Wednesday, August 02, 2017

Are Wrongheaded U.S. Policies Ceding the Future to China?

HMS Hood steaming to meet Bismark - a  heroic but sad symbol of
a failure to recognize the forces of technological and economic change
A piece in the New York Times has a piece that suggests that Donald Trump, a/k/a Der Trumpenführer, may be about to ignite a trade war with China.  The move stems from apparent growing concerns in the United States over a Chinese government-led effort to make the country a global leader in microchips, electric cars and other crucial technologies of the future. Unlike the orthodoxy of the GOP which wants to crush government regulations - including worker and public safety regulations - in China the ideology is to have government work with industry and foster the best possible economic future if for no other reason than the fact that economic success helps the Chinese leadership stay in power.  Thomas Friedman argues that Trump and his isolationist regime where ignorance is embraced and inconvenient facts are ignored or labeled "fake" are taking the wrong course and that the main beneficiary will be China going forward.  In many ways, as explained below, America finds itself where Great Britain was at the end of WWI.  Will American leadership make the same mistakes? Here are column highlights: 
I have a simple view of governing today: We are in the middle of not one but three climate changes at once to which government must help citizens respond — and Donald Trump doesn’t have a clue and China does. 
In the past you could fix any climate/environmental problem later or now. But today later is officially over. Later will be too late. At some point, the deforestation of the Amazon is not reversible.
We are the middle of a change in the “climate” of globalization. We are going from an interconnected world to an interdependent one, and in such a world your friends can hurt you faster than your enemies: Think what happens if Mexico’s economy fails. And your rivals’ falling becomes more dangerous than your rivals’ rising: We will be hurt a lot more by China’s economy tanking than its putting tanks on islands in the South China Sea.
And lastly we’re in the middle of a change in the “climate” of technology. We’re moving into a world where machines and software can analyze (see patterns that were always hidden before); optimize (tell a plane which altitude to fly each mile to get the best fuel efficiency); prophesize (tell you when your elevator will break and fix it before it does); customize (tailor any product or service for you alone) and digitize and automate just about any job. This is transforming every industry.
Governing today is all about how you prepare your society to get the most out of these three climate changes and cushion the worst. Sadly, that’s not our society’s priority right now. In the age of Trump we are treating governing as entertainment. Some conservatives argue that’s fine. The less D.C. does, the better. Let the market rule. I disagree. What actually made America great was a government that prepared the right soil in education, regulation, immigration, research and infrastructure, and a dynamic private sector that grew all kinds of flowers in that soil.
Which brings me to China. China takes governing seriously — in a cruel way and in an impressive way. Its leaders wake up every morning and ask themselves two questions. First, how do we stay in power?
China’s leaders are just as focused on asking a second question: What world are we living in? Which leads to: What are the biggest forces shaping this world? And what kind of national strategy do we need so our people can get the most out of these forces and cushion the worst?
They know we’re in the midst of these three climate changes and have formulated a strategy — “Made in China 2025” — to thrive within it. It’s a plan for building the infrastructure, investments, education and regulations that will enable Chinese companies to lead in supercomputing, new materials, computer-controlled machine tools, industrial robotics, space and aviation equipment — including drones — clean cars, clean energy, biomedicine and next-gen medical devices.
By contrast, Trump hasn’t even named a science adviser. He pulled out of the Paris climate accord without any input from scientists, and he proposed a budget for fiscal 2018 that eliminated the Department of Energy’s innovation lab (the “Advanced Research Projects Agency — Energy”) and slashed funding for all of our key national science and medical labs, which provide the basic research for the very next-gen technologies in which China is now massively investing. He’s spending the money instead on a wall against Mexico. Is there anything more stupid?
And then you watch the health care debate. And then you realize that in addition to the executive branch, one of our two parties has gone nuts. For seven years the G.O.P. made replacing Obamacare, which needs improving, its top goal . . . . it was clear that it had done no homework on a better plan or built any intraparty consensus for it. It was all a fraud.
And then you look at all the knife fights between rival Trump aides and you realize that none of these fights were over how to thrive in a world challenged by these three climate changes. They were all about who could get closest to and flatter our Dear Leader most. But our Dear Leader — as we saw in the health care debate — has done no homework on the future, either. He’s been too busy promising to restore the past.
This is so dangerous. When the pace of change accelerates in climate, technology and globalization all at once, small errors in leadership navigation can have huge consequences. It’s like a 747 pilot who enters the wrong navigational coordinates. You can find yourself so far off course that the pain of getting back will be staggering.
We have such a pilot. It is time for the adult Republicans and Democrats in Congress to come together and take the helm.
Back to Great Britain.  On the eve of WWI, Britain was the most powerful nation on earth with a military, especially its navy, second to none.  It had lead the way in industrialization in the 19th century and had reaped huge economic benefit.  But things were changing.  Germany was rapidly gaining on Britain industrially and economically and science and the technology of the day was changing rapidly.  By the end of WWI, Britain's industrial base had become antiquated and leading industrial strength was moving towards the United States and even Japan.  Britain's leadership turned inward, failed to see the crucial need to modernize with the government leading the way.  By the eve of WWII, while still powerful, Britain had been eclipsed by America, Germany and Japan, the latter two of which had governments that pushed and controlled the modernization of their industrial bases, albeit for militaristic and imperial purposes. Will Trump and the GOP take America on a course akin to Britain's mistaken path?  Right now, I fear the answer is yes.  If this happens, Americans need to get used to the idea of America no longer being the world's leading power and economy.   

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