National Security

The Seriousness of Taiwan

    The Biden administration has a lot of priorities - some self-generated; some generated by Nancy Pelosi's House; some imposed from outside: completion of Donald Trump's withdrawal from Afghanistan; trillions of dollars of spending for "Coronavirus relief" and "Infrastructure"; the accompanying deficit and tax increase; the chaotic border with Mexico; expansion of the California voting system; climate change; the Iran nuclear deal; Russian hacking and threats to the Ukraine; Chinese global ambitions; packing the Supreme Court; statehood for the District of Columbia.  The Coronavirus - which was largely responsible for his predecessor's defeat - is a place apart in terms of human suffering, economic impact, and politics.  The status of Taiwan may well emerge as the second "Top Priority". 

    Some background:

        - Taiwan's original inhabitants have been overwhelmed by successive waves of Han Chinese immigrants beginning in about 1600, with major expansions in the mid 1700s and through the 20th Century, with over 2 million refugees accompanying the arrival of Chiang Kai-shek's Kuomintang in 1949. Today, Taiwan's population of 24 million is about 95% ethnically Han Chinese. That said, there is a distinctive Taiwanese identity which was reinforced in the years following 1949, during which the ruling KMT saw Taiwan as a lesser province of China and a temporary refuge.  

    - Taiwan was an important target during the colonial period: Dutch from 1624 to 1668; Qin Chinese from 1683 to 1895; and Japanese from 1895 to 1945.  Following World War II, Taiwan was returned to the control of Chiang Kai-shek's Republic of China, a decision resented by many of the Taiwanese.  Of lasting impact was the "Incident of February 28, 1947",  in which the KMT-led Republic of China killed tens thousands of Taiwanese to quell an anti-government uprising. 

    - With both the communist People's Republic of China and the KMT-led Republic of China espousing a "One China" policy, the United Nations General Assembly voted Taiwan out in 1971, giving the Security Council seat to the PRC.  In 1979, the United States under president Carter switched our recognition from Taiwan to Beijing. Since that time the American Institute in Taiwan has served as the unofficial embassy, and our attention has been focused on Beijing.  

    - During the period of estrangement, Taiwan has developed a vibrant democracy and a robust economy.  While the KMT exercised one party rule after its retreat from the mainland in 1949, a 1979 crackdown on pro-democracy advocates in the city of Kaoshing served as a watershed. A National Assembly was democratically elected in 1991; the first direct election of a president occured in 1996 with a KMT victory; the Democratic Progressive Party presidential candidate defeated the KMT candidate in 2000, for the first peaceful transition of power, and was reelected in 2004; KMT candidates won in 2008, and 2012; the DPP in 2016, and 2020. The KMT remains more favorable toward reunification but the overwhelming consensus is that status should be determined democratrically by the Taiwanese, and the younger generations are aligning more with the independence-committed DPP.  

    - Along the way, there have been periodic confrontations with the PRC across the 110 mile wide Taiwan Straight - at the Yijiangshan Islands in 1950 (PRC capture); at Quemoy and Matsu Islands in 1958 (PRC repelled); and with the deployment of the USS Nimitz supercarrier by president Clinton in 1996. Over the past year the Chinese have been conducting an escalating series of flights by reconaissance aircraft, fighters, and bombers near Taiwanese air space - including a simulation of an attack on the US bomber base on Guam; presidents Trump and Biden have responded with a series of transits by US destroyers throught the straits.   

    The Trump administration took a series of steps to move in the direction of Taiwan independence: authorizing sales of drones and missiles; sending a high level delegation for talks; loosening guidelines for state department and other government contacts with the island. To some surprise, the Biden administration  has followed suit, inviting Taiwan's de facto ambassador to the inauguration, sending its own high level delegation to Taiwan, endorsing broader contacts, and advocating Taiwan's admission to  the World Health Organization.  Meanwhile, China's negation of "one country; two systems" in Hong Kong has done much to harden the attitude of many Taiwanese against eventual absorption. 

    The rhetoric on both sides has become more inflexible, from  Xi Jinping's New Year's address stressing that reunification was inevitable "by all neessary means" to the exchange in Anchorage between Secretary of State Blinken and China's top diplomat Yang Jiechi. The current visit to Taiwan by former Senator Dodd and two former deputy state department secretaries is designed to further demonstrate the Biden administration's resolve. 

    Our Pacific rim allies would be devastated if we allow Taiwan to be incorporated unwillingly into China.  Optimists would say that Xi Jinping will play the long game, that he will exhibit the Taoist philosophy of victory by maneuver without combat, and that he will not jeopardize China's global financial and political rise.  Pessimists would say that the Chinese hawks will be emboldened by the absence of any real consequences for their actions in Xinjian and Hong Kong, that the full independence advocates in Taiwan will be emboldened by their support from the US, that bipartisan anti-China sentiment in the US will keep pushing the boundary, and that miscalculations are likely.  

    Taiwan is the most high risk element in our relationship with China. There is nothing that we can do to change Hong Kong or help the Uighurs.  Fixing the trade imbalance, competing with the Belt and Road, and all of the other things in our China relationship can take place in offices or commercial settings and will play out over a long time.  (Well, there is the South China Sea.) Conflict with nuclear-armed China over Taiwan is a quantum different matter. Lets hope that the Biden administration is up to the test; the status quo is OK.  


    One canary in the coal mine: Taiwan Semiconductor is the world's preeminent computer chip manufacturer, accounting for 22% of the world's supply. There is good reason that Biden's "infrastructure" bill contains $50 billion for the domestic semiconductor industry.  This writer also believes that a portion of the current global shortage of computer chips reflects purchasing agents increasing their safety stock requirements. 

bill bowen - 4/15/2021



Bringing Our "A" Game

    The issue of the day  - as clearly framed at the March 18-19 meeting of top U.S. and Chinese and officials in Anchorage - is whether China's ascendency over the past four decades is matched by an inevitable decline of the United States.  The New York Times professed  in 2012, that the centralized authority of the Chinese planning system was superior to messy Western democratic capitalism, and a quick Google of "Chinese System Superiority" provides a flood of similar sentiment today.  The tone of Chinese Foreign Affairs Commissioner in his 20 minute attack  was reminiscent of Nikita Khruschev's "we will bury you; your children will live under communism" rant in 1956.  Whereas Russia had a relatively small population and an economy based heavily on oil, gas, and wheat. China has more than four times our population and a diverse, robust manufacturing economy. The implications for American primacy are worth contemplating.

    Those of us born in the United States around the end of World War II have enjoyed an unusual period in world history, with one country representing about 5% of the world's population, setting up the management structure and writing the rules - particularly since the collapse of the Soviet Union in the 80's. We have occasionally found limits - the Vietnam War; the 2008 economic crisis - and we have relied on allies - particularly western Europe, Japan, the British Commonwealth, South Korea - but it has been our game. We have run the international banking system and enjoyed the global currency; English is the de facto international language (for civil aviation for example); when things go wrong we have deployed our overwhelming military strength.  American companies have dominated the age of the internet. Our farmers feed much of the world. At the moment this legacy remains ours, but the Chinese have overtaken us in patents issued and will soon in Gross Domestic Product (although we remain far ahead per capita.) With this competitor we will need to bring our "A Game" 

  The editors of the Wall Street Journal are fearful that, despite a hostile assessment of China  and some rhetoric matching the perspective of the Trump administration, Team Biden (with many of the same players) will revert the Obama administration's feeble response to challenges from Russia (Crimea; eastern Ukraine), China (cyber attacks; intellectual property theft), and Iran (Suleimani's local wars; the nuclear deal on which the WSJ believes that John Kerry was "fleeced".)  Beyond some specific decisions and rhetoric, there are a few things to watch to see if what results will be China achieving near parity with a still  vibrant America or whether our paths are going in the opposite directions.  

    1. Whether our politicians and our thought leaders can objectively analyze strengths, weaknesses, and recent events. The Trump administration cleaned up the mess that it inherited in the Middle East, and shifted the national attention to China with a major emphasis on trade - a  subject of central importance to the Chinese and leverage for us. The fact that trade was a Trump focus cannot be allowed to put it off limits for the Biden administration. The fact that Trump was more active than recent presidents in supporting Taiwan should not result in a retreat by Team Biden.

    2. Whether we can end our flurry of woke self-flagellation that has been driven by several high profile killings of Black males by police and the NYT-driven narrative that our society has always been racist and sexist.  Chinese propaganda draws heavily on Black Lives Matter talking points and stresses  the moral bankruptcy of the imperialist West. US advocates need to move beyond "consciousness raising" to proposing solutions. The American model is the embodiment of Enlightenment thinking; generations of legal immigrants have come here successfully seeking liberty and opportunity; we are a "Work in Progress", but far superior to the dehumanizing, centralized control model of the Han Chinese. If we are to remain the world leader, we need to have confidence in our principles. 

     3.  Whether we can get control of our mushrooming debt.  The self-absorbed Baby Boomers (ages 57 to 75) and Millenials (ages 41 to 56) have discovered that they can have guns, butter, and low taxes by passing on the bill to Generations X, Y, and Z. The Coronavirus relief bills have provided a break with the traditional American values of fiscal discipline and personal responsibility. We have crossed over from debating how low personal taxes should go to debating how high government payments should be for people who are not working - and whether there should be any work requirements at all. Now comes the Infrastructure Bill spending with some investments which will have a long term benefits, but with many which are liberal wish lists of government expansions such as child care and free community college. If we are willing to trade off a bit of growth for higher taxes on corporations, that could be a rational decision, but more unfunded spending on social programs will sink us when that day eventually comes. 

    And then there is the problem of Joe Biden whose mental health has held up better than expected in his first few months in office.  There is a reason that Xi Jinping is asking to meet with him despite Biden calling him a thug, and there is a reason that Vladimir Putin has proposed a debate with Biden despite Biden calling him a murderer.  And then there's Hunter ....  Leadership matters also. 


   This week's subject seemed to call for an old favorite from Bob Dylan. 


Bill Bowen - 4/1/2021 


Vaccine Diplomacy

    Within the next few months Operation Wharp Speed 2.0 will deliver enough doses to vaccinate all Americans, and the domestic focus will turn to encouraging the reluctant, expanding service to children and underserved communities, and developing vaccines for new virus variants. We've got enough focus, expertise, and money to handle this. Now let's poke our heads out of the foxhole, and look at the rest of the world. 

The setting:

    As of March 24, some 130 million doses had been administered in the United States, at a running rate of about 2.5 million per day, and with commitments from Moderna, Pfizer, and Johnson & Johnson to provide enough doses t0 vaccinate 300 million Americans (out of a population of 330 million of all ages) by the end of May. Add to that AstraZeneca which has been the global leader - approved in 100 countries, and committed to producing one billion doses for global use -  but which has run afoul of US testing bureaucrats. Also add  Novavax which has tested well in the UK and South Africa, but which has been slow in it's 30,000 person US trial. The gusher of federal money has included $22 billion for testing and vaccine distribution before President Trump left office. The faucet is full ON.  

    The rest of the world is not so lucky. Israel, Chile, and a handful of small countries exceed the US rate of 15% fully vaccinated. The UK made the apparently correct decision to delay second shots in favor of maximizing the 76 % effective AstraZeneca first shot and now have 53% with one shot.  Canada is about 2% fully vaccinated; Mexico is .6%. 

    Europe is a mess - what EU Commission President Ursula Von der Leyen called the "crisis of the century" - as the EU passed legislation to ban exports of vaccines.    Even the constantly "why can't we be more like Europe?" New York Times has discovered that the continental vaccination rate has lagged far behind Great Britain and the United States because the bureaucrats are more concerned about criticism for risk taking and nationalist infighting  than a mounting death toll.  It is each country for itself, with regulations preventing exports.

    The international vaccination response for 92 low and middle income countries is coordinated by COVAX (Covid 19 Vaccines Global Access), begun by the World Health Organization, the European Commission, and the government of France in April 2020, and promptly joined by 165 countries.  WHO's role includes sharing statistics and best practices, and providing Emergency Use Authorizations for candidate vaccines. While COVAX claimed to "have access to" 2 billion doses in December, actual deliveries from Pfizer and AstraZeneca will be under 5 million doses in the first half of 2021. Funding comes from 30 countries, plus philanthropies: the European Union promised about $1.1 billion; China $20 million over five years. President Trump opted out due to his conflict withe the World Health Organization, whose investigation of the disease's origin is still blocked by China. In January President Biden committed the lion's share of the group's funding, at $4 billion. 

    India which produces 60% of the world's vaccines in normal times,  is perhaps second in importance to the United States in terms of defeating Covid.  Bharat Biotech intends to produce 700 million doses of their traditionally produced vaccine by the end of the year, having begun their innoculation program in January while testing was still in progress. The Serum Institute of India is producing about 50 million doses per month of AstraZeneca's vaccine, also skating on the edge of technical approvals. India has exported both versions with a total of 58 million doses going to 71 countries - some commercially, some as diplomatic "gifts", and some under the COVAX umbrella - but has recently cut back to concentrate on the  needs of their 1.4 billion people. 

    In February the Chinese began exporting vaccines produced by Sinovac and Sinopharm - without publishing clinical trial data or gaining WHO approval - to 22 countries with a goal of reaching 53, including Pakistan, Mexico,  and many of the Belt and Road development partners. This month the United States, Australia, India, and Japan (the evolving Quad alliance) committed 100 million doses of Johnson & Johnson's vaccine to other Asian countries. Game on. 

    The next phase of Covid will be ugly, with countries representing the top 19% in wealth having purchased 54% of the committed vaccines, and projections that global supply will not meet demand until 2023. A dialogue is needed about increasing supply and balancing distribution for humanitarian reasons and because we are all at risk of mutations while the disease is rampant anywhere on the globe. 

    Some suggested American priorities:

        - Mexico and Central America. Disease stifles economies; immigrants carry disease; the Chinese would love to make inroads in our back yard.  (An easy opening gambit for VP Harris' new task as immigration czar.) 

        - Support for Israeli exports to Middle Eastern countries. (Start with those who have recognized her.) 

        - Technical and logistics support for Indian exports to South and Southeast Asia. (Particularly Taiwan and South China Sea countries threatened by China.) 

        - South Korea - with an understanding that North Korea will receive all that they will acccept.  (An ice breaker for nuclear negotiations, preferably with South Korea in the lead.) 

        - Allies like Japan and Canada who need help. (An apology for the assault on Canada's oil and gas industry.) 

        - Production; production; production. 


bill bowen - 3/25/21



Engaging China: Biden-Style

    First, the good news: it appears that the Trump administration's pivot from President Obama's unsuccessful focus on the Middle East to a focus on a rivalry with China will have some legs with the Biden administration. At least there are some indicators:

        - Biden's first week in office began with a minor test by the Chinese - an unusually agressive incursion by nuclear-capable bombers into Taiwan's Air Defense Identification Zone.  We responded with the deployment of two carrier strike groups to the South China Sea, a destroyer transit of the Taiwan Straights, and the deployment of four B-52 bombers to Guam.  Message received. 

        - Days before leaving office, Secretary Pompeo's State Department formally designated Chinese actions against the Uighurs as "genocide" - "the forced assimilation and eventual erasure of a vulnerable ethnic and religious minority group.” Biden's Secretary of State, Anthony Blinken supported the designation during his confirmation hearings. 

        -  Long-time Biden staffer Ely Ratner has been designated to lead a four month Defense Department study of strategy and operations in Asia, including techology, force posture, intelligence, and the role of allies. No major changes are anticipated, except perhaps some impacts of climate change which are popular in Biden-think, but were largely ignored by Trump. 

        -  Biden administration nominees have echoed Trump criticisms of China's trade practices, with Treasury Secretary Janet Yellen telling the Senate Finance Committee "China is undercutting American companies by dumping products, erecting trade barriers, and giving away subsidies to corporations."  Tariffs will be kept in place as details of the economic policy are redfined. 

        - Biden's February 9 phone call with Xi Jinping at least addressed  the Uighurs, Hong Kong, and Taiwan which are considered off limits by Xi as matters of Chinese sovereignty and territorial integrity. They agreee to work together on health security, climate change, and weapons proliferation. 

    The second piece of good news is that our fate relative to China is in our hands. While the Chinese GDP could match that of the United states in a few years, and  they hold over $1 trillion of the $7 trillion of our debt held by foreign governments, we are self sufficient in agriculture and energy, and lead the world in military force and technological innovation.  This could change with continuing trillion dollar deficits, and neither the Treasury Secretary nor the Federal Reserve Chair are concerned, but a substantial majority of voters are significantly concerned about the national debt, and an optimist would believe that eventually the politicians will reflect that. (At least the Senate Republicans would like to slow down the Covid give-aways.) 

    We - with a little help from our Post-WWII friends - invented the current world order - the United Nations; the World Bank; the International Monetary Fund; the World Trade Organization; the World Health Organization; the International Civil Aviation Organization; The Internet Corporation for Assigned Names and Numbers (ICANN);  the International Standards Organization; and on and on. The Chinese would like to play a leading role in telecommunications standards with Huawei's 5G architecture, but Trump raised the alarm, and they face a steep hill.  

    The primary goal of Xi Jinping and his Communist Party allies - the consolidation of power - will have adverse effects.  The forced integration of Hong Kong will constrict China's largest point of interaction with global financial markets. The forced assimilation of the Uighurs will play poorly in the neighboring Muslim countries of Indonesia, Pakistan, and central Asia. Measures to bring Jack Ma's social media empire to heel through regulation, jailings, and intimidation will result in less creativity and reduced ability to compete with Western internet companies. 

    While the Belt and Road largesse is attractive to third world countries seeking infrastructure development, there is plenty of reason for China's neighbors to be wary of China's heavy hand, with border skirmishes within the memory of leaders from India, Vietnam, the Philippines, and Russia.  

    So, how could a Biden administration build on what they inherited? 

    1. They should rejoin the renovated Trans Pacific Partnership with New Zealand, Australia, Brunei, Malaysia, Singapore, Vietnam, Japan, Canada, Mexico, Peru, and Chile. (Britain, free of the European Union, applied for membership last week.)  Biden would have to negotiate domestic labor and environmental objections as well as Trump's aversion to multinational dispute adjudication procedures, but an extensive alliance of countries seeking an alternative to Chinese domination is waiting for us. China's alternative proposition - the Regional Comprehensive Economic Partnership -  will grow if we do not move. 

    2. Biden's team should build on the recently activated Quadrilateral Security Dialogue with the navies of Japan, Australia, and India to manage ocean transit among the countries of the Indian Ocean and the southwest Pacific. This is a step out for Australia, whose largest trading partner is China, but a multi-national approach is called for as China expands their ambitions in international coastal waters. 

     3. At a minimum, Biden's team should require closer monitoring of the Chinese Communist government relationships on US campuses. During his term, Trump eliminated half of the 100  Confucius Institutes - Chinese government funded cultural centers on US college campuses. Of the FBIs 5000 active intellectual property theft cases, half involve China, including prominent professors at Harvard and MIT who were paid by China while receiving grant money from the National Institute of Health or the Defense Department.  With 300,000 Chinese students in the United States, the task may be impossible.  

    4.  Chinese pressure on North Korea is a must. There should also be pressure for Xi to join nuclear non-proliferation agreements with Russia, and to support measures to prevent Iran from becoming a nuclear power. While the most important, this is probably the least likely. 

    5. A few bargaining chips will be used on global warming, where China accounts for 28% of global CO2 emissions compared to our 15%, and they espouse goals without plans to stop increasing in a decade and become "carbon neutral" by 2060. For the zealots who would destroy our economy, where emissions are decreasing, a bit of intellectual rigor is needed. 

    And then there is the Hunter Biden factor: appointed to the Burisma board in the Ukraine; Joe brags about getting the Burisma investigator fired; Chinese agents notice; Hunter and Joe fly off together to Beijing on Air Force 2; Hunter returns with lucrative investment banking connections and a gift of a large diamond, discussing allocation of shares to, among others, "the big guy";   Hunter publishes his memoirs to the gushing praise of the New York Times. Maybe it is best if Joe is just a figurehead. 

bill bowen - 2/11/21

Engaging China - Background

    The history, culture, and world view of China are very different from that of Europe and North America. Some background refreshment is needed before assessing current events and suggesting policy positions. 

    Important guidance is contained in Sun Tzu's Taoist classic, The Art of War. Written some 2500 years ago during a period of warfare between competing Chinese kingdoms, the short book is a staple of Chinese education and American business schools.  Two themes recur throughout the short 13 chapters: the importance of profound knowledge about yourself, your adversary, and the terrain in which you are engaged; and the goal of winning through maneuver, with conflict a last resort.  Consider the advantage of having over 300,000 Chinese students in the United States, up from 100,000 a decade ago.  Consider the advantage of broad  English language proficiency on the one hand, and the lack of Westerners' ability to read Chinese newspapers on the other.  Consider the 2014 Chinese hacking of the the US Office of Personnel Management's records of some 22 million Americans, including sensitive background check information - who can be blackmailed?; who can be recruited? Consider Chinese government-connected telecommunications manufacturer Huawei which has been banned by the US and  intelligence-sharing allies.  We start with a major disadvantage in the "profound knowledge" dimension. 

    A brief Chinese history is also enlightening: 

        - 1839-1860: The Opium Wars with England and France which resulted in ceding territory (Hong Kong), legal rights over foreign nationals, commercial concessions, freedom of navigation on Chinese waterways, and unfettered prosteletyzing by foreign missionaries. 

        - 1850-1864: The Taiping Rebellion, led by Christian millenarian Hong Xiuquan. Millions killed.  

        - 1862 - 1877:  The Dungan "Muslim Rebellion" in western China. Millions killed; survivors moved to Russia.  

        - 1911:  The collapse of the Qing Dynasty, with the eventual emergence of the Koumintang  party under Sun Yat-Sen, and the Chinese Communist Party. 

        - 1927-1949:  Civil war between the Koumintang under Chiang Kai-Shek and the Chinese Communist Party under Mao Zedong, with an interruption for World War II. Communists win; Koumintang retreats to Taiwan. Millions killed. 

        - 1942-1945: World War II. Japanese occupation of northern and coastal China. Millions killed. 

        - 1950 - 1953:  The Korean War. 180,000 Chinese soldiers killed. 

        - 1958-1962:  The Great Leap Forward. Forced collectivization of agriculture. Some 30 million died, largely of starvation. 

        - 1962:  Brief war with India which secured Chinese position along mountainous border. Preceded Chinese support for Pakistan in the India-Pakistan War of 1965.  

        - 1966 - 1976:  The Cultural Revolution. Youthful Red Guard - led effort to exorcise remaining elements of pre-communist thought. Ended in 1976 with the death of Mao and the ascention of Deng Xiaoping. 1.5 million killed. 

        - 1969: Brief clashes with Russia in the Far East and in central Asia. 

        - 1979: China invades Vietnam in response to Vietnam's deposing the Chinese-aligned Khmer Rouge in Cambodia. Small clashed continue for a decade. 

        -  2001: China joins World Trade Organization as an advantaged "developing nation", with the US and Europe hoping to spread Western trading practices, including restrictions on state-owned or sponsored enterprises. By 2020, the global Chinese trade surplus was $535 billion - $317 billion with the United States. 

        - 2009: China issues extensive sovereignty claims to the South China Sea and begins to build military facilities in the Spratley and Paracel Islands. Minor skirmishes with Philippine and Vietnamese fishermen. 

        -  2012:  Xi Jinping (age 59) assumes leadership of Chinese Communist Party. Exempted from term limits in 2018.

        - 2013:  Belt and Road Initiative adopted by Chinese Communist Party to invest some trillion dollars in infrastructure projects in Asia, Africa, and Europe to create trading network, recruit allies, and employ Chinese labor and manufacturers.  

        - 2015:  Made in China 2025 Initiative adopted by the Chinese Communist Party to move manufacturing toward high technology with mostly domestic produced components in information technology, robotics, aerospace, pharmaceuticals, semiconductors, rail, agricultural equipment, new energy vehicles, advanced materials, and ocean shipping. Intellectual property targeted. 

        - 2017: Forced assimilation of Muslim population in western China begins with construction of concentraion camps for some 1,000,000 Uighurs.  

        - 2020:  New Hong Kong security law, which contravenes the 50 year "One Country, Two Systems" agreement which underpinned the turnover of the former British colony in 1997. 

        - 2020:  Amid the coronavirus disruptions, China surpasses the United States as a destination for foreign direct investment from other countries.  Based on current exchange rates, the US Gross Domestic Product is 50% greater than China's, but at projected growth rates, China will catch up by 2028. On a per capita basis we remain well ahead.  

    That is a lot to absorb. A few themes can guide next week's assessment of the Trump administration approach and the early indicators of the Biden administration approach:

        1. After centuries of carnage and humiliation, it is logical for the Chinese people to accept a trade-off between stability and growing prosperity on the one hand, and restrictions on individual liberty on the other. 

        2. The Chinese have a long history of  modest-sized military border disputes.  An American military presence is appreciated by many of China's neighbors.  

        3. A centrally planned, well disciplined industrial and financial system can achieve strong results (at least in the span of decades), particularly if trading partners and competitors are fragmented and undisciplined. The contrast with the decentralized, entrepreneural, capitalist system of the United States is intellectually interesting, and of global importance. 

        4. Up until 2016, American presidents were preoccupied with the Middle East while Chinese leaders laid out clear plans to surpass the United States economically, and to dominate their neighbors militarily.  Trump brought the focus of American foreign policy to China. 

   There is much to ponder in this most important relationship ... and whether ther Biden team will have the skill, interest, and fortutude to take it where it needs to go. 

bill bowen - 2/4/21


Biden's Establishment Team

      When Donald Trump entered American politics he blew up the Republican Establishment. One implication was that he wound up with a lot of third rate people briefly on his team - Paul Manafort; Steve Bannon; and Anthony Scaramucci to name a few.  Rience Priebus did bring the national Republican Party to the campaign and was briefly rewarded as Chief of Straff, and there were several qualified former generals who temporarily stepped up - John Kelly; James Mattis; HR McMaster -  but by and large this was deliberately not an administratiion for the Establishment. 

    Joe Biden is the polar opposite. After 47 years in Washington, and eight near the pinnacle of the last Democratic administration which ended just four years ago (is that even possible?), he is the ultimate candidate of the Democratic Establishment, pulled out of the dust bin when it looked like Bernie Sanders might sink them all. His personnel selections go to the Establishment - for better when it means that most are qualified and experienced; for worse when it means that they may well be prisoners of past failed policies or just adept at currying bureaucratic favor. 

    First, the domestic crew, where like it or not, they will do their best to implement the policies which they believe got them (oops, him) elected: expansion of public medical coverage; phasing out carbon based energy; somehow stimulating the economy; making it easier for illegal immigrants;  restricting charter schools; protecting abortion; not being Donald Trump. For most of these things, the department head doesn't much matter. The Congress may provide a check - assuming a Republican Senate - but the executive branch will march to the Left. 

    Some thoughts on key players who might make a difference: 

        - Janet Yellen: As Treasury Secretary, perhaps a lateral transfer or demotion from her time as Federal Reserve Chair.  She is well qualified in terms of both technical knowledge, and experience working in the politics of Washington.  One concern: she has a long history of wanting low interest rates to help the economy in the short term. With 27 trillion of debt and ongoing trillion dollar deficits, we will be entering a period where fiscal prudence is demanded. Federal Reserve Chair Powell is committed to low interest rates for years. The Senate can only do so much. 

    - Prospective Chief of Staff Ron Klain has been  with Biden since the 80's, most recently as Vice President Biden's Chief of Staff, with a focus on the 2009 Recovery Act (among the slowest in history), and the administration's Ebola czar. While the Obama administration's Ebola response was not impressive, Klain knows all of the domestic and international agencies and should be helpful in the next phase of the coronavirus response. 

    - The announced candidate for head of the White House's Office of Management and Budget, Neera Tanden, whose role involves negotiating the many trade-offs that have to be made, was a Hillary confidant, helped write the Affordable Care Act, and most recently has headed the uber-liberal Center for American Progress. She tweets more than Trump and has recently gone out of her way to insult Trump, his supporters, and Lindsey Graham. (And that's the Washington Post biography.) Senate confirmation is uncertain.   

     Second, the international crew, where Biden has more latitude to act, and where he is committed to reverse Trump's emphasis on what is best for America. 

    - John Kerry is a "twofer": 

        As President Biden's Special Envoy for Climate, he will be empowered to bring the United States back into the Paris Climate Agreement which he helped to create as President Obama's Secretary of State, and which President Trump left in 2017. He will be asked to implement Biden's commitment to spend 2 trillion dollars to transform the transportation and power sectors of the economy. For what it is worth, the stark change of policy with each administration change shows the folly of making major changes by executive order rather than by treaty, which would require building national consensus, as was most recently done on the North American free trade agreement.    

    Most troubling about Kerry, Biden has placed the climate czar on the National Security Council with  the Secretaries of State, Defense, and Treasury and the Director of National Intelligence.  It is hard to believe that Kerry will stay in his lane amid discussions about the Iran nuclear deal, which he also negotiated.  That he (illegally, but openly)  had discussion with Iranian and European leaders in the early years of the Trump administration suggests Biden may not be in charge of this most important risk.  

   - The rest of the national security team  include some with experience on VP Biden's staff (Anthony Blinken as Secretary of State and Jake Sullivan as National Security Advisor); some with significant Obama Administration experience (Alejandro Mayorkas -who led DACA implementation - as Homeland Security Secretary); and some careerists (Avril Haines as Director of National Intelligence, and Linda Thomas-Greenfield as UN Ambassador.)  The Secretary of Defense position remains open, with Michele Flourney the most qualified  to make the difficiult financial prioritizations which are to come - but while she would check the female box, she would continue Biden's failure to appoint Blacks to senior positions.  Like Biden, the group has a history of being wrong on Afghanistan, Libya, Iraq, Syria, and ISIS, and none posesses significant experience with China, which outgoing Director of National Intelligence John Ratcliffe emphatically calls the greatest threat  to democracy and freedom since World War II. 

    Don't look for any carry-overs.  Searching for middle ground is a good campaign slogan.  


bill bowen - 12/4/20