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Fwd: Benn Steil's Weekly Standard piece on Trump, "Selling America Short," 2/26/16

From:erskine@2bowles.com To: john.podesta@gmail.com Date: 2016-02-26 16:33 Subject: Fwd: Benn Steil's Weekly Standard piece on Trump, "Selling America Short," 2/26/16

Worth reading Sent from my iPad Begin forwarded message: Dear Mr. Bowles, My latest piece in The Weekly Standard, co-authored with Max Boot, argues that a Trump presidency would undermine the liberal international order which the United States painstakingly constructed and cultivated after the Second World War. This would, we believe, gravely damage America’s security and standing in the world. I hope you find the piece of interest. All best regards, Benn Steil Follow me on Twitter @BennSteil<https://twitter.com/bennsteil>, and read about my latest book, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order: www.cfr.org/battle_of_bretton_woods<http://www.cfr.org/battle_of_bretton_woods> -------------------------------------------------------------------- Selling America Short Max Boot and Benn Steil The Weekly Standard February 26, 2016 Following his primary victories in New Hampshire, South Carolina, and Nevada, Donald Trump has established himself as the clear frontrunner for the Republican presidential nomination. He has done so offering grandiose slogans — He'll Make America Great Again! He'll have us win so much we'll get bored with winning! — and precious little in specifics. He has said, for example, that he would repeal Obamacare, without saying a word about what would replace it — beyond promising that his health program would be "terrific" and "take care of everyone." When Trump does offer specifics, more often than not they are impossible to implement. Recently, for example, he said that he would solve the North Korea nuclear problem by getting China to assassinate Kim Jong-un. Given that China's leaders are unwilling to sanction North Korea, it is exceedingly unlikely they will murder its leader at President Trump's request. In short, Trump has redefined the Art of the Deal in American politics: His promises would make even the most cynical political veteran blush. It is hard to know whether Trump is serious about what he says, given his ever-shifting views, lack of policy advisers, and claims that he would behave differently in office than on the campaign trail. Nevertheless, with the populist billionaire continuing to ride high, it is important to take him seriously as a potential occupant of the Oval Office. What would a President Trump do, and what would be the likely consequences of his actions? Start with trade policy, the area that, along with immigration, seems to exercise him the most. One of America's greatest accomplishments in the early postwar era was the creation of a rules-based international trade regime. The aim was to prevent a recurrence of the trade wars of the early 1930s, which spread the Great Depression globally and helped fuel the rise of both fascist and Communist movements around the world. Governments stuck by this trade regime even through the recent financial crisis and recession. Trump, however, says he is prepared to abrogate America's commitments, citing nothing more than the pretense that our importing more than we export is evidence of "cheating" by foreign governments. He has pledged to slap an illegal 35 percent tariff on U.S. automakers that manufacture vehicles in Mexico. If Mexico refuses to accept his as-yet unspecified demands to change the terms of the North America Free Trade Agreement, he has pledged that "we will break it." Such a trade war with America's third-largest trade partner would raise prices and kill jobs on both sides of the border, no doubt prompting new waves of the illegal immigration that Trump has pledged to end. As for the recently concluded 12-nation Trans-Pacific Partnership deal, not yet ratified by Congress, Trump has condemned it. He argues that TPP will benefit "big corporations in America" and China, which is doubly bizarre. Companies with over 500 employees account for half of U.S. employment and two-thirds of U.S. exports. Does Trump then seek trade deals in which mom-and-pop shops will somehow drive exports? As for China, it is not part of the deal and has in fact signaled "countermeasures" to offset the impact of its exclusion. Trump has pledged to brand China a currency manipulator for pushing down its currency as a means of gaining trade advantages. In retaliation Trump has threatened a 45 percent tariff on Chinese goods — which will surely open a second front in the trade war, this time with America's second-largest trading partner. Yet even ignoring that the International Monetary Fund declared China's currency "fairly valued" last May, its central bank has lately been intervening to push its currency up — not down. China's foreign currency reserves have fallen $760 billion from their 2014 peak and $300 billion in just the past three months. At this rate of decline, it will actually face a dangerous shortage of reserves by the spring. To start a trade war with China while it is helping, rather than hurting, U.S. exporters is not only reckless but crazed. On immigration, Trump has famously called for the roundup and deportation of the roughly 11 million undocumented immigrants living in the United States. He claims he can accomplish this in 18 months. According to the center-right American Action Forum, this would actually take about 20 years to accomplish and cost U.S. taxpayers between $400 billion and $600 billion. The impact on the U.S. economy would be considerably larger: Gross domestic product would fall by nearly $1.6 trillion, not only because of enforcement costs but because of the disruptive impact of removing 11 million people from the workforce. Industries such as agriculture that rely on immigrant labor would be hardest hit: Farm income would decline; food prices would increase. Businesses in urban areas, where many immigrants live and work, also would suffer from a sharp fall in customers, while consumers would suffer an increase in the cost of everyday services. To prevent a future immigrant influx, Trump would construct a 1,000-mile wall on the Mexican border; he claims this will cost $8 billion, but more credible estimates suggest it will be over $40 billion. This, he says, Mexico will finance because "you tell them they're gonna pay for it." This strategy failed signally for Trump's creditors when his businesses declared bankruptcy four times, refusing to pay their debts; how it would succeed in Mexico's case remains a mystery. Trump assures us Mexico can afford the wall, whose cost would amount to 3 percent of its annual GDP ($1.2 trillion), because of its trade surplus with the United States. Yet a surplus is a claim on future U.S. goods and services; it gives America goods and services for which we do not immediately provide any in return. It is manifestly not a windfall. It is a safe bet that no Mexican government could possibly give in to his demands and, if it did, it would not stay in power for long. Trump would be no more successful in pursuing his stated strategy for the Middle East. Instead of trying to end the Syrian civil war, he suggests we should "make something with Russia" — that is, support its military intervention in Syria. This is of a piece with his admiration for Russian strongman Vladimir Putin, whom he has praised as a real "leader, unlike what we have in this country." One problem with this is that only 10 percent of Russia's munitions in Syria are directed at America's enemy, ISIS. The other 90 percent are being dropped on moderate opposition groups supported by the United States. Putin's objective is to shore up the Bashar al-Assad regime in cooperation with Assad's backers in Iran. But as long as Assad continues to commit war crimes against the majority Sunni population, ISIS and other extremist Sunni groups, such as the Nusra Front, will continue to attract support from Sunnis. There is also the troubling fact that Russia is aiding and abetting Assad's war crimes — troubling to everyone but Donald Trump. He has pledged to commit war crimes of his own by going "beyond waterboarding" in his treatment of captured terrorist suspects, even if brutal interrogation techniques don't elicit any new information. "They deserve it anyway for what they do to us," he says. He also threatens to target families of terrorists and to "bomb the shit" out of areas held by ISIS. More recently he has spoken admiringly of shooting Muslim prisoners of war with bullets dipped in pig's blood — a practice he erroneously attributes to Gen. John J. Pershing during his service in the Philippines. If Trump were to order the U.S. military to act as he suggests, the likely result would be a crisis in civil-military relations. Many military personnel would refuse to carry out orders so blatantly at odds with the laws of war; soldiers know that they could face prosecution under a future administration. If soldiers were to do as President Trump ordered, moreover, terrorist organizations would have a new recruiting pitch with the world's Muslims — the need to counter American barbarism. The anti-American backlash would grow greater still if Trump carried out his threat to ban Muslims from entering the United States and to seize Syrian or Iraqi oil fields — an undertaking that would require a long-term American military occupation. Such actions would alienate allies that the United States needs to fight terror and would risk driving a substantial minority of American Muslims toward extremist views in a way that both Presidents George W. Bush and Barack Obama carefully avoided doing. Trump would also alienate America's oldest allies in Europe and Asia if he carried through on his repeated threats to renegotiate or terminate the agreements under which U.S. troops have been based abroad for decades. Trump has promised to tear up the 1960 U.S.-Japan Treaty, saying, "If somebody attacks Japan, we have to immediately go and start World War III, okay? If we get attacked, Japan doesn't have to help us. Somehow that doesn't sound so fair." He has been equally acerbic in criticizing South Korea, saying, "We have 28,000 soldiers on the line in South Korea between the madman [Kim Jong-un] and them. We get practically nothing compared to the cost of this." In fact South Korea pays more than $800 million annually to support U.S. troops on the peninsula, making it arguably cheaper to keep U.S. forces there than on the American mainland. Japan also contributes to the upkeep of U.S. forces based there. In return the United States maintains the security of America's fourth-largest and sixth-largest trade partners, while preventing a nuclear arms race in Asia. Japan and South Korea, if stripped of American protection, would almost surely go nuclear. Indeed, Trump's incendiary rhetoric is already leading more South Koreans to argue that their nation should acquire its own nuclear arsenal. Trump has spoken in similarly contemptuous tones of America's European allies, who, in his view, are also giving American taxpayers a raw deal. He says that in combating Russian aggression, the Europeans should take the lead. "You know the old expression," he says, " 'Go on fellows. I'm right behind you'?" And he adds indignantly: "Why are we always at the forefront of everything?" At the same time, Trump has said he would get along "fine" with Russia. This suggests that he would undo the role that the United States has played in defending Europe against Russian aggression since 1949 and might even tilt U.S. policy in a pro-Russian direction. Since Putin has called the collapse of the Soviet Union the "greatest geopolitical catastrophe of the [20th] century," Eastern Europe will surely tremble while waiting to see how much of it will have to be restored as the cost of the blossoming Trump-Putin "bromance." The radical changes that Trump proposes are all the more dangerous because he is so singularly ill-equipped to manage the resulting turmoil. This is a candidate, after all, who doesn't know the difference between the Kurds and the Quds Force or have any idea what the "nuclear triad" is. Nor has Trump so far made good on his pledge to attract "top top people" to help him run things; he has still not unveiled a campaign foreign policy team in spite of months of pledges to do so. In any case, advisers cannot make up for a president's ignorance and prejudice; presidents always get conflicting advice, and it is their job, and their job alone, to make the most difficult judgment calls in the world. Trump has already done considerable damage to America's reputation with his crude, bombastic, and often ugly rhetoric. American standing, as measured both in "soft power" and more traditional realpolitik terms, would suffer far more if he were to become commander in chief. A Trump presidency threatens the post-World War II liberal international order that American presidents of both parties have so laboriously built up — an order based on free trade and alliances with other democracies. His policies would not make America "great." Just the opposite. A Trump presidency would represent the death knell of America as a great power. -- Max Boot, a senior fellow in national security studies at the Council on Foreign Relations, is a contributing editor to The Weekly Standard. Benn Steil is director of international economics at the Council on Foreign Relations and author of The Battle of Bretton Woods. Original article link: http://www.weeklystandard.com/selling-america-short/article/2001271 If you would prefer not to receive future emails of these pieces, please reply to this message with "unsubscribe" in the subject line. Thank you. Council on Foreign Relations 58 East 68th Street New York, NY 10065