By David L. Hunter
“Show me the money!” – Everyman actor Tom Cruise as soul-searching, down-and-out sports agent “Jerry Maguire” (1996)
Before divorce, the world’s richest man, capitalist Jeff Bezos, was reportedly worth $157 billion. For context, that’s greater than America’s last budgetary surplus of $128.2 billion in fiscal year 2001: when Bill Clinton was president and Republicans controlled Congress. However impressive billions are to average citizens, they are mathematically a thousand times smaller than trillions. Therefore, our nation’s escalating debt is equivalent to a staggering 2,250 billion (or a mind-blowing 2,250,000 million!). Is it any wonder that such a gargantuan fiscal drag—over 18 years old now—is, has and will impede future U.S. economic viability? As further evidence, tradingeconomics[dot]com indicates, “The United States recorded a government debt equivalent to 106.10 percent of the country’s Gross Domestic Product in 2018.” Despite today’s hype, this mountainous burden unmistakably demonstrates a terminally weak economic foundation that’s rotting from within. Fortunately, a better path exists to rectify this pivotal problem if Washington decision-makers wisely pursue it:
“Two roads diverged in a wood and I – I took the one less traveled by, and that has made all the difference.” ― Robert Frost, “The Road Not Taken” (1916)
In that regard, more of the status quo—including Trumponomics—hasn’t worked: and won’t going forward. Instead, our collective political leadership must not repeat the compounding missteps of the last 31 years through both party’s administrations. To be frank, Washington must immediately start to put our nation’s deeply underwater finances in order. This column vitally explains practicalities: what went wrong, and by what method the tide can still quickly be reversed. Yet, any more squandered time is irreplaceable. The choice is to act decisively in the appropriate manner advocated here: or face a reckoning as destructively certain as disregarding the law of gravity. Our government must undo this “mature” monster unwittingly made:
“A great civilization is not conquered from without until it has destroyed itself within.” ― Will Durant, Caesar and Christ (1944).
Like gravity’s intractability, another elemental truth of basic economics continually confounds insulated Washington politicians and their “expert” advisors: despite greatness no country can deficit spend itself into lasting prosperity. To quote fictional detective Sherlock Holmes regarding the human proclivity for obtuseness:
“There is nothing more deceptive than an obvious fact.” ― Arthur Conan Doyle, The Boscombe Valley Mystery (1891)
So what’s happened to America’s economic mojo? Historically, for 142 years our society had sustained economic prosperity as the largest economy by GDP. Essential to that reality was the U.S. domination of the global marketplace. The streak began in 1872—when Lincoln contemporary Ulysses S. Grant was president—and was finally snapped under Barack Obama in 2014. Displaced by China in the modern era, isn’t it clear that the sustaining economic prosperity—that propelled the U.S. forward for almost a century-and-a-half—has shifted into foreign hands?
In his recent Washington Times piece, “Rooting for recession,” Stephen Moore, senior economic advisor to candidate Donald Trump in 2016, hints at the systemic deficiency causing today’s economic slowdown: a critical loss of competitive advantage in heavy industries (see: Figure 1). In this regard, Mr. Moore writes, “The slowdown is reflected in weak manufacturing and industrial production in 2019….” Unfortunately, the long-term hollowness at the heart of the U.S. economy is not a recent phenomenon. In truth, America has not been on an even economic footing with China for almost two decades. Specifically, the Committee on Small Business and Entrepreneurship’s report “Made in China 2025 and the Future of American Industry” shows Chinese domination of key industries worldwide:
China’s unrivaled, long-term control of these crucial commercial spheres—and America’s unsustainable, metastasizing 22.5 trillion debt—ensure an economic black hole that cannot be remedied by today’s conventional thinking embodied by Trumponomics. While both wings of our political leadership remain in a deep denial (spanning decades), China’s long-term philosophy employs the strategy of another famous despotic conqueror:
“Never interrupt your enemy when he is making a mistake.” ― Napoleon Bonaparte
Analogous to the possession of physical territories in past world wars, the 21st century battlefield is economic supremacy over the global marketplace. Thus, China’s share of the worldwide market, as measured by exports, is another clear indicator of their ascendancy:
By contrast, Trumponomics has proven that domestic consumerism only spurs economic growth in the short-term. (Hence the tepid, second quarter GDP growth of 2.1% reflecting the fiscal malaise of Obama’s second term, or 2.2%.) In this regard, Mr. Moore states, “Sustainable growth depends on business formation and expansion, not consumer shopping.” (Obviously, having money in one’s pocket to spend is highly desirable—as is low unemployment. However, cyclical trends such as these are anecdotal: not benchmarks of a society’s true economic strength.) On the other hand, a nation’s gross national income (GNI)—which measures money flowing into a country from the global market—is a more accurate measure of long-term economic vitality. Concerning the annual percentage of gain from 1996-2017, China’s GNI is like capitalism on steroids compared to the rest of the world, in general and America, in specific:
Over many years, China is clearly doing something different—effectively gravitational—to consistently siphon wealth to their country: at a much faster rate than America and the rest of the world. So how does the U.S. regain the upper hand over this nefarious geopolitical rival? And even more importantly: preeminence in the worldwide market? With the U.S. trade deficit up over $100 billion, ham-handed financial manipulations like tariffs haven’t worked. The required shift that must now occur is a mind-set in both governance and private industry. In other words, the reengagement of a successful and proven way of doing U.S. business: the same practice that originally built America into an unsurpassed economic superpower. Specifically, before our modern era, American companies habitually exploited evolving technological know-how—to create the best goods and services supplied to the world—resulting in the natural consequence of sustained economic prosperity. (An important clarification: this long-standing outcome was not based on government spending, taxation rates or fiscal policies to manipulate the value, or supply, of money.) Applied to U.S. businesses, this time-tested method actively reverses today’s shortsighted practice—of cutting corners (ie, reducing the quality of a product by penny-pinching) to return short-term quarterly or daily profits (ie, artificially elevate the “almighty” stock price)—that has inevitably led to the widespread experience of less competitive U.S. companies and inferior American products (see: Figure 1, above). In a nutshell, all of America’s fiscal woes are rooted in a long-term, fundamental loss of a competitive advantage: as expressed by accelerating erosion of economic ground by U.S. firms in the global market. In tandem, our ever-expanding debt is another unmistakable symptom of our nation’s festering finances. For our government to immediately respond in the proper way prescribed here is absolutely essential.
Complicating matters is the insulated political establishment’s well-known resistance to disruptive change. Meanwhile, as more time is wasted, what’s likely being pursued now isn’t promising: the mirage of a grand trade deal with China to “fix” this perfect storm of long-term economic dysfunction. That’s like playing Monopoly when the opponent already runs the board. Even if such a deal is possible (it isn’t), can any Faustian arrangement be trusted given China’s well-established, global track record of predatory behavior economically, militarily and politically? Characterizing them correctly as adversaries, the Statement for the Record, Worldwide Threat Assessment of the U.S, Intelligence Community, Senate Select Committee on Intelligence, 29 January 2019 states their goal:
“[T]o diminish US influence. … Chinese leaders will increasingly seek to assert China’s model of authoritarian capitalism as an alternative—and implicitly [read: without doubt; absolute] superior—development path abroad, exacerbating great-power competition that could threaten international support for democracy, human rights, and the rule of law.”
No friends of ours, the Chinese actively oppose Western values of human liberty. Why should they help us when our own political leaders and captains of industry continue to ignore the systemic problem? Furthermore, why are the Chinese so confident their method is unquestionably superior to ours? To illuminate the subject let’s briefly summarize the two practices. In our modern age, U.S. business decisions focus on the short-term manipulation of money for quick profits. By contrast, China’s long-term strategy centers on exploiting evolving technology to produce an endless stream of highly desirable, profit-generating goods and services for export. Put another way, our shortsighted society still myopically “chases today’s dollar” by typically skimping on production process, quality of output, outsourced jobs for cheaper labor costs etc. Meanwhile, China has acquired the long-term “golden goose”: competitive advantage through technological innovation and dominates today’s global marketplace with goods and services that better meet the needs of consumers worldwide. As an analogy, while America futilely plays checkers with financial shell games, China responds with grandmaster chess via their Technology Development Strategy. While freely ignoring the chart’s distracting complexity, the key component is the term ‘Innovation-Driven Economic Growth Model’ boxed in its center:
Simply put, China’s singular economic orientation always intersects technology: its purchase, development and exploitation, even theft, of intellectual property. And under current, well-established conditions—unchanged by any naive trade deal, future U.S. sanction, tariff or law—China will remain secure and largely unaffected. With skill and stealth, our geopolitical rivals have appropriated America’s former competitive advantage. Realistically, there’s no diplomatic or political solution. How can superficial trade “concessions” offset a tech-savvy world’s growing demand for Chinese cutting edge offerings? The intentional blindness of Washington’s ruling elite to this titanic threat is their greatest ally. Indeed, in this battle for de-facto global control, China’s modern conduct has ancient, time-tested roots:
“Engage people with what they expect; it is what they are able to discern and confirms their projections. It settles them into predictable patterns of response, occupying their minds while you wait for the extraordinary moment—that which they cannot anticipate.” ― Sun Tzu, The Art of War (roughly 5th century BC)
Historically, China began taking the rudimentary steps in this direction—known as technology-based planning (TBP)—in the early 1980s. As previously described, their Innovation-Driven Economic Growth process is the economic engine that enabled them to overtake America as largest GDP in less than 40 years. Incidentally, another feat similarly mystifying to Washington’s economic “experts.” For proof, let’s look at both nations’ GDP growth rates from 1980-2018:
Besides America’s lean years of GDP weakness or contraction in 1980 (-.025); 1982 (-1.8%); 1991 (-0.11); 2001 (1.0) and 2009 (-2.5), the notable fluctuations between both countries:
- 1984: U.S. 7.2%; China 15.1% (peak or Reaganomics)
- 1992: U.S. 3.5%; China 14.2% (end of presidency/Bush, Sr.)
- 2007: U.S. 1.9%; China 14.2% (beginning of 2nd term/Clinton)
- 2010: U.S. 2.6%; China 10.6% (middle of 1st term/Obama)
- 2018: U.S. 2.9%; China 6.6% (middle of current term/Trump)
Witness the ongoing, massive economic expansion enjoyed by China: not America! Over decades, what paltry U.S. returns! Who knew Asian communists make better capitalists than us? Tellingly, while the graph clearly demonstrates 38 years of our chaotic cycles of boom and bust, China’s GDP growth never dipped below 1990’s 3.9%! They even managed to more than double the rate of our best year, 1984. And ironically, it’s to 1984 and another U.S. president that the Trump administration must look to: to right our nation’s fiscal ship, end the debt, and ensure the freedom of untold, future generations. If only the brash billionaire and Washington outsider will look beyond convention as his predecessor Ronald Reagan did!
A man of true foresight and vision, President Reagan saw the eventuality of declining U.S. influence—and recognized its root cause. His administration pioneered a system—via the then top-secret Socrates Project—to resolve the systemic problem: America’s loss of its competitive advantage. Specifically, the Socrates System is designed to analyze and track all significant technological capacities worldwide. Hence, the abilities of geopolitical rivals are compared to the U.S.’s in real-time. Further, the system shows how foreign entities (ie, nations, international corporations etc.) can be outcompeted, and blocked, in the development and/or production of key prosperity-generating goods and services. (Another important clarification: this process is based on gathering intelligence, not time-consuming and expensive Research and Development.) Simply put, it’s the way to restore America’s long-term competitive edge over all foreign competitors: today.
Does it work and how powerful is the system? In its first generation developed the 1980s, as an example, President Reagan used Socrates to topple the Soviet Union. He showed Gorbachev—with scientific proof and mathematical precision—that America could, and would, outcompete Russia both economically and militarily. However, because the Socrates Project was classified its existence could not be disclosed to the public. Thus, a “plausible” narrative was concocted to explain why the Soviets capitulated. Hence Reagan’s wacky promotion of the Strategic Defense Initiative (SDI) known in popular culture, rather dismissively, as “Star Wars.” A widely lampooned endeavor still perplexing to any scientists hypothetically tasked with creating a near 100% effective laser guided missile defense grid capable of knocking out a cascade of descending nuclear warheads. SDI is fiction; Socrates—currently unutilized in America—is fact. This is the road not taken: vital to the long-term preservation of our way of life. Will the powers that be come around? If not:
“What happens to a[n indispensable] dream deferred?” ― Langston Hughes, “Harlem” (1951)
Now in its third generation and more powerful than ever, Socrates is now called the Quadrigy Automated Innovation System. Shepherded by President Reagan’s former director of the Socrates Project, Michael C. Sekora of Austin, TX, this is the Answer to truly “Make America Great Again.” It’s the only proven path to turn back the otherwise inevitable tug of further U.S. decline and decimation. Looking at all the data presented here, any sensible person realizes a sobering reality: America is bankrupt and teetering on the brink of insolvency. President Reagan’s yet unrealized economic legacy for safeguarding our nation—the Socrates System—must be deployed immediately by our government and private industries. Frankly, the continuation of more of the same—conventional “business as usual”—is unthinkable. In closing, as prosperity is essential to human liberty, the aptly named speech “A Time For Choosing” is uniquely apropos:
“Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children’s children what it was once like in the United States where men were free.”
— Ronald Reagan (October 27, 1964)
David L. Hunter is an Associate Editor at “Capitol Hill Outsider” and a “Newsmax” contributor. He’s on Twitter and blogs at davidlhunter.blogspot.com. He is published in The Washington Post, The Washington Times, “FrontPage Mag,” and extensively in “Patriot Post,” “Canada Free Press” and “American Thinker.”