T. Belman. This article highlights the importance of Israel to both sides. The US will have to abandon the Palestinians and the TSS if it wants to solidify its alliance with Israel.
By Andrew Thornebrooke, EPOCH TIMES.
A worker toils at a manufacturing plant of Sany Heavy Industry Co. in Changsha, Hunan province, China, on Oct.19, 2019. (Thomas Peter/Reuters)
The United States has fallen behind China and numerous other countries in its global share of key industrial sectors, according to several experts in technology and industrial policy.
U.S. global shares in high-value industries have fallen so dramatically that the nation now ranks just above Italy and behind Mexico in a list of key advanced industries, said experts at an April 27 industrial strategy conference hosted by the Information Technology and Innovation Foundation (ITIF) think tank.
“We’re below the global average…,” said ITIF founder Robert Atkinson. “We’re moving in the wrong direction.”
“We’re almost a developing nation.”
The industries measured in the so-called “Hamilton Index” include pharmaceuticals, electrical equipment, machinery, motor vehicles, computer equipment, and other key sectors that play an outweighted role in determining the nation’s competitive advantage.
While the United States had garnered a massive share in low-value added sectors like IT and information services, it had steadily lost its global share of advanced, high-value industries over the course of the last three decades, Atkinson said.
Moreover, Atkinson added, Washington policy makers seemed largely to blame for this trend.
“Public policy in Washington is intentionally trying to decrease our position [in these industries],” Atkinson said.
“Once you lose these capabilities, it’s hard to get them back. You’ve got to fight.”
US Must Reject ‘Progressive Economics’
To that end, Atkinson said that many American policy makers believed that all industrial sectors were essentially equal in economic promise, and that that belief rendered them incapable of crafting meaningful legislation to enhance and fortify the nation’s most critical technologies.
He referenced the now infamous quote from Michael Boskin, an economic adviser to President George H.W. Bush, who once said “Potato chips, computer chips, what’s the difference?”
That failure to recognize that some industries play a greater role in securing the nation’s competitive edge persists in Washington now, he said. Changing that thinking among political leadership is the key struggle that will determine the future of American competitiveness.
“The single-most battle we have to fight is an intellectual battle, not a political battle,” Atkinson said.
“Computer chips are more important than potato chips.”
Atkinson added that the nation’s competitive advantage was “not given,” but “fought for,” and that abandoning the “progressive” and “neoliberal” economic theories that have been ensconced in Washington for decades was crucial.
“This is about competition,” Atkinson said.
“If you don’t want to compete, you’re going to lose.”
G7 Nations Losing High-Value Industries to China
David Sainsbury, former Minister of Science and Innovation for the UK, agreed with the assessment, saying that a new theory of growth and competitiveness was necessary to break China’s growing economic domination and forge a path forward for the United States, UK, and other G7 nations.
Indeed, he said, all of the G7 nations faced declining rates of economic growth since around 1990, when their approximately ? of global GDP plateaued and entered a period of dramatic decrease correlating with China’s true entry into the international marketplace.
The loss of high value-added industries like energy, mining, and advanced manufacturing, and their replacement with lower value-added services, he said, had drastically hindered the G7’s economic development.
“We have a poor rate of innovation in advanced industries, which are really the engine of economic growth,” Sainsbury said.
“It’s a race to the top and to get into the more advanced areas.”
Moreover, he said, the United States faces a $250 billion trade deficit in advanced sectors like those listed in the Hamilton Index, and would need to deploy new strategies to deliberately grow those sectors including through subsidizing or incentivizing research and development, skills training, and financial resources.
Ultimately, he said, American leadership would need to accept that it can only improve its own industrial capacity at China’s expense, or else allow China’s communist regime to advance at its expense.
“The point about competition is some people win and some people lose,” Sainsbury said.
Boosting American Competitive Advantage
Securing competitive advantage over China in the long term will require much larger investments both into the depth and breadth of the United States’ innovation ecosystem, according to David Adler, an economist who wrote a book on industrial policy.
Adler noted that senior Chinese Communist Party (CCP) officials already regarded industry as “the main battlefield of technology innovation” and industrial policy as the ultimate “foundation for winning the competition [with the United States].”
To counter the regime’s own push to topple the U.S. economy, he said, the United States should learn from Japan’s new economic security strategy, which he considered to be a framework to deal with the China challenge.”
Under the strategy, he said, Japan’s entire political system is being reintegrated to counter CCP predation by funding supply chain resiliency, promoting critical industrial sectors, and aligning the corporate sector with key government goals.
The United States could pursue a similar path, he said, strategically investing not in single companies, but whole sectors deemed to be of vital importance to national security.
“The key to industrialization is competition,” he said, adding that the nation should grow critical sectors at home or in allied nations while removing them from strategic competitors like the CCP.
Michael Brown, former director of the Pentagon’s Defense Innovation Unit, agreed, but added that the United States would need to spend more to align U.S. companies to strategic goals in the long term.
“I think the capitalist system we have today is optimized for short-term results,” Brown said.
“We’re not actually spending enough because the companies… are fragile… and we have to make the commitment [over a long period].”
Whereas a few companies like SpaceX might have an eccentric billionaire willing to put money on the line and take risks, he said, most corporations did not have that luxury, and were incentivized to put short-term gains before long-term corporate interests, much less national ones.
By providing incentives, he said, the U.S. government could help to support moderate risk-taking and long-term capital growth while convincing key industries to pull back from China.
“How did we win [the first Cold War]?” Brown said. “A consistent policy of containment.”
“No company was thinking about how [they could] expand into Russia.”
Slowing China’s Ascent
The issue of the new Cold War between the CCP and United States also complicated the decision-making for how to best boost American economic advantage, said Jonathan Ward, Founder of the Atlas Organization advisory firm.
The CCP, Ward said, is pursuing a “post-American world.” Speeding up American industrial capabilities, therefore, is not enough to ensure the future. Rather, the United States, must also actively work to limit the CCP’s power and innovation.
“They have a very clear geopolitical vision that is essentially about the destruction of the American-led order,” Ward said.
“We do want to restrict the growth of China as long as the Communist Party is in power.”
Ward explained that much of the CCP’s long-term vision viewed the United States as essentially “being in the way,” and, as a result, the regime is building a military meant for the explicit purpose of fighting the United States in the Pacific and ejecting it from the region.
To that end, Ward suggested retaining trade with China in certain fundamental areas like agriculture, while strategically decoupling sectors critical to U.S. competitive advantage like AI and biosynthetics.
Sen. Todd Young (R-Ind.) said that accomplishing such a goal would require incentivizing the growth of some industries because China “weaponizes” industrial policy against the United States.
Young confessed it felt like an “unnatural act for a limited government Republican” to support such industrial policy, but that the threat posed to the nation by the CCP through industrial planning created the necessity of an exception to the goal of an otherwise limited government.
“If we want to be the world’s leader across the range of strategic industries, that means making strategic decisions,” Young said.
“We need to incentivize.”
@B. Poster
Tell that to the Taiwanese. Moreover, Taiwan is a democracy, a genuine one. China is a brutal fascist empire. Tibet and Xing Xang are also colonies. The U.S. had no right to give Taiwan’s seat in the U.N. to Peking.
China is also a rising neo-colonial power that enmeshes its prey in debt in dealing with aid to poor countries. The danger for Israel is letting China own and run ports and other vulnerable security areas.
China is as committed to supporting Iran and the Pals as is Russia. Much more than the U.S.
As long as this is the case, Israel must commit nothing to them.
Russia has as much to fear from Israel as a military opponent as the other way around. The Syrian compromise is to the interest of both and involves no committment other than non-aggression.
Israel does need the U.S. veto in the U.N. Either that, or a way to ward off sanctions.
Russia thwarted sanctions by Obama exactly once at Bibi’s request, behind the scenes.
Otherwise, Russia and China have ALWAYS voted to condemn Israel and aided Israel’s enemies. (After 1948 when the Soviet Union recognized Israel de jure and China abstained at the request of Two Gun Cohen)
But, there is no reason it shouldn’t be an equal partnership in common projects.
But Israel must be militarily self-sufficient. Obama delayed missile shipments in 2014 and U.S. stockpiles in Israel have mostly been sent to Ukraine. The U.S. suppressed Israeli air craft production. That should resume though the U.S. stabilzes its economy by aiding its own military industries via gifts to Israel which is otherwise a competitor, albeit a minor one.
And, yes, there are about 83,000 Jews in Russia, about a thousand in China, and about 6 million in America.
Nearly all the Jews in the world are in Israel and America, mostly in New York, New Jersey, California and Florida. Israel has about 7 million. The next largest is France with about 250,000. There are only about 15 million Jews in the world.
More than 85 percent of all the Jews in the world live in Israel and America.
If Israel were to all-out ally itself with America’s enemies, that would put American Jews in danger. America has a long history of persecuting national ethnic groups related to the adversary of the moment, apart from “mostly peaceful Muslims” 😀 in G.W. Bush’s words after 9/11 (I can’t believe I voted to re-elect him in 2004) anyway. I doubt his Dem opponent, Can’t even remember who it was, would have been able to trick Sharon out of Gaza. It’s the gushing “friends” who Israelis fall for everytime. “Now you see it, now you don’t. Step right up friends, can you tell under which cup the coin is? Feeling lucky today?”
B. Poster,
Your suggestion that Americans find “peace” by kowtowing to the Chinese and Russian devils, sounds an awful lot like Islamic “submission”.
It will not happen, in your wildest wet dreams.
Hi, Keelie
The US Administration has been usurped by a Fascist putsch. Like hitler and Mussolini’s fascism, it is a merger of wealthy corporate interests and the government: The government does its dirty work (such as censorship and election interference) through the corporations (Facebook, Blackrock, etc.), and the corporations, in turn, benefit from government policies that directly impact their bottom line.
This is at the heart of what’s going on here. Obviously, this has no connection with Israel; it is our own problem — created by a few Americans, for the most part, to destroy America for personal gain. It would be nice, as Ted suggests, if Israel could help us; but they can’t. Israel has its own problems, which the American people cannot affect for good or for bad.
US “industrial policy” has been horrible for a long time. Anyone paying attention who isn’t blinded by ideology or has some other agenda figured this out long, long ago. The US “military industrial complex” according to a number of sources and observations can’t even keep up with Russia in the Ukraine war. As such, I see no way to keep up with China in the current situation and the situation is years if not decades in the making so it’s unlikely it can be fixed in enough of a time frame to change anything in the foreseeable future.
“If we want to be the world’s leader across the range of strategic industries…..” While “strategic decisions” will certainly help long range, to many bad ones have been made over decades to make a difference in the current situation. Russia and China are the world’s most powerful countries, adjust, and act accordingly. Within this framework good outcomes are possible for us as the American people.
Bumbling into Ukraine was a colossally bad strategic decision. I warmed important members of our leadership class about this back in 2014 through multiple letter writing campaigns and phone calls to their offices. All its accomplished is anger a a major world power and hasten our nation’s decline. This was easily predictable. Another bad “strategic decision” is slavish support for Taiwanese independence. For decades, the US avoided this. There was a good reason for that. Taiwan is a province of China. They will eventually be reunified under Chinese control. The question is what does this look like for Taiwan? How much autonomy are they going to have. Taiwanese policy recognizes this and military and other posturing is aimed at getting the best outcome possible when they reunify with their Chinese brothers and sisters. Is it such a good idea to pour American treasure, military hardware, and US military strategic training into this? What happens at the reunification when all of this becomes a part of China?
Has our leadership class even thought through such things? Blinded by ideology and other agendas I think it highly likely they have not.
Hi Michael, I know that most of the people in the US (ie: those who are still relatively sane) don’t care about all the things I mentioned. What I said was that the ADMINISTRATION is all-in in that stuff.
As an example, if you examine the US Unfunded Liabilities debt (as opposed to the National Debt as often discussed) make sure you are sitting down. It will take more than a “New Vision” to address and correct this, if at this stage it can be corrected. You’ll notice that this aspect of US debt is rarely discussed, for various reasons.
I fail to see how the US needs Israel. As for China, it isn’t just gunning for the US:
UAE is allied with Russia and China (and increasingly, with Iran) in Africa and the Middle East. Biden’s “Vietnam-style” entry into the Sudan conflict is just the latest move in this chess game. Before Israel thinks about taking on the US, they should mind their own back yard.
Believe me, Keelie, very few Americans are concerned about Transphobia and LGBRQXX. A crashing economy, a collapsed border, a fentanyl epidemic, chaos in the streets and the very real prospect of a major shooting war, are far more important. Don’t worry about us, Israel. You won’t miss out on any of this sort of thing yourselves.
Ted, right now the US doesn’t give a damn about Israel. The admin is more fixated on Transphobia and LGBRQXXX (whatever that means) matters; in general, wokeness.
No small thing changing one’s energy system over to an unpredictable shadow of the dominant system on the basis of scientific and overall technical ignorance.
Right now the US appears to be on a deliberate slide down to the bottom. Merely knowing this will do nothing to ameliorate the current situation.
It takes great effort over a great deal of time to re-establish a totally lost industry, or should I say, many many totally lost industries, so Mr. Atkinson shouldn’t hold his breath. Time is running out.