Dangerous Business: A devastating account of the downside of globalism

Pat Choate has written the ultimate riposte to the radical globalists who dominate policy-making in Washington. [This review first appeared in the September 15, 2008 issue of Manufacturing & Technology News.]

Americans of a certain age know that something is profoundly wrong. Their nation is not what it used to be. But what exactly is amiss?

In his new book Dangerous Business: The Risks of Globalization for America, economist Pat Choate provides a deeply researched and authoritative answer: the fashion for radical globalism of the last two decades has driven American society off a cliff.

Other writers have taken shots at globalism but few if any have come to the subject with a greater depth of experience or a more acute intellect than Choate. Add in the fact that Choate is a born writer with powers of explication that other policy analysts can only dream of and the result is a remarkable tour de force that is must reading for any American concerned about his or her nation’s future.

Choate, an economist and best-selling author who was Ross Perot’s vice presidential running mate in 1996, comes up with devastating facts that give the lie to the globalist chop logic that in recent years has suffused the editorial pages of America’s great newspapers.

As he points out, a fundamental issue is the extent to which Washington has come to be run by lobbyists — and particularly lobbyists acting in various guises for foreign governments and industries. The activities of the K Street lobbying system have not only greatly speeded up the acceptance of globalism by America’s largely economically illiterate elite but, in a pernicious self-feeding process, have been facilitated by such acceptance.

In showing how pervasive the lobbying system has become, Choate tells the story of Executive Order 13184, one of the last documents President Bill Clinton signed before he left office in January 2001. This order, which has so far gone almost entirely unpublicized, revoked a previous order Clinton had signed in 1993 which ostensibly debarred his officials from taking up lucrative lobbying opportunities when they left public service. The 1993 order had been widely hailed as a new, more ethical approach to government. Yet the effect of the 2001 order allowed, with a stroke, thousands of officials to head straight for K Street where they would sell their government-acquired contacts and knowhow to the highest bidder.

Perhaps even more tellingly, Clinton’s 2001 order cleared the way for the incoming administration of George W. Bush to revert to K Street’s idea of “business as usual.” Had the 1993 order been allowed to stand, it could not have been revoked by any subsequent administration without setting off a major — and probably unacceptably embarrassing — political uproar.

The picture that emerges from Dangerous Business is of a Washington rancid with “legal” corruption — a city where ambitious and ruthless young people routinely view public office merely as a stepping stone to a lucrative career on K Street. More and more, what matters to administration officials is not serving the American public but rather currying favor with future lobbying clients. In these days of radical globalism, that often means serving foreign corporations or governments whose interests are diametrically opposed to those of the United States.

Among countless other key points Choate makes, here are just a few.

+++ The Clinton administration’s push to establish the World Trade Organization has proved farcically counterproductive. Not only has the United States renounced the right to deal directly with other nations in resolving trade disputes, but by agreeing that the WTO should adjudicate such disputes Washington has lost all control. The United States has just one vote in the WTO — the same as the island of Antigua, whose population is a mere 69,000! All WTO decisions moreover are made in secret by adjudicators who are completely unaccountable to any objective standards of fairness. Moreover most of the adjudicators come from Third World nations, many of which are notorious for exceptionally low standards of public ethics.

+++ Where the story really gets Gilbertian is that the United States has been subjected to far more unfair trade suits than any other nation. Yet the American market is much more open than most others and America’s trade deficits are by far the largest of any nation in world history. The basic problem is that the WTO is founded on the principle that American-style legal remedies are universally applicable around the world. In reality, they apply fully only in a few English-speaking countries. In other nations, most notably in China and other key nations in Confucian East Asia, the WTO’s writ doesn’t run, so there is usually no point in suing them for unfair trade practices. According to Robert Lighthizer, a former Deputy U.S. Trade Representative, WTO rules have been “gutting” American trade laws. As quoted by Choate, Lighthizer blames WTO judges for having “exceeded their mandate by inventing new legal obligations that were never agreed to by the United States … allowing our trading partners to achieve through litigation what they could never achieve through negotiation.”

The U.S. government can no longer even vouch for the safety of America’s food supplies. True to its ultra-globalist principles, the Bush administration has thrown the American market wide open to food imports, many of which come from places like China and Mexico where hygiene and chemical use standards are a lot lower than in the United States. Meanwhile, in the name of reducing government spending, it has drastically cut the number of health inspectors who check on food imports. On Choate’s numbers fewer than 1 percent of America’s food imports were inspected in 2007, compared to 4 percent in 1999. The real comparison is with Japan, which inspects 15 percent of its food imports. Moreover Japan greatly strengthens it food security by implementing a system of approved suppliers, whereas, in deference to the laissez-faire principles of radical globalism, the American market is open to all-comers. The advantage of the Japanese system is that it strongly pressures designated suppliers to police themselves. The pressure is intensified by the fact that Japanese regulators not only check imports but often subject designated suppliers’ plants in China and elsewhere to surprise visits. Suppliers live under a Damocles sword in that if they fail an inspection they stand to lose forever their access to one of the world’s most lucrative food markets. Under the American system, there is often virtually no downside for a remiss supplier in shipping sub-standard food into the United States.

The problems are compounded by the rise of a new delicacy which Choate labels “Trans-Pacific Chicken,” his term for chicken produced in places like Mexico which, in frozen form, is shipped across the Pacific for processing in China only to be shipped back across the Pacific to the American market. As Choate points out, this modus operandi greatly increases America’s vulnerability to the potentially devastating avian flu that has broken out in China in recent years.

Although the United States spends more on defense than all other nations combined, its approach to globalization has massively undermined its military security. Not only have American regulators permitted critical American defense suppliers to be taken over by foreign interests, not least corporations based in China, but the Defense Department makes no serious attempt to map America’s potential vulnerability to shortages of components and materials that, because of the shutdown of the American manufacturing base, are now available only from foreign suppliers (typically based in East Asia). In the case of imported high-tech components, the risk moreover is massively compounded by the fact that “Trojan horse” viruses can be embedded in them that are impossible to detect but can be activated by a hostile supplier nation in a military confrontation. As Choate points out, such so-called cyber warfare was a key to the speed with which the United States knocked out Saddam Hussein’s defenses in 2003. American suppliers in the 1980s had embedded Hussein’s computers with viruses that were activated once the war started. Now the shoe is on the other foot, as East Asian nations, entirely overlooked by the American public, provide most of the highly miniaturized advanced components in American military hardware.

In his summing up, Choate provides a long list of things the United States must do to put its house in order. Perhaps the single most important is to improve the flow of information to the American public. Because American voters are being kept in the dark about key consequences of radical globalism, there is virtually no effective pressure on elected representatives to re-examine the nation’s fundamental course.

Two decades ago the problem was merely that the establishment press was asleep at the switch. Today the problem is far worse: the press’s upper reaches have become colonized by ambitious editors and commentators who realized long ago that the way to get ahead was to bow low to the gods of globalism. As Choate points out, part of the problem is that the rules about media concentration were greatly relaxed in 1996 and 2003. Thus these days most news reaching Americans is filtered by just a few giant transnational corporations — corporations moreover that under the doctrines of globalism regard as their highest “ethical” obligation the need to maximize profits.

If that were the only problem it would be bad enough but the fact is that most of these corporations are blatantly compromised as well. They have large commercial interests in China, for instance, so they don’t encourage their editors to take too searching a look at America’s dependence on China for everything from defense components to the funding of the national debt.

Even America’s most prestigious newspapers, which for the most part are free of the blatant commercial pressures that have dumbed down American television reporting, are shadows of their former selves in the courage and openness with which they approach key issues. Ben H. Bagdikian, a prominent Berkeley journalism professor quoted by Choate, accuses American newspapers of self-censorship in their reporting of globalization. Bagdikian observes: “Trying to be a first-rate reporter on the average American newspaper is like trying to play Bach’s ‘St. Matthew’s Passion’ on a ukulele.”

That may be so but — at least for a while longer — books will continue to be published that pull no punches. No book has done a better job of explaining the full dimensions of the problem than Dangerous Business.

Eamonn Fingleton is the author of In the Jaws of the Dragon: America’s Fate in the Coming Era of Chinese Hegemony, (New York: St. Martin’s Press, 2008).

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