactly how a foreign government will react to sanctions and trade agreement details, government is not an impartial executor of policy. Democratic forces and interest groups will always mutate policy as it passes through government, and it will not be implemented in the idealized fashion you might like. For example, what does the phrase “U.S. foreign policy human rights record” conjure up?

It’s true that China has not become a democracy, while many foreign policy types certainly believed it could happen, particularly in the 90s. Chris seems to think he predicted this outcome (not cited). Suppose you knew this, would you change policy? In a choice between a poorer China without democracy and a richer China without democracy, it seems we should choose the richer one because, you know, we want good things for all humans, not just people who live in the same country as us. 

Finally, let’s get to the economics here. There is no “us” who “exported our factories”. Individual firms make decisions in a complex economy. And those decisions have been that as a percentage of the total, manufacturing jobs peaked in the 40s prior to the establishment of the People’s Republic of China:

Arnade seems to understand that as he cites the recent scandal in the NBA where the Houston Rockets GM tweeted in support of the Hong Kong protesters, and quickly deleted it under a firestorm. Yet, Arnade switches between U.S. trade policy, governed by Congress (allegedly), and private firms making profit maximizing decisions without bothering to differentiate them.

It’s unclear exactly how Arnade wanted U.S. policy to intervene to stop private firms from making their own decisions. He cites an upcoming book, but provides no details. He also cites anti-labor policy, and I have heard similar discussions from economist Noah Smith, and many others associated with the new neoliberal movement. My problem is that given all the weird deceitfulness and strawmanning, I have no reason to trust Chris when we finally get to the policy discussion. I agree with him that the NBA or Blizzard caving to the Chinese government is a bad thing, but saying more robust industrial policy would have changed that is a non-sequitur.

Moreover, there are still tons of benefits from trade with China. The smartphone revolution changed the way we interacted with the world, and mostly in good ways I believe. This happened in part because of Chinese manufacturing allowing anyone to buy a highly complex piece of technology for cheap. On the other hand, technologies we have a dimmer view on today, like social media, are entirely U.S. grown.

There are problems in the world today, but we need to improve our level of dialogue if we want to solve them. Refusing to engage with well known arguments that critique your position and instead going on uncharitable Twitter threads is something we should avoid.

Free Market Arguments from National Security

Libertarians are not fans of wars or government spending, often for overlapping reasons. Consequently, libertarians often remain uninterested in foreign policy, writing off the entire area of study as something not worth engaging in. Given the current administration has found a way to be both not interested in global affairs (“America First“), while also highly anti-market and pro-government spending (especially defense spending), I believe there might be an alternative that both retains a small government approach to the economy, as well as an important role for American leadership in the world.

The overarching theme here is that China is a rising power, whose outlook is distinct from that of the U.S. and the liberal world order generally. We might have expected China to continue its trajectory towards a freer economy and perhaps even a freer political ideology even 10 years ago, but no longer. Economic reforms touted by Xi Jinping have not materialized, and in fact the Chinese Communist Party and the state have strengthened their hold on the economy and the role of state owned enterprises within it. The Chinese state has maintained a highly nationalistic ideology; American foreign policy has created plenty of messes, but has also done some good in promoting free trade and at least stated goals democracy and respect for human rights. China is looking to offer an alternative to the current American-dominated world, and it is likely one that is worse for the world. American policymakers need to do better. Here are ways they could do so.

Institute Fiscal Discipline

The first point is that any potential policy that looks to achieve American goals vs Chinese goals will cost money. The U.S. government had a deficit of $665 billion last year. This year it will probably exceed $1 trillion. Entitlement spending will cost money, military R&D will cost money, cybersecurity will cost money, projecting power near China will cost money. Yet, we have passed a massive tax cut with no way to pay for it. From a libertarian perspective, unfunded tax cuts could be argued either way; they reduce the tax burden on citizens, but they crowd out investment, don’t actually change the amount of government interference in the economy, and they could lead to higher taxes later on. But from a national security perspective, this fiscal policy is terrifyingly irresponsible.

I find it uninteresting who owns the national debt. Much has been made of the fact that the Chinese government owns large portions of our debt. So what? They will receive future interest payments, but the federal government received cash from outside the U.S. economy it could spend immediately.  That kept interest rates low in the U.S. while Chinese savings and taxes were taken by the U.S. government and used to pay for Medicare, Social Security, and the War in Iraq. This is just a trade and doesn’t even seem like a great investment from China’s perspective. China could dump its American debt holdings onto the market, pushing up interest rates in the U.S., but by flooding the market, they’d also be selling the debt at a discount, writing off the losses. Moreover, China only owns a bit over a trillion dollars of debt, compared to the national debt’s total size of almost $21 trillion.

China could have put that capital directly into infrastructure investment or education or buying off communist party officials to implement more complete market reforms or even malaria nets in sub-Saharan Africa! But instead they bought low yield American government bonds. Seems like a waste of capital in my opinion. Had China not purchased that debt, the federal government still would have issued it, but interest rates would have been higher. On the other hand, the fact that the treasury owes some of this debt to other entities in the government isn’t super comforting. Those government agencies need the cash too; if they aren’t paid, they won’t be functioning, and their employees won’t be working.

No matter who owns our debt, increases in interest payments, whether through interest rate rises or increases in the underlying total debt will make accomplishing any policy goals, including foreign policy, that much more difficult.

Stop Military Counter-Terrorist Interventions

Predictable point of any libertarian foreign policy critique? Yes, but it’s unfortunately unavoidable. The cost of the Iraq and Afghanistan Wars are hard to calculate exactly. Direct appropriations costs were over $1 trillion, but the Afghanistan War remains ongoing (are you sick of winning?). Long term costs including veterans benefits will probably be more than double the direct costs.

The U.S. has a long history of Middle East interventions, and they just don’t have much to show. There are still almost no democracies, Libya, Syria, and Yemen are still divided states living under various governments, Iraq has been suffering under a war with the Islamic State which has cost a hundred thousand lives and displaced millions. The Iranian nuclear deal prevented a theocratic autocracy from obtaining a nuclear weapon, which was said to be only a couple years away.  This would be one of the only bright spots in U.S. policy in the Middle East, yet the President has threatened to tear up the deal.

If China is to be the focus of an American foreign policy, we can no longer afford to sink resources into fighting small terrorist groups that kill 10 times fewer Americans per year than police officers. And despite Trump’s so-called “America First” approach, we are most certainly still wasting resources in the Middle East. The President has carried out operations in Syria, Iraq, Yemen, Afghanistan, Pakistan, Somalia, and Libya. There are also U.S. forces apparently in Niger, Chad, and Cameroon. Perhaps it’s too late, and China’s expanding influence means the U.S. has to maintain a military presence in developing countries around the world to offer an alternative, but it would have been nice to save those expenditures in the intervening 30 years between the end of the Soviet Cold War and the ratcheting up of whatever this new one is. As it is now, these interventions have left American foreign policy broke.

Reform the Military Budget

As (grudgingly) stated earlier, we will need to fund the Department of Defense if our goal is to geopolitically confront China. Nonetheless, the DoD budget needs serious reform, and perhaps should be torn down and rebuilt from the ground up. The Government Accountability Office (the best government office) has never been able to audit the DoD in over 20 years (see page 3). In 2010, Congress told the DoD it had seven years to get its act together and finances in order. It missed the deadline. This year, the Department will allegedly finally undergo an audit, the report to be released November 15. This is, of course, a step in the right direction, but we need so much more.

The procurement system in the DoD is a complete mess.  The F-35 fighter is way behind schedule and already $400 billion in. Last year, Lockheed Martin produced 66 planes. This exposĂ© from 2014 is deeply disturbing. When the military isn’t pouring money into contractors who are making out like bandits, or paying for tanks it no longer wants nor needs, or blowing up perfectly usable munitions because it can’t keep track of what is needed and where it should go, it dumps its extra assets, including leaving thousands of humvees in Iraq that were eventually captured by the Islamic State.

This military budget needs a reckoning and I’m unsure Trump is up to the task.

Promote Free Trade

China is jumping off the free market ride, and the U.S. needs to pick up the slack. The best way to expand the benefits of markets is to expand markets themselves through trade. More to the point of this post, countries that have a stake in global trade and free movement of goods are much more likely to have economic goals and values that align with the U.S. and its allies. During the Cold War, there was a strong alternative to capitalism and trade, and while most countries didn’t have a “choice”, many countries did exist outside of the free trade liberal market order pushed by the West. After the fall of the Soviet Union, that alternative largely dried up. Today, if you want to have a successful, rich country, freer trade and openness to foreign investment are vital steps to take.

China is much more open to trade and markets than the Soviet Union ever was. Nevertheless, any policies or goals where their motivations are less market oriented and more nationalistic would be exactly where they would differ with that of western values/free trade/liberal markets. This is evident in their extensive protection of Chinese industries and even in non-tariff barriers such as the Great Firewall. To the extent that China seeks to offer an alternative to the United States’ world order, they support protectionism and oppose free trade.

This means increasing trade and integration into the global economy of an allied (or possibly allied) country is the national security interest of the United States. A hypothetical Cuba that was highly integrated into the U.S. economy would be much less likely to be flirting (metaphorically I think) with Chinese dignitaries. The Trans-Pacific Partnership played exactly this geopolitical role, integrating Pacific countries’ economies with the U.S. and its allies, while leaving China on the outside. Yet Trump declared that we should leave the TPP as soon as he entered office, effectively siding against American national security and promoting China’s geopolitical goals.

Tying U.S. policy to free trade and global markets is powerful. It’s very difficult for a country to become rich and successful without at least selling their products on the global market. Access to the global market is thus in every country’s national interest. If U.S. policy is to have open trade, then the American economy will be highly integrated into the global market, meaning it is in the national interest of other countries to gain access to the American market. U.S. trade policy has been to offer access to the American market as part of bilateral and multi-lateral free trade agreements, thus offering foreign countries’ national interest goals if they conform with American goals of free trade and free markets. Integration with the U.S. economically necessitates geopolitical alignment with the U.S. That’s why it’s not just obviously economically stupid to oppose free trade (like crazy stupid), it’s against American national interests.

Allow More Immigration

All of these points have been critiques of the current administration. Some of these might also be critiques of conservative positions generally, but that will depend on to what extent current Republican positions are defined by historical conservative positions or by Donald Trump. This final point may still be the most difficult for conservatives to hear.

As a matter of national security, the U.S. needs more immigrants.

Immigrants are more entrepreneurial. Immigrants are less likely to commit crimes. Economists widely agree that high skilled immigration would benefit the average American, and tend to believe that even low skilled immigration would benefit the average American (although they are more split on the second). If we are concerned about the political effect of immigrants, we should take Rush Limbaugh’s (fairly progressive) approach and allow immigrants to work and live in the U.S., but not vote for a long period of time. Perhaps that’s more politically difficult than I imagine, but it seems like a good compromise from a national security perspective (and voting is sort of worthless anyway). That’s also not the only solution; if today’s political climate means only highly skilled labor can be let in, then at least that should be done. This administration has instead made the H-1B visa process more arduous. Trump’s immigration allies in the Senate have also introduced a bill to reduce legal immigration, including high skilled immigrants.

Immigration is an important engine for economic growth, an engine that nationalistic Chinese policies will have a hard time replicating. America is better able to absorb and benefit from immigration than any nation on Earth; it should apply this strength.

The final point relates back to deficits; entitlement spending is projected to continue to grow and consume the federal budget. The ratio of workers to retirees is dropping. Immigration can help change that tide, keeping our working age population growing, when fewer Americans are entering the workforce, often because families are just having fewer children. It won’t be enough, entitlement reform is important as well, but immigration is tool that must be utilized.

Conclusion

I don’t know how much of a danger China really poses to the U.S. Xi Jinping’s recent power grab is a bad omen though, and a large highly nationalistic protectionist country led by a dictator is certainly worth keeping an eye on. But if Sino-American relations get worse in the next decade, U.S. policy is in a poor position to adapt. Trump has claimed to want to confront China, yet his policies are actively harming our national security.

 

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The Election Doesn’t Change Trump’s Bad Policies

The Trump Issues

In the Trump election aftermath, many on the left have discussed how best to approach this new challenge. Many have talked about trying to understand the concerns of Trump voters. This is a worthwhile undertaking. The people who voted for Trump have several worries spanning cultural differences, economic hardship, and perhaps even existential fear for the country as a whole. First, let’s go over those concerns.

The first, and perhaps most important concern for Trump voters was that the alternative was Hillary Clinton. This blog had an extensive discussion on Hillary’s shortcoming including her flaunting of the law, her foreign policy, her defense of Obamacare, her tax increases, and her slant towards government power in every sphere. I would argue some of these flaws are also present in Trump, but many Trump voters could at least hope the Trump unknown would deliver something more to their liking than the known failure of a Hillary presidency.

Granting all of Hillary’s problems, why did they think a Trump unknown was worth risking? Broadly, one area we did know where Trump stood was on the culture wars, and for that he was initially hailed as a hero against the left. I think the left has to shoulder a huge part of the blame here, because people have been trying to tell progressives their culture is intolerant for years.  See: Scott Alexander on tribalism and tolerance in 2014, Clarkhat on Gamergate in 2014, this blog last year, another blog, and Robby Soave did a good job summing it up after the election. I don’t think there’s much to add here.

On economic hardship, the more stereotypical Trump supporters (Trump won older voters, rural voters, and uneducated voters) have something to complain about as well. If you want to be depressed, please read this ridiculously long piece called “Unnecessariat “ (or skim this American Conservative piece for some key points). The takeaway is that Trumpland is hurting because it has been economically abandoned, not just culturally isolated. With services dominating the economy, the prospects for those living outside of cities has diminished as well. We are seeing increased suicides, drug addiction, and hopelessness in these areas.

Finally, combine these worries with media that feeds panic about disasters and internet echo chambers, and you get stark existential panic about entirely separate threats.

Cracked had an interesting piece on Trumpism and how we got here, and what caught my eye was the idea of urban culture slowly making its way out to the country. Cracked claims that older, less educated, rural folks saw the abandonment of Christian traditional culture in these hedonistic wonderlands of coastal “liberal” cities and thought there would be dire consequences for the nation. Low and behold, they see: “Chaos…Blacks riot, Muslims set bombs, gays spread AIDS, Mexican cartels behead children, atheists tear down Christmas trees.”

The Trump Solutions

The problem is that many of these perceptions are just wrong. We are healthier, less likely to be murdered, and safer than ever before. Maybe we blame clickbait media, maybe we blame gullible people for believing it, but living in cities just isn’t that scary.

Last year, I met an acquaintance who had grown up in a smaller town in the South, but was now moving to another state near a major urban center. He found out I had grown up in his destination city, and despite having just met 5 minutes prior, he peppered me with bizarre questions about whether I thought it was safe to live there. I assured him that it was a major metropolitan area where millions live and work without a problem every day. He made it seem like he was moving to Afghanistan. Look, I’m sure it was pretty hairy to live in New York/Miami/Chicago/LA in the 80s, but crime rates have collapsed over the last 25 years. The amount of people murdered in the first season of Daredevil in Hell’s Kitchen likely exceeds the total number of murders in all of Manhattan last year. Our perspective is all off. And if we are imagining that law and order is collapsing, our solution is going to vastly over-correct.

That’s part of a bigger point I’ve already made: Trump’s political victory doesn’t mean his supporters have any good ideas about improving the country, or even their own situations. It just means enough people thought there were enough problems for more voters to cast a ballot for Trump over Hillary in Michigan, Wisconsin, and Pennsylvania. For instance, I think there is a real basis for complaining about the intolerant left-wing culture that has grown more bold over the last 10 years. But the Trump response has been his own version of intolerance, just copying the left and doing nothing to improve the situation.

On the economy, Trump’s plan is at best a mixed bag. Experts are mediocre at predicting economic growth, so figuring out the best economic policies to help growth may also be difficult. Trump and his supporters might blame globalism for their woes, but putting tariffs on imports and striving to shut down commerce with some of our largest trade partners will hit the poor the hardest. Price increases on low cost imported products will harm low income earners much more than upper middle class households with savings and easier means of substitution. Maybe in the long run this will spur some industrial investment, but I think it’s just as likely to speed up automation. In 4 years, many economic problems scaring Trump voters could easily be exacerbated.

More to the point, the government can’t reverse the decline of manufacturing jobs in the United States. Short of seizing control of the economy via a 5 year plan, the world has changed. Manufacturing jobs peaked in the early 80s (BLS), and while globalization has accelerated the trend, it didn’t start it. Of course, “globalization” isn’t really an entity either; decisions that changed where firms do business were made by millions of individuals looking at cost-benefit analyses and comparing prices. The government didn’t say “move these factories to Mexico”, the government said “Technology is making it easier to communicate and do business in other countries, so we will reduce taxes and import quotas to make it easier for businesses and shareholders to do things they already want to do”. Trump can’t come back and order companies to make bad business decisions unless he wants a Soviet-style command economy with capital controls.

The United States has such a strong economy due to many factors, including its large, diverse, and skilled working populace, an abundance of natural resources, heavy investment in research and capital, and strong and interconnected financial markets. Our consumer market is the largest in the world, our trade dominates the globe in both goods and services. International economic institutions from the New York Stock Exchange to the World Bank and International Monetary Fund are based in (and often dominated by) the United States.

Trump’s push to cut us off from strong trade ties will certainly harm the American centrality to the global economic system. Obviously, to many Trump fans, this is a bonus, not a problem. But long term decline in American trade would likely be connected to more sluggish growth as native industries are protected from competition; for example, Apple has pushed innovation in the smartphone market since 2007 which radically changed the status quo of what phones could do. It has had ripple effects throughout the economy as the spread of widely accessible powerful mobile computers has changed everything from transportation to social interaction to navigation and even shopping. But we should remember that the smartphone revolution was made possible by cheap global supply chains, and without them, we are likely to see stagnation.

And those older, rural, lesser educated Trump voters? No one is going to want to hire them unless the economy is clicking and demanding more workers. Sluggish growth with no competition bred by protectionist policies won’t help them.

Maybe Trump’s tax cuts and deregulation pushes will jumpstart the economy enough to overcome his bad trade polices. It’s possible, but I’m not betting on it. If it doesn’t work, in four years we will simply have the same economic problems just with tons more debt. That’s a big risk he’s taking. And it’s made more risky by Trump’s plan to expand the police state and start deporting at least two million people  (not to mention increasing military spending from the $500 billion a year we spend already).  The ACLU has gone into detail about the difficulties we face if Trump attempts to carry out his campaign promises. It’s very difficult to deport millions of people without doing away with probable cause; how do you find and arrest only the people here illegally? If they aren’t caught by the police while engaged in crime, then by necessity the police must come to them, requiring sweeps of entire residential areas, stopping people with no probable cause at all. At the very least this is grossly expensive, and more likely it will harass and catch thousands of innocent American citizens in a dragnet. And none of this even touches on registration of Muslims, continued mass surveillance, and use of torture.

In four years if the economy hasn’t improved much, debt has accumulated, and the police state has been vastly expanded, will Trump admit his policies haven’t worked? This seems unlikely as Trump has never really apologized for any stances he’s taken or mistakes he’s made. It seems far more likely that he’ll use this built up police state to harass his political enemies.

If Trump is willing to place trade barriers and dramatically reduce the world-leading $2.4 trillion worth of goods imported, how much will he be willing to use government subsidies to pay companies to “invest” in the United States? Does this sound like government direction of the economy? If things aren’t going well, will he seize more control of the economy?

I should note, I haven’t even brought up Trump’s extensive conflicts of interest, where representing American diplomatic interests may run counter to his profit-seeking ones. I also haven’t mentioned that someone who is extremely thin-skinned will be in charge of the nuclear launch codes. Many of the concerns of Trump voters don’t make much sense, many of the policy solutions of Trump and his voters are bad and would make things worse, and on top of that, Trump is irresponsible, incompetent, authoritarian, and many other things I’ve argued before. Continued opposition to Trump’s policies is vital over the next four years.

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