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Can Trumponomics - Fair-trade, Tax-cut and Deregulation Make America Great Again?

7/29/2017

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Dr. Wordman

​Trump won the 2016 US presidency election based on the slogan, ‘make America great again’, which had resonated with a grassroot movement. Trump's victory gave him a mandate to deliver his campaign promises despite of his battle with the mainstream media during and after his presidential campaign. The media and the left have been critical to Trump's Administration since his inauguration. Negative reports about his transition team, cabinet appointees, executive orders and policy initiatives appeared daily. Trump's impulsive tweets, protocol defiant manners, eagerness in exercising executive authority and accusation about biased media created lots of sensational news and mutual hostility. To this day, Trump is still using the term, fake news media, to fight a continuous assault from the media on his Administration and his policies as if his presidential campaign is still going on.
 
In this column, we have objectively discussed the Trump phenomenon, correctly hinted Trump's victory over Hillary Clinton, made detailed observations on Trump's first one hundred days in the White House and we shall continue to monitor and offer suggestions from a patriotic citizen's point of view. Today, Trump faces a 'Russian Gate' and a 'Comey Firing' investigation while confronted by the nuclear threat from North Korea and the deployment of military actions in Syria. Even though defending his actions and credibility and handling foreign affairs are important daily activities on Trump's agenda, the key domestic issues are much more on American citizens' mind especially on those who put Trump in the White House. 

Thus we entitled today's column, Can Trumponomics - Fair Trade, Tax Cut and De-Regulation Make America Great Again? A question may remain for years to come. However, it is timely to start the discussion on the title subject since The Economist (TE) has just conducted a 'free flow' interview with Trump (with Mnuchin, Secretary of Treasury and Ms Hope Hicks, Strategic Communications Director, present) at the White House on May 4, 2017 on economic issues. The interview was a candid and open Q&A on several issues which deserve our comments. Our comments are far more positive than the post-interview editorial article (Why Trumponomics Won’t Make America Great Again, May 13, 2017, in the Leader section of the print edition of TE). This post-interview article seized the opportunity to trash Trumponomics by saying that it is wrong, it won't work, it creates dangers, and it is a poor recipe for long-term prosperity, producing more deficits, more inequality and more anger in Americans as if one interview would cast the fate of American economy.

The vast number of comments appeared after the interview and the editorial in TE were understandably anti-Trump but still to my surprise, they were so one-sided, full of criticism, sarcasm and intellectual elitists’ views, except one asking: why there isn't any Trump supporter. However, some criticisms were valid on Trump's poor verbal English and lack of vocabulary, adequacy in expressing comprehensive answers to the weighty questions. But the blame should be shared by the interviewer and the editor (perhaps, Ms Hicks as well) since they made no attempt to clarify Trump's words during the interview nor through the 'light edit' as if keeping a rambling dialogue is the virtue of an interview.  The transcript of the interview with ‘light editing' and the editorial article were available on economist.com along with references (essays negative on Trump and his policies) and many deplorable reader comments. Only one fair sensible reader comment noted was that “numbers (referring to 3% economic growth) are more important than words”.

Actually, it is too early to cast judgment on Trumponomics. We will comb Trump's candid words to find clues and indication whether he is shaping a Trumponomics or just dealing with a set of proposals or business wishlist as the TE article claimed. The interviewer's first question was: What is Trumponomics and how does it differ from Republican economics? This is a broad and diffused question (the TE interviewer was not even primed adequately on Reaganomics as commented by a reader) begging for an oratorical answer. Trump is no great orator but his answer was fair. He focused on trade and wanted free trade but emphasized fair and reciprocal. He cited NAFTA, he wanted to terminate it that prompted Mexico and Canada Prime Ministers to call him 10 minutes apart. So renegotiation of NAFTA would take place if Congress would approve a fast track for the Administration to renegotiate the NAFTA treaty by a new negotiator (Robert Lighthizer). Trump delivered his answer in his usual jumpy and scattered manner and the interviewer let the interview run its rambling course, from reducing trade deficit to reciprocal taxes to China and Xi Jin Ping to illegal immigrants before getting to tax cut to get company investment back to the United States and consequences of bigger deficits and sustainability of faster growth. From the questions raised and the answers flowed, we may conclude that the interviewer did not do his homework to prepare a more productive and informative interview.     

After carefully reviewing the entire interview transcript, we may conclude a number of meaningful points from Trump’s statements even though they don’t necessarily support a clear thesis of Trumponomics. First, Trump is dead serious being patriotic (American First) to deal with trade issues. He is also serious believing in negotiation and his experiences with negotiation. He felt confident in getting Enrique Pena Nieto (PM of Mexico) and Justin Trudeau (PM of Canada) to call him to renegotiate NAFTA, likely reaching a more favorable compromise. In contrast to his threat to terminate NAFTA, his praise for Xi Jin Ping (“He is a great guy!” and “We like each other a lot.”) and China was not entirely a psychological technique prior to trade negotiation with China or making deals with North Korea counting on China’s help. More likely, Trump is showing a genuine respect for Xi as Trump proudly stated that his 10 minutes meeting with Xi alone at Mar-a-Lago turned into 3 hours long and another of his 10 minutes meeting with Xi turned into a 40 person meeting. Probably, Xi’s knowledge on these issues earned Trump’s respect. If Trump and Xi indeed liked each other a lot, it would be a good thing for the world economy.

Trump is equally serious about stopping corporations from going abroad and bringing companies especially manufacturing back to the U.S. using tax-cut, waiver of foreign profit repatriation tax, de-regulation or tax penalty whatever works. He coined the phrase “Prime the Pump” to stimulate economic growth and to expect a 3% GDP increase. Whether the projection for shorter fast growth or the long term $2 trillion revenue over ten years is accurate or not, his direction is correct that perhaps explains the Wall Street’s positive reaction. Everyone knows tax reform is a tough nut to crack, so does Trump and his advisors. So it is only fair to allow his Administration “contemplating”, a word used in the interview. We should be more concerned about philosophies, principles and directions Trumponomics adheres to at this point than picking every proposal apart and declaring death sentence before they begin. TE’s Trumponomics interview is really disappointing, wasting an opportunity to be constructive and productive. The TE Q&A process and the editorial afterwards should have been prepared to explore and construct a positive picture of Trumponomics instead of trashing it before anyone (Trump team and economists) could contemplate a clear picture of it.

So, to the title question, the answer at this point should be, Trumponomics may have a chance to make America great again, if more positive thinking and energy are applied to it.           


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Democracy and Regime Change Are Means Not Goals for Political Conflicts

7/22/2017

1 Comment

 
Dr. Wordman

​Abstract

NED advocates its goal as strengthening of democratic institutions around the world. The author argues that providing education on conflict issues is more important than promoting democracy and political and social changes in the name of using democracy as a means.  NED is funded by the U.S. Congress with bi-partisan support thus it serves the U.S. national strategy and interest. However, when the U.S. Government which adopts 'regime change' as a quick method to resolve a conflict, unavoidably, NED activities often become a prelude of military action of 'regime change' which doesn’t work as shown by political scientists with history to prove.
 

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"The National Endowment for Democracy (NED) is a private, nonprofit foundation dedicated to the growth and strengthening of democratic institutions around the world. Each year, NED makes more than 1,200 grants to support the projects of non-governmental groups abroad who are working for democratic goals in more than 90 countries. Since its founding in 1983, NED has remained on the leading edge of democratic struggles everywhere, while evolving into a multifaceted institution that is a hub of activities, resources and intellectual exchanges for activists, practitioners and scholars of democracy the world over." The above description of NED is fairly accurate about its projects and activities but it failed to clarify a genuine 'goal' question, especially where NED had no entry point to make any impact, for example in North Korea (NK).
 
"Strengthening of democratic institutions around the world" cannot be a goal without first defining and understanding the purpose of each institution, an ideology question. There is a distinction between providing education on democracy as a means or method for making decisions and selecting leaders, such as illustrating available technological tools for voting, their benefits and pitfalls and pre-conditions of democracy versus promoting political and social changes in the name of democracy. "Working for democratic goals in more than 90 countries" cannot be a genuine goal for NED since each country is free to define its own goals in terms of ideology, culture and philosophy. NED may educate the people about using the democratic procedure to make decisions and select leaders but cannot dictate what are the right decisions or right leaders for the states and their people. When NED does that, many NED activities and projects are more viewed as intervention programs contributing to turning societies into turmoil and chaos through other companion method such as 'regime change' and/or ‘revolution’ or ‘agitation’, instead of being viewed as promoting harmonious and prosperous societies through education on the issues.
 
As a national interest, the U.S. has a policy of against communism and spreading democracy as if it was an ideology. After WW II, the U.S. has become a superpower; as a strategy, she continues to pursue global primacy by taking on the responsibility of preventing nuclear weapon proliferation, rooting out terrorism and upholding human rights. NED is funded by the U.S. Congress with bi-partisan support thus it serves the U.S. national strategy and interest. However, the U.S. Government with bi-partisan support has adopted 'regime change' as a quick method to eliminate an unfriendly or threatening leader in another country to solve a conflict with her and her allies. Thus unavoidably, NED activities often become a prelude of military action of 'regime change' providing information on the targeted and preferred leader in the country NED has an operation in.
 
Regime change has a long history with some successes even though political scientists have shown that the leaders installed by regime change have 65% chance being violently removed within five years and 40% of the regime changed states have civil war within ten years. Clearly, regime change is not a force for stability. Let's now review the history related to regime change:
 
1.  President Woodrow Wilson (D) overthrew leaders of Mexico (1914), Dominican Republic (1914, 1916), and Haiti (1915).
2.   WW I, the U.S. and her allies demanded German Militarists leaving power.
3.  Post WW II, Presidents Franklin Roosevelt (D) and Harry Truman (D), established regimes in West Germany and Japan and also attempted on Korea.
4.   President John F Kennedy (D), ordered coup against Ngo Dinh Diem, S. Vietnam (1963)
5.   William Howard Taft (R), sent marine to oust leaders of Nicaragua and Honduras (1907)
6.  Dwight David Eisenhower (R) ordered CIA to depose Mohammad Mosaddegh of Iran (1953), Sukarno of Indonesia (1965) and Lumumba of Congo (1960)
7.    Richard Nixon (R) ordered CIA to prevent Salvador Allende to take elected office in Chile (1973)
8.    Ronald Reagan (R) invaded Grenada (1983) and covert against Nicaragua (1984) 
9.    George H W Bush (R) brought down Manuel Noriega in Panama (1989)
10. George W Bush (R neoconservative) and Barack Obama (D liberal internationalist) both shared the same goals maintaining US primacy with the latter adding human rights goal in conducting regime change policies in Middle East (Iraq, Afghanistan and Iran)
 
The article, Regime Change Doesn't Work, by Alexander B. Downes, Boston Review, 9-1-2011 gave more details on the above history and an excellent analysis on why the U.S. is practicing regime change. He attributes the US leaders' actions to their belief that regime change is a quick fix to a conflict (they personalize the conflict) and they can get bi-partisan and domestic support with ability to ‘manufacturing consents’. The US leaders face few hurdles to initiate military action abroad; they can be elusive about its cost and can easily get away from accountability. In my opinion, personalizing a conflict or threat by an evil leader is a naive view of the problem and removing the evil leader by regime change is definitely contradictory to the slogan of promoting democracy. It is more important to educate the people about the conflict and threat issue than to force a regime change upon the state whether in the name of democracy or not. History shows that only a few cases of regime change worked in the states where democracy previously existed or where they had favorable preconditions of democracy as pointed out by Downes: high income, homogeneous population and strong bureaucratic and constitutional rule. I would add that these preconditions are highly dependent on the educational level of the people. 
 
I agree with Downes that regime change doesn’t work; in fact it is a cause for instability.  Downes cited the Philippines as an example that regime change was not applied to Fernando Marcos when he was a corrupt dictator. Marcos eventually submitted to an election loss (1985). Luckily, with no regime change, the Philippine government had progressed under stability although still having corruption issues. The newly elected President Rodrigo Duterte won the election with a landslide as a tough-on-crime candidate irritating human rights watchdogs by his ‘extrajudicial’ killings of drug dealers. His war on drug and courage to say no to the U.S. may be annoying but it should not be grounds for the U.S. to contemplate a regime change. Same argument applies to NK, even though she is pursuing nuclear weapon development posing a threat to its neighbors and the U.S. NED has no entry point into North Korea, thus any thought of imposing a regime change in NK runs the risk of entering an unexpected situation with possibility of creating a prolonged chaos in Korean Peninsula and a potential nuclear war. Therefore, China is wise to urge the U.S. and Russia to engage a six-party dialogue to deal with the NK nuclear threat issue. Hopefully, with gentle efforts educating the North Korean people that nuclear weapon development is not beneficial to themselves, NK will eventually abandon its nuclear weapon program. In today's communication environment, such educational effort has a better chance to produce favorable results than externally forced regime change. 


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Why Do The U.S. and China Do War Studies Against Each Other?

7/22/2017

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Dr. Wordman

Abstract

A recent Rand report commission by the Office of Undersecretary of the Army has raised many eyebrows since it touts that the war with China may be inevitable. The reports analyzed four scenarios and concluded that the U.S. will win without causing nuclear war if the U.S. initiates the war the sooner the better. At least two articles have criticized the report for making dubious assumptions and suggesting questionable conclusions which may embolden the hawks to prepare war with China within 3 to 8 years.

 
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For national security and defense, it makes sense to be cautious making broad assumptions and taking long-term view as well as near-term events seriously. Therefore, the Defense Department must conduct war studies based on hypothetic assumptions and targeted enemies. In making assumptions and choosing enemy target, conflict of interest is logically the primary concern. Thus it is fairly easy to understand that, if two countries have serious conflicts, they would likely be hypothetical enemies possibly entering war if conflicts are not solved. In order to prevent or minimize conflict, each country should clearly define her core interests so that other countries would understand and could avoid escalating a conflict. Often, a serious condition is defined for a particular interest as a ‘red line’. We would hope other countries would not step over the ‘redline’ defined by us, if it was defined and declared rationally.
 
Among countries big or small, all have their own interests defined by their national or societal ideology, economic endeavors, geopolitical or territorial concerns with neighbors or other countries. Redlines are drawn on certain interest to highlight the seriousness. When a country steps over the ’redline’ defined by another country on an interest issue, chances are serious conflict or confrontation will result possibly leading to war. Hence logically war studies are usually made when a country perceives that her interest and redline may be challenged. For example, in 1962, the Soviet Union was going to install missiles in Cuba which obviously threatened the U.S. security, a clear redline being stepped over by the Soviet and Cuba. President Kennedy took a decisive position to confront them, entering war if necessary. In the end, the Soviet backed down. Presumably, a war study had been done by the U.S. before the crisis; the Soviet Union would never be able to win a war against the U.S. on the battle field of Cuba and in the Atlantic Ocean so far away from the Soviet Union.
 
Recently, Rand Corporation published a war study, entitled, War with China – Thinking Through The Unthinkable. This study was sponsored by the Office of the Undersecretary of the Army, conducted by the Strategy, Doctrine & Resources Program at Rand’s Arroyo Center, and authored by David C. Gompart, Astrid Stuth Cervallos and Christina L. Garafola (ISBN 978-0-8330-950-0  2016). While I was pondering on the purpose of this study, why it becomes public and how could such a serious study be based on wrong assumptions, analyzed with wrong parameters and concluded with wrong implications (worse! leading the readers to think a war with China is to our advantage, sooner the better, strike first to win and no concern of escalation to a nuclear war), a number of authors beat me to it in criticizing the report. One article, entitled, Rand Corporation Lays Out Scenarios for US War with China, by Peter Symonds, was published on 8-5-2016 on the World Socialist Web Site (wsws.org as well as strategic-culture.org & usfriendship.com). Another article is entitled, Making A US-Sino War ‘Thinkable’, by Amatai Etzioni (9-12-2016, Diplomat). Peter Symonds, a staff writer of WSWS and a member of the Socialist Equality Party, the Australian section of the International Committee of the Fourth International (ICFI), writes with a socialist view against war; however, his arguments of war being not inevitable and too many uncontrollable variables (beyond ‘intensity and duration’ of the war being considered by Rand) making the Rand report implausible. Amatai Etzioni, a professor of international relations of George Washington University and a military analyst, also questioned the validity of Rand’s report because of its dubious assumptions and questionable conclusions (no possibility of nuclear war and US will sure win with first strike sooner the better); the report may erroneously embolden the hawks to prepare war with China eagerly.
 
Not only am I in agreement with the above points the two authors made but also I want to emphasize that this report gives no regard on two important aspects, one is there was no credible analysis on why a US-Sino war is inevitable based on conflict of interest and what redline each one may be crossing to justify a war. Furthermore, I agree with Prof. Etzioni that the Rand research never bothered to think through what will the U.S. gain in making a first strike and winning a severe war with China? Professor Etzioni questioned ‘regime change’ as a valid objective, since we have failed in many of our regime change endeavors in the past. China is a big country rising rapidly. The conflicts with China are like competition in the Olympic Games; the redlines are lines defining the race track. So long no one is crossing the red track line to stop the other from racing fairly, there is no serious conflict. Recently, the U.S. declared that the South China Sea (SCS) as our critical interest trying to elevate SCS issue as redline to the interest of the U.S. Let us think about it, the U.S. has no territorial interest in the South China Sea, why should we draw a redline there. The new President of the Philippines, Mr. Duarte, seems to understand that; hence, he is distancing from the U.S., not wishing to draw redline to provoke China. After all, China has kept her SCS interest soft, taking a position that any conflict can be negotiated bilaterally at a negotiating table.
 
A bible in the Art of War and Diplomacy, Sun Tze War Strategy, is well known in the world and it is taught in many military academies and universities. Sun Tze said unequivocally war is the last resort between nations; leaders must exhaust all other means to resolve conflict before thinking of war. Even under circumstances of looming war, smart leaders must prepare measures to minimize war, however possible, rather than to maximize the war, never provoking war The leaders of the U.S. and China must honestly analyze each nation’s critical interests with people’s welfare in mind, carefully define redlines in a rational rather than an arbitrary manner and truthfully anticipate compromise rather than provoking confrontation. The back-off of the Soviet Union from the Cuban crisis was the blessing of all mankind, a valuable history lesson. Placing Ternial High Altitude Area Defense system (THAAD) in South Korea and agitating the SCS issue bear some similarity to the Cuban crisis. A compromising posture will lead to peaceful solutions more likely than beating the war drums and preparing for war. If war would be inevitable between the U.S. and China, battle ground occurring on the U.S. homeland might also be inevitable, an all-out nuclear war might also be inevitable as well. As said by Prof. Etzioni,”as someone who has been to war, I join the many who observe that all assumptions and scenarios about how a war will unfold, hold only until the first missile is lobbed”.
 
The hypothetic war dates mentioned in the Rand report are 2015, 2020 and 2025. 2015 was already passed, fortunately, no war other than military exercises took place in South or East Asia. 2020 and 2025 are only 3 and 8 years away, wouldn’t it be insane to urge our government to prepare for war with China?!

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