Monday, December 16, 2019

Boris Johnson’s Conservative Party Blowout Win In Britain On December 12, 2019, Foretells President Trump’s Reelection in 2020

President Trump will be reelected in 2020.

The Hoover Institution lists 200 Fellows on its website.  Some are full-time, some part-time, some in residence, some off-campus, some short-term visitors, some long-term visitors, and so on.  Of the 200 or so affiliated with Hoover in 2016, I was the only Fellow to predict that Trump would win.  I did so in writing two weeks before the election.  My witnesses included Professor David Brady, General Jim Mattis, and a handful of others.

I based my prediction on what is known as “the shy Tory voter.”  When Prime Minister Theresa May’s June 2016 referendum on Brexit was approved, the result shocked almost all British pollsters and political experts.  The explanation was “shy Tory voters” who did not tell the pollsters their real voting intentions.

From Brexit, I surmised that Presidential Candidate Donald Trump would be the beneficiary of “shy Trump voters,” who would not tell American pollsters their true voting intentions.  I further surmised that Hillary Clinton would not do as well among Black voters as Barack Obama had done in 2008 and 2012.  I was right.  I put my money where my mouth was and won a spectacular one-star restaurant lunch.

Fast forward to December 12, 2019.  In the final days of the five weeks Parliamentary elections campaign, British polls showed Jeremy Corbyn’s Labor Party narrowing the lead of Johnson’s Conservatives.  Many headlines speculated on a ”Hung Parliament,” in which no party wins an absolute majority.

Once again, “shy Tory voters” turned out, this time in greater force than in the 2016 referendum.  Conservatives won constituencies that had been reliably labor for decades, in one case for a century.  Browse British media on December 13, 2019, and you will find lots of differing explanations.  I’m not a student of British politics, so I’ll let the experts fight it out.

Between now and November 2020, American pollsters, media, pundits, and professors will point to polls showing Trump losing supporters from all walks of life.  They will try to explain why 2020 is different from 2016, and that Johnson’s huge victory in Britain cannot be duplicated in America because conditions in the two countries are different.  They will be wrong again.

Trump will win at least as many electoral votes as in 2016, perhaps even more.  You can trust my forecast with a high degree of confidence.  After all, I was the only Fellow among 200 Hooverites who got it right.

Wednesday, November 27, 2019

Hong Kong People Vote Overwhelmingly For Freedom And Democracy, Repudiating Pro-China Establishment Politicians and Business Elites

On November 24, 2019, Hong Kongers went to the polls to elect 452 members who serve on 16 District Councils.  Turnout was 71% compared with 47% in 2015.  Compared with 2015, Pro-democracy candidates won 388 seats (+262), Pro-Beijing candidates 59 seats (-239), and Unaligned candidates 5 seats (-2).  Pro-democracy candidates won a majority in 15 of the 16 District Councils (+15).

On March 29, 2019, China’s hand-picked Chief Executive Carrie Lam and her appointed Councilors published an Extradition bill in the Legislative Council, which would allow the Hong Kong Government to extradite Hong Kong residents to China for trial. Hong Kongers first demonstrated two days later and continued demonstrating every week demanding the bill be withdrawn.  Hong Kongers know the difference between the Anglo-American “rule of law” and Chinese-Communist tyranny.

To put 2019 in perspective, Britain transferred sovereignty over Hong Kong to China at the stroke of midnight on June 30, 1997.  The demonstrations broke out three months before the 22nd anniversary of the handover.  This means that every Hong Konger under 22 years of age had not lived under British administration.  Everyone under 32 was aged 10 and under in the new Hong Kong Special Administrative Region (HKSAR).  Everyone 40 years and under was no more than a teenager under British administration.

Amazingly, the youth of Hong Kong led the demonstrations.  The Joint Declaration and Basic Law of Hong Kong promised that Hong Kong people would govern Hong Kong, and that Hong Kong would maintain its separate social, economic, and political systems unchanged for 50 years to 2047.  In Xi Jinping’s worldview, Hong Kongers were supposed to welcome Chinese sovereignty.  Instead, they waved British and American flags, defaced the Communist Party’s Liaison Office in Hong Kong, and burned Chinese flags.

Let me repeat this.  Hong Kongers with little or no experience living under British rule clamored for the maintenance of British institutions.  They want universal suffrage which they were promised.  They want Western law and order.  They want private property, freedom of speech, freedom of assembly, freedom of religion, freedom of association, and all the other Western freedoms stipulated in the Basic Law.  Hong Kong voters repudiated the Chinese Communist Party.

Chief Executive Carrie Lam is tone deaf.  She reluctantly withdrew the proposed Extradition bill on October 23, 2019, after nearly six months of demonstrations.  Had she withdrawn it immediately, calm might have been quickly restored. Following the huge victory of the Pro-democracy candidates, she has again displayed tone deafness, only wanting to dialogue with the protestors.  Let’s face it.  She is a toady, having no authority except what Beijing allows her to exercise.  Her best option is to go abroad for medical care and not return.

Beijing’s best option is to restore the spirit and letter of the Joint Declaration and Basic Law and wait out the 50 years of autonomy until July 1, 2047.  Why provoke the world over a small territory that is steadily becoming less important to China?  Think of the long-term benefits to China if the nations of the world actually believe China’s promises and agreements.

Is there any way to persuade Xi Jinping to honor the Joint Declaration and Basic Law?  Would it be possible to assemble a coalition of leaders of a hundred countries to sign a statement endorsing a live and let live approach to Hong Kong?  That would be the ultimate win for everyone.

Tuesday, October 1, 2019

Our Strength And Our Prosperity Depend On Our Diversity: Reality Or Ideology?

Economic growth is driven by increases in productivity and labor.  However, not all labor is the same.  Some is low-skilled, low-valued-added, while other labor is high-skilled, high-value-added.  It makes a big difference in the rate of growth if the increase in labor is low-skilled or high-skilled.

The data below show the changing racial and ethnic demographics of the United States by decade, 1940-2020, in percent.  The far-right column shows the annual average rate of economic growth for each decade beginning with the year in the first column.

Racial and Ethnic Demographics of the United States, 1940-2060
By Decade

Two numbers immediately pop out.  One is the increase in the share of Hispanics (Mexicans, Central Americans, South Americans, and some Caribbean islanders)  The other is the decade average declining rate of growth.  Correlation is not causation.  But the data make it hard to argue that large numbers of Hispanic immigrants, whether legal or illegal, increase the rate of growth.

Could we argue the counterfactual, that the rate of growth would be lower still without large-scale Hispanic immigration?  No.  Studies show that first generation Hispanic immigrants in America are disproportionately low-skilled.

It’s hard to go a day without hearing an economist say that the United States needs both kinds of immigrants.  High-skilled immigrants help drive innovation, while low-skilled immigrants do the jobs Americans don’t want to do.  But wanting low-skilled immigrants is not the same thing as needing them.  Let middle-income and upper-income households mow their own lawns and do their own household chores.  Let agriculture invest in automation and mechanization instead of relying on low-cost, backbreaking immigrant labor.  (E.g., Australia).  Let industry continue to invest in automation.  Let the middle class pay a bit more to eat out, or stay in a hotel, or pay more for other services that use low-cost labor.  Importing low-cost labor for the economic comfort of middle- and upper-income households does not have any moral basis, while it simultaneously increases the income gap between the top 10% and the bottom third of the income scale, which has become an issue of national concern.

The implication for immigration policy is clear.  Our strength and our prosperity benefit from high-skilled immigrants.  We should also increase the skills of resident Americans!

Politics and economics often conflict.  The Democrat Party wants more low-skilled immigrants, who vote Democrat when they become citizens.  Try a thought experiment.  If the vast majority of Hispanic immigrants voted Republican, would the clamor for low-skilled immigrants continue or decline?  Be honest.

Thursday, September 26, 2019

Why It’s So Hard To Withdraw U.S. Troops From Afghanistan, The Middle East, And Other Regions

First, some facts, based on U.S. Department of Defense statistics as of June 30, 2019.  The data are by region, identifying the most important countries.

Europe:  (NATO):  64,702
            Germany:  35,232  (20 U.S. military bases in Germany)
            Italy:  12,843

East Asia (Excluding Hawaii and Guam):  84,593
            Japan:   55,327
            South Korea:  26,086

West Asia, Central Asia, South Asia, Africa, and Indian Ocean:  10,683
            Bahrain:  4,371

Unspecified:  9,076
Afghanistan (Q4 2017):  11,100

Iraq (Q1 2012):  11,445

U.S. troops have been in post-war Europe for 74 years, providing stability and preventing Soviet (Russian) expansion into Western Europe.  U.S. troops have been in Japan for 74 years and in South Korea for 59 years, protecting Japan from Russian encroachment and helping to secure stability and prosperity in South Korea.  Since 2001, U.S. troops have fought wars in Afghanistan, Iraq, Syria, and Libya, and are stationed in bases in Bahrain and Qatar.

The annual cost of maintaining U.S. troops in Europe, Japan, and South Korea is relatively modest compared with the past two decades of “hot” wars in Afghanistan and the Middle East.

An official estimate of the cost of the war in Afghanistan between 2001-19 is $975 billion in overseas contingency operations dedicated specifically to the war.  During 2001-14, Operation Iraqi Freedom cost $815 billion.  In addition, the base budget for the Department of Defense increased about $250 billion and the Veterans Affairs budget increased by more than $50 billion since 2001.

A Brown University study estimated the direct cost of the wars in Iraq, Afghanistan, Pakistan, and Syria between 2001 and 2016 at about $3.6 trillion.  Adding in money appropriated for war spending and on homeland security for 2017-19, the total surpasses $5 trillion (includes future obligations of $1 trillion through 2053 for veterans medical and disability costs, as well as interest on borrowing for wars).

Should the United States continue to deploy over 100,000 troops and spend hundreds of billions of dollars to stabilize Europe and East Asia?  A case can be made that the U.S. has benefitted from a stable global economic order.  A case can also be made that fewer troops in Germany, Japan, and South Korea could also do the job.

In contrast, the Middle East and Afghanistan lack the stability of Europe, Japan, and South Korea.  Without a major U.S. presence, the Taliban might be able to take over Afghanistan, an aggressive Iran could threaten Iraq and other Arab countries, and ISIS could resurface.

But it can also be asked if thousands of casualties and the expenditure of trillions of dollars since 2001 have brought security, stability, democracy, and prosperity to these countries.  Those who served in political, diplomatic, or military office in the Bush and Obama years are generally opposed to even minor withdrawals of U.S. troops.  Apart from President Trump, antiwar activists, and  those who believe the money should be spent on domestic programs, there are few influential interests advocating a significant withdrawal of U.S. troops from the Middle East and Afghanistan.  They are no match for the Diplomatic, Military, Industrial, Political Complex.

The Diplomatic, Military, Industrial, Political Complex

Before naming names, let’s start with an overview.  The Project on Government Oversight has documented that as many as 380 high-ranking Defense Department Officials and officers over the past decade have left government to become lobbyists, corporate board members, and defense contractor consultants.  The list includes 25 four-star generals, 9 admirals, 43 three-star lieutenant generals and 23 vice admirals.  A quarter went to work for the top five defense contractors (Boeing, General Dynamics, United Technologies, Lockheed Martin, Northrop Grumman).

Former Defense Department officials and officers are only a part of the DMIPC.  Prominent consulting groups generally support continued involvement in the Middle East and Afghanistan.  

Let’s take a look.  (Rather than list all the important names affiliated with each group, I think you would benefit from the research exercise of looking up each group, examining the scope of their global operations and personnel, and letting the information sink in.  I’m not being lazy.)

Albright Stonebridge Group.  ASG was founded by former Secretary of State Madeline Albright and merged with Stonebridge international.  Its heavy hitters include the former U.S. Commerce Secretary, former foreign ministers from Spain, Germany, and Portugal, and a former Swedish Minister of Finance.

Kissinger Associates, Inc.  It’s a Who’s Who of the powerful and influential.

The Cohen Group.  TCG was founded by former U.S. Secretary of Defense William S. Cohen.  Its staff and counselors come from the White House, the departments of State, Defense, and Commerce, and Congress.

Rice Hadley Gates.  RHG was founded by former U.S. Secretary of State Condoleezza Rice, former Secretary of Defense Robert Gates, and former Assistant to the President for National Security Stephen Hadley.

The Clinton Foundation.

Members of Congress generally support large defense appropriations and military bases in their districts to provide jobs and income for their constituents.

Several important think tanks concentrate on defense and foreign affairs.  The majority of their experts do not support withdrawing troops from Afghanistan and the Middle East.

Several of my military and diplomatic Hoover colleagues serve on the boards of directors of top defense contractors and are principals and counselors of global consulting groups.  Do not construe this post as criticism of their activities.  These individuals can bring their vast experience and expertise to bear upon important matters of foreign policy and national security.

My point is that they and their employers have little incentive to support reduced military expenditure and involvement in Afghanistan, the Middle East, Europe, East Asia, and other real and potential trouble spots.

It takes a major shock (e.g., Kent State) to reverse military policy.  Any major shock that occurs in the near future is likely to strengthen the argument for continued or even increased U.S. military involvement in geostrategically important regions. Iran, Russia, and China loom on the horizon.

Monday, September 9, 2019

Understanding Chinese President Xi Jinping’s Motivation And Ambition

Apart from a brief flirtation with democracy immediately after the fall of the Qing Dynasty in 1911 and the emergence of multi-party democracy in Taiwan in 1992, autocrats have ruled China throughout its history.

China has been governed by regional nobles, national emperors, warlords, and Communist Party leaders.  The current Communist leader is Xi Jinping, author of “Xi Jinping Thought on Socialism With Chinese Characteristics For The Modern Era,” a 14-point statement that has been incorporated into the Constitution.  President Xi has eliminated the traditional limit of two five-year terms for the Chinese Communist Party paramount leader.

China’s Communist leaders have worked hard to eliminate the stain of Western imperialism that began with the Opium War in 1839 and ended on the Chinese mainland with the founding of the Peoples Republic of China in 1949.  Mao Zedong’s successor, Deng Xiaoping, formulated the doctrine of “one country, two systems,” under which Hong Kong and Macao were promised a high degree of autonomy to maintain unchanged their capitalist way of life for 50 years.  Recovering Hong Kong (1997) and Macao (1999) eliminated the remaining enclaves under Western control on the Chinese mainland.  Absorbing the Republic of China on Taiwan into the mainland is the remaining objective to complete the unification of China.

The philosophy and practice of Communist Party governance has not taken the form of a straight upward trajectory.  There have been bumps along the road.  Think in terms of “two steps forward one step backward,” “one step forward one step pause,” and other combinations of advancement, retrenchment, and holding patterns.  President Xi’s current dance with President Trump over a trade agreement may appear that Xi is making concessions to Trump to avoid risking a slowdown in China’s growth.  That would be wrong.  Any concessions Xi makes should be seen as a temporary measure along the way to fulfilling his (and China’s) domestic and foreign policy goals.

What is Xi’s ambition?  First is securing China’s dominance in economic, political, and military power throughout East Asia, pushing the West, specifically the United States, away from  China’s sphere of influence.  Second is expanding China’s influence throughout Southeast Asia, South Asia, and Central Asia, concurrent with a gradual reduction of America’s military presence in Afghanistan, Central Asia, and the Middle East.  Third is increasing Chinese influence in Europe (“one belt one road”) and enhancing China’s influence in Africa, the Caribbean, and Latin America.  President Xi can deploy the wealth generated from decades of high growth in pursuit of China’s regional and global ambitions.

Does President Xi really understand American politics?   Or is he getting mistaken advice that America can be pushed out of Asia and lacks the will to complete with China for global influence?  Perhaps Xi was poorly advised about President Trump in his early encounters with him.  Perhaps Xi believes that Trump desperately wants a trade deal to win reelection in 2020 and that Trump will make concessions.  Perhaps he believes U.S. polls showing Trump trailing several Democrat candidates and that he can wait until 2021 when a Democrat takes over the conduct of U.S. foreign policy.  Even if Xi signs what seems to be a one-sided deal in America’s favor, do not expect China to adhere to the spirit and letter of an agreement.  If you want evidence, Hong Kong people were promised that they could elect their Chief Executive by universal suffrage.  So much for that promise!

Xi is well on the way to attaining Chinese dominance in East Asia.  The U.S. cannot deploy all its military and economic resources to contain China as America also confronts problems in Europe, the Middle East, the Arctic, and Africa.  The U.S. has also entered a period of increasing racial/ethnic and other political divisions which will occupy political attention at home.  China can bide its time till it takes the net big step forward.

It would be a mistake to listen to the American doomsayers of China’s diminishing economic prospects.  They have been wrong for 40 years.