Beating Drums and Clanging Gongs

On CNBC’s Squawk Box this morning (May 18, 2018), Leland Miller, CEO of China Beige Book, a consultant company specializing on the Chinese economy, was discussing the current deplorable state of the US trade negotiations with China. He stated that the Trump team is split between getting a short-term win versus waging a long-term battle. The short-term win would be a deal to reduce the automobile tariff on US cars in China and a reduction of the US trade deficit with China. The long-term battle would be to develop a sustainable trading relationship between the two countries, elimination of the unequal treatment of foreign companies in China and the protection of US intellectual property.

Mr. Miller felt that gains on deficits and tariffs would impair our ability to achieve a more durable and sustainable trade relationship with China that would, incidentally, resolve many of the short-term issues. (Many economists believe that the Trump Team’s objective to reduce the trade deficit is misplaced since the deficit is a result of US fiscal policy more that predatory trade practices – but that a different discussion). He further mentioned that Treasury Secretary Steven Mnuchin is currently in charge of China policy for the administration but that this hadn’t been true several weeks ago and may not be the case in the future.

All of this squabbling between trade hawks (US Trade Representative Robert Lighthizer and White House advisor Peter Navarro) and globalists (Secretary Mnuchin and Director of the National Economic Council Larry Kudlow) struck me as very counterproductive. There well may be squabbling and infighting on the Chinese policy team (although this is very difficult to determine given the opaqueness of the Chinese regime) but there is no doubt about their strategy.

In a very interesting paper by Alice L. Miller of the Hoover Institution (Only Socialism can Save China; Only Xi Jinping can Save Socialism) she describes the implications of the reforms instituted by the 19th National People’s Congress (NPC) of the Communist Party of China (CPC) in October of 2017, not the least of which was the elimination of term limits for Xi Jinping’s presidency and the inclusion of Xi Jinping Thought into the preamble of the constitution of the People’s Republic of China (PRC) (its pretty easy to change the constitution of a dictatorship as long as the dictator agrees).

But the most important aspect of the reforms was that the purpose of the reforms was to help achieve the centenary goals of China, the two centenaries being the 100th anniversaries of the founding of the CPC (2021) and the PRC (2049). 2021 may not appear to be a very long-term goal until you understand that the goal was established by Deng Xiaoping in 1982. The goals are updated at the NPCs to reflect changing circumstances but the broad objectives of the goals remains the same and, to quote President Xi, “it will take more than beating drums and clanging gongs to get there.”

The 19th party congress instituted the most extensive reforms since Deng Xiaoping citing “a new era of socialism with Chinese characteristics.” The New Era denotes the fact that China has largely achieved the goals laid out for the centenary of the founding of the CPC and that Xi and the party are now focused on achieving the greater goals to be achieved by 2049.

This represents a challenge to the United States, not because China is an adversary (although it may be in the future) but because the United States cannot elaborate what its goals are for 2019 let alone 2049. Where do we want to be in thirty or fifty years? What kind of goals would we want to establish? What kind of challenges (including China) might we face? Do we have confidence in our ability to achieve these goals and face these challenges?

But America never had long-term goals. Alexander Hamilton may have had a better vision of America’s industrialized and federalized future than most of the Founders but his vision was not the consensus. He was bitterly opposed by Jefferson and other Founders who envisioned a rural, agrarian America with very limited government. Manifest Destiny is more apparent in retrospect than it ever was during our continental expansion.

But throughout it all we held true to our principles. We even fought a great Civil War to assure that our actions and policies were in alignment with our principles. But right now, when we are facing great challenges, we are doubting the very Founding Principles that made us what we are today. The progressive vision is not based on American principles but on Marxist principles (and look to what happened to the Soviet Union). And the current populist vision espoused by President Trump and his supporters is only a pale simulacrum of the true America.

In America we seem to have nothing but beating drums and clanging gongs. Between Fox News and MSNBC there is nothing but round the clock coverage of President Trump both pro and con (which he loves because there is no such thing as bad publicity). It is time to focus on the principles that made us great because it is only those principles (and not today’s politicians) that can assure our future.