Most hysteria, one of Washington’s finest manufactured delicacies, is preposterous. But some problems are important. As President Eisenhower said to the Second Assembly of the World Council of Churches, "I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent."
While Washington focuses on urgent things it is neglecting the important thing. China has overtaken us technologically and is racing ahead in ways that will reduce America, economically and geopolitically, to a has-been. Unless we gear up and fast.
Donald Trump sometimes spoke blunt truths both impolitic and shockingly accurate. In Dallas on June 16, 2016 he said: "I don’t blame China. I blame our leaders for being taken advantage of …." He was not invariably accurate, however. In Spokane Washington on May 7, 2016, "I will take care of that situation so fast in one day that situation will be equalized. One day, okay?"
Then Trump proceeded with ill-conceived tariffs and embargoes that made matters worse and America much weaker relative to China even as our economy hummed until felled by Covid.
Now what? David Goldman, an OG supply-sider long based in Asia, has definitively identified America’s important problem and its solution in a book provocatively titled You Will Be Assimilated: China’s Plan to Sino-Form the World.
What will become of us? A young leader, Rep. Peter Meijer, is rising in the House. Meijer shows signs of having a firm grasp of the key threat to America’s status as the world’s leader and who looks like he is on to the real solution, not bravado and bluster.
At key points in history America has found itself befuddled. Then someone came forth and galvanized public opinion. In 1775, the American colonists were baffled by England. Then Tom Paine published Common Sense. Its presentation of the problem and the solution was compelling. Within six months America declared itself independent. The rest is history. Is David Goldman our Tom Paine?
Fast forward 200 years. Jimmy Carter exemplified cluelessness by declaring on October 24, 1978, "Inflation is obviously a serious problem. What is the solution? I do not have all the answers. Nobody does."
Two hero economists, Robert Mundell (who later won the Nobel Prize) and Arthur Laffer (who later received the Presidential Medal of Freedom) tutored a courageous young Congressman, Jack Kemp, on the solution. Kemp passed it to Ronald Reagan who supported Fed Chairman Paul Volcker in vanquishing inflation.
The rest is history.
Is Rep. Peter Meijer the next Jack Kemp?
Today the threat is not colonialism.
Goldman nails it: China’s technological imperialism and America’s lame response.
Goldman doesn’t mince words: "My Chinese interlocutor was not impressed. ’You’re trying to tell me that the people who run the world’s great superpower are complete idiots who don’t think about the consequences of their actions?’ That was exactly what I was trying to say…."
Goldman immediately disposes of five myths about China that have been lulling America into a false sense of security and misguiding our policy makers. He then gives us an "insider’s tour" of China, its history, culture, political economy and current, shockingly successful, drive for supremacy by technology.
He vividly shows how America – which grew fat, dumb and happy after the collapse of the USSR – has been defaulting to China in the competition for world preeminence. Goldman is not amused. Nor will you be.
China is making massive and smart investments in R&D while the US government has been faltering. "America succeeded in the Cold War because of ‘long ball’ rather than ‘small ball’ research and development. Usually, corporate R&D must be justified by relatively short-term improvements in revenues. … That is why military R&D plays such a big role; to win wars, the United States has no choice but to push the envelope of physical knowledge."
Goldman explains why there’s almost no chance of an American shooting war with China.
China is making multi-trillion dollar investments in R&D to establish itself as the preeminent world power.
We’re not. Unless we wish to cede our preeminence to China we must mobilize our resources.
Doing so would cost less than what the misguided Biden infrastructure plan proposes to spend. It could be bipartisan. So, yes we can. But will we? Unless America outcompetes China we will "suffer the fate of the boiled frog. … We have one decisive advantage, though, and that is America’s genius for innovation."
As General Pete Worden, one of America’s great technology elder statesmen, once famously observed, success is not a "self-licking ice-cream cone."
Now a young potential China-taming champion arrives in the person of an unprepossessing freshman Congressman from Michigan, Pete Meijer.
This is no trivial challenge. Will he succeed?
Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $88T. Read Ralph Benko's reports — More Here.
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