Secretary Blinken warned recently that the Chinese might supply arms to the Russians. I don't know if that is a direct response to the chips escalation. But what is clear is that East-West relations are at their lowest point since 1986.
Who's interest is this serving? 1/
Who's interest is this serving? 1/
Who's interest is this serving? Why is the US shooting down recreational balloons? Does it suit a great nuclear power to throw such tantrums? Of course, that comedy is largely posturing. The question is why are we ripping East-West relations apart? 2/
The present discourse, with even other serious people like @RanaForoohar and @RoKhanna, we're seeing an ill-considered groupthink, as @FareedZakaria describes it. Not to mention the state of the official discourse, which is alarming indeed. 3/
@RanaForoohar @RoKhanna @FareedZakaria The present discourse does not come close to the seriousness with which the question of breaking relations with China should be considered.
Why are US policy elites convinced it is a good idea to break relations with Chinese and the Russians? 4/
Why are US policy elites convinced it is a good idea to break relations with Chinese and the Russians? 4/
Answering that question requires nothing short of a "contemporary intellectual history." But let's begin naively, but asking a simpler question: whose interest is the Biden revolution in US foreign policy serving? 5/
It is not serving the interest of the banks or the asset managers, who are keen to access the Chinese markets. Deese's departure may contain that signal. The White House may have parted ways with East 52nd Street (policytensor.substack.com) precisely on this question. 6/
Multinational firms and financial firms in general have an interest in preserving an Asian pole that features China not as a security threat but as a market. 7/
The main anti-China element in the Biden coalition appears to be specific tech companies excluded from China. Have Google and Facebook thrown their weight behind Biden's dramatic revisionism? It's possible. But shouldn't US political economy be more competitive? 8/
I mean, sure, Google is very close to the Obama World, where the Biden team made its bones. But can they really override Apple alone even? After all, Apple's is worth more than Google and Meta combined. 9/
If we mentally add up the firepower available to the Fergusonian players on this question, it is not even close. The "Globalists" (boohoo) have all the money. So, it is certainly not the corporate interest that is being served by the new consensus in DC. 10/
It is also not serving the interest of the American people—we're committing to take on extraordinary risks and costs for … what? This isn't 1947. There are no communists in Europe. 11/
China's is being assertive. True. They began throwing their weight around after the catastrophes of the mid-2000s. But even at the peak of Chinese misbehavior, they've been vastly more restrained that the USSR in the late 1940s. 12/
The idea that the Chinese have stolen good jobs from the American people is nonsense. Even if you think that the fault like with US firms, that is still nonsense. 13/
The China shock did not put Trump in the White House. The correlation is due entirely to the mechanical fact that Trump won working class commuting zones. policytensor.substack.com 14/
The Chinese high savings strategy was part of the reason for global imbalances. The other part was the windfall of the energy exporters, and the reserve accumulation strategies after the treatment they got from us in 1998 (we used the IMF). 15/
*Reserve accumulation of the Asian exporters. In any case, global imbalances did not cause the financial booms of the mid-2000s and therefore could not have caused the global financial crisis, as I proved here. 16/
The structural break in deaths of despair beings in the mid-1990s with the Clinton capitulation, not in 2001, with the China shock. They were caused by the destruction of the working class family, which was in turn caused by the neoliberal hourglass jobs economy. 17
It is not the case that the hourglass economy was caused by China, or any other foreign competitor. It was caused by factors internal to our political economy; endogenous to our system, and having very little to do with the Asians. 18
The brutal fact is that no power can flourish in the modern world without exposing its firms to the global market; and the global market is indeed unforgiving. 19
But given that *all* of the productivity growth is in the tradable sector, we're quite literally killing the golden goose by decoupling and fragmenting the world, without any prospect of gains behind our walls. 20
So, the mercantilist theory is just as wrong as it sounds when it comes out of Trump's mouth, even when it comes from @RanaForoohar, @RoKhanna or Biden. 21
If you want to reverse the deaths of despair, winning the war against fentanyl is not going to cut it. You have to reverse the decline of the working class family; and that can only be done through reform and policies that create good jobs for high school graduates. 22
So, I applaud the Biden team's far-reaching efforts to invest in America. The question is whether this paradigm ought to extend out of domestic policy, and to foreign policy. And if so, is confrontation with China useful for that purpose. 23 policytensor.substack.com
Of course, you can whip people into a frenzy against a Asian and a Slavic great power. But should we be doing that simply bc it can make things a little easier in the politics? Who wins the dog whistle game? Dems or Republicans? 24
Now, we're back to the original question: what are they thinking? What is the contemporary intellectual history of this White House? What is the reference frame? 25
The Biden World seems to believe that they need this to contain Trump. Dems in general believe that they need to demonstrate their hawkish chops to fend off the challenge from the right. But is this quite right? 26
I'm afraid Dems are not longer competing against the Old GOP. I watched Trump speak today. He spoke of defending social security and medicaid, and how he never started any war and will gut the deep state that is responsible for our endless wars. 27
Even if we accept the view of the Biden World that US foreign policy should be subordinated to the goal of containing Trump, that may not mean being more hawkish, but more dovish! Otherwise he'll outcompete from the left quite easily. 28
So, even if one is completely empathetic to the Biden war, and "internalizes" it so to speak, it is not clear at all that there is any instrumental reason to break relations with China in the context of Biden's double security dilemma. 29
I am much more worried about the breakdown in Sino-US relations. I think it's going to make our position weaker across the board. Our allies will work with each other to get around our policing. We're going to end up isolated and perhaps humiliated. It's not in our interest. 30
*empathetic to the Biden World, …
/fin
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