​I enjoy reading economists' essays and book reviews, especially the debates and contrasting theses and conclusions in economics more so than in the domain of sciences and technologies. The discussions in economics can be followed by common sense principles, a lot easier than invoking physical and biological principles to follow scientific discussions. Paul Krugman, a well known economist, wrote a book review article in the New York Review of Books (12-17-2015 issue), entitled Challenging the Oligarchy, triggered by a new book, Saving Capitalism: For the Many Not the Few by Robert B. Reich, who also published another book, Work of the Nations: Preparing Ourselves for 21st Century Capitalism a while ago (1992), a best seller among 14 books published to his name. Krugman's review linking the above two books by Reich essentially leads to the issue of the widening of wealth gap in the U.S. and what can we do about it? Using "Challenging the Oligarchy" as the title for his review, Krugman advocated and concluded his view: Reich only sketched a basket of liberal and socialistic idea with optimism on politicians’ ability, under public opinions, of making ‘difficult to define’ political changes to produce results - even each idea might not produce a significant effect, but together they might be worth trying. I certainly hope so, but I have my doubts simply because neither Krugman nor Reich discussed how to save capitalism from the basic principle of capitalism: individuals and private corporations have freedom to compete to produce and distribute wealth.

Krueger's article was not an in-depth review on the two books by Reich but he conscientiously raised the important social-political issue - the ever increasing income/wealth gap which all citizens are concerned with. Stated in Reich's 1992 book, "20% of U.S. citizens enjoy 50% of national income", a serious social concern then has evolved into "the 1% richest citizens earned more than 19% of all household income in 2014". (Or "10% of the U.S.citizens captured 48.2% of total national earnings in 2014" for easier comparison). It is no wonder that Reich entitled his new book, Saving Capitalism: For the Many Not the Few and economists like Krueger would raise the income/wealth gap issue on the radar screen of economics. It is certainly politically correct to say that we need right policies to solve the problem of growing income/wealth gap, but what policies are right seem to be difficult to define under capitalism versus socialism. If politicians would have difficulties to define right policies, you could imagine how citizens could understand and fare under the difficult to define policies. Therefore, we need to discuss this 'gap' issue more on the principle level of capitalism under our democratic and capitalistic economic and political system, in a language that both citizens and politicians can easily understand.

Reich has tried to correlate wages and skills to understand the income gap in his 1992 book (as Krugman stated: “Reich popularized the skill-based technical changes (SBTC) factor”) but today labor and skills are losing grounds to capitals which contribute to the rapid growth of income/wealth gap favoring capital owners and/or professional capital managers. Reich and Krugman have defined a new view - market power - which instead of being affected by the variables in the economy, it is controlled by individuals (and oligarchy) who have market power (monopolists set sell price and monopsonists set buy price). Examples of local monopoly on broadband services, Monsanto's monopoly on soy and corn seeds as well as MacDonald (monopsony power) were cited to emphasize the importance of policies such as rigorously pursuing anti-trust laws. Reich has pointed out the positive feedback loop of driving up income/wealth gap, i.e. the 1% can buy political power (campaign, lobby, etc) to protect or enhance their market power, for example, through a sustained campaign effort to prevent public provision of Internet Access to stifle competition and protect profit.

From the above books and reviews, I come away with frustration that the economists (and politicians) are talking complicated 'surface' issues on the widening of income/wealth gap problem without offering any convincing solutions based on principles of democratic capitalism.  Living in our democratic capitalistic society for six decades, I felt like venting my common folks view on the crux of the matter - why are Americans losing out in our economic status and having an ever-increasing income/wealth gap? The simple diagnostic is in one phrase: we lose because we are taking competitiveness out of capitalism in the wrong place in our economic system and society. Communism tried to produce a flat income/wealth distribution for everyone, it failed miserably; Russia, China, Cuba, N. Korea were clear examples. The U.S. was founded on capitalism and she prospered.  We do know that capitalism needs some dosage of socialism or social policies to deal with the problem of wealth distribution or concentration. Why aren't our policies working in the last four or five decades?

In a simple common sense way, I think, we forgot that the principal driving force for capitalism is free competition. Free competition offers opportunities for individuals (and corporations) to create jobs, to produce goods and services, to earn income and to accumulate wealth. Equally important, but miserably forgotten by socialists is that free competition can also offer individuals and corporations opportunities to distribute wealth, to create public good, and to invest for the future. It is important to manage and balance competitiveness (competition-ism!) in our capitalistic system and society to save capitalism for the many not for the few.

The U.S. workers lose their global competitiveness hence their earning power from many root causes. One of the most fundamental reasons is in our public education system. A system discourages free competition under capitalism. The teachers union and administrative and employee unions stifle 'free competition', a vital gene of a capitalistic society. The public education system therefore produces decades after decades young people framed by 'politically correct socialistic ideals not much grains in true capitalistic principles', which the developing countries are now embracing. The second important reason is the creation of entitlement concept replacing competition-ism. The New Deal was meant to be a society's safety net not a guaranteed leisure retirement life at the age of mid fifties or sixties. Public employees (including law makers) especially set such entitlement examples causing private sectors giving up the responsibility of healthcare, retirement, etc. simply because the entitlement concept will eventually kill the capitalistic system. 

Socialists often blame capitalism for its faults particularly in producing the 'gap' problem. In reality, we need to understand that living in a democratic capitalistic society, 'competition-ism' not 'entitlement' must be preserved and used to distribute wealth in addition to create wealth. Under capitalism, income and wealth must be earned and high income and accumulated wealth can be encouraged to be distributed by ‘competition-ism’. I recall as an employee of IBM, I personally enjoyed the various incentive programs the Corporation offers to everyone and many social benefits the Corporation volunteered to provide in a competitive spirit to be a 'good', 'respected', 'employee-minded' and 'proud' corporate citizen. IBM and many other corporations changed under the weight of "right policies" Reich and Krugman alluded to. Why?! Individual wealthy citizens earned their wealth in the capitalistic America are willing to give up their U.S. citizenship to live elsewhere. Why?! Shouldn't our economists and politicians think deeper in the principles of capitalism?! Shouldn’t we restore and preserve the simple concept of ‘competitionism’?!

The United States has risen to the world’s number one superpower in less than two centuries since her independence. As a colony of the British Empire, the U.S. fared magnificently compared with many other colonies ruled by the British, Australia, Canada, India and many other Africa and Asia territories. The successful rise of the U.S. has to be attributed to the idealism that the early Americans and their leaders in the thirteen colonies held, typified by Thomas Paine (born 1737 Thetford, England and died 1809 in NY, USA, honored as the ‘Citizen of the World’) with his famous pamphlet, Common Sense, published in 1776, and political views of George Washington (1732-1799, First President 1789-1797, had Common Sense read to his revolution troops), John Adams (1735-1826, author of the Monroe Doctrine, while serving as the Secretary of State, 2nd President, 1797-1801) and Thomas Jefferson (1743-1826, author of the Declaration of Independence, 1776, 3rd President, 1801-1809). The Monroe doctrine, anti-colonialism and rejecting interference from European powers in the continent of America, is a foreign policy sustained by President James Monroe (1758-1831, 5th President 1817-1825, in his 7th State of Union Address). Promoting freedom (liberalism) and rejecting the entire system of power politics of Western Europe won over the debate against anti-federalists with a belief that geopolitically the U.S.’s security is assured by the surrounding oceans with no need of establishing a militaristic Constitution to make wars.

There is a reason that Thomas Paine is honored as a “Citizen of the World”. Paine sailed to America in 1774 as a young man with his belief of establishing a new order free from Monarchy and treacherous world politics. Common Sense offered Americans a clear argument for independence from Britain. Paine argued that America's attachment to Britain alone endangered its security. This thought logically followed from Britain's role in European politics causing heavy burden of taxation, alliances, and perennial wars demanded of Britain because of her continental involvement. This British connection tended "to involve this Continent (America) in European wars and quarrels, and set us at variance with nations who would otherwise seek our friendship, and against whom we have neither anger nor complaint….. Our plan is commerce, and that, well attended to, will secure us the peace and friendship of Europe; because it is the interest of all Europe to have America a free port." Paine predicted that France and Spain, both New World powers, would never be "our enemies as Americans, but as our being subjects of Great Britain. … " American independence would mean rejecting the British Empire and the European power politics and the U.S. would have no cause to defy other countries with demanding foreign policies. Americans achieved independence and then were convinced that the oceans assured the country's security without the Constitution's power to initiate war.

The 240 years of nation building and development has changed the world scene and the U.S. The Monroe Doctrine may have some influence on the early American foreign policy; it had little impact on imperialism and militarism prevailing in the continental Europe and elsewhere. World War I (1914-1920) is the evidence of that. Fortunately, the U.S. entered the WW I only half way (1917) after Germany violated its ‘Sussex Pledge’ – not attacking passenger ships. President Woodrow Wilson was reluctant to enter WW I even after ‘Sussex pledge violation’ and ‘Zimmerman Telegram Evidence’ – Germany urging Mexico to attack the U.S. to recover territory ceded to the U.S.  Wilson declared the war with the objective, “to vindicate the principles of peace and justice in the life of the world.” And he had a peace plan to establish a new order that led to the idea of League of Nations. WW I ended but the Imperialism and militarism did not. The U.S. did not ratify the ’Treaty of Versailles’ because the US Senate opposed to joining the League of Nations and ceding war powers of the U.S. to the League’s Council. WW I had a significant impact on Russia promoting her ‘Bolshevik Revolution’ into a new imperialistic nation. Japan’s engagement into WWI and her extended occupation of Northern China and into Russia sowed the seed of her imperialistic ambition leading to WWII.

Indeed, despite of the above noble objective declared by President Wilson, the U.S. and the world to some extent had not abandoned the notion of imperialism and militarism after WW I. The evidence was clearly presented by WW II. No doubt, the cause leading to WW II was imperialism and militarism advocated by Nazi Germany and Imperial Japan both believed that their military power would fulfill their imperialistic goal. In the end justice prevailed in WW II, Germany and Japan were defeated, but Communist Soviet Union emerged as a new Imperialistic block of nations. The U.S. emerged from WW II as the strongest nation in the world especially militarily. Unfortunately, militarism was breeding in the U.S. throughout the Cold War while confronting the Soviet Union. When the Cold War ended with the collapse of the Soviet Union (1989-90), a new imperialism, the U.S. had become the superpower with the most advanced army, navy and air force. She continues the responsibility of maintaining world peace, supposedly, replacing the old WW II imperialism then the Cold War imperialism with a new world orders. The U.S. did not practice colonialism nor hungered for occupation of foreign land (as evidenced by Okinawa and Porto Rico), however, she held onto militarism. The U.S. had constantly used military power in settling international issues. The U.S. had engaged many wars since WW II more so post Cold War, decades in the Middle East now posturing in Asia Pacific.   

The U.S. did not join the League of Nations and did not lead the United Nation well to hold justice for the world. Instead, she seems to believe in militarism despite of a clear fact that arms race in a nuclear world spells human destruction. The U.S. continues to expand the NATO after the collapse of the Soviet. Her Pivot to Asia policy essentially is using military force, through alliances, to curtail the rise of China. China’s rise in economic power is not imperialism nor militaristic (unlike the U.S., China has no military bases outside of China; like the U.S. China had no appetite in occupying foreign land). The perceived threat of a rising China is purely a classic example of a developing country raising her people’s standard of living through economic competition. Militarism has no place in solving economic problems or competition. Responding to China’s initiative in establishing the Asia Infrastructure Investment Bank, the United Kingdom has rejected the US opposition and embraced the AIIB, The current UK foreign policy towards China reminds us the ‘Common Sense’ philosophy applied to the US independence movement. (America's attachment to Britain alone endangered its security!)

Perhaps the UK would feel that her attachment to the U.S. alone might endanger her security and future prosperity; simply because the U.S. is conducting another militaristic foreign policy towards the Asian Pacific Region similar to the British Empire’s behavior 240 years ago. 

The U.S. does not seem to have a formula for new world orders but holding onto militarism, which not only encourage others to follow suit but also lead others to believe the world orders can only be maintained by military power. History showed that military power led to wars. The fact that the UN is ineffective in maintaining a new world orders is due to inaction against militarism. UN is powerless against militarism when its key Security Council members do not agree to an anti-militarism policy and a rigorous de-nuclear weapon program. The military power in the hands of a dictator is no different from in the hands of democracy. The end game is war. The only hope for mankind is that the civilized world must abandon militarism. All civilized people must promote that concept!
 

Foreign Policy is an important subject for US Presidential candidates. They have to demonstrate to the American voters that they are qualified to manage not only the U.S. domestic economy which is of the most concern but also able to deal with the foreign affairs in terms of protecting US national security and interests. The candidates often make tough talks to arouse patriotism during campaigns, but once elected, they soon face the reality and must adopt the ongoing foreign policy or make an adjustment if they know what to do. History bears this out. For example, candidate Obama made strong statements regarding the Middle East affairs, but President Obama, soon made revisions to his campaign promises as the reality dictated his decisions. Foreign affairs often change with time. A national leader must be able to make sound judgments as affected by events.

As China is rising to be a great power, the U.S.-China relation becomes one of the most important foreign relations to the U.S. The importance of the 2016 U.S. presidential election from the standpoint of leadership transition of the two nations is critical. The U.S. presidency is four or eight year terms whereas the Chinese presidency is five or ten year terms, hence the leadership or power transition of the two nations would occur at 2016 (US), 2022(China), 2024 (US), and 2032 (US and China). Any steady foreign relation has its inertia, leaders tend to follow the steady course and react to its course outcome. President Xi assumed power in 2012 and adopted an aggressive reform course to sustain China's rapid growth. Xi has successfully promoted China's diplomatic influence on the global stage and offered olive branch to the world especially to the U.S., whereas the U.S. in the past 2-3 years under Obama and a Clinton-Kerry transition has conducted a fuzzy (inconsistent and self-contradictory) China policy. On the one hand, the U.S. cultivates military alliances with China's neighbors to contain China and on the other hand increases interactions with China on all levels (even military) to derive stable trade and investment opportunities and economic benefits. The 2016 U.S. president-elect will be mandated to crystallize a clear China policy dealing with Xi. If a hostile relation were maintained, a bad Domino effect would take place through the subsequent leadership transitions (2016-2032) likely to produce a tic-for-tac foreign policy. Such a downhill undesirable relation may not be easily reversed until the Year 2032 when both nations have a new leader to take the opportunity to reconsider. Wouldn’t it be too late then?  

Republicans will be challenging the Democrats in 2016 to take back the White House. It may likely happen. While Hillary Clinton, the Democratic front runner, with her Obama legacy, questionable performance (Banghazi, etc.) and style (email, arrogance and hostility towards China) may not be a good choice, but the large number of the Republican candidates give American voters tough choices with their ‘tough talks’ with little beef. Since most of them had no foreign policy experience, American voters must pay attention to what they say in their campaign speeches and among debates, especially on China policy. Here, I will start with a collection of news reports from ChinaFile and other mainstream and organic media on candidates’ view on China and add with my comments for you to ponder on the China issue and think about which candidate can best steer the U.S.-China relation to a positive and fruitful course, in view of the fact the American public has lowered their favorable view of China over the past decade due to a biased mainstream media reporting.

Donald Trump, the leading Republican Presidential candidate, on November 10, 2015, in Milwaukee, commented on TPP: "It’s a deal that was designed for China to come in, as they always do, through the back door and totally take advantage of everyone.” This remark shows his knowledge as a businessman in understanding the importance of TPP but obviously not factual about China's strategy on trade and investment via bilateral agreements and her visionary scheme of ‘one belt and one route’ (trade routes) to promote world- beneficial development. The new U.S. president should seek this collaborative opportunity rather than ignoring it.

Chris Christie, the New Jersey Governor, said: "The Chinese don't take us seriously. If the Chinese commit cyber-warfare against us, they are going to see cyber-warfare like they have never seen before. .. On South China Sea, I will tell you this, the first thing I'll do is I will fly Air Force One over those islands, then they will know we mean business." It may be heroic when a candidate talks tough, but it is silly to say that the Chinese don't take us seriously. We see repeatedly that the Chinese not only take the U.S. seriously, she also tries very hard to get the U.S. to believe that China desires to rise peacefully. To ensure China to rise peacefully does not equate to instigate conflicts escalating to war. 

It is amazing that on a serious issue of China policy, we merely hear meaningless rhetoric such as, Xi should be disinvited and taken to a woodshed (Scott Walker, Governor of Wisconsin), I would offer Xi a Big Mac rather give him a pomp dinner (Donald Trump) and I would downgrade Xi's State visit to a working visit (Marco Rubio). No concrete idea or a new plan to work with a rising China came from any Republican candidate. No one seriously reflected whether it is China who does not keep her words to rise peacefully or the U.S. who keep instigating conflicts between China and her neighbors. South China Sea had no single incidence not even sea pirating obstructing maritime traffic. Historically China's sovereignty included large portion of South China Sea and the U.S. maintained neutrality or silent position for decades. The Philippines and Vietnam had begun squatting some islands and started constructions several years ago. China's recent landfill construction appear to be a counter action to the ‘squatting’ very different from the camp Schwab military base the U.S. is building at Okinawa. Sending naval ships to South China Sea and urging other nations to strengthen naval force simply force China to turn those island constructions for military use. This kind of China policy is neither productive nor honorable if world peace is kept in mind.
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Regarding Chinese economy and China's recent stock market drop affecting the U.S. stock market, the candidates had a lot to blame, Carly Fiorina on Federal Reserve, Chris Christie on Obama and Huckabee on Wall Street elites. "Because China's going bad it's going to bring us down too, because we're so heavily coupled with China," real-estate mogul Trump said on Fox News, "I'm the one that says you better start un-coupling from China because China's got problems." It seems that a special debate just focused on China issue nay be in order. Should the U.S. target China as an enemy? What concrete steps should an elected U.S. president take to guide the U.S.-China relation to a productive and mutually beneficial path? Since a hawkish position is likely to increase tension, and arms race leads to war, perhaps all candidates need to think through the rationales and the consequences of hawkish statements before addressing the public.
William Pesek in a recent article for Bloomberg View had said: “There’s a time warp quality to this sort of China bashing.” I wholeheartedly agree with him. As American voters, shouldn't we ask the above questions and assess our presidential candidates accordingly?!