American Values--what are yours?

What are American Values? We hear a great deal about family values, traditional values, Judeo-Christian values, even liberal values. But we hear hear these from the megaphones of pundits and the ubiquity of mass mailings.

I don't think any of those definitions are (at the very least by themselves) American Values. We're about to enter a primary season where 'values' of one stripe or another will likely start to surface again as candidates on both sides of the isle attempt to rouse their faithful.

Before the rhetoric flies and the TV commercials start, I think it would be good to hear about what you all think are American Values.

Post a comment, or send me an email. I think a collection of views on American values, and an ensuing discussion, might be a richer experience than what we can get from O'Reilly or the McLaughlin group.

Hope to hear from you.

Not a four-letter-word any more

In polite society there are four letter words. We all know them, even if we manage not to use them. Politics, however, has simplified this a bit. Whether in Washington or anywhere else in America, we are now down to a three letter word. Tax.

It may be heresy to say this, but both parties have found something to agree on: taxes are bad. The disagreement is one of degree, not of position. The easiest way to describe the Republican position is, “taxes are bad, especially on those who make the most money because they work the hardest, but necessary to maintain a strong national defense.” The Democratic position is slightly more convoluted, “Taxes are bad, especially on the poor who can least afford to pay. But taxes are also a good way to redistribute wealth.”

While I would like to say that neither of these messages is compelling, the Republicans have shined their “taxes are bad” message into a beacon to draw people like moths to a flame, and have sharpened their rhetoric to use “tax hike” as knife to cut down opposition.

So instead of saying that neither the Republican or Democratic position is compelling, I will say that neither is genuine, and has the interests neither of Americans nor America at its root. Like too much political rhetoric in the past twenty years, our language on taxation has been wielded to build a more successful party, not a more successful America.

For all the rhetoric and position-jockeying on taxes, there are a couple simple things I try to keep in mind when thinking about them.

First, taxes are where cheap talk gives way to real commitment. Nothing happens in the government (or anywhere else, as the charge for wireless internet connections at Starbucks illustrates) for free. A politician can talk up an idea all he or she wants, but until there is an action to put money behind it, it’s just a nice speech.

Second, the collection of what the government commits itself to becomes our social compact. Whether you believe government has a large or small role in society, taxes are the government’s commitment to a people that it will move the country in a given direction. A government’s ability to convince people to surrender their earnings to accomplish something is the government’s badge of legitimacy.

Statements that taxes are ‘bad’ or ‘good’ miss these two points entirely. People are willing to pay thousands of dollars for a business-class airplane seat because they feel there is value in what they are purchasing. This is the direction our national conversation on taxes must move: not whether taxes are good or bad, carte blanche, but whether the government is able to provide something of value to Americans for the taxes collected.

Any politician can demonize taxes—whether because they are too high on the wealthy, the poor, or the middle class—but the rhetoric of negation and using ‘tax’ like a three letter word will not create a stronger, safer, smarter, wealthier America. What America really needs, if we are to continue to be a strong, smart power, are politicians who are willing to recommit to a social compact with America.

An outsider's inside view of North Korea

Jon Wolfsthal, Senior Fellow at CSIS, just published a short piece that does an excellent job painting the picture of the challenges faced by the American inspection teams about to head to North Korea to verify the dismantling of North Korea's nuclear facilities. And Wolfsthal would know better than most, since he spent a fair length of time in North Korea doing dismantlement verification in the 1990s.

Globalization: Not as easy as it used to be

Globalization is getting more complicated. Now we have labor in the U.S. fighting it, and big business in India and China pushing it. The two sides are presented clearly in this piece from Wednesday’s Times (via Reuters). India is having a huge public debate (usually in the form of protests) over whether to allow ‘big box’ retailers to set up shop. Not Walmarts, Targets, and Best Buys—foreign companies are barred from establishing “multibrand” establishments.

There are actually a number of significant issues emerging: is rapid economic modernization worth the price of massive social upheaval? Can we expect a people (not just a few people) to sacrifice their livelihoods in the name of progress? How does a society balance competing demands when one portion of its population desires a risk-opportunity-reward environment against the wishes of a group that prefers security and stablity?

There are basic economic questions as well: if a big-box retailer can sell the same number of goods (at a lower price) while employing only two million people, and traditional retailers need 40 million to sell the same quantity, which is better for the economy? Tipping towards a big-box makes sense in a labor-scarce country like the U.S., but does the same make sense for a labor-abundant place like India or China? And it gets even more complicated when market-segments are considered. Wages for “knowledge workers” in both India and the U.S. (and all over the world) are going up, as the demand for their services outpaces the rate at which they are produced. Conversely, earnings for low-skill positions are flat or falling, as international competition combined with mechanization are eliminating positions across the globe. Said another way, can a labor-abundant India afford to give up millions of jobs, only to increase profit?

How should policy makers frame their thinking in this kind of environment? How does a society position itself to best weather the shocks, and capitalize on the opportunities of this type of economy?

A few places are getting it absolutely right: Singapore, Hong Kong, Dubai. These small city-states have the advantage of being small and knowing anything they achieve will be precarious: so they are constantly struggling to achieve. It makes them less ideological and more pragmatic than many other—larger—countries. They invested in education, shipping, and low-tech manufacturing 30 years ago. Now they are transitioning to high-tech, investments, banking, and other spin-offs of their small, highly educated populations. Of course, not everyone in Singapore, Hong Kong, or Dubai is highly educated. But the places are small enough—with enough central government control—that they can be highly selective about immigration, and they can fund education very well to encourage their own citizens to be well-educated.

Large countries—like China, U.S., India, or even Germany or Canada, have a more complicated problem because of a large, diverse population, spread across large areas, and (relatively) loose central control. The solutions that work for San Diego, might create disaster in San Antonio. The economy in Minneapolis looks nothing like the economy in Mobile.

My guess is that getting the U.S. (or India or China) to serve both parts of its population—the risk-taking, and the security-seeking—is going to take a bit of a two-step. Both Washington (or Beijing or New Delhi) ceding control to local levels for education and employment policy, but also a greater central-effort on job-training, unemployment benefits, health care and emergency-retirement.

I’m no expert though, and welcome thoughts, if you're willing to share.

What power?

Fred Hiatt at the Washington Post has sparked quite an exchange today in Post Global, with his piece arguing that the U.S. should let China know it has a choice: a friendly regime in Burma, or a successful Olympics next year. This precipitated a detailed response in opposition from James Fallows, The Atlantic’s correspondent in China.

Both men provide compelling arguments, but this discussion raises a broader question about American foreign policy since the end of the Cold War: if we are unwilling to speak with our adversaries, and we are unwilling to coerce our friends, what power does the United States have left?

Burma update, before the weekend

Following up on the post earlier this week about Myanmar/Burma’s unfolding saga, I should offer a quick update. Especially since for North America, Friday afternoon is on us, and the weekend’s distractions may soon begin.

President Bush and the U.S. administration did, indeed, back words with actions this week by ratcheting up sanctions against the military regime. There are some doubts about what impact the increased sanctions will have, but in fairness, I don’t think there is much the U.S. can do directly to influence the regime.

Instead of exploring the minutiae of the debate about whether sanctions are helpful or problematic, I’d like to highlight a few Burmese bloggers, brought to global attention by Richard Ehrlich of the San Francisco Chronicle (at least that is where I found out).

All the blogs he shares have at least a couple things in common: they are run anonymously, they are apparently run by people in Burma, and there is clearly a state of turmoil in what they are posting.

One, by an author claiming to be a woman is written in staccato snippets—posted all at once, but time-stamped and covering events over the course of a day.

Another is clearly more politically focused, with a photo collage on the front page including the caption “Stop Dictatorship Now!” Further down the page is an explanation/apology, “sorry i am closing down Cbox for a while for having miss used, and writing bad words. Thank you”. Most interesting are the photos posted to the site, and the link to a Picasa album of the processions of monks from Monday.

Lastly, there is a blog clearly maintained by a foreigner. It was mostly dormant for the previous 9 months (sounds familiar...) but was resumed shortly after the oil and gas price-hikes at the end of August. It gives a very lucid description of what has been happening, and puts it in a fairly clear context. I don’t know enough about Burma to know if it is accurate. It hasn’t been updated since last weekend.

On what may happen next: the U.S. has little influence in Burma, and has admitted as much. President Bush's statement seems directed at the largest country in the region, China, as much as our closest ally in the region, Thailand. Both have significant interactions with Burma--though it is unclear that either has great leverage. And neither has the same interest. A piece in the current issue of Foreign Affairs, by Michael Green and Derek Mitchell lays out the history, the current challenges, and a possible way forward.

By all accounts, the current protests in Burma began because of price-hikes, and concerns over acute economic conditions. This rapidly expanded into a broader political demonstration. Burma is not the only country with energy-related economic concerns, or political conditions that may change considerably with a small spark. With the world highly interconnected (see yesterday's post), it may be worthwhile to consider how to ensure global progress is not subject to major ups-and-downs caused by volatility in a relatively small number of places.

The coming age of thirst

If there was ever a need for the reminder of just how interconnected the world is, there is a piece in today’s New York Times (yes, I’m very happy Times Select is defunct) that helps bring it home.

China is consuming its freshwater at runaway speeds. In the words of Fred Pearce, “If northern China were a separate country, it would be one of the most water-stressed in the world.”

China’s industry consumes 3-10 times the water of comparable industry in the developed world, according the Times article. China’s farmers are siphoning water out of the ground to sustain crop-growth in semi-arid parts of the country. The easy answer would, of course be to stop farming in dry areas, and to ratchet up standards on manufacturing to use water more efficiently (see what a Coke-WWF partnership is striving towards, here).

If the solutions were easy, there wouldn’t be much need for a discussion.

Here is my guess at some of the problems China is facing in solving this challenge:

1. Modern, developed-country standards for manufacturing are more expensive, are probably less labor-intensive, and probably require a more sophisticated maintenance system than current operations. So to make this work would be to actually reduce the number of jobs available, and to increase the product cost (because in Northern China, labor is still cheaper than capital). To be environmentally responsible, then, might mean putting industry out of business.
2. Maintaining a near-self sufficient farming base gives China two things: first, a huge job-cushion. If a person can’t find a job, but has food (because he or she is a farmer), there isn’t the same kind of urgency as there would be if there were no farmers; and second, it gives an abundant supply of low-cost food for China.

A significant change in either of these policies exposes China to great uncertainty about the future, and likely unrest of some form or another. And all of this is independent of China’s challenges with providing its people (and economy) enough electricity to satisfy increasing demands from an increasingly affluent populace. Currently, most of that growing demand is slated to be satisfied by newly built coal-powered generation plants.

To this point, the problems have all been China-related. The connections to the world are numerous. Some overt, and others more subtle. Starting at the above the waterline issues, and plunging quickly:

Global food prices. If China changes its policies about domestic water use for farming, it could greatly impact the global supply of grains like corn, rice, and soybeans. This would be great for other farmers around the world who would receive higher prices for their crops. But it would be bad for global consumers—especially poor urban consumers—who have to spend relatively high portions of income on staple foods.

Global trade. European and U.S. trade imbalances with China would likely decrease, as our farmers would be able to sell their crops to China. If China’s industry was using more water-efficient processes, the per-unit cost would likely increase as well. This means that the American consumer would likely buy less (or the factories would leave China all-together). On the surface these two seem beneficial, but the ripple effects would likely trend negatively. Job-loss in rural northern China would require the government to spend more of its money on social-welfare, job retraining, or educational programs. And since we’re talking about programs for a few hundred million people, these would be significant expenses. There may also be programs to support grain-purchase subsidies, to keep the prices low for the urban poor. This means the Chinese will have less money to pump back into the U.S. economy in the form of buying our government debt. This leads to downward pressure on the dollar, which leads to an increasing interest rates and fears of inflation.

To be clear: China is going to do what is in China’s interest, not in the U.S. interest. But if the U.S. wants China to deal effectively with the water problem it is facing (which is, incidentally, the same water-problem the U.S. faces, by the way), we will have to find a way to work with China to use less water, grow or buy the same amount of grain, and do them both without significantly disrupting their current pace of economic growth.

New plan

The blog has been on life-support for almost a year now. Rather than mothballing it, I thought I'd make a couple of changes and take another run at it. The biggest change is that I'm moving out from behind the curtain. It's just me posting, so no real purpose in veiling my identity. It'll still be the same topics and format though. If anyone is still reading, I'm always interested in comments.

And, since I work in a sector that does international affairs research and writing, I should add one thing: these are my views. Only my views. Comments are not. Hopefully that will keep things interesting.

John