- The markets have been slow to recognize the high-stakes game that’s playing out on the world stage.
- Like the neoconservatives, Trump’s closest advisors have all identified China as the foremost threat to the United States in the years, and decades, ahead.
- While there is good reason to challenge China on a variety of fronts and force it to change behavior that disadvantages the U.S., it is not inevitable that China is as dangerous as members of this administration claim.
- This is is a new Cold War to determine who will be the hegemonic power, economically and militarily, in the years to come.
DESPARDES — Back in 1997, a group of neoconservatives founded “The Project for a New American Century” (PNAC) Think Tank in Washington DC, and produced a 97-page report.
It’s vision and goal included the following:
- Shape an American Century favorable to American principles and interests
- Challenge regimes hostile to American interests and values and target them for “regime change”
Korea , Iraq, Iran, Libya, Syria, Lebanon, Somalia, Sudan
- Assert military authority around the globe
- Increase military spending and capacity
On September 2000, one year before the September 11 event, PNAC issued a report that became the blueprint that has become U.S. Foreign Policy beginning with George W. Bush and continuing through the Obama administration, and it continues today in the Trump administration.
The Three Main Objectives
- Wage simultaneous wars
- Form a global “constabulary” i.e. world police force
- Control Space and Cyberspace
This is “The New World Order.”
Led by so-called neocons, including former Vice President Dick Cheney, former Defense Secretary Donald Rumsfeld and current National Security Director John Bolton (all Republicans), the group leading the thinktank wrote white papers and sent letters to then-President Bill Clinton urging him and his foreign policy team to support regime change in Iraq, to start with. While Clinton (a Democrat president) voted out, his successor George W. Bush (a Republican president) would populate his foreign policy team with these group members and ultimately follow their lead into Baghdad for regime change– preceded by Afghanistan.
Similarly today, Trump’s (a Republican president) closest advisors have identified China as the foremost threat to the United States in the years and decades ahead. They argue that China represents an existential economic and military threat to the U.S. and often imply that nothing less than crippling China’s economy will prevent Beijing from becoming stronger than the U.S. in military terms, threatening U.S. interests and becoming the world’s leading economic power in the next 10-15 years.
The Pivot to Asia, the tariffs, and annual war games in the Asia Pacific are all designed to threaten and to check China’s expansion which is the primary economic threat to fulfillment of this plan for a New World Order. China simply cannot be allowed to dictate the terms of a new world order.
President Trumph, like Bush 43 before him, is putting all his stock in these individuals who have more apocalyptic views of the world than advisors who have since departed the White House. President Trump has also stated plainly that he intends to win the “trade war” with China after the U.S. suffered through decades of unfair Chinese actions on the trade front. While there is good reason to challenge China on a variety of fronts and force them to change behavior that hurt the U.S., and other major trading partners, it is not inevitable that China is as dangerous as members of this administration claim.
China, although it has more than $3 trillion in foreign exchange reserves, is also awash in debt and excess capacity from its housing supply to its manufacturing industries. Its economy is already weakening while its demographic profile is becoming a drag on growth. That, however, is not stopping this group from pressing China as hard as possible operating, as others did with respect to Iraq, on the assumption that China could somehow destroy the U.S. economically and militarily someday in the near future. That may be a dubious claim, as was the one about Iraq having weapons of mass destruction.
Like Bush, Trump appears to truly believe this is a war easily won with few adverse implications for the U.S.
But the financial markets are beginning to show signs of disagreement and sending message that fears of slowing global growth are a direct result of the widening fight with China. For example: Stocks, especially those exposed to China, are falling hard. So are interest rates, and economically sensitive commodities like copper and oil are weakening as well.
This is not a trade war. The markets have been slow to recognize the high-stakes game that’s playing out on the world stage. If this were just about bilateral trade deficits with China, the U.S. could easily sell more agricultural and energy products to China and narrow the gap by hundreds of billions of dollars. Instead, this is, as some surmise, a new Cold War to determine who will be the hegemonic power — economically and militarily — in the years to come.
That’s what the president’s closest advisors believe, even if Trump is focused solely on trade imbalances.
As was the case in 1997, and eventually when Bush took office in 2001, when important, or powerful, people tell you they are going to do something, it’s best to take them seriously and literally. That lesson appears to have been lost on Wall Street and Main Street … not so in Washington.
The question today, as in 2003, is how much of a price will we pay if the economic nationalists turn out to be just as wrong today as the neocons were more than a decade ago?
(Edited version of original article by Ron Insana, Senior Analyst & Commentator, CNBC).