Biden Prepares to Hug the Panda (Finance Friday)
TPP gets more initials and applicants
Fresh on the heels of undermining American power through humiliation in Afghanistan, Joe Biden is compounding that failure in other regions of the world. There are strong signs that he is going soft on China.
The administration dropped charges against Huawei CFO Wanzhou Meng, who was being held in Canada at U.S. request. The Trump administration had sought her extradition for facilitating the evasion of U.S. sanctions on Iran. The indictment also signaled aggressive moves against Huawei more broadly; the company is China’s version of Apple, Qualcomm, and the NSA rolled into one, but with much better industrial espionage capabilities. In an effort to be relevant to the China discussion, Trump’s Commerce Secretary, Wilbur Ross, accidentally discovered a bureau at his agency in charge of export controls and used them aggressively to deny Huawei U.S.-derived technology, even if it came from Japan, Korea, Taiwan, or other bigs from the previously and soon-to-be-again boring world of semiconductors.
Although Biden later denied it as part of his September-long fusillade of lies about foreign policy, he asked Xi Jinping for a summit and was rejected. This unrequited flirt was a huge loss of face for the president. It also marks a reversal of roles: previously China was usually the party seeking senior-level meetings even if they produced nothing—in fact, especially if they produced nothing. (In our isolated, China-skeptical part of the State Department in the 2000s, we had a saying that, “Commies love pageantry.”)
Xi however did use the call to his advantage, demanding that Biden release Meng. Biden snapped to, allowing the release in exchange for a vague statement from her of impropriety—a deal no one else on Earth could get from the Justice Department. Meng returned to a heroine’s welcome in China and Canada got back two businessmen who were being held hostage by Beijing. The rest of the Free World got nothing. Biden didn’t even mention incarcerated publisher Jimmy Lai or any of the other political prisoners in the country incarcerated as part of Xi’s left turn.
A reporter asked Secretary of State Anthony Blinken whether the trade “…has done anything to jumpstart progress on other key issues in U.S.-China relations.” His eventual response: “…that’s totally separate and apart from any other issue that we may be engaged in with China or with anyone else.” This answer breaks a basic rule of effective diplomacy, which is to stick to plausible lies.
The deal came on the heels of Biden’s address at the United Nations in which he said the USA is not “seeking Cold War” with China, glossing over the fact that China has started one with us.
Then, Commerce Secretary Gina Raimondo said she would seek to improve U.S. business ties with China. She told the Wall Street Journal, “It’s just an economic fact. I actually think robust commercial engagement will help to mitigate any potential tensions.” To anyone who has paid attention to Beijing’s increasing aggression in the last two decades as it has accrued wealth through our foolish trade practices, Raimondo’s “economic fact” is actually a fiction: the soothing tale that making Beijing rich will make it a friend. Aside from the Chamber of Commerce and House of Bush denizens Hank Paulson and Bob Zoellick, few still believe it—except apparently the JV team populating the Biden administration.
Rounding out that team are Wendy Sherman and John Kerry. Sherman, the deputy secretary of State, was in China in July and in retrospect was likely laying the groundwork for the give-away of Meng. Sherman excels at this form of diplomacy, having in 2015 given Iran billions of dollars in the most lopsided deal since the Indians sold Manhattan to the Dutch for beads. John Kerry, who serves jointly as the administration’s climate czar and as the special envoy for marrying rich women, recently said he will soon travel again to China. While that sounds like a threat, he didn’t mean it as such. It revives suspicions that Biden will cut a deal with China over climate change, the progressives’ religion, while ignoring China’s other transgressions. To that effect, Kerry in recent weeks downplayed Beijing’s detention of more than a million Muslims in political camps and has lobbied against a bill banning the import of products made from slave labor in China. His wife, who keeps him in finery and pays for the yacht, reportedly has millions in investments in China. Biden is desperate for a diplomatic breakthrough after a miserable eight months in office and a big deal with China might fit the bill—even if everyone knows that China will never follow through on promises that cost more than nothing to implement.
The big question is whether the tariffs Trump implemented on Chinese imports will be cut, and whether export controls placed on high-tech goods will be eased. In a sense they are already in decline since Biden has announced no new tariffs or controls, and exporters have a way of wiggling around some restrictions given time.
Notice also that any military refocusing on China, which was supposedly a reason for Biden’s incompetent withdrawal from Afghanistan, is nowhere in the picture. Washington is about to spend an enormous amount of money we don’t have on things we don’t need, but reallocating a few dozen billion from the bloated defense budget to plus up the Navy and Air Force in the Pacific isn’t even part of the debate.
Beautiful Beautiful Oil
There is a funny episode of the Simpsons in which Lisa expresses alarm at an oil spill on “Baby Seal Beach.” Homer’s response: “It’ll be okay honey, there’s lots more oil where that came from.”
Quite right, although there is less being produced in the USA than during much of the Trump administration. While oil production dropped sharply in 2020 due to the pandemic, even as GDP has rebounded to pre-pandemic levels, domestic oil production has stagnated. The reason is the Democrats, who have sought to increase energy prices in sacrifice to their pagan sun god, whose anger causes climate change. (Sticklers will note that virgin sacrifice is more customary, but supply is limited, and flexibility is a hallmark of religions that stick.) Oil is bad and Joe Biden has sought from the first day of his administration to make production harder, beginning with his cancellation of the Keystone XL pipeline.
With Murban crude now approaching $80 per barrel and a gallon of mid-grade gasoline still at an eye-popping $3.55, something must be done. Off goes national security advisor Jake Sullivan to the Middle East. His trip included a visit with Saudi Crown Prince Mohammed bin Salman, whom expert diplomat Biden antagonized during the campaign by promising to punish Saudi for the 2018 killing of a disgruntled former employee who had become an Islamist activist employed by the leftwing Washington Post. Officially, the trip was to discuss the long-running Yemen War. In reality, the trip was to beg Saudi Arabia to produce more oil and bring down the price. It failed.
Not to worry: oil always drops during U.S. recessions, and Democrats have a plan to cause one. The economy is already slowing and tax hikes, including higher levies on investment, should eventually put an end to the last part of Trump’s legacy: economic prosperity that benefitted everyone. The Democrats’ spending blowout may mask this outcome temporarily since government expenditures are included in the calculation of GDP, but that mostly will fool only Paul Krugman.
One China, Fun China?
China announced it wanted to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. These guys really need a better name. You’ll recall there was something called the Trans-Pacific Partnership, which was supposed to be an East Asian-North American trading bloc sans China, but we weren’t allowed to call it that. As with most giant trade deals, it was likely to export much of what is left of U.S. manufacturing overseas, especially to Vietnam, and provide little benefit to the USA. Naturally everyone from Hillary Clinton to the Chamber of Commerce was gaga for the pact, but Trump pulled America out. This pact with extra words in its title is the successor. The Wall Street Journal editorial page runs hourly op-eds warning of our de facto surrender to China if we do not rejoin, but apparently we’re not the only ones who doubt this pact will lead to much benefit to China, whether it is in or out. Member nations have been cool to Beijing’s bid for membership, and Xi is inflicting more trauma on China’s businesses each month than could ever be recovered by lower tariffs.
Taiwan admirably chose recently to complicate the situation by proposing to be a member itself, even if it had to use the Inspector Clouseau-like disguise of identifying as the “Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu” that the nation of Taiwan uses for membership in the World Trade Organization. Beijing predictably flipped out, with a spokesman declaring, “There is only one China in this world, and Taiwan cannot be separated from China.” (See my previous comment about sticking to plausible lies.)
As a former senior Singaporean official remarked to me about Taiwan’s bid, “It will not succeed but it is a good counter to China’s ploy of joining the CPTPP to divide it.”
Sacré Bleu
France promptly surrendered to reality and returned its ambassador to the United States after a brief withdrawal. He returned on Thursday, preceded by armed Americans establishing security, as is the style. Paris had recalled the envoy after Australia decided to cooperate with Britain and the USA on replacement submarines instead of the French. One problem: like French tanks, the subs have four speeds for reverse, but only one for forward. The one for forward is in case they are attacked from the rear.
One argument France deployed in protest of Canberra’s switcheroo was that France has possessions in the South Pacific and wanted to cooperate on defense. This brings to mind an opportunity. If only we had the CIA of the late 40s and early 50s, which understood political warfare, and acted to help communists lose elections in Italy in 1948 and bounce from power a proto-commie in Tehran in 1953 who risked pulling Iran behind the Iron Curtain. That CIA would understand what clearly must be done: liberating Tahiti and other French possessions in the picturesque region from France.
How hard can it be? The French high commissioner in New Caledonia is a dude named Patrice who looks like the head waiter at a Parisian tourist trap. You can’t make this stuff up. Personally, I’m willing to sacrifice and lead a new U.S.-funded Polynesian Liberation Front. We’ll set up shop at the Four Seasons in Bora Bora and plot revolution over mai tais.
Who can deny that Polynesians would be better off on their own or as part of the USA? Surely we can all agree on the need to end this last vestige of racist European imperialism. And as with the demise of Soviet imperialism in Grenada in 1983 at the hands of Americans, this act of liberation would be a great booster to American morale and restore confidence in our dysfunctional national security establishment.
Go Woke Go Broke
On Thursday, self-professed leaders in the “outdoor industry” declared their support for Joe Biden’s plans to raise energy costs to fight climate change. With maximum sanctimony, they described themselves as “at the front lines of the fight against climate change because of supply chain disruptions, the shifting consumer environment, and the impact of extreme weather events on the American outdoor experience.”
Idea: shut up and make more fleece vests. Included among the apparently leftist companies are: 22 Designs, BioLite, Burton, Carhartt, Eddie Bauer, evo, Hydro Flask, K2 Sports, Klean Kanteen, L.L. Bean, MiiR, NEMO Equipment, New Balance, Nite Ize, Oberalp North America, Osprey, Outdoor Afro, Orvis, PacWesty, Patagonia, PeopleForBikes, Public Lands, REI, Ruffwear, Simms Fishing Products, Snow Peak, Specialized Bicycle Components, SRAM, and Toad & Co.
I haven’t heard of most of these companies and assume that many are irrelevant boutiques run by aging hippies. I worked at Eddie Bauer as a sophomore in college in 1994, and it’s been downhill since then. But New Balance? Did they turn Democrat when they started making shoes outside of the USA?
Once again we see the work of leftwing marketing departments, afflicted by insularity, ignorance, and bigotry against non-progressives. Perhaps they reason, not without logic, that they can attract leftwing consumers without losing the docile majority that hasn’t drunk the kool-aid. It’s the same with wokeness. Put simply, there is a perceived cost to not pleasing progressives given the volume of their self-righteousness, but conservatives never boycott anything or complain about lefty corporations financing socialism. Libertarians think that private organizations are entitled to their opinions and wrongly believe that the market will work all of this out. It won’t.
What is really needed is a future Republican Congress to haul boards of directors before the cameras and patiently ask them to explain why their companies are advancing leftism with shareholder capital. The lemmings in today’s corporations will fold like a cheap lounge chair. As I’ve previously argued, a Republican House should bring back HUAC. Conservatives must paradoxically get comfortable with the idea of using their political power—the power of government—to backfoot their opponents. Or lose the culture war and then the country.
GB News
Speaking of fighting the culture war, keep an eye on GB News in Great Britain. It has a great lineup that includes captivating pros like Nigel Farage and Colin Brazier, among others. I’ve been on both of their shows. Britain needs a place where conservative voices can be heard by the public. The lefty, boring, oh-so-important and deeply concerned BBC, which is also government funded and anti-American, isn’t going to fill that role, even on rare occasion. I had high hopes a decade ago for Sky News UK, but unlike its iterations in Arabia and Australia, the British version of Sky News is just a poor man’s BBC. I’ve enclosed a captivating short video by Brazier about why he as a widower with six kids took the risk to join the upstart network, as well as a hit by the Center for the National Interest’s George Beebe on Brazier’s show. All we need is an activist minority to fight for Western Civilization, even against all odds, in order to prevail, and these guys are part of the fight. You can watch full episodes on their app or select clips on their YouTube page.
Have a great weekend!