— from the office of U.S. Rep. Rick Larsen —
Rep. Rick Larsen(WA-02), the Co-Chair of the U.S.-China Working Group, issued the below statement regarding the tariffs against Chinese products which went into effect last night [July 5, 2018].
“In a tit-for-tat trade agenda, it is the local hard-working folks who feel the brunt impacts on their lives. We will begin to see these effects due to retaliatory tariffs against U.S. products.
“This administration’s tariff policy threatens local jobs and the economic stability of Washington state, the most trade dependent state in the country.
“There are better ways to address the legitimate concerns about the trade balance with China. One way is through bills like the bipartisan Trade Authority Protection Act to impose Congressional Review of trade actions by the administration.”
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The Honorable Rick Larsen:
Not defending or opining as to the administration’s trade strategy vis-a-vis China but I have to ask if you considered the possibility that this isn’t really about trade imbalances per se, but more about controlling the future levers of global social/economic and militaristic development.
ISSUE 1
Marty Feldstein wrote a piece last week regarding the topic of the administration’s approach to trade imbalances and rightly pointed out that richer (per capita) countries are naturally going to buy more and thus there’s a built-in structural cause for continued deficits.
I would ask him the same question I’m putting to you and wonder aloud: for whom do you and Marty speak?
Consider the below:
What may really be at issue here, trade imbalances aside, is the conclusion that the US needs to wage a silent economic cold war (with trade imbalances acting as a cover for the administration‘s longer term goals); of course the standard refrain is that we do not intend to “contain” China but I would argue that this is beyond naive and that that is exactly what’s happening albeit in a more outwardly acceptable manner.
The below is what’s truly at stake for future global development and for reasons clarified below, good arguments are being made to suggest that this cannot have a win-win outcome.
A dose of reality:
– The development and launch of 5G and establishing its global standards is a $12-20+ trillion dollar annual market; it’s going to be done by China or the US. Only one global standard will rise and dominate. China’s outreach aims to lay the foundations globally for their winning and this is far more important than the traditional economy and labor matters of which you speak.
– AI development and global automation from manufacturing to the service sector;
– Space X and Technological Control of Space and commercial development of same including the inevitable military angle that is already well underway in China and being further refined and developed here and there, both, and also in Russia.
China runs a relatively closed, top-down command economy under an authoritarian regime. The need for consensus and reconciliation of views do not hobble its ability to act, fund or steer vast sums (approaching $3 trillion in cumulative trading profits of money made in trade with us) towards state subsidized strategic initiatives. But for the vague retort that such a controlled system lacks the seeds for greater innovation, it’s extremely effective; moreover, if our high-tech corporate institutions give away their intellectual souls (IP) to the Chinese Politburo in exchange for heavily regulated and limited access to their consumer and corporate markets, who needs to be innovative? You simply steal or blackmail the R&D of your competitors. It’s been happening for 20 years even before China’s admission to the WTO which, by the way, continues to classify them as a “developing” nation with all the unequal benefits derived therefrom. Amusingly, each country gets to decide its own classification. Surely, a WTO confidence builder.
Is it realistic to believe there’s a win-win outcome in our competitive future encounters vis a vis China or Russia? Perhaps something in between win-win and zero-sum but still not defined. Either way, “competitive” is a serious understatement as an adjective.
ISSUE 2
What will surely destroy Washington’s and most every other State’s labor markey and general economy as well as greatly destabilize American society?
In addition to the above nation-changing high tech challenges confronting us, the more immediate destabilizing and society-altering changes forthcoming have little if anything to do with the traditional economy to which you refer. I’m referring to jobs– the loss of them.
Why is congress not sounding alarms about the mass displacement of the labor force that is happening and will greatly accelerate on much larger scales between now and the next 10-20 years?
Do you think automation and AI won’t develop at lightening speed (as it is now) outside the US thereby forcing the hands of American corporations in order to remain competitive?
Read Dr Kai-Fu Lee’s white paper on the matter and his projected timelines…it’s literally around the corner. His doctoral advisor was the famed Raj Reddy at CMU …leading AI computer scientists who together with a handful of their colleagues laid the very foundations for Google’s Deep Learning AI.
Google didn’t innovate. They simply made use of parallel processing in order to be the best search engine out there and then just happened to be at the right place with the already established computational infrastructure to deliver the best optimizing computation then available which led to their Deep Learning AI architecture and mind-boggling crunching capacity. FB, Amazon et al jumped on board.
A society based on each of us being codified and all of our transactions algorithmically correlated, controlled and monitored. That’s what’s here in large part and will be rolled out more and more annually as refinement and development accelerate. China’s use of facial recognition technology (Amazon sells some of the best) has already been widely implemented and launched throughout their society in truly Orwellian fashion.
Jobs? Do you think UBI will satisfy the centuries-old ingrained American work ethic and satiate the dreams and aspirations of tens of millions of unemployed Americans throughout the country (displaced via automation). Even loan officers will become irrelevant and replaced as well as many tasks that can be unbundled in my line of work (attorney)? Neither manufacturing nor the service sector will be spared.
Is congress planning for this inevitable outcome?
These are the issues that will rock the boat. I don’t hear or read about them being discussed in Congress much less Congress generating possible solutions to prevent the social unravelling that will ensue.
So, yes. I hear your points but I can’t help but wonder if you’re worried about the least of our concerns and really in the wrong domain talking about what is already, practically speaking, a past concern while standing in the present and being confronted with an entirely different animal.
To recap: 2 issues:
1. technological supremacy with value and wealth unlike that which any US Silicon Valley industry has ever experienced to-date in a zero sum or close to a zero-sum competitive economic and high-tech war (since our real competitors are authoritarian regimes zero sum is clearly the applicable model); and
2. Jobs? Mass displacement of America’s labor force! Risks: mass destabilization of society and the destruction of a centuries-old American work ethic in how the common man and woman define their self-worth, value and reason for being (whether we agree with such definitions or not is beside the point).
Whether this is dystopian or not is subjective interpretation. Nevertheless, the facts speak for themselves and the above is happening more rapidly than most now assume.
Hoping for the best, but planning for the worse.
Respectfully,
Chris Graham
Sent from my iPhone