US foreign policy: run by "The Blob"?

A very interesting (and sometimes amusing) article takes a critical look at US foreign policy:  how it's made, how it's run, and its consequences over the past half-century or so.  It doesn't pull its punches.

The major policy think tanks in Washington are rife with three sources of funding: government, private defense companies, and very wealthy neoliberal and neoconservative foundations (think Carnegie on the left, Scaife on the right). The National Security and “Grand Strategy” programs at elite schools are no different. They all have one thing in common: the status quo. As a result, the output is hardly dynamic, it’s little more than dogmatic, conventional thinking about world problems that keep bureaucrats in jobs and always meddling, the military amped up with more hammers and nails to hit, and politicians (and attending administrative class) favorable to either or both of these goals in Washington, preferably in power.

This is a closed club that offers only gradations of diversity just like Democrats and Republicans during the war: No one argued about “liberating” Iraq, only about the tactics. That was why it was so easy for Hillary Clinton’s Nat Sec team in-waiting to create the Center for a New American Security in 2008 and transition to an Obama think tank shop in 2009. Plug and play one for the other, counterinsurgency under Bush? Meh. Under Obama? Let’s do this! They all had a plan for staying in Afghanistan, and they made sure we were, until this day.

This doesn’t even include the orbit of research centers like RAND and the Center for Naval Analysis, which actually get government funding to churn out reports and white papers, teach officer classes, lead war gaming, and put on conferences. Do you really think they call for less funding, killing programs, eliminating lily pads, or egads, pulling out of entrenched strategic relationships that might not make sense anymore? Never. The same players get the contracts and produce just what the government wants to hear, so they can get more money. If they don’t get contracts they don’t survive. It’s how the swamp works.

As for it being a cabal? This ecosystem—the Blob—is a revolving door of sameness, a multigenerational in-crowd of status-driven groupthink inhabiting a deep state that is both physical and of the mind. It’s a lifestyle, and a class. To get anywhere in it, you not only have to have the right pedigree, but the right way of thinking. Ask anyone who has attempted to break in with the “wrong credentials,” or marched off the reservation in the early years of Iraq only to be flung to the professional margins. Conference panels, sanctioned academic journals, all run by the same crowd. Check the Council on Foreign Relations yearbook, you’ll catch the drift. You can be a neocon, you can be a “humanitarian” interventionist, but a skeptic of American exceptionalism and its role in leading the post-WWII international system? Ghosted.

There's more at the link.  Recommended reading.

This is the "deep state" writ large, IMHO.  It doesn't matter who's in power:  the foreign policy "establishment" has (in the past) continued to run things its way, and basically forced the administration to conform (not that much forcing was needed).  President Trump overturned that.  From the beginning, he ran down the importance of the State Department with its entrenched cabal, and got rid of a lot of the deadwood there by appointing Secretaries of State who would wield the axe with vigor.  He continues to run the USA's foreign policy on the basis of "America First", and insists that professional diplomats toe the line on that.  Many of them still resist, more or less covertly, but so far he's managed to keep control.

However, let a more compliant President take office, and all bets are off.  The Blob will grow again, because you can't decapitate a Blob - it has no head, only an endless appetite.  Feed it, and it'll grow back to what it was.  Let's hope that doesn't happen.

Peter

Am I a prophet, or what?

Yesterday I wrote an article titled:  "Should we pay companies to move manufacturing out of China?"  In it, I suggested (bold, underlined text is my emphasis):

Aid can be given to help critical industries diversify production, so that it's spread across several countries in more than one region (thereby preventing loss of production in one country from shutting down manufacture of that product altogether).  Additional subsidies to bring at least part of that manufacture back to the USA might also be feasible.  They might not involve payment up front, either:  if the US government guaranteed the purchase of a given amount, or a given proportion of domestic production, that might be sufficient incentive.

Well, guess what?  Within hours of my publishing those words, Presidential economic advisor Larry Kudlow, who's also the Director of the United States National Economic Council, was interviewed by Fox Business.  At about 8m. 35s. in the interview, he had this to say:

A 100% tax write-off of all expenses involved in moving production from China back to the USA?  That's a good start, and demonstrates I wasn't far off the mark.  I have little doubt additional subsidies will be made available once our economy is firing on all cylinders once more.

I suspect a public avowal like that of support for manufacturing repatriation is unlikely to please China.  We'll have to see what their reaction might be:  positive, negative, or a combination.  They can crack down on US companies already there, or offer them incentives to keep their production in China, or both.  Which way will they jump?  One thing is for sure;  they'll put their own interests ahead of those of the United States.  That's a given.

Peter

Should we pay companies to move manufacturing out of China?

I note that Japan is doing precisely that.

Japan has earmarked US$2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China, as the coronavirus disrupts supply chains between the major trading partners.

The extra budget, compiled to try to offset the devastating effects of the pandemic, includes 220 billion yen (US$2 billion) for companies shifting production back to Japan and 23.5 billion yen for those seeking to move production to other countries, according to details of the plan posted online.

. . .

The government’s panel on future investment last month discussed the need for manufacturing of high-added value products to be shifted back to Japan, and for production of other goods to be diversified across Southeast Asia.

There's more at the link.

I don't know that it's a good idea to specifically subsidize a negative - i.e. for companies to move their manufacturing out of China, or any other country, for that matter.  However, subsidizing a positive benefit might be worthwhile.  Aid can be given to help critical industries diversify production, so that it's spread across several countries in more than one region (thereby preventing loss of production in one country from shutting down manufacture of that product altogether).  Additional subsidies to bring at least part of that manufacture back to the USA might also be feasible.  They might not involve payment up front, either:  if the US government guaranteed the purchase of a given amount, or a given proportion of domestic production, that might be sufficient incentive.

This might also be a useful lever to use against companies that put their profit ahead of all other considerations.  If they refuse to move their production, on the grounds that it'll cost them too much money, then let the government offer subsidies to competitors to enter that market and make what we need.  If smaller, faster-on-their-feet rivals see that they can benefit, they'll jump at the chance.  It might also be tied to President Trump's proposed investment in our run-down national infrastructure.  If contracts to rebuild (say) bridges, or roads, or railways, are linked to moving production back to the USA, or those contracts specify that only US-produced goods and materials may be used in those projects, that'll concentrate a lot of business minds.

Of course, this may lead to a whole new trade war.  China can be expected to cut its prices to the bone, if necessary with government subsidies to do that, in order to make it too expensive for companies to leave its shores.  Alternatively, it can try to buy up all the critical raw materials needed for production elsewhere, and insist that they'll only be released to manufacturers using them inside China's borders.  There are all sorts of countermeasures China can employ.  It might even start throwing its weight around in the military sphere (e.g. by threatening Taiwan, or stoking up the ongoing controversy over the South China Sea).  That would provoke crises that divert other countries' attention from moving production to putting out geopolitical fires.

It'll be interesting to see how this plays out.

Peter