Far be it from me to disagree with Robert Rubin
One thing I never thought I would see: William Greider (no fan of Citibank Democrats) interviewing Robert Rubin. The end result is well worth reading.
Rubin doesn’t seem to be in Steve Roach’s camp. He thinks China’s peg and the resulting reserve accumulation has something to do with the US current account deficit.
Rubin: … I surely never thought, if you have the kinds of imbalances you have today, you'd have the kinds of exchange rates we have today … . To put it differently, I never thought in the face of very substantial trade imbalances, you would have inflexible exchange rates. I don't think that was part of anybody's anticipation. Another thing I don't think anyone anticipated, though it's a related thing, is that you would have these very large influxes of capital, which is what's happening in this decade–it didn't happen in the '90s–that were designed to support the dollar in order to subsidize exports [from China and other Asian nations].
So all of that has occurred. I don't think I expected the exchange rate system to work that way–I don't think anybody did. If they did, I never heard anybody say it.
Greider: Well, leave aside what people thought…. We've now got a situation that you yourself describe as quite serious in both trade and current-account deficits.
Rubin: Yep.
Greider: Does that suggest something else should have happened in the design running up to the current situation?
Rubin: I don't think that's a design issue. I don't think that's actually a trade issue. I think it's a foreign exchange issue…. If you had had fully flexible exchange rates. Though I'm not advocating, by the way, that China go to that immediately because I think it might create a lot of chaos….
Rubin certainly doesn’t ignore the United States contribution to these deficits either.
Rubin notes:
.. if we had higher savings rate, we'd have a lower trade deficit. But, of course, nobody in our term thought we would go back from substantial [federal budget] surpluses to substantial deficits. Nor should we have. Nor do we have to.
Greider though was most struck by Rubin’s concern that the benefits of US growth have not been widely shared – something Paul Krugman also highlighted today.
Greider: But there was this pattern–except for this window in the last half of the 90s, when things began to line up again–that greater productivity doesn't get distributed in growth too broadly. That's why the inequality–wages don't keep up with productivity…
Rubin: Except for those years, you are correct. My recollection is, if you take the last thirty years, roughly speaking, that for twenty-five of them, real median wages have been stagnant despite rising GDP growth.
Stagnant median wages may not be quite as pressing an issue as what is now going on the Middle East, but it is a huge issue. And with oil prices heading up even further, it may become an even bigger issue. And like Greider, I am glad Rubin is calling attention to it.
Dave Chiang – One request from me. I would appreciate it if you did not use this thread to post a general critique of former Secretary Rubin’s “neoliberal” views. If you want to comment specifically on the material in the Nation interview, feel free.
BWS noted: edited, Freud …
“I would appreciate it if you did not use this threat”
Freudian slip.
‘what is now going on the Middle East’
Interestingly, Ritholz is less apocalyptic than his readers about that, at least as a catalyst for asset meltdown. Take it from the ultimate canaries in the mine, Israel & Palestine: Mideast chaos & carnage is not the end of the world, financially. Empirically, Israel’s integrated with the world, so contagion from outside matters more in the long run. Only the intifada stayed significant for as long as 240 days. The suicide bombing & re-occupation of 3/31/02 affected only the narrow market; the IEDs & urban warfare of 5/10/04 affected only the currency, with a lag. That said, everybody likes negotiated settlements, or even the prospect of them. So we can still hope for leadership this weekend from President Putin, leader of the more-or-less-free world.
bad link: chaos & carnage is at
http://www.bankisrael.gov.il/deptdata/mehkar/papers/dp0602e.htm
http://www.bankisrael.gov.il/deptdata/mehkar/papers/dp0602e.pdf
Tackling America’s growing inequality – You do not need to take a definitive stance on why America’s high productivity growth has been so disproportionately captured by a small percentage of Americans to agree that it makes for a potentially volatile political scenario. Alan Greenspan, the former chairman of the Federal Reserve and a Republican, has made the same point in public.
Martin Wolf: Democracy and the future – Economic inequality makes democracy repugnant to elites and attractive to the masses. It is a recipe for civil conflict and unstable democracies. But a sizeable middle class is conducive to democracy: civil society is stronger, while the dangers of unbridled populism are reduced.
Martin Wolf: The real cause of rising US inequality
The opening of world trade is eliminating opportunities for production of labour-intensive tradeable goods and services in high-income countries. Employment of the native-born unskilled must increasingly be in non-tradeable activities. If unskilled immigrants drive down wages for such jobs, too, a hapless underclass will inevitably emerge.
Does this matter? The answer depends on whether extreme inequality is compatible with successful democracy. The precedents suggest, instead, that it is a recipe for populism, plutocracy, or a miserable alternation between the two.
“…In large part, investors have remained calm because the economy’s underpinnings are stronger than they have been in decades. The country’s fiscal management is prudent and rising oil revenues finance social programs and roads and other construction. The central bank’s reserves of nearly $80 billion are higher than the country’s foreign debt. American and other foreign companies ignored the bitterly fought presidential campaign and continued to move work to Mexican plants. The economy is on track to create a million new jobs this year. “Foreigners looking at it from the outside say that López Obrador is making a lot of noise but why should I worry?” said Jonathan Heath, chief economist for HSBC Mexico. “The part that is consolidated is macroeconomic stability. That’s helping us not to feel the contagion effect from the politics.”…
Mr. Newman argued that Mexico’s political class suffers from a complacency caused by what he calls the “curse of abundance,” which takes the pressure off passing hard reforms. “The stronger the inflows, the less progress we have on reforms,” he said. “The market was concerned for a while that Mexico would face some kind of crisis and asked would it withstand a negative shock. “It has learned how to withstand negative shocks,” Mr. Newman added. “But how do you withstand the positive shocks of workers’ remittances, strong direct foreign investment, strong tourism and strong oil?”…” http://www.nytimes.com/2006/07/14/business/worldbusiness/14peso.html
Sounds like lay-offs?
“…Robin Bhar, a metals strategist at UBS, said a number of Chinese stainless steel producers have announced plans to cut output by 20 per cent for a month because of high nickel prices…” http://www.ft.com/cms/s/93bd6abe-11c4-11db-b1ff-0000779e2340.html
Hi Brad,
I’m actually very surprised to read William Greider interviewing Robert Rubin. Based on his numerous articles at the Nation magazine and his verbal criticisms of Federal Reserve policy, I would have thought that Robert Rubin would be the top SOB on William Greider’s list. In earlier editorials, William Greider was right on target questioning Rubin’s role in the Enron fiasco with financial derivatives marketed by Citicorp to evade federal taxes and manipulate earnings.
According to Chalmers Johnson, the financial imperialism enforced under the Clinton Administration was the moral equilvalent to the current Bush Administration push for US global hegemony. And wasn’t Thomas Friedman of the New York Times closely associated with Robert Rubin’s policy agenda of promoting Neo-liberalism economics. In reality, the Asian economic crisis in the 1990’s was a clash between Wall Street Neo-liberalism capitalism and Asian State-driven Industrial capitalism, also known as the Asian Developmental model.
With the Asian Developmental model spreading far beyond the confines of East Asia to the rest of the developing world, I highly recommend that the US government makes a reassessment of the current economic merits of the US Neo-liberal, laizze-faire economic model. The Asian Developmental model is spreading like wildfire to Brazil, India, Russia, Pakistan, and even the Middle East (Iran and Syria).
Regards,
“Since the Chicago Mercantile Exchange (CME) first introduced financial futures in the 1970s, this instrument and other modern financial derivatives have gained ground and become popularized over the past decades… financial derivatives still remain in their infant stage in China…” http://en.chinabroadcast.cn/3130/2006/06/22/501@105756.htm
Hmm – can’t get that link to show on the post. If anyone’s interested, this should lead to the Google link to the cached text:
http://www.en.chinabroadcast.cn/3130/2006/06/22/501@105756.htm
but any search of China financial derivatives will lead to many articles, like this: ‘Liu Mingkang: Financial Derivatives Encouraged’ “China Banking Regulatory Commission (CBRC) takes a positive attitude toward the development of credit derivatives.” http://www.china.org.cn/english/2005/Dec/152616.htm
I give up. Joseph Wang?
who would sell insurance against default by Chinese SOEs … talk about assessing non-economic risks. But not really the topic here …
I hadn’t realized Greenspan had expressed concern — even if cached as concern about the political consequences — about the distribution of the gains of economic growth. Surprising. I thought he was in everyone will benefit from a bigger pie so make sure that there are no barriers to more economic flexibility that might be introduced should concerns about distribution drive policy camp …
The credit risk derivatives that are being considered aren’t for SOE’s. They are for things like mortgage backed securities so that banks with high exposure to real estate loans or auto loans can spread the risk to other banks.
The basic problem is that this. Real estate loans make up about 15% of commercial bank loans, so a large number of real estate defaults are not likely to sink the entire banking system. However if you are a bank that has 60% real estate loans, then a bad market could sink you. This could be especially bad since you might be a bank that is really good at issuing real estate loans (China Construction Bank is named China Construction Bank for a reason).
So what the CBRC is doing is to introduce CDO’s to spread risk. CCB and some of the JSCB specialize in real estate loans, and they get good at doing real estate, they then issue CDO’s which spread the risk, and allow banks that have no idea how to do real estate loans some exposure to real estate.
The funny thing about these derivatives is that you can only buy them if you are a bank. Right now they are traded on the inter-bank trading network, which is regulated by the CBRC. If they were to be sold to non-banks, they would be securities which would be regulated by the CSRC.
Any bets on the “unnamed country” in the interview?
I’m guessing Mexico.
i find rubin’s answers when he’s in the white water of todays global flows…useless stuttering
forget thew age old distribution vs growth bull session
and the we friends of american native jog holders
need to “help” em help themselves
to build better skill sets
and hammer away at the forex inflex the pegs
and the class /national gains
from the present conditions of exchange
on this he’s incoherent cautious stumped
and hand wringing with a smile
my fave:
the passage where
late great samuelson
warning sage
comes in for quite a school boy number tumble
Mexico would be necessarily off the record given citi’s investments there, but … there are certainly other options. Mexico wouldn’t be my guess, but i find it easier to think of places rubin wouldn’t criticize than to identify the place is willing to criticize.
GCS — in my experience, Rubin is a very cautious guy, not one to go out on too much of a limb. And I thought his stumbling was revealing — it suggests he is searching for something, and hasn’t yet found an answer he is confortable with. I agree with Krugman that there are limits to the invest in human capital argument, since the very very top (rubin and others at the top of the corp ladder) is peeling away from the top (your average ph. ds), and all have lots of human capital. but i am not surprised that Rubin is unwilling to go further. What i do think is interesting is how forefully rubin has been willing to identify rising inequality and the absence of median wage growth as an issue, even if he isn’t yet willing to embrace a policy response that goes much beyond Clintoneconomics.
Bob Rubin and others will speak on 25 July.
Meeting the Challenge of a Global Economy: Trade, Economic Security and Effective Government
Tuesday, July 25, 2006
10 am – 12:30 pm
The Brookings Institution
http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm
and
http://www.brookings.edu/comm/events/20060725.htm
Live webcast available from Brookings according to the Hamilton Project.
I don’t think that Citi investments were the reason why Mexico would be off the record. The reason that it would be off the record, would be because of Rubin’s role in promoting NAFTA, and also the interview came close to a tight Presidental election there.
(I can just see the nasty headlines associated with Rubin mentioning Mexico, whereas I don’t see those headlines if he mentioned any place else.)
brad:
you’re on to something with this ….
“What i do think is interesting is how forefully rubin has been willing to identify rising inequality and the absence of median wage growth as an issue, even if he isn’t yet willing to embrace a policy response that goes much beyond Clintoneconomics”
i hope you are right
and this isn’t suave
“i feel your pain…..but can do nothing ”
i’d be much relieved
if he said something like
“we need to shift the tax burden
of this mounting
external debt service
to the rentiers
who are the passive beneficiary klass
of globalization
given that uncle’s credit card paid for
the basis of that globalization
by
winning the kold war
and perhaps even the blow back
our trans nat activities
produce
by paying for bush and compnay’s GWOT
but ain’t that a dream
to be fair i did like
his reasonably straight if perplexed talk
on forex extremes
and the infernal no flex peg leg pete
winners response
Some of us here have been complaining about the rising disparity for quite some time…glad Rubin heard the distant din sitting on those silver-lined investment clouds.
I beg to differ with Rubin: It is a design issue. These guys designed how globalization presently works. Any CEO worth his salt and a bit lower on the food chain than Rubin saw immediately where the gold was…and how to keep most of it for himself and his friends. Cheap labor….cheap labor…with few controls and less regulation. What in the world did Rubin expect?
Sorry, Brad, but the fumbling of Rubin is shameful. Useless stuttering.
And who, precisely, is supposed to be saving when median wages have in effect been stagnant? Or gone backwards? Of course, we know some who have saved quite a lot.
We know whose hide will now be flayed to pay for all this debt.
For the life of me, I do not understand why these guys get any kudos for showing a glimmer of understanding.
Dave Chiang–No need to call it Asian State-driven Industrial Capitalism or Asian Development Model, because it really started in the United States!
In late 18th century, Alexander Hamilton started protection of US manufactures against UK competitors, and a German economist, Friedrich Lizst, impressed by US success, advocated similar policy for German industries in 19th century. Therefore, it can be called US-German Development Model!
At the same time, Asian Development Model(s) may be too diverse in the present context. Korean Development Model (close control of industry and avoidance of FDI) resembles to Pre-war Japanese Developemnt Model, but very different from Southeast Asian Development Model (loose control of industry and big role of FDI). Chinese Development Model (co-existance of SOEs and foreign corporations as crucial players) is considerably different from both of them.
So, although the concept of Asian Development Model may be of some use as indicative of everything other than Washington Concensus (or Neo-liberalism in economics?), it may not be so constructive or meaningful.
HK: It gets even more diverse. Different provinces, even different counties can have radically different development models.
Stormy:
Rubin deserves some credit for speaking out at all because his doing so will encourage others of his class to admit there’s an issue. I suspect quite a few upper income folks are starting to “get it”, but they’re powerfully inhibited from speaking out. After all, the main thing that needs to change in the short run is that they themselves need to pay more taxes.
Socialism is dead (or at least deeply out of fashion), but no intellectual framework has emerged to take its place. That’s why Rubin is so confused. It’s awfully hard for a rich man to invent a theory of social and economic justice. Give him a little credit for noticing the need for one.
“…Wassily Leontief was one of the first to do more than just theorise about this tangled web of interdependence. In 1941 he published his book “The Structure of American Economy”, which he updated a decade later… Leontief’s book was translated into Russian; his techniques studied by Soviet planners. Leif Johansen, a Norwegian economist often credited with building the first CGE model, put his handiwork to use at Norway’s planning ministry…” – ‘Big questions and big numbers: We cannot live without big and ambitious economic models. But neither can we entirely trust them’,
Jul 13th 2006, http://economist.com/business/displaystory.cfm?story_id=7159491
re: “median wages have been stagnant despite rising GDP growth.”
At that level, the relative greater productivity of most is increasingly drawn from respective markets, rather than base salaries. Correct me if I’m wrong, but Shleifer’s salary was not the ticket to his becoming a wealthy man. Too bad we hear so much about his case and not so much about others.
At the bottom of the scale, many are forced to support themselves in grey and black markets. There are many ways employers can circumvent minimum wages. And minimum wages don’t recognize huge differences in the costs of living – and working – in different regions and sectors. Far above that, the wealthy draw, and retain, relatively little of their income from their substantially higher base pay.
There are massive distortions in what is thought to be productive and how it is measured.
Joseph – thank you for your response.
re: “It gets even more diverse. Different provinces, even different counties can have radically different development models.” – along with different cities, neighborhoods and parallel economies. Tend to think of globalization as the jazz fusion of all this, strung together by global markets – ‘white’, grey and black.
“…Listening to British businessmen talk about the world’s biggest economy of late can feel a little like stumbling into an anti-Vietnam war rally. Though few yet refer to the Great Satan, there is a palpable sense of anger about the extra-territorial impact of US regulation at all levels of business life. It is not just the extradition of NatWest bankers… It grabs the attention of businessmen because it reminds them that anyone who does business in the US or owns a subsidiary there is constantly vulnerable to the unpredictable might of the US legal system… One ticking time-bomb is the consolidation of international stock exchanges. Nasdaq’s wish to buy the London Stock Exchange will not go away and, with a 25.1 per cent stake, it will be hard to ignore. Yet many regulators in London are increasingly fearful that the next logical step after a Nasdaq takeover will be a single global exchange regulated from Washington… One reason for the misunderstanding is that what we regard as americanisation, the US regards as globalisation. It just happens that, as the world’s biggest economy, the US exerts a stronger pull when setting standards for the global market….
The irony of the current backlash is that London has done better out of globalisation than anywhere. Wall Street financing techniques flourish here. London’s investment banks, private equity and hedge fund firms are chock full of American talent. For much of the non-English speaking world, the dominance of such firms is better known as Anglo-Saxon capitalism. Certainly, the terms of abuse are far worse in continental Europe than our quaint jibes about imperialism. In Germany, the private equity firms were famously dismissed as “locusts”. In France, one senior Parisian business figure recently described London’s hedge fund activists as “terrorists” during an off-the-record breakfast. Despite the understandable concern of British business, critics need to remember that since the rise of the eurobond market and before, London’s ability to straddle these two worlds has been the secret of its success… The surprise therefore is not that there is concern about creeping US regulation, but that it is not counter- balanced by greater understanding of the benefits of globalisation…”
http://www.ft.com/cms/s/be5f84e2-139e-11db-9d6e-0000779e2340.html
STS,
Reading that interview last night, I was livid. After a night’s sleep, I will give him some credit for stuttering, for all but admitting something is wrong with the plan. Three points:
1. Your use of the phrase “…his class.” Think about the phrase and the implications of how you described the nature of his reluctance. No more need be said. Unraveling it should be embarrassing.
2. It is trade; it comes down to trade and the “design.” He and Clinton should have known it. The neo-cons saw it immediately. And they ran with it.
3. Finally, there is no moral center to what is happening. None. I do not care a whit about the terms “socialism” or “capitalism” or “communism”: Simple-minded counters that PR people use to push our buttons. What I want is a moral center to business activity. Do the following:
a. Legislate and regulate it and address the issues politically. Businesses have moral responsibilities to the countries and locales that fostered their growth. Patriotism should not convenient only when the dollars are good. Remember when Walmart was crowing: “Made in America”?
b. Take unbridled greed out the philosophical underpinnings of economics. The unbridled greed of each person does not lead to the greater good. With great power comes greater greed. There are times when giving your opponent more than he can bargain for is finally in your own best interest, when his bargaining power is simply not strong enough to force you to do so. With power comes real responsibility, not just to your shareholders. How about putting a “power” variable into economic calculus?
Well, the party is closing; the economic good times were had by a few.
“… if you are 50 years old, then about 100 new countries will have been created since your birth. Membership of the United Nations (UN) grew from 51 original members in 1945 (there were 74 nation-states at that time) to 191 in 2002…. Now think what this means in terms of business laws: 191 or more countries equals the same number of legal systems.” – Jean-François Bourque, International Trade Forum, Issue 4/2002, Page 4
re: “the party is closing”
Not so sure about that. Would be interesting to see an update to this:
“…Branch banks located outside home countries now account for the bulk of earnings for many banks (Kapstein, 1994, p. 4). Some $6 trillion has escaped the national boundaries and is nested in various offshore havens (United Nations Office for Drug Control and Crime Prevention, 1998) thus, further calling into question the power of sovereign nations to regulate financial flows…” -”Globalization” And The State-Profession Relationship: The Case The Bank Of Credit And Commerce International’, Patricia J. Arnold University of Wisconsin-Milwaukee, USA, Prem Sikka University of Essex, UK, Accounting, Organizations and Society, Vol. 26, No. 4, 2001
Might anyone know of recent work which attempts to describe the ‘economics’ – industry? – including an estimate of the amount of money, from both government and private sector sources that is spent and/or invested in this industry (increasing or decreasing over the years?) as well as some explanation of how economist productivity is measured and has changed over the years, along with wage disparities and income sources in this industry. Perhaps insights into the evolving ways in which economists attract and allocate capital, and measure and reward their own productivity may also shed light on factors which influence economic thought and its outcomes.
The problem with arguments regarding moral calculus and economics is that the people making the moral arguments often have obvious self-serving interests that cause their arguments to fall apart. A job goes from a factory worker in Michigan to a factory worker in Sri Lanka. How is this immoral? This only works if you argue that the factory worker in Michigan somehow has a greater moral claim to income than the one in Sri Lanka, and that is hard to argue if you aren’t from Michigan. Eighty percent of the world would *love* to exchange their economic situation with an unemployed factory worker from Michigan, and arguing morality on this issue is going to sound absurd to most of the world.
Something that you have to keep in mind is that most large multi-national corporations are global corporations, not American ones. It’s very hard to make the argument that an MNC should have a special responsibility to American workers as opposed to French, Mexican, or Sri Lankan ones, since the companies aren’t uniquely American, the workers aren’t American, and the management isn’t American.
The basic reality is that we live in a global world, and we need to think of these problems globally. The fact that American society is becoming unequal is merely a reflection of the fact that the distribution of global wealth and income is profoundly unequal, and that the only way that the American middle class can survive is to make sure that there exists a middle class in Mexico, China, and Sri Lanka.
We have to shaft labor, capital won’t hold still for it.
Joseph:
First of all, I said put “power” into the economic calculus, something that is not done. Economists put lots of loaded terms into their discussions: “fiscal transparency,” for example. In all this talk about market forces, “power” never enters. Furthermore, you have not answered my central assertion: There are times when giving your opponent more than he can bargain for is really in your own best interest, when his bargaining power is simply not strong enough to force you to do so.
Second, the argument regarding shifting jobs from Michigan to Sri Lanka—you and I have had that argument before. If the Sri Lankan worker is simply exploited—wages suppressed, no bargaining rights, no protection, no proper working conditions–, then it is immoral, plain and simple. If not, then you might as well start supporting slavery. You do draw the moral line at slavery, I assume? If you can draw that line, then what is stopping you from refining your morality a bit more? And I do not accept the response that the Sri Lankan worker should be happy that he gets a few more crumbs at our expense.
Third, regarding the nature of multinationals: I am well aware that they fly many different flags. A year ago, I asserted that the power of some multinationals is greater than many countries, that Western-style multinationals were becoming countries in and of themselves. This is of global concern; they have the power to fashion public opinion, to fashion laws even in the strongest of countries. For this reason, we need global institutions. I would begin by reforming the WTO, its charter and rules. Labor and the environment must have a real place at the table, not simply an advisory role. Begin by insisting on labor rights in those countries that wish to join the WTO. The issue of nationally owned firms is another issue, one that also must be addressed.
Fourth, regarding the distribution of global wealth: I have repeated said that “globalization” is leading to rapid disparities world wide, not just in the states. I am not as parochial as you consistently assume.
Fifth: Guest’s interesting observation that branch banks have finally found tax havens should be of great concern to everyone—as should the very existence of such lucrative tax havens. Countries are losing control of their financial flows. Just as multinationals can now leverage any impoverished country, so can they and financial institutions and wealthy individuals hide their wealth in tiny countries designed especially for that purpose. This is simply more evidence of the growing disparity of wealth. Wealth has a place to hide where it is not even subject to taxation. Is there something in the economic calculus to account for tax havens? Why not?
These dialogues—patch-worked over many topics—are difficult to have. Each time I have to tell you that we are closer in thinking than your knee-jerk reactions to me. Email me…try me out. Let’s understand where each is coming from so that we do not have to repeat the same old exchanges.
Stormy:
I have no substantive disagreement with you, except perhaps this:
‘I do not care a whit about the terms “socialism” or “capitalism” or “communism”: Simple-minded counters that PR people use to push our buttons. What I want is a moral center to business activity.’
I do care about these terms because language is the only means of creating consensus about what constitutes a “moral center”. The lack of language with which to rally public support for concept of social and economic justice (and I do not mean equality here, only a moral connection between consciencious effort and reasonable participation in good results) is the root of our troubles at present.
There was at least one voice in the Clinton Administration speaking for your perspective (approximately at least) and Rubin names him in the interview: Robert Reich. Unfortunately, Reich is just a lonely voice crying in the wilderness. He wants to express ideas akin to “socialism”, but the PR people (to say nothing of a lot of inconvenient facts) have blunted all of the vocabulary on the left. He can speak out all he likes, but the unions are his only audience — and they don’t even believe in the old concepts the way they used to (think of Reagan democrats in the midwest).
Adam Smith was a *moral* philosopher (by title) and his morality as refracted through Galbraith (Rubin tried to reference Galbraith’s “American Capitalism”, but fumbled it) is effectively that morality has to be enforced through a competition among ideas. There is no “contervailing power” on the left speaking with a single voice for an attractive alternative view of what we owe one another as members of an economic community. Only capital has a voice — so much so that a handful of high capitalists are beginning to be embarassed about it.
Joseph Wang aptly expressed the problem with labor movement socialism — it is parochially focused. What about all the working people abroad? There needs to be a genuinely internationalist labor agenda which helps working people identify with one another across national boundaries, or contemporary globalization will end just as late 19th century globalization did: in nationalism and war.
One small point: Rubin has never hesitated to speak up (and push for) a progressive system of taxation. He didn’t push that point in the interview, but it is integral to his global view: tax those who have done particularly well to augment the human capital of everyone. I agree that this vision has some limits — well-described by Krugman — wand we need to do more. Rubin hasn’t put his voice behind the “more,” but he does seem to me to be searching for the “more,” though he may not find something that he is willing to embrace — whether because he is an I-bank turned commercial banker or because he is an intellectually cautious man.
After watching the Bush administration throw caution to the wind (see “invading iraq without doing every thing possible — in terms of troop numbers/ international support — to make the operation a success”) on the shake things up and something better will emerge (not looking very likely right now), I have come to conclude that a bit of Rubin’s caution and sense of responsbility is a good virtue in a policy maker.
The basic problem here is that I know personally people who are on the other end of globalization, and they are not slaves or exploited, and they are economically benefiting far more than in any other system that I can imagine.
Until we address this basic disagreement then I don’t see how we can come to any sort of consensus on anything. I think the disagreement comes because I’ve seen places where globalization clearly works (southern China), whereas you’ve seen places where it clearly doesn’t.
I don’t think we agree on very much at all. I try to be polite and listen to people I disagree with, butI still think that there is this basic difference which colors our world views.
I do agree with you that power is important, but in the cases I’m familiar with the workers (i.e. China) actually have a great deal of effective bargaining power, which may be why the outcome is better.
1) Chinese rural workers have the option of going home and farming.
2) The firm that the Chinese worker works for is rarely a MNC but usually a small subcontractor, which means that the power relationship is more equal. The subcontractor usually has a tiny profit margin which means that they are sensitive to work disruptions.
3) The workers often come from the same village, and they have strong clan/village loyalties which get manifested in direct action.
4) The workers can and do riot, and the sensitivity that the state has about social stability means that the risks of rioting are actually fairly low. Most people don’t get punished, and the ring leaders usually get rather short sentences (days to months) at the end of which they are considered heroes. If they get fired, well they just go back to the farm. There’s really not much reason for the police to be more sympathetic to the factory owner than the workers.
Also, in cases where workers riot, its because the employer has done something illegal like withhold wages (if the problem is promised wages or working conditions they just leave and go home). If you draw the attention of this to the authorities or of the MNC which is contracting work, this puts a lot of pressure on the factory owner to pay back wages.
I really think that in south China, the system as it is (make workers mad, they either go home or riot) is more effective than what you are proposing.
Joseph,
I am not impressed with your point #4. Rioting for better conditions even if the risks are low? Don’t know about you, but a month in jail is not my idea of fun. Nor does the prospect of having to riot my idea of a good time. And if I get fired, well, back to the rice field? I am not impressed.
What happened to collective bargaining–independent of state auspices? Independent unions? What happened to enforced regulations governing payment of wages? of workers rights?
I do not think China was ready to enter the WTO–plain and simple.
I am not ready, either, to offer China excuses in terms of labor or the environment. I know perfectly well why FDI does better in poor countries, why returns there are enormously high. And I hold their leaders and our leaders complicit in that regard.
For this I blame the “designers” of globalization. The conditions they required of developing countries met only the needs of capital. That was a recipe for disaster and one mess after another. (I could point to Mexico as an example. If not this election, then by the next one, we will see a Venezulaned Mexico.)
I am pushing this point hard–overstating my argument because there has been no serious discussion of “conditions” other than those required by the financial and business communities. Their conditions are necessary but not sufficient.
Labor and environmental regulations have to be in place. If a government wants to join the WTO, then it should get its act together in these areas. I am not interested in a country becoming an export machine at the expense of labor there or labor here…or at the expense of the environment.
When countries become serious trading partners, there is generally no problem if they are equally matched. When there is great inequality, that inequality and all its dangers must be addressed responsibly.
As I said, I am pushing my argument hard, harder than maybe necessary. But the issues have to be addressed.
STS,
I agree with you about Reich. Good man.
The reason I dislike the terms is that they have become “boogey words,” words with that are loaded with too much affect to be effective. It is much better to deal with specific problems and possible solutions than to scare people with such words.
Unfortunately, that is the game is now played. We love our new “scare” words.
Stormy:
The riots generally aren’t for better conditions. If the workers aren’t satisfied with conditions, they generally just leave. Riots tend to happen when there is the a broken promise of payment.
Unions become corrupt and toothless. Collective bargaining doesn’t work well in industries with high turnover. Regulations are just an excuse for petty corruption. Bureaucracies start having their own interests.
As far as rights. You get what rights you fight for. Pay the workers well, they’ll work. Stop paying the workers, they’ll go home or riot. Pretty simple enforcement system.
If you can think of a better one, be my guest…..
Look I’m trying to be helpful here, but the one thing you have to understand is the WTO and Western multinational corporations are very popular in China, and if you start imposing conditions on Chinese participation in international organizations, you’ll just come across as an arrogant Westerner to most people in China. Just what right does the West have to impose its conditions on China if China can’t impose its conditions on the West?
Yes, China has problems with the environment, workers rights, and all that stuff, but China has the will and the means to figure out how to handle these very well on its own , thank you, and it can also stand toe-to-toe and negotiate very good deals with multi-national corporations. MNC’s need China more than China needs MNC’s.
If the West has problems with Chinese trade practices and can’t compete with China, that’s fine. These can be discussed, but don’t come across claiming that the West is being altrusic or “moral”. The West has self-interests. China has self-interests. If people stop pretending to be moral and just talk about self-interest, we might actually get something useful accomplished.
I don’t get annoyed when people talk morality. I don’t get annoyed when people talk self-interest. I do get plenty annoyed with morality is used to justify self-interest.
If an autoworker takes the attitude “I want to keep my job, screw the rest of the world.” That is refreshingly honest and quite understandable. If we have a balanced system in which that worker can fight like hell for his self-interest and people with opposing interests can fight like hell for theirs, we may end up with a just and fair outcome.
But If someone takes the position “I want protectionism to protect the Chinese environment, and it’s only a coincidence that it will let me keep my job” then I get annoyed. China can take care of itself.
The system works in China because China has the bargaining power to negotiate good deals with the West, and a government and economic elite that is extremely frightened of being overthrown in a bloody revolution if people don’t get rich.
It might not work where the conditions are different.
I’m all for trade. What is going on is not trade – it is a burn and pillage harvesting of American middle class wealth by the aristocracy and their asian strongmen.
Trade suggests a two way street. We buy from them – they buy from us. Imbalances are corrected by the shifts in relative value of the currency. Unfortunately, they do not buy from us, nor do they allow free access to their markets. The “trade” imbalance has reached such an extreme that the necessary shift in relative currency valuation would blow the economic world up.
Bob Rubin sees the problems associated with impoverishing America. Hopefully, the fall elections will reclaim our country from the “globalization” zealots who don’t give a whit about our way of life or the way of life in Sri Lanka.
Joseph wrote:
“Look I’m trying to be helpful here, but the one thing you have to understand is the WTO and Western multinational corporations are very popular in China, and if you start imposing conditions on Chinese participation in international organizations, you’ll just come across as an arrogant Westerner to most people in China. Just what right does the West have to impose its conditions on China if China can’t impose its conditions on the West? ”
What right? The right that every country has to impose its own conditions on trade, China included. I have not precluded China from imposing conditions. China does that every day it maintains the peg. It does that in every law it passes…in decisions to give FDI tax breaks, in decisions to curb monopolistic behavior…Stop playing the victim here. Most countries are free agents; China certainly is. Just as we would have to accept the consequences of our actions, so would China have to accept the consequences of its.
If I criticize the WTO and multinational behavior, I appear as arrogant Westerner? Do you have any idea of the absurdity of such logic? I am not to criticize the WTO or multinational behavior? Are these no no’s? Are such discussions not “politically correct”? Are such discussions allowed in China? What discussions are allowed in China?
The core of my arguments are based upon the consequences of present WTO rules and multinational behavior that I see playing out globally. That is an argument we should have, not my parrying your “poor victim” sideshow.
You like multinational behavior now; the multinationals are sitting in your backyard and you get the leftovers. You should pay close attention to the tiger that has entered your gates. It is heartless and rapacious. It requires real control, real regulations. Ask Mexico.
You like the WTO because it allows for tax arbitrage, and unrestrained labor and environmental arbitrage. I see these things as dangerous, not only for the West but for the entire world. Frankly, having chosen its present form of leap-frogging into the 21st century, China will fall far short. It does not have ten or twenty years before global warm and environmental destruction and an energy crisis will stop it—and everyone else, dead in their tracks. That is the core of my argument.
Now, if you want, we can talk about labor regulations…the WTO’s position on them and China’s labor regulations. Hey, we could toss in Mexico as well. That would be a far more profitable exchange. We might also discuss global warming and environmental destruction. And I am not going to let my own country off the hook here, either.
HK,
Joseph Wang is correct about provinces / counties, but nevertheless that was a nice description of the wide variety of development models in the Western Pacific.
Well done.
Ditto to Joseph Wang: “A job goes from a factory worker in Michigan to a factory worker in Sri Lanka. How is this immoral?”
Extremely well done!
Stormy,
You’re way off base.
1. The bottom line is that blue collar America doesn’t like brown people taking their jobs due to greater productivity at lower cost under a less expensive regulatory environment.
2. The WTO and its predecessor, GATT, were prime drivers behind lifting billions out of poverty. Keep your hands off, because the next billion can’t afford you playing around with their lives.
3. When Joseph Wang says “Chinese rural workers have the option of going home and farming. ” he means it. Farming is a real option, and not a bad one. A month in jail for labor-related riots in China? Not a chance! Reality check time.
4. China does not now have, and has never in all of history had, collective bargaining independent of state auspices; independent unions; or enforced regulations governing payment of wages. Moreover, those labor characteristics had absolutely nothing to do with China’s entry into the WTO. Zero.
Got that? OK, now let’s try again.
China isn’t America.
There are different rules. Demanding that China play by American rules makes exactly as much sense as demanding that America play by China’s rules. Got it?
* * *
“I would begin by reforming the WTO, its charter and rules. Labor and the environment must have a real place at the table, not simply an advisory role.”
I assume you mean American labor and environmental regulations, not those of, say, Northern Europe (much harsher than American laws) or Southern Africa.
Question: Who gave you, or America, the right to decide what the environmental and labor regulations should be, and then to shove them down the throats of other nations?
.
Growing inequality is turning America inward: Many present the main threats to the security of Americans as coming from the outside. But more pervasive ones begin at home.
DOR:
“There are different rules. Demanding that China play by American rules makes exactly as much sense as demanding that America play by China’s rules. Got it?”
That’s a pretty stern defense of a nuclear-armed (nominally) communist dictatorship. How times change
Why not negotiate for rules that comport better with our fundamental values? Now that the US has asserted a right to preemptively invade countries with regimes we suspect might assist terrorist attacks on us, it seems odd to argue that the US isn’t allowed to have a polite conversation with Chinese commissars about lesser issues. If American corporations move to China in part to avoid US law, and the US Government isn’t allowed to talk politely to China about maybe closing a few loopholes, doesn’t that count as ceding some US sovereignty to those Chinese commissars?
Certainly private corporations are allowed to negotiate with the Chinese government about what their laws should be and how they are enforced. Microsoft can threaten not to hire more Chinese engineers unless they get better enforcement of IP rights. Why shouldn’t the US Government do the same sort of thing?
I guess the real question is whether stuff like human rights, political liberty or environmental protection could possibly rise to the same level as Microsoft’s royalty stream in the hierarchy of American “fundamental values”. At present, I have my doubts.
Stormy: China isn’t Mexico. If you are trying to argue to me that multinational corporations and WTO have been horrific for Mexico or Guatemala, I’m willing to listen since I don’t know anything about Guatemala, and what I’ve seen of Mexico isn’t pretty. However, if you are trying to argue that Western MNC’s and WTO are bad for China, that’s like trying to convince me that the sky is purple. It just flatly contradicts my first hand experience.
One of the basic differences is that China doesn’t need foreign investment. Foreign investment is useful and positive in a lot of ways, but China has enough internal savings and good negotiators that it can say no, if foreign MNC’s demand too much. What’s happening is that MNC’s are falling all over themselves to get a piece of the China market, and the terms that some of them are signing are incredibly favorable to China.
And if Western MNC’s aren’t being useful to China, just kick them out. WTO just requires that foreign and domestic companies play by the same rules.
The main thing that China wants from Western MNC’s is knowledge. China wants to be a superpower and being a superpower means having MNC’s based there. The conditions for entry for Western MNC’s into banking, oil, telecommunications is that those MNC’s have to teach Chinese how to run an MNC so that twenty years from now there will be a lot of Chinese MNC’s in the global 500. Once Western MNC’s impart this knowledge so that China can manage it’s indigenous corporations, it really doesn’t matter if they leave China and go elsewhere.
I don’t sense this level of vision and ambition in a lot of other countries. China wants to be a world-class economic player and the equal of the United States and Europe. If you want to be a player, you need to learn from the best. That’s the admission ticket that China is demanding from MNC’s. (I get the same feeling from India. I don’t get the same feeling from Mexico.)
You are free to criticize WTO’s and Western MNC’s or anything else. I’m just telling you that most people in China would consider you totally out of touch with what is going on there if you do.
Global warming, energy, world environment degradation are real issues, but they need to be solved in a forum where China is treated as an equal and can mandate regulations on the United States as much as the US mandates them on China. Holding up Chinese entry to the WTO, doesn’t seem like it will produce a equal negotiation.
If you attach these issues to trade then what will happen is that people who just don’t want Chinese trade *PERIOD* will use this as an excuse to advance their agendas. These issues need to be negotiated in other forums (and other forums do exist like Kyoto).
STS: Why shouldn’t the US Government do the same sort of thing?
Because there is no reciprocity. There are a lots of things wrong with China, but if the US keeps nagging, people just get annoyed. There is *zero* reason that the United States would run China better than the guys that currently run it. The US had its chance to run a country (Iraq) and totally blew it.
Nag. Nag. Nag.
STS: I guess the real question is whether stuff like human rights, political liberty or environmental protection
The US bluntly does not have the credibility to dictate terms to anyone. I can just see this. You “Mr. Abu Gruib, kill Kyoto, Guantanamo” are lecturing *us* on human rights, political liberty, and environmental protection? China at least let the UN Special Rapparteour on Torture look at its prisons. He didn’t even get that far at Guantanamo.
Now it is true that the human rights situation in the US is better than China, but if the US doesn’t accept international criticism of its human rights record (not necessarily from China), then there is *zero* chance that it can credibly dictate terms to China. Once you put China’s human rights on the table, then you put US human rights on the table, and until the US is accept trade sanctions from the EU on its use of the death penalty, it’s not in a position to complain about China resisting linking those things to trade.
Agree with Joseph Wang’s comments about being in a global world where MNCs that are not uniquely American, with non-American workers and non-American management, and how they have a duty of care to all their stakeholders including their host nations. Especially as country’s need to import from third countries what they lack for their growth and prosperity such as oil & gas, base metals and capital.
As for Asian Development model. I note that Russia is not so much becoming less of a market economy or less democratic as charged by some arm chair liberals in the west, but on closer inspection becoming a lot more like France in its goverence and ties between state and industry and effectively ruled by an inside elite. Given their historic ties, I am not surprised.
I would NOT buy CDS on Chinese banks nor an ABS by Chinese banks to buy protection in the case of default or to get exposure to Chinese real estate. It is a double blind. YOu do not know the state of the bank’s balance sheet and its non-performing loans, and the process of default can be completely arbitrary. These derivatives are complex enough under normal, transparent market conditions, infinitely more complex where you have uncertain legal redress and the state controls the banks, the legal system and allocation of credit, too. IMHO.
May I make an observation from several posts most recently on China-US imbalances? I do not expect an answer, but this struck me as interesting. Essentially, Regan won the cold war by outspending the USSR, which bankrupted them eventually, leading to their economic decline and dissolution. I am not pretending the policy makers in the USA are any smarter, and they seem to lurch from emergency to emergency putting out fires, but in the absense of an efficient system of capital allocation in China, or as Brad put it several days ago, no functioning macroeconomic levers, and certainly no ROE, ROI or IRR caclulations being done on a wide scale in China Inc. how do we know they are making any money or a return on their long-term cost of capital? Perhaps they are spending themselves into a hole through over production of goods that are sold below their real cost of production, and this is masked by the build-up of external foreign exchange reserves as well as non performing state loans and zero returns paid on FDI?
It would be hard to argue that including all future liabilities that the current growth in China is sustainable in the long-term? And their main sustainable competive advantage seems to be only labor, and not land, capital or intangible assets like proprietary know-how or technology?
In this context, over-consumption fuelled by debt to buy from your competitor who is producing at a loss may be no different than taxing to fund an arm’s race? Likely not, but it struck me as one outcome, and not necessarily a good one either.
Joseph Wang:
I quite agree that the US has no moral authority or credibility at present. And I said nothing about “dictating” anything. Just responding to DOR’s apparent outrage at the idea of *negotiating* for anything. But of course, as Bill Clinton put it at the 2004 Democratic Convention: “we can’t enforce our trade laws against our bankers! I mean c’mon!” But I persist in the hope that the US can recover from its present aberrational leadership.
MrBill:
Is Russia evolving a “French” model? Interesting possibility. More hopeful than the perhaps more likely “Czarist” model.
Reagan’s borrow-and-spend military build up didn’t “win the Cold War”. The overwhelming weight of failure and illegitimacy killed communism. 40 years of containment (including military spending) was important, but had communism been a success, it would have survived.
China’s boom is probably unsustainable for a variety of reasons, but their development path seems like a winning game for a long time to come. Again really a question of their success or failure, not of our cleverly impoverishing ourselves to weaken them. Joseph Wang is right that China has tremendous vision and ambition. I only wish the US government was as farsighted.
STS,
Since China is a bit of a hot button, is it OK if I use Japan, Portugal, South Africa or El Salvador as examples of sovereign nation states that don’t think the US has the right to shove its values down their throats? Does your argument change then?
* * *
Overheard conversation:
Sam: Boys, I know we don’t get along too well, and there are a lot of areas where your national interests and mine conflict. Still, what do you say we sit down and negotiate for rules that comport better with MY fundamental values?
Chirag: I’m thinking it would not necessarily to discuss about that.
Liod : Ag, are you tuning me kak?
Kakuei-san: [Yes, I hear you.]
Bruce: Don’t come the raw prawn with me, Sammy!
Jongchan: [No.]
Jose: [No way, man!]
Zhou: [Why don't you go #&*@ your mother, instead?]
.
It’s the World *Trade* Organization, not the World *Fix Everything That is Wrong* Organization. The trouble with linking everything to trade is then you end up hostage to a lot of groups that really don’t care about the environment, or human rights, and are just looking for any excuse they can find to derail things.
If they put conditions on trade that China finds unacceptable and walks away, they win, even though you haven’t done anything positive for human rights or the environment.
I wouldn’t buy a CDS, but a senior tranche CDO from the China Construction Bank looks good (unfortunately, those aren’t traded outside the Interbank networks). I disagree about not knowing.
We have a very good idea of what the balance sheets of the big four are, and what the risk factors are. Part of the condition for foreign investment in CCB, BOC, and ICBC was spending years and with hundreds of accountants to quantify the balance sheets of the banks.
Also, getting to the point where one was able to issue CDO’s also took years of legal work. It seems solid.
China also has plenty of macroeconomic levers. They just aren’t the same one’s as those in Western countries. The large scale ROI, RRI calculations are done by the “invisible hand.”
As far as sustainability, in the long run no economic model is sustainable, and you will have to change what you are doing to meet different conditions. However, the economic model that China has right now, looks sustainable to me for the next 20 years until that vast pool of labor is industrialized.
The trouble with your scenario is that China is exporting capital, not importing it. Also, the big problem right now is that not that the SOE’s are in financial trouble, it’s the opposite.
If you look at why China has huge saving rates, part of it is household savings, but the bulk of it is because SOE’s are now generating tons of money, and no one has any idea what to do with it.
It’s actually an amusing blind spot. If you go back to the late-1990’s, no one really asked the question, so suppose China does manage to fix the banking and SOE sector, what happens, and even now, I don’t know of too many people that have made the connection between the successful Chinese SOE/banking reform and the imbalances in global economy.
Right now I’m asking the question, suppose China does succeed with its current round of economic reforms. What are the likely problems that will result?
DOR:
As I replied to Joseph Wang, I agree the US hasn’t got much credibility with anyone lately. I’m just wondering what (if anything) another country could do that would make you any less enthusiastic about trading with them. As the terms of trade shift against the US we’ll have less and less leverage.
Your hypothetical conversation reads to me like: uncle ‘Sam’ had better not try to negotiate for anything ’cause he’s about to have someone else’s “fundamental values” shoved down his throat. Probably an accurate picture, but aside from some rough justice to a hypocritical bully, I see something to regret in that image.
Joseph Wang:
“suppose China does succeed with its current round of economic reforms. What are the likely problems that will result? ”
Good question. I’m guessing the ‘problems’ will be with financing the US CA deficit. It’s hard to see successful banking reform as a bad thing for China.
STS,
“I’m just wondering what (if anything) another country could do that would make you any less enthusiastic about trading with them. As the terms of trade shift against the US we’ll have less and less leverage.”
There is a fundamental assumption in your question that I don’t buy. The assumption is that the terms of trade are turning against America because of – and only because of – the actions of other countries. The US of A is blameless, it is those nasty foreigners who are doing this to us!
Nope.
My conversation was designed to (a) amuse, and (b) show that the rest of the world isn’t about to swallow US values just because we want them to.
If you find something to regret in your own insight that other countries might shove their values down America’s throat, what does that say about the notion of shoving American values down other people’s throats?
Maybe we should all stop trying to dictate to others, hmm?
.
“”It’s actually an amusing blind spot. If you go back to the late-1990’s, no one really asked the question, so suppose China does manage to fix the banking and SOE sector, what happens, and even now, I don’t know of too many people that have made the connection between the successful Chinese SOE/banking reform and the imbalances in global economy.
Right now I’m asking the question, suppose China does succeed with its current round of economic reforms. What are the likely problems that will result?”"
I guess it was a part hypothetical question and part Devil’s Advocate musing.
In any case, we all know what will happen. Countries that get their act together grow faster and become more wealthier than those that pursue poor policies that lead them down blind alleys.
If China reforms its banking system, and its banks become more transparent, and if they manage non-performing loans better than the Japanese or the S.Koreans did for example, etc. then not only will their real economy benefit from that openness and transparency with faster growth or perhaps more importantly sustainable growth policies, but the positive feedback loop includes more FDI.
The same as we have seen throughout central and eastern Europe as we saw convergence in the legal structures and banking sectors. Those that reformed the quickest were the first to turn around their economies and grow the quickest, attracting the FDI and strategic investments in banks for example.
This does not surprise me at all. What does surprise me is that alternatives such as The Bolivar Revolution and other populist policies are being offered up as serious alternatives to the stick to the basics approach to reform, and that these alternatives are finding a wide audience despite being largely discredited by past experience?
What drove this home to me was about two years ago when I read two articles on the same day. In one, China was fretting that they did not have enough (cheap) labor in a quickly growing area and they were wondering (planning) how to shift an extra two million workers to this fast growing area from underperforming ones.
The second article was an African leader bemoaning that the global economy had passed them by and that more socialist solutions were necessary to address the failings of the market economy, etc.
It is ironical that China’s fast growth based on a market economy, although nominally socialist, is creating the demand for base metals, energy and commodities that is actually putting money into the coffers of some of these African countries, but African leaders lack the means to put underemployed labor to work to turn more revenue from higher commodity prices into secondary and tertiary economic development.
I criticize China, mostly because I think they are pursuing growth at the expense of sustainable development and storing up environmental problems for the future, but that is their trade-off to make as a sovereign country. On the otherhand, great swathes of under developed countries are either pursuing populist policies that will not be successful in the long run, or alternatively doing nothing. In comparison, China is an unbridled success story! ; – )
DOR:
I wasn’t assuming the US was faultless in its loss of credibility or weakening terms of trade — quite the reverse. Nor do I suggest the US should be “dictating” anything. The only dictatating in progress is your dictating the interpretation of what I write
My only disagreement with either you or Joseph is on what constitutes a legitimate “trade” issue. Although I agree as a practical matter that we probably have little-to-no bargaining power to negotiate over most of the issues I raised, I’m reluctant to agree that it’s inherently wrong to do so.
What I regret about the “shoving” image is: a) that the US has become a hypocritical bully who might deserve such treatment, and b) that the alternative to US leadership appears to be gang rule. Just not a happy picture for folks like me who really don’t much like “dictating” behavior in any form.
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