I have an essay in the latest issue of The Spectator (U.K.) that starts from a basic premise:  politicians in one country are utterly hopeless in comprehending the domestic politics of other countries.  The opening paragraph:

Ever since the United States rose to great power status, it has displayed bouts of appalling ignorance about the politics and cultures of the rest of the world. Pick a region, any region, and one can find quotations and policies that demonstrate a breathtaking ability to think that other countries were just like the United States. During the Cold War, US policymakers continually misread the Pacific Rim. In the 1940s, Senator Kenneth Wherry of Nebraska vowed that ‘with God’s help, we will lift Shanghai up until it is just like Kansas City’. It turned out that the communists were more successful in that endeavour than Chiang Kai-Shek.

This isn't merely an American phenomenon, however. 

Why is all political understanding local?  You'll have to read the whole thing to find out. 

Trying to pick the most offensive campaign ad of this election season is not easy -- there's a long and distinguished list of truly offensive ads out there. However, my award for Most Offensive Ad goes to the Democratic Senatorial Campaign Committee with this attack ad on Pennsylvania Republican senatorial candidate Pat Toomey:

I'll give credit to the DSCC: Not everything in the ad is offensive, just 98 percent of it. By far, however, the worst part is the DSCC's suggestion that Pennsylvanians not vote for Toomey because he thinks that "it's great that China is modernizing and growing." Using that logic, apparently the DSCC supports doing everything to keep China backwards and impoverished. Which, if you think about it a little bit, is really disgusting.

I'd love to say that this is the only anti-globalization ad of this election cycle, but that's obviously not true. In another ad, the DSCC blasts Toomey for -- God forbid -- spending part of his career overseas. Forbes' Shikha Dalmia points out, however, that both sides have been throwing up mercantilist ads as fast as they can produce them: 

Virg Bernero, the Democratic gubernatorial candidate in Michigan, where I live, has dubbed his opponent, Rick Snyder, Chief Executive Outsourcer (ha, ha). Mr. Snyder's crime is that he is a successful businessman who invested in a semiconductor company that once employed five -- five! -- people in Shenzen to sell its products in China. In other words, it is no longer a sin to buy from China. It is also a sin to sell to China! (Where did Bernero get his views on trade theory, anyway? The Kim Jong Il School of Autarky?)

Nor is Bernero alone in the Democratic Party: California Sen. Barbara Boxer is accusing her opponent Carly Fiorina, former CEO of Hewlett Packard, of outsourcing thousands of jobs to "Shanghai instead of San Jose"; Senate Speaker Harry Reid is calling Sharron Angle "a foreign worker’s best friend"; and Richard Blumenthal, Connecticut Attorney General running for Senate, who lied about serving in Vietnam, has the temerity to attack his opponent, the former CEO of World Wrestling Entertainment, for "outsourcing" American jobs because her company got toy action figures manufactured in China instead of America.

Hostility to trade is par for the course for Democrats perennially beholden to Big Labor, but what is the excuse of Republicans -- the alleged believers in free markets? In race after race, they too are hitting China to beat Democrats. In West Virginia, Spike Maynard, a Republican running for the House is airing ads against his opponent, complete with Asian music in the background, castigating him for giving stimulus money to a Texas company that happens to be buying windmills from China. Meanwhile, in Virginia Republican Robert Hurt is accusing Rep. Tom Perriell of supporting tax breaks for foreign companies "creating jobs in China."

Well, it's not that surprising to see this. Americans think about trade through a mercantilist, relative gains lens, as opposed to the radical concept that trade can generate win-win outcomes. The Obama administration has abetted this mindset with a trade policy that careens between an idiotic exclusive focus on exports and complete radio silence. And, of course, China has been taking steps in recent months in order to perfect their role as economic bogeyman.

I'd love to say that if the Obama administration mounted a full-throated defense of trade liberalization, this mindset would go away. The thing is, I don't believe that. As the Gallup data suggests, even decent growth rates won't eliminate the zero-sum mindset that people have when it comes to free trade. 

Developing… in a thoroughly depressing manner. 

If you're a DC reader of this blog, and you have nothing to do between 12:30 and 1:30, well...

The End of America's Global Hegemony: Implications for the Global System
Lecture by Daniel Drezner 

Date: October 21, 2010
Time: 12:30-1:30

Rome Auditorium
JHU School of Advanced International Studies
1619 Massachusetts Ave NW

Subject: Professor Drezner will be speaking on the implications of a multipolar world where the United States is no longer the sole superpower. Specifically, he will discuss the prospects for global coordination in a world without a dominant power.

Keith Bradsher reports on the latest move in Chinese economic statecraft:

China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted some shipments of those materials to the United States and Europe, three industry officials said this week.

The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.

"The embargo is expanding" beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities.

They said Chinese customs officials imposed the broader restrictions on Monday morning, hours after a top Chinese official summoned international news media Sunday night to denounce United States trade actions....

The signals of a tougher Chinese trade stance come after American trade officials announced on Friday that they would investigate whether China was violating World Trade Organization rules by subsidizing its clean energy exports and limiting clean energy imports. The inquiry includes whether China's steady reductions in rare earth export quotas since 2005, along with steep export taxes on rare earths, are illegal attempts to force multinational companies to produce more of their high-technology goods in China.

Despite a widely confirmed suspension of rare earth shipments from China to Japan, now nearly a month old, Beijing has continued to deny that any embargo exists.

Industry executives and analysts have interpreted that official denial as a way to wield an undeclared trade weapon without creating a policy trail that could make it easier for other countries to bring a case against China at the World Trade Organization.

So far, China seems to be taking a similar approach in expanding the embargo to the West.

Hat tip to Will Winecoff, who asks, quite reasonably, "What in samhell is China thinking?"

Assuming that the New York Times story is accurate, there are three ways to think about what Beijing is doing. First, this could just be all about domestic politics. Bradsher notes that the decision was made after a Central Committee meeting. It's possible that as the currency wars heat up, and as the U.S. starts complaining to the WTO, there was a need to assuage some nationalist outrage. Of course, no one really knows what Chinese domestic politics looks like, so who the hell knows how much validity to give to this argument.

The second way to look at it is that China's leaders have been reading The Sanctions Paradox. I argued in that book that high expectations of future conflict between the sanctioning and the sanctioned state would lead to frequent episodes of economic coercion, but each attempt would yield only minimal concessions. So far, this model holds up: the past month of China's rare earth export controls have yielded them exactly one returned fishing boat captain. Maybe they are hoping that extending the ban to the United States will force Washington to back down in their WTO complaints. Given rising conflict expectations, that's about the most they're going to get from this action.

The third way to think about it is that China is being ridiculously short-sighted in their use of economic coercion. As Patrick Chovanec notes at Seeking Alpha:

[China] really shot itself in the foot. By flexing its muscles so eagerly, over a relatively minor incident, it alarmed its customers and possibly frightened them off, when a softer approach might have lulled them into continued and deepening dependence. There's no question that China can extract rare earths at the cheapest price, in purely monetary terms. But now China's trading partners must be seriously wondering, what could the real price amount to, when the bill eventually comes due?

China's foreign economic policies with respect to raw materials suggests that Beijing doesn't think market forces matter all that much -- what matters is physical control over the resources. This is a pretty stupid way of thinking about how raw materials markets function, and it's going to encourage some obvious policy responses by the rest of the world. Non-Chinese production of rare earths will explode over the next five years as countries throw subsidy after subsidy at spurring production. Given China's behavior, not even the most ardent free-market advocate will be in a position to argue otherwise.

More importantly, China's perception of how economic power is wielded in the global political economy is going to have ripple effects across other capitals. If enough governments start reacting to China's economic statecraft by taking similar steps to reduce interdependence with that country, then China will have created a self-fulfilling prophecy in which geopolitics trumps economics. Another possibility is that the rest of the world will operate as before in dealing with each other, but treat China differently, developing CoCom-like structures and fostering the creation of explicit economic blocs.

That really would be the worst of both worlds for Beijing. China is growing, but the economic weight of countries that prefer market-oriented ways of doing business is still much, much larger.

In going for the short-term gain, China is inviting a long-term containment policy. That might allow for some rally-round-the-flag support at home, but it's going to be a massive net loss for their economy.

According to Bloomberg, Brazilian Finance Minister Guido Mantega would like the real to stop appreciating and for the rest of the world to cooperate on currency matters:

Brazil's real dropped the most in two weeks after Finance Minister Guido Mantega raised taxes on foreign inflows for the second time this month to prevent appreciation and protect exports from what he called a global "currency war."

Brazil, Latin America’s largest economy, raised the so- called IOF tax on foreigners' investments in fixed-income securities to 6 percent from 4 percent. It also boosted the levy on money brought into the country to make margin deposits for transactions in the futures market to 6 percent from 0.38 percent…

"This currency war needs to be deactivated," Mantega told reporters. "We have to reach some kind of currency agreement.” …

Mantega cited the Plaza Accord of 1985, when governments agreed to intervene to devalue the U.S. dollar against the yen and the German deutsche mark, as the kind of agreement that might be required. International policy makers failed to narrow their differences on intervention in currency markets during the International Monetary Fund’s annual meeting this month.

Hey, you know, I bet the G-20 would be a decent forum for Mantega to foster this kind of cooperation. It's a good thing that there's a G-20 Finance Ministers meeting this weekend in Seoul. 

Wait, what's this Dow Jones story saying?

Brazilian Finance Minister Guido Mantega will not attend a meeting of Group of 20 member-country finance officials in South Korea this week, a Finance Ministry spokesman said Monday.

The spokesman said Mantega would remain in Brazil while the government studies possible introduction of foreign exchange policy measures to curb the strengthening of the country's currency, the real.

Brazil's government will be represented at the meeting by Finance Ministry International Affairs Secretary Marcos Galvao and Central Bank International Affairs Director Luiz Pereira.

Is this rank hypocrisy by Mantega? Not entirely. It's something worse -- a judgment by Brazil's policy principals that more will be accomplished by staying in Brasilia to stem the tide of inward capital flows than to go to Seoul to seek a multilateral solution to the current lack of macroeconomic policy coordination. 

There's plenty of blame to go around on this, but if Brazil thinks the G-20 is not going to accomplish much… then the G-20 is a dead forum walking. 

Tom Brokaw has acquired sufficient gravitas such that, when he clears his throat in a meaningful way, he gets his own New York Times op-ed essay.

This morning, Brokaw cleared his throat about why the ongoing conflicts in Afghanistan in Iraq aren't being talked about during this election campaign season. 

[W]hy aren’t the wars and their human and economic consequences front and center in this campaign, right up there with jobs and taxes?

The answer is very likely that the vast majority of Americans wake up every day worrying, with good reason, about their economic security, but they can opt out of the call to arms. Unless they are enlisted in the armed services -- or have a family member who has stepped forward -- nothing much is asked of them in the war effort.

The all-volunteer uniformed services now represent less than 1 percent of the American population, but they’re carrying 100 percent of the battle…

No decision is more important than committing a nation to war. It is, as politicians like to say, about our blood and treasure. Surely blood and treasure are worthy of more attention than they’ve been getting in this campaign.

It's true that Iraq was a much bigger issue during the 2002 and 2006 midterms. Is Brokaw right that the lack of a draft is deflecting the issue? Sort of. 

Brokaw has half a point in saying that the all-volunteer force blunts the incentive to have a public debate on this Very Important Topic. There's a better reason to explain the silence, however: There's not much daylight between the two parties on this issue. 

In 2008, the Bush administration began the drawdown phase in Iraq. In 2009, the Obama administration anted up for 30,000 more troops in Afghanistan. Neither war is popular with the U.S. electorate. 

Given these political facts, why would either party bring up these conflicts? Democrats can't rail against wars being prosecuted by a Democratic president. Not even nutjob ultra-conservative hacks can credibly claim that Obama has been a "Kenyan anti-colonialist" on the military front. Democrats can't really run on a "see, we told you that Obama isn't a war wimp!" message either. The GOP has little incentive to call for doubling down in these conflicts and can't really pivot towards a "pro-peace" position either. [I suspect the Islamophobia issue is cropping up on the GOP campaign trail because it's a stalking horse for "getting tough" with the United States' enemies. Even here, however, it's not like Democrats have created all that much daylight between them and the party of opposition.] 

If neither party has an incentive to bring up these wars during the campaign, the only way it becomes an issue is if a powerful interest group and/or social movement raises it. Here's here the all-volunteer force comes into play. Perhaps some returning veterans want to bring up the war as an issue for policy debate -- but the returning veterans do not appear to be alienated en masse. There is also no U.S. equivalent of the Union of the Committees of Soldiers' Mothers of Russia -- not that the Russian version was all that effective. All one finds on this terrain are the Cindy Sheehans of the world, and her credibility has been eroding as of late. 

Brokaw is right that matters of blood and treasure should be debated. But a debate requires politicians to have divergent views to debate about -- and right now, that doesn't exist between the major parties. 

Today's Tom Friedman column on China's future is a pretty good one, in that it demonstrates how and why Friedman excels at a craft that flummoxes the best essayists. First, he asks a great question: 

[O]ne of the most intriguing political science questions in the world today is: Can China continue to prosper, while censoring the Internet, controlling its news media and insisting on a monopoly of political power by the Chinese Communist Party? 

Then, he makes a coherent argument in less than 800 words that the most populous nation in the world will have no choice but to liberalize and democratize. Friedman's thesis:

The “Beijing Consensus,” of economic liberty without political liberty, may have been a great strategy for takeoff, but it won’t get you to the next level....

My reason for believing China will have to open up sooner than its leadership thinks has to do with its basic challenge: It has to get rich before it gets old....

The only stable way to handle that is to raise incomes by moving more Chinese from low-wage manufacturing jobs to more knowledge- and services-based jobs, as Hong Kong did. But, and here’s the rub, today’s knowledge industries are all being built on social networks that enable open collaboration, the free sharing of ideas and the formation of productive relationships — both within companies and around the globe. The logic is that all of us are smarter than one of us, and the unique feature of today’s flat world is that you can actually tap the brains and skills of all of us, or at least more people in more places. Companies and countries that enable that will thrive more than those that don’t.

This argument is clear enough for the average New York Times reader to get it. It's also clear enough for us foreign policy bloggers in pajamas online analysts to point out where and how he's wrong. In particular, Friedman makes two large errors:

1) It's not clear that China has to get to "the next level" of economic development in order to become the most powerful country in the world. China's GDP could be larger than America's while still possessing only 1/3  the per capita income of the United States. If the rest of China were to enjoy the infrastructure and living standards or, say, Shenzhen, China would be doing quite well for itself. And as Chinese consumers demand more goods and services, the domestic jobs that power the rise of middle-class professionals -- teachers, lawyers, consultants , environmental engineers, travel agents, etc. -- will start to emerge in large numbers. 

Just to be clear here -- Friedman is right to say that greater liberty is likely to lead to more innovative growth. My point is that a population of a billion plus people allows the government to focus on intensive growth for an awfully long time and still prosper an amazing amount. 

2) In a world of network technologies and externalities, the best and most innovative technology does not always win -- the technology used by the most customers develops the lock-in. China doesn't have to have a technological edge, it just has to ensure that the largest market in the world embraces China-friendly technologies. Hey, come to think of it, you know what institution could ensure that occurrence? The Chinese Communist Party.

[Still, you hope Friedman is right and you're wrong.... right? --ed. Well, in theory yes, but...... after reading this SPIRI paper on China's new foreign policy actors, I'm not so sure. The common thread in that paper is that the more pluralist actors were also the most nationalist. It's entirely possible that a freer China is also a more reckless China.]

[NOTE: This was written on Thursday, but I foolishly forgot to 'publish" it.  It's still relevant, however -- ed.] 

Longtime readers know I'm fond of the phrase "going Vizzini" when policymakers or reporters keep using a word incorrectly. 

Today, I'm adding "going Goodman" in honor of The Simpson's Brad Goodman. In the episode Bart's Inner Child, he said, "There's no trick to it, it's just a simple trick!" I hereby award the Goodman to anyone who says something to the effect of, "We're not asking that you do A, just do A instead!" 

For today's Goodman, let's go to the New York Times and Israeli ambassador to the United States Michael Oren's op-ed explaining Netanyahu's latest offer to the Palestinians:

Benjamin Netanyahu, for the Palestinians to recognize Israel as the nation-state of the Jewish people, enabling his government to consider extending the moratorium on West Bank construction. "Such a step by the Palestinian Authority would be a confidence-building measure," Mr. Netanyahu explained, noting that Israel was not demanding recognition as a prerequisite for direct talks. It would "open a new horizon of hope as well as trust among broad parts of the Israeli public."…

For Palestinians, recognizing Israel as a Jewish state... means accepting that the millions of them residing in Arab countries would be resettled within a future Palestinian state and not within Israel, which their numbers would transform into a Palestinian state in all but name. Reconciling with the Jewish state means that the two-state solution is not a two-stage solution leading, as many Palestinians hope, to Israel’s dissolution.

While the cliché is that the Palestinians never miss an opportunity to miss an opportunity, that's not what Oren and Netanyahu are offering. They're offering two months of doing nothing on settlements in return for Palestinians giving up the right of return, which is one of the core bargaining issues in any final settlement negotiations. 

This might have the distinction of being one of the worst bargains ever offered in the history of Israeli/Palestinian negotiations. True, everyone knows that, eventually, the Palestinians will have to give up the right of return for there to be a final peace. Everyone also knows, however, that the only way that happens in a politically viable manner is if it's part of a package deal on the final status of the occupied territories. 

Regardless of what Oren is writing in his op-ed, this offer amounts to the following: "We're happy to enter into final status negotiations, just as soon as you throw in your biggest bargaining chip to get what you want in final status negotiations." 

If Oren and Netanyahu think they can cadge it from the Palestinians in return for a two-month moratorium on settlements, well, then they win this week's Brad Goodman Award.