2 weeks Ago By [email protected] (MENAFN)
( MENAFN - Asia Times) This article first appeared on The American Mind, a publication of the Claremount Institute think tank, and is republished with permission. Dear President Trump: Congratulations on your November election victory. President Joe Biden and Vice President Kamala Harris have left you with a strategic disaster and a fragile economy, but you have put forward a program to keep the peace and restore economic growth.
Here are some ideas that may help in your efforts, followed by more specific proposals: Biden and Harris left you with record debts and deficits, and a dangerous household debt burden. Their reckless spending on handouts to their favored constituencies caused this inflation, not monetary policy, as David Malpass observed. The Federal Reserve kept interest rates too low for too long and then raised them too much.
Former Treasury Secretary Lawrence Summers showed that the real inflation rate is double the official number after including higher interest rates. Ask him to help the Bureau of Labor Statistics publish the real inflation rate. You need a stable monetary policy instead of the Fed's boom-and-bust whipsaw.
Put people on the Federal Reserve Board who understand how monetary policy actually works instead of the ideologues who run the Fed today. The biggest obstacle to industrial revival is the lack of skilled labor, thanks to the liberals who control US education. Summon the CEOs of our biggest manufacturing companies, and they'll tell you the same thing: less than a quarter of US high school students are proficient in math.
That puts high-end jobs in computer-controlled manufacturing out of their reach. We can fix the problem by enlisting state community college systems in partnership with corporations. Florida already has the ball rolling.
Ask Governor Ron DeSantis to head an emergency effort to train skilled workers. For the first time in American history, America imports more capital goods than we produce for domestic consumption. The downside of tariffs is that they will increase costs for manufacturers who rely on foreign inputs, and domestic substitutes will take time and money to provide.
You might propose a tariff rebate for American manufacturers who buy Chinese capital goods to expand production in the US. The tax system is rigged against capital-intensive investment, raising the after-tax cost of capital for manufacturing. America's stock of manufacturing equipment hasn't risen in 20 years according to the Federal Reserve .
To return to a long-term growth trend, we need about $1 trillion in capital spending. GOP leaders in Congress should propose emergency legislation to allow immediate tax write-offs of capital equipment. The 2017 corporate tax cut, which increased the number of years required to expense capital equipment, should be revised to allow immediate expensing of capital equipment.
That may be a bigger stimulus for domestic manufacturing than tariffs. You outraged the foreign policy swamp when you denounced endless wars, and they spent four years trying to remove you from office. The swamp bet the farm on endless war in Ukraine, and your refusal to play along makes you their irreconcilable enemy.
Don't underestimate how determined they are to stop you. You hired establishment types in your first administration and had cause to regret it every time. Now, there's no room for compromise with the swamp.
The Deep State entrapped your first National Security Adviser, General Mike Flynn, and his successors H R McMaster and John Bolton repaid your trust by turning on you. You can't trust the failed, feckless foreign policy establishment. It knows nothing but forever wars and meddling in other countries' affairs.
The problem is that the establishment has controlled promotion in government service and academia for three generations, so any candidate with a big resume got it the wrong way. Vance may not have a lot of foreign policy experience, but common sense is a better qualification than years of pushing incompetent policies. Ask Victor Davis Hanson to run foreign policy and national security recruitment for the transition team.
And continue to seek the advice of Hungary's Prime Minister Viktor Orban, your strongest supporter overseas and the smartest politician in Europe. Vance's plan to end the war in Ukraine-establishing a ceasefire, a buffer zone, and Ukrainian neutrality-will do the job. David Friedman did a brilliant job crafting the Abraham Accords as Ambassador to Israel in your first term.
Persuade him to return to the job. The Biden administration treats Saudi Arabia like a pariah and cozies up to Qatar, the host and paymaster to Hamas. That's an outrage, especially after the October 7, 2023 massacre.
Reach out to the Saudis and the UAE. Otherwise, US influence in the region may dissolve in the face of China's diplomatic initiatives. You rightly proposed a missile shield to protect the United States.
Reviving Reagan's Strategic Defense Initiative is the best defense policy anyone has put forward in years. You will get bad advice from the uniforms. They wasted trillions building the wrong kind of military and will try to justify their previous blunders by demanding more of the same.
We don't need nearly a quarter million troops deployed overseas. The Navy's expeditionary forces are obsolete. Surface ships are sitting ducks for anti-ship missiles-and China has thousands of them.
Meanwhile, our depleted industrial base can barely build one submarine a year. The Pentagon brass will feed you phony scenarios to justify more obsolete legacy systems. Hire experts who see through flummery like Air Force officer and Stanford Professor Oriana Skylar Mastro.
You can't trust the US Intelligence Community. Fifty-one senior intelligence officials signed a statement in 2020 claiming that the Hunter Biden laptop story was a Russian hoax. That might have cost you the election.
Their appointees hold all the senior jobs today. Seventy percent of the US intel budget goes to private contractors, opening the system to cronyism and corruption. It will take years to clean up this mess.
In the meantime, create a“Team B,” a small group of people you can trust at the National Security Council to keep you informed on world affairs and double-check the CIA's daily briefing. Don't trust the“process people” at the White House. Your Deputy Chief of Staff Chris Liddell told a Republican luncheon not long ago that by picking the people who would attend meetings at the Oval Office and assigning their roles, he could predetermine your decisions 90% of the time.
Bring in outsiders who work for you, not the swamp. We're in a situation like 1973, when Soviet air defense ruled the skies. In less than ten years we invented smart warfare, turned the tables on Russia, and began winning the Cold War.
We invented the Digital Age as a byproduct of our revolution in defense technology. Don't put a flag officer or defense contractor lobbyist in charge of the Pentagon. Appoint a defense secretary with deep knowledge of new military technologies, someone like Michael Griffin, your Under Secretary of Defense for Research and Engineering and the former head of NASA.
Under fiscal constraints, we can't expand defense spending across the board. Focus on missile defense for the American homeland and American military assets. Cut legacy spending on forever wars, like the 230,000 US troops deployed overseas, and legacy systems like aircraft carriers.
Your first two defense secretaries came respectively from the Marines and the defense industry-and both of them tried to stop you from winning in 2024. You would be better served by a scientist who understands high tech in defense of the American homeland. Chips for defense and critical infrastructure should be produced at home under secure conditions.
Biden's CHIPS Act is a disaster. It gave $8.5 billion to Intel just before it laid off 10% of its workforce.
Worst of all, it left out R&D for chips based on new technologies. We've played Whack-a-Mole with China's chip industry for five years. The battle for semiconductor dominance will be won by chips using interaction at the molecular or atomic level, with speeds orders of magnitude faster than silicon.
Finally, the swamp bet the future of NATO on the Ukraine misadventure. That disaster will cripple, if not destroy, NATO in its present form. We've spent $7 trillion on forever wars.
China spent $1 trillion on its Belt and Road Initiative. We lost influence and power, whereas China gained both. China's exports to the US, Europe, and Japan are stagnating, but its exports to the Global South have doubled since you left office.
China now exports more to the Global South than to all developed markets combined. A lot of Chinese exports to the Global South are indirect exports to the US: China builds, plans, and ships components to Vietnam, India, and Mexico, and they export in turn to the US. This translates into a jump in Chinese influence in Asia, Europe, the Middle East, and Latin America, and more US dependence on Chinese supply chains.
China is gaining on us. At best, sanctions on exports of US technology to China buy time. At worst, they will backfire: Instead of keeping China dependent on our products, we have handed Chinese companies a captive domestic market for legacy chips and chip-making equipment.
We beat Russia in the Cold War by inventing the Digital Age, using NASA and the defense budget to drive breakthroughs in new technologies. We can innovate better than China. But federal support for R&D under Reagan was double its present level as a percent of GDP.
That's why it's critical to shift the defense budget to support new technology. To take only one example: We can't out-produce China in missiles. The best response to China's huge force of anti-ship missiles is directed-energy weapons (for example, lasers).
But the Pentagon R&D budget for these new weapons is less than $800 million a year, or the cost of ten fighter planes. We want to maintain the status quo over Taiwan. China won't risk using force as long as Taiwan doesn't move toward independence.
With thousands of anti-ship missiles and hundreds of 5th-generation aircraft, China already outguns us in the South China Sea. To keep the balance of power, we need new anti-missile technology-not more sitting ducks in the form of surface ships. Act at once on your proposal to combine steep tariffs on Chinese EV imports with an invitation to Chinese companies to build plants in the US.
As Elon Musk well knows, China has a big lead in industrial automation, including AI applications and 5G communications. Xiaomi just opened a fully automated plant that can turn out 1,000 cars a day. No US company can make an EV with a sticker price under $10,000 like BYD's Seagull.
It's like the 1980s when Japanese automakers had better technology than Detroit. Forcing the Japanese to build plants here helped the U.S.
auto industry get up to speed. Just as we did during the Cold War, we need to harness America's unique capacity for innovation to renew our industrial base. And if you can guide us there, Mr.
President, your second administration will be remembered as a turning point in American history. David P Goldman is deputy editor of Asia Times, a Washington fellow of the Claremont Institute and a senior writer for Law & Liberty. Thank you for registering! An account was already registered with this email.
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