It’s funny that China is already Saudi Arabia’s biggest customer, because it was the United States who first convinced the Saudis to guarantee oil with the Chinese in order to gain China’s support for economic sanctions against Iran.
This one sentence was just in a list of unfinished drafts I have for the blog; no links present. Occasionally I’ll start something and never finish, coming back to it months later to find the tidbit was actually interesting.
In the interim we had the Mao years, which, politically speaking, were kind of like being strapped in the passenger seat of a stolen Lexus at 3:00 a.m. with your good friend Gary Busey at the wheel huffing paint and sucking down his third bottle of Goldschläger.
This is an exhortation to please read Jottings from the Granite Studio, the blog of Jeremiah Jenne, who is the academic dean and teaches Chinese history at IES Beijing, the study-abroad program I attended last fall.
Today was a gloriously sunny day in Santa Cruz, California. We took the dogs down to the beach to get a run in and then stopped for ice cream down at Marianne’s. That is also an exhortation to try out the combination of Horchata and Mexican Chocolate ice cream. The two together must be divine inspiration.
Ryan Lizza writes a great piece on the Obama doctrine for the New Yorker:
“The project of the first two years has been to effectively deal with the legacy issues that we inherited, particularly the Iraq war, the Afghan war, and the war against Al Qaeda, while rebalancing our resources and our posture in the world,” Benjamin Rhodes, one of Obama’s deputy national-security advisers, said. “If you were to boil it all down to a bumper sticker, it’s ‘Wind down these two wars, reëstablish American standing and leadership in the world, and focus on a broader set of priorities, from Asia and the global economy to a nuclear-nonproliferation regime.’ ”
Trying to figure out the correct balance between realism and idealism is hard. And this article (among many others), complains about the lack of an Obama ‘doctrine’ or ‘vision’. But I almost feel like Clinton and the NSC staff quoted are apologizing for not being more clear about that. They don’t need to – even if it turns out that the Obama ‘doctrine’ is some messy combination of idealism and realism that fully satisfies neither camp. This doesn’t have to be a flaw, and it definitely could be a virtue. We have a large array of philosophical systems in our policy ‘toolbox’, and we should consider using all of them as appropriate. This is, as Obama notes, non-ideological. And it’s also smart. Here’s what Obama could say to break through the clumsy rhetoric, or at least, what I would say:
“I believe in values, but I also believe we should pursue the best policies to advance those values. Both domestic and foreign policy represent shared national values that we hold as a country. Policy makes a moral statement. But invading a country to instigate regime change may not be best way to serve those values – if democracy protestors in a given country retain credibility in the eyes of the people when the US does not interfere, then we should not apply military force, and pursue other means of promoting our values. It’s a philosophy that espouses an idealistic vision while retaining the ability to tailor our policies situation by situation.”
There. Isn’t that simple?
Or maybe, its simplicity lies in acknowledging we must embrace complexity.
This op/ed in the New York Times written by Reagan’s OMB director and former Republican congressman David Stockman is the best piece of writing I have read about the deficit in the past year. And Stockman even manages to be bipartisan in his criticism of the various deficit plans! It’s common knowledge at this point that Rep. Ryan’s budget makes the deficit worse immediately by extending the Bush tax cuts and not doing anything with Medicare until the 2020′s; furthermore he focuses on cost-shifting and raising the burden on seniors and the poor and not on actually making the delivery of healthcare cheaper. But what Stockman reintroduces to the debate is that the Obama budget has its own problems – it is too timid and doesn’t call for any shared sacrifice from the middle class in the form of raised taxes.
This is the liberal argument we have been missing. But it’s also a realistic argument that states the obvious. The deficit debate has measurably shifted to the right – first, the Simpson-Bowles Deficit Commission was supposed to be the centrist plan, the compromise. Then the Republican Study Group’s budget was labeled conservative, the Ryan plan was labeled ‘serious’ and moderately conservative, and the Obama plan came out to the right of the Deficit Commission. Viola – a new middle, seriously shifted to the right.
There seems to be two methods of leading and bargaining in a political context – first, “The American President”-Michael Douglas style, where a leader articulates his preferred outcome, negotiates and compromises. Or, the second, where a leader releases a bargaining position that is designed to appeal to the other side, already compromised from the ideal. The President embraced the second tactic from the get-go, and he’s received a lot of flak from the Left and the media for doing so. Personally, I’m torn – I’m sure the success of tactic #1 is idealized, where the perfect outcome only exists in movies, like “The American President.” At the same time, I think the country needs presidential leadership with an aspirational vision. I don’t see that vision articulated in the Obama White House. I see: “We’re cutting less spending than the other guy.”
So does the White House need more David Stockmans in the White House – and a more liberal-sounding president? Do we need more people like Jared Bernstein, Biden’s economic advisor who just resigned to join the Center on Budget and Policy Priorities? I’d like to think so, if only because I still believe policy is ultimately an extension of the values we hold as a country. And would that mindset cause negotiations to grind to a halt, and lose on every priority the president has? Ideological conviction doesn’t seem to have stopped the Republicans from winning the debate.
China has some of the strangest development patterns in the world. The inner city is always the most desirable place to live. The migrant poor live in exurbs. Suburban tract homes are reserved as second or third homes for millionaires.
Driving through Chengdu a while ago on the way to the airport, I saw it all. There were miles of cranes. New apartment buildings not two years old that already looked shabby. The ubiquitous white tile. Ads for European style villas. Walls topped with shards of glass and cameras protected barren concrete apartments. (why?) The apparently new campus of the Southwest University for Nationalities stood alone. (the university was quite a sight – every building identical, all in red brick) On one corner of the campus, a field of yellow bok choy grew behind a small hut. Had this been the lone example in China were the local government had been unable to appropriate the land? Had eminent domain failed? The city has paved vast new roads, empty on either side, the sidewalks lined with perfectly groomed trees painted white around the base to show that they have already been trimmed. Even in this no-man’s land, special sidewalk tiles for the blind have been laid.
The development seemed to get more intense the closer we got to the airport. The temporary walls surrounding construction projects were lined with a continuously repeating poster of the airport of the future: gleaming new terminals, the roofs undulating naturalistically as the ocean waves so very far away from this inland city. The only terminal thus completed was packed with businessmen and the rising upper middle class. A few foreigners stood idly gawking at the bustle. As our plane took off, smoky haze slowly obscured my view.
I’ve seen many similar developments in Beijing – the subway lines that extend to yet-to-be-developed areas, the construction, the strange frontier where urban and rural collide. But Beijing seems almost mature and developed compared to what I saw in Chengdu. Beijing is only one side of the story; there is always somewhere else in China that is undergoing a more fantastic rebirth of construction. Nature no longer exists; it’s as if China is one big construction lot.
Travelling through Sichuan made me realize I still had old copy lying around from previous travels that I had never published. The next couple of posts will be those. Here’s the first. Reflections on Chengdu and Emei Shan will follow.
In Xinjiang, cultural politics mixes with oil politics. Every time the Chinese government squashes Uyghur expressions of independence or solidarity, the West reacts with outrage. ‘The people of Xinjiang (and by extension, Tibet) must have rights of self-determination,’ they shout. The West fails to recognize China’s priorities. China’s desire to foist a nationalist identity on Uyghurs and create a unified China is a secondary concern; it only exists so that they can extract as much oil as they can from Xinjiang.
Karamay is Xinjiang’s oil capital. 15 years ago, it was a patch of the Gobi Desert. Now it is a city of 290,000. It has cost billions of yuan to build – a river was even diverted from the mountains to make it livable. Just recently, a billion yuan was spent to build a major park downtown, featuring a spectacular water and laser light show at night.
Surrounding Karamay for a hundred kilometers are oil fields. You can drive along the highway next to the Taklamakan Desert and never stop seeing them; oil derricks stretch beyond the horizon. It was the first oil field discovered and tapped in post-revolutionary China, and the fourth largest, after those in the Northeast and in the East China Sea. 6.3 million tons of oil flows out of Karamay every year. In the US, you would expect an endeavor like this to be built by private enterprise. But this of course is China, and the Karamay oilfield is owned by the state-run China Petroleum.
Karamay isn’t just one of China’s biggest oilfields – it’s also a major conduit for oil and natural gas to and from Kazakhstan and the rest of the Central Asian “stans”. In this regard, the pipeline is the most important resource in Xinjiang. Even if all the oil dried up today, the city would still exist because of this connection. China could actually be drilling more oil in Karamay, but it’s harder and deeper to get to. They don’t need to spend the capital to invest in more expensive technologies, however, because the oil in Kazakhstan is simply cheaper.
Xinjiang is known for its “one white, two blacks”: cotton, coal, and oil. Of lesser geopolitical importance is its “one red”: tomatoes exported to Italy. Although the vast wind fields, solar power plants and hydropower dams are impressive, they are not as significant, because they are only used to supply energy to Xinjiang itself. Oil and coal, however, power the rest of China.
Too many China scholars view China’s insistence on the territorial integrity of Xinjiang as culturally or historically based, as if the Chinese would “lose face” if the barbarians in the West seceded and overturned their tributary relationship. This is mistaken. Opposition to Uyghur independence is not primarily a matter of nationalism, the unification of all minzu (nationalities or ethnicities) under common citizenship, and certainly not about pride. It’s all about oil.
Francis Fukuyama once again reaffirms why he is one of the most serious foreign policy intellectuals today, crystallizing in a few sentences what most other China commentators have missed or failed to express so eloquently:
The hardest thing for any political observer to predict is the moral element. All social revolutions are driven by intense anger over injured dignity, an anger that is sometimes crystallized by a single incident or image that mobilizes previously disorganized individuals and binds them into a community. We can quote statistics on education or job growth, or dig into our knowledge of a society’s history and culture, and yet completely miss the way that social consciousness is swiftly evolving through a myriad of text messages, shared videos or simple conversations.
If Yajun’s post at Jottings from the Granite Studio was an introduction into the Chinese mindset and the functional barriers to political change, then Fukuyama’s post is the perfect combination American realist/idealist take on the Jasmine Revolution, focusing on China’s middle class. The middle class is definitely the right frame with which to analyze future political instability in China. If change does come, it will be at the hands of a large number of increasingly comfortable but not wealthy Chinese. This is especially true given that, as Fukuyama notes, the unemployment rate among college graduates in China is one of the highest in the world.
UPDATE: I’m rather surprised that my previous post on the Jasmine Revolution published in the Trinity Tripod is now leading New York Times coverage when you google “Jasmine Revolution”.
Published in the Trinity Tripod.
Over 60 years ago, Chiang Kai-shek envisioned China as a bustling economic and political power, albeit controlled by his own totalitarian state. Today, the Chinese Communist Party (CCP) has reshaped China from a rural, fractured, feudal society into a bustling economic and political power, albeit controlled by totalitarian government. Does this sound familiar? The CCP couldn’t have carried out Chiang’s vision better than Chiang himself. And now, with Taiwan functioning as a democracy, some in China want to follow their lead. Several weeks ago, members of an overseas Chinese-language website, Boxun, called for China’s very own “Jasmine Revolution,” a take on the more successful uprising in Tunisia. I say more successful because the Chinese “revolution” has so far been a dud.
The idea was for sympathizers of democracy to gather in designated public areas in major cities every Sunday, and then peacefully take a “stroll,” thwarting the police from figuring out who was a protestor and who was merely a tourist. Things didn’t go as planned. The first Sunday, Jon Huntsman, U.S. Ambassador to China and soon-to-be Republican presidential candidate, “strolled” into the Wangfujing shopping street in Beijing with his family, pretending not to know that there was anything political going on. A video of Huntsman caught in the act was later used by hyper-nationalists to prove a point about the U.S. meddling in Chinese affairs. The second Sunday was even worse. In Beijing, the meeting place was blocked off; police (uniformed and in plainclothes) outnumbered civilians at a ratio of 10-to-1; and some foreign journalists were harassed, taken to police precincts, and even beaten. This past Sunday was much of the same.
It might be tempting to draw comparisons between the Middle East protests and China, but to do so would be ignoring quite a number of differences. At the end of the day, the majority of Chinese citizens are satisfied with their government. If democracy was suddenly instituted in China, there’s no doubt the CCP would win by a landslide. Under CCP rule, economic development has changed peoples’ lives immeasurably. The Chinese wife of a friend of mine has this anecdote: “My mom could only afford a small piece of sugar for lunch during the Great Famine in 1960, but her daughter traveled in three continents before she turned 25.” Who would forsake a party with those results? Furthermore, most Chinese people haven’t even heard of the protests; the “revolution” mainly received news on websites that are blocked in China.
There are still many Chinese people who hold grievances against the government; but to date, there has not been an incident that unifies the farmers and students, or factory workers and professionals, reaching across socioeconomic strata to create the only force that can create political change in China. Even the Tiananmen protests 20 years ago never reached rural areas. Those fighting for political reform in China will have to wait a little while longer. Don’t lose hope.
Around the country, many teachers see demands to cut their income, benefits and say in how schools are run through collective bargaining as attacks not just on their livelihoods, but on their value to society.
This great New York Times article gets to the heart of the matter: breaking the backs of public sector unions inherently entails vilifying teachers and everyone else who enters public service as ‘leeches’ and the like. Ironically, this also comes at a time when more young people than ever are entering into public service. People decry poor results in education and yet don’t realize that attracting better teachers means that we have to raise the status of teachers in society and pay them more. There’s a reason why Teach for America is effective at getting college students to commit to the job for a few years, but isn’t as effective in recruiting life-long teachers.
This isn’t just true in education; it’s true across the public sector. We wonder why the SEC isn’t doing its job effectively and then forget that the GOP is cutting its budget, which just sends more quality public service employees into the much higher-paying financial industry.
With the release of the Treasury Department’s new white paper on housing policy, the administration has restarted a national discussion on reforming the GSEs (government-sponsored enterprises, Freddy Mac and Fannie Mae). The long and short of it is that they distort the market for mortgages, and contributed to the collapse of the economy by backing risky mortgage securities that later blew up. (they are not however the root cause and creators of those exotic securities; you can thank Wall Street for that) Our bailout of Freddy and Fannie has cost the government far more money than the stimulus or TARP ever cost. This entire set-up is rather strange, given that these are for-profit corporations with an arsenal of lobbyists.
What’s the government’s plan? I got curious when I read Ezra Klein write this bit: “But the government isn’t looking to dramatically change the role they play in the housing market. They’re just looking to get away from poorly designed institutions like Fannie and Freddie.” This seems like a contradiction – and I think he misread the report, although I agree with everything else he wrote in that post. The government’s stake in the mortgage market is going to be substantially altered. As Daniel Indiviglio writes, the government will still subsidize a small portion of mortgages for the poor and veterans through FHA and VA programs, but under any of the options provided by the Treasury Department, the U.S. government will gradually exit the 85% percent of the market it had previously inhabited.
The plan makes GSEs less and less competitive with private sources of funding, gradually winding down its influence on the mortgage market. Fees guaranteeing mortgages will rise, more private capital would need to be raised to cover credit losses, and larger mortgages will not qualify for government-backing. Next, the plan offers three options for a limited government presence on the market: completely private, no government role of any kind; a crisis funding mechanism that is so expensive that during good times it is never used, and in bad times much cheaper to ease a credit crunch; and a catastrophic guarantee reinsurance program. Indiviglio describes this better than I can: “Mortgages would pay a premium to obtain this insurance, but the first losses (up to some specified percentage) would hit whoever held the mortgage asset, whether it be a bank or investor. If losses exceed that first loss piece, then the government would cover the remainder. The government would use the guarantee fees it obtained to do so. That way, theoretically, taxpayers would not be harmed. Think of this as a little like depository insurance, where there’s a fund in place paid for by insurance premiums that the government uses to cover losses.”
This is all good. When it comes to housing policy, one major question will shape how you view all related policies: is universal housing ownership a worthy goal of U.S. government policy? I would say: not in of itself. Owning a house is not a smart decision for every single person. It might be the American dream, but we do more harm than good when we try to force it on people. I would suggest everyone also take a look at the GSE section of the Roosevelt Institute’s 2009 report on financial reform, “Let Markets Be Markets”. There’s a very good lecture from Raj Date included. The full report is here (pdf).
