The European Union currently buys a significant amount of oil from Iran, about 20% of total exports. Iran’s economy is already suffering, with rising house and food prices. In order to avoid a worsening economic situation, the Iranians will have to find other buyers for 20% of their oil exports. China, Japan, and India are already major buyers of Iranian oil, and it is possible that exports to these countries could increase. If this does happen some of Europe’s major economic competitors will be benefiting from the sanctions while the negative effect on Iran’s economy will be minimized. This is the best outcome.

There is a worse possible outcome, that the sanctions do have a negative impact on the already struggling Iranian economy. The Iranian government can continue making the argument, with some legitimacy, that much of Iran’s economic woes are due to overbearing western economic measures. While it is true that there is an oppressed political opposition in Iran, sanctions serve to unite the country behind the regime the sanctions are aiming to harm.

Relations with Iran are getting measurably worse. In the last six months the UK’s embassy has been stormed, a former U.S. marine has been sentenced to death, a British frigate and American destroyers have moved into the Arabian Gulf, and Iran has confirmed uranium enrichment. What is clear is that past sanctions have not managed to dissuade Iran of its nuclear ambitions or improved diplomatic relations.

Bastiat’s maxim, “When goods don’t cross borders, armies will” is being slowly confirmed in Iran. The best chance the west has in minimizing the threat of a nuclear Iran is to end the economic barriers that prohibit free trade while taking steps to ensure that diplomatic efforts to prevent an Iranian nuclear weapon resume. Unfortunately, government officials in Europe seem incapable of considering either of these to options as legitimate courses of action.

While there are serious economic concerns in Europe the continent is also facing domestic political upheaval. The unelected Greek government is failing to implement needed austerity measures, Italy’s technocratic government is making too few changes too late, and the patience of the German people is being tried. There is only so long that Germans will put up with contributing to the clean up of their neighbor’s mess, and we could soon see domestic German politics reflect this growing attitude.

While the continual downgrade of European countries and the slowing growth of China are out of the responsibility or remit of any American politician, the GOP should take note. The sovereign debt crisis in Europe is our future if serious measures are not taken to adapt an aggressive and serious fiscal policy that tackles spending and government growth. Unfortunately the only candidate who understands the severity of the situation and is advocating such measures is alienated by the GOP because of his pro-peace, pro-trade and pro-diplomacy foreign policy.

Some attribute Hostess’ troubles to healthier eating habits among Americans, the USA Today article on their filing states:

Hostess has enough cash to keep stores stocked with its Ding Dongs, Ho Hos and other snacks for now. But longer term, the 87-year-old company has a bigger problem: health-conscious Americans favor yogurt and energy bars over the dessert cakes and white bread they devoured 30 years ago.

Last year, 36% of Americans ate white bread in their homes, down from 54% in 2000, according to NPD Group. Meanwhile, about 54% ate wheat bread, up from 43% in 2000.

That explanation sparked some discussion from Reason’s Nick Gillespie, who writes:

I’m not sure I’m buying that argument in its totality, but there’s no question that sliced white bread, especially Wonder Bread, went from being the staff of life for upward-striving post-War middle-classers to being a cultural touchstone for all that was bad and wrong with America. Whether we’re buying less of the stuff – or feel less in need of the myriad ways it supposedly enriches our bodies – I don’t know. But there seems less a role for white bread in a world where even the Olive Garden is pushing rustic loaves of yeast and flour.

Big Government’s Dana Loesch was skeptical, observing that the USA Today article buried facts about Hostess’ union problems and rising ingredient costs deep in the article.

 It’s not difficult to sell creme-filled heaven snacks and America isn’t exactly eating healthier. If anything, America is eating leaner because the price of everything has increased eleventy-fold because the cost of energy is passed to us, the consumers.

…

…Hostess, a privately held company based in Irving, Texas, has outstanding debts of more than $860 million and owes over $50 million to vendors, an economic situation that sources attribute to rising prices for sugar, flour and other ingredients and higher labor costs which the company’s approximately $2.5 billion in annual sales have not been able to cover.

…

Additionally, Hostess employees are unionized while most of its competitors aren’t. As a result, Hostess has high pension and medical benefit costs.

While the broader trend Gillespie observes is certainly true – Trader Joe’s anyone? – it’s also true that during recessions, people adjust their purchasing habits. The stock price of McDonalds, for instance, has doubled since late 2007. Based on today’s report, it appears Loesch is right. If an agreement with the unions isn’t reached in 75 days, the terms of the loan state that Hostess could begin selling off its assets.

Also, apparently during the earlier negotiations the international parent union was representing the local chapters, which they aren’t authorized to do:

In perhaps the hearing’s most dramatic moment, Hostess President and Chief Executive Brian Driscoll took the witness stand and told a lawyer for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, or BCTGM, that he was unaware that during recent labor negotiations, the international parent union wasn’t actually authorized to negotiate on behalf of the local unions.

“Who were you negotiating for?” Driscoll asked the union’s lawyer, Bredhoff & Kaiser PLLC’s Jeffrey Freund.

“I’m asking the questions,” Freund responded.

“I would like my $900,000 back,” Driscoll said, referring to the amount of money Hostess has paid to its professionals negotiating with the unions. While Driscoll’s response elicited laughter from nearly everyone in the courtroom but himself, the back-and-forth is a clear precursor to a tough fight between Hostess and the union both in and out of the courtroom.

It’s hard out there for a snack food company, and these hamfisted union negotiations certainly don’t help. Hostess is more or less the last independent publicly-traded purveyor of snack foods with names most people have heard of. Almost all of the brands that filled the school lunchboxes of American children for decades have experienced major upheavals in the last quarter-century. The venerable Keebler (est. 1853) is in the hands of Kellogg as of 2001.  Nabisco has been passed around like an, erm, Ho Ho since its merger with RJ Reynolds in 1985, and will presumably be a part of the snack-food company resulting from Kraft Foods’ planned split.

For a company like Hostess with a less diversified line of products, it’s a lot harder compensate for the cost of something like this, too.

To add to the amazement, their research report, “The Evolving Structure of the American Economy and the Employment Challenge,” was published by the very establishment Council on Foreign Relations.

For a decade I have warned that US corporations, pressed by Wall Street and large retailers such as Wal-Mart, to move offshore their production for US consumer markets, were simultaneously moving offshore US GDP, US tax base, US consumer income, and irreplaceable career opportunities for American citizens.

Among the serious consequences of off-shoring are the dismantling of the ladders of upward mobility that made the US an “opportunity society,”  an extraordinary worsening of the income distribution, and large trade and federal budget deficits that cannot be closed by normal means. These deficits now threaten the US dollar’s role as world reserve currency.

I was not alone in making these warnings. Dr. Herman Daly, a former World Bank economist and professor at the University of Maryland, Dr. Charles McMillion, a Washington, DC, economic consultant, and Dr. Ralph Gomory, a distinguished mathematician and the world’s best trade theorist, understand that it is strictly impossible for an economy to be moved offshore and for the country with the off-shored economy to remain prosperous.

Even before this handful of economists capable of independent thought saw the ruinous implications of offshoring, two billionaires first recognized the danger and issued warnings, to no avail. One of the billionaires was Roger Milliken, the late South Carolina textile magnate, who spent his time on Capitol Hill, not on yachts with Playboy centerfolds, trying to make our representatives aware that we were losing our economy. The other billionaire was the late Sir James Goldsmith, who made his fortune by correcting the mistakes of America’s incompetent corporate CEOs by taking over their companies and putting them to better use. Sir James spent his last years warning of the perils both of globalism and of merging the sovereignties of European countries and the UK into the EU.

Sir James’s book, The Trap, was published as long ago as 1993. His book The Response, in which he replied to the “free trade” ideologues in the financial press and academia who denigrated his warning, was published in 1995. (For readers who wish to hear a speech given by Sir James to the U.S. Senate in 1994 warning of the perils of globalism, go here and here.)

Sir James called it correctly, as did Roger Milliken. They predicted that the working and middle classes in the U.S. and Europe would be ruined by the greed of Wall Street and corporations, who would boost corporate earnings by replacing their domestic work forces with foreign labor, which could be paid a fraction of labor’s productivity as a result of the foreign country’s low living standard and large excess supply of labor. Anytime there is an excess supply of labor, or the ability of corporations to pay labor less than its productivity, the corporations bank the difference, share prices rise, and Wall Street and shareholders are happy.

All of this was over the heads of “free trade” ideologues, who threw accusations such as “protectionist” at Sir James, Roger Milliken, Herman Daly, Ralph Gomory, Charles McMillion, and me. These “free trade” ideologues are economically incompetent. They do not know that the justification for free trade is based on the principle of comparative advantage, which means that a country specializes in those economic activities in which it performs best and trades for those goods that other countries do best. Instead, the ideologues think that free trade means the freedom of capital to seek absolute advantage abroad in lowest factor cost. In other words, the free trade incompetents have never read David Ricardo, who formalized the case for free trade.

Other economists, especially those high profile ones in high profile academic institutions, were bought and paid for. In exchange for grants from offshoring corporations these hirelings invented “the New Economy,” in which everyone would prosper as a result of getting rid of “dirty fingernail jobs.”  The New Economy wouldn’t make anything, but it would lead the world in innovation and in financing what others did make.  The “new economists” were not sufficiently bright to realize that if a country didn’t make anything, it couldn’t innovate.

Let’s go now to Michael Spence and Sandile Hlatshwayo, who have provided an honest report for which we should give thanks. Professor Spence could have made many millions using the prestige of his Nobel Prize to lie for the Establishment, but he chose to tell the truth.

Here is what Spence and Hlatshwayo report:

This paper examines the evolving structure of the American economy, specifically, the trends in employment, value added, and value added per employee from 1990 to 2008. These trends are closely connected with complementary trends in the size and structure of the global economy, particularly in the major emerging economies. Employing historical time series data from the Bureau of Labor Statistics and the Bureau of Economic Analysis, U.S. industries are separated into internationally tradable and non-tradable components, allowing for employment and value-added trends at both the industry and the aggregate level to be examined. Value added grew across the economy, but almost all of the incremental employment increase of 27.3 million jobs was on the non-tradable side. On the non-tradable side, government and health care are the largest employers and provided the largest increments (an additional 10.4 million jobs) over the past two decades. There are obvious questions about whether those trends can continue; without fast job creation in the non-tradable sector, the United States would already have faced a major employment challenge.

The trends in value added per employee are consistent with the adverse movements in the distribution of U.S. income over the past twenty years, particularly the subdued income growth in the middle of the income range. The tradable side of the economy is shifting up the value-added chain with lower and middle components of these chains moving abroad, especially to the rapidly growing emerging markets. The latter themselves are moving rapidly up the value-added chains, and higher-paying jobs may therefore leave the United States, following the migration pattern of lower-paying ones. The evolution of the U.S. economy supports the notion of there being a long-term structural challenge with respect to the quantity and quality of employment opportunities in the United States. A related set of challenges concerns the income distribution; almost all incremental employment has occurred in the non-tradable sector, which has experienced much slower growth in value added per employee. Because that number is highly correlated with income, it goes a long way to explain the stagnation of wages across large segments of the workforce.

What is Spence telling us?  Spence is careful not to say that globalism is the intentional result of enhancing capital’s profits at the expense of labor’s wages, but he does acknowledge that that is its effect and that globalism or jobs off-shoring has the costs that Daly, Gomory, McMillion, Milliken, Goldsmith, and I have pointed out. Spence uses the same data that we have provided that proves that during the era of globalism the US economy has created new jobs only in non-tradeable services that cannot be off-shored or be produced in locations distant from their market. For example, the services of barbers, waitresses, bartenders, and hospital workers, unlike those of software engineers, cannot be exported. They can only be sold locally in the location where they are provided.

Tradeable jobs are jobs that produce goods and services that can be exported and thus can be produced in locations distant from their market. Tradeable jobs result in higher value-added and, thereby, higher pay than most non-tradable jobs.

When a country’s tradeable goods and services are converted by off-shoring into its imports, it is thrown back on low-productivity domestic service jobs for its employment. These domestic service jobs, except for dentists, lawyers, teachers, and medical doctors, do not require a university education. Yet, America has thousands of universities and colleges, and the government endlessly repeats the mantra that “education is the answer.”

But with engineering, design, and research jobs off-shored, and with many of the jobs that remain within the US filled by foreigners on HB-1 and L-1 visas, we now have the phenomenon of American university and college graduates heavily indebted with student loans, jobless, and living with their parents who support them.

Spence also acknowledges that the change in the structure of American employment from higher productivity to lower productivity jobs is the reason both for the stagnation in US consumer income and for the rising inequality of income. Sending middle-class jobs abroad raised the earnings of capital. Spence understands that the lack of growth in consumer income has resulted in a shortfall in domestic demand, resulting in high unemployment. He could have added that jobs off-shoring also gave us the Federal Reserve’s policy of pumping up consumer debt as a substitute for the missing growth in consumer income. There is an obvious limit to the ability to maintain the growth of consumer demand via the growth of indebtedness.

The off-shored economy is the “New Economy,” which the “free trade” hirelings of Wall Street and the global corporations invented in order to pay, with grants from the off-shoring corporations, for their summer homes in the Hamptons.

As a graduate student in economics, I was fortunate to study with a number of professors who had or were subsequently awarded  Nobel Prizes. Among these creative people there are two economists whom I did not study under, but whose work I have read, and whose work is of great importance to our economic prospects. The two most important economists of our time, who, without any doubt, deserve the Nobel Prize are Ralph Gomory and Herman Daly.

Ralph Gomory’s book Global Trade and Conflicting National Interests, coauthored with William J. Baumol, a past president of the American Economics Association, is the most important work in trade theory ever produced. This book, and subsequent papers by Gomory, prove beyond all doubt that the free trade theory set out by David Ricardo at the beginning of the 19th century is merely a special case, not a general theory.

Economists learn in their graduate courses that free trade is an unchallengeable doctrine and that only ignorant protectionists dispute the theory. This mindset was sufficient for Gomory’s book to be largely ignored, even though Paul Samuelson, the dean of American economics, acknowledged the critical point that there are situations in which free trade is not mutually beneficial.

The other deserving recipient of the Nobel prize is Herman Daly. On the trade issue, Daly’s point is different from and less revolutionary than Gomory’s. Daly makes the same point that I make, which is that the classic theory of free trade is based on comparative advantage, not on absolute advantage, and that off-shoring is based on absolute advantage. Thus, off-shoring is not free trade.

Daly’s revolutionary contribution to economics comes from his realization that the production function that is the basis of economic science is wrong.

This production function is known as the Solow-Stiglitz production function. This production function assumes that man-made capital is a substitute for nature’s capital. It follows from this assumption that whatever humans do to use up and destroy the natural environment can be overcome by the resourcefulness of science and technology.

Daly shows that this reasoning is incorrect. If the Gulf of Mexico is destroyed by fertilizer run-offs from agri-business and by oil spills, only nature can correct the problem after many years measured in decades or centuries. In the meantime, humans are without the resource.

Daly’s argument is brilliant in its simplicity. In former times, nature’s capital was enormous, and man’s reproducible capital was small. For example, fish in the oceans were plentiful, but fishing boats were not. Today fishing boats are in excess supply, but ocean fishing stocks are depleted. Thus, the limiting factor is not man-made capital, but nature’s capital. Daly stresses that by leaving ecological and social costs out of the computation of GDP, economists do not have a reliable measure of the effect of economic activity on human welfare.

All of economics is predicated on the notion that resources are inexhaustible, and that the only challenge is to use them most efficiently. But if resources are not inexhaustible and cannot be replicated by human capital, the world economy is being ruthlessly exploited to its detriment and to the detriment of life on earth.

Thanks to Bush/Cheney/Obama and the wars for military/security profits, we might not last long enough to test Daly’s hypothesis. As American hegemony confronts both China and Russia, hubris can rid the planet of humans before nature does.

To find a Nobel prize-winner documenting the high cost of globalism to developed economies is extraordinary. For the Council on Foreign Relations to publish it suggests that the Establishment, or some part of it, suspects that its hubris has run away with its fortunes, and that different thinking is needed to restore the US economy.

We must hope that Spence’s paper will encourage thought.  On the other hand, the bought-and-paid-for-economists will confront Spence with their fantasies that the US would be enjoying full employment if only government did not discourage employment with unemployment compensation, food stamps, income support programs, unions, minimum wages, and regulation.

Recently, yet another high-level warning came from the International Monetary Fund.  The IMF report said that the US economy has been seriously eroded and that the age of America is over.

Will the US business and economic establishments heed these warnings, or will the US become a third-world country, as I predicted at the beginning of this century?

The good news: He is on the way. U.S. exports of goods and services grew in 2010 by 16.6 percent.

Bad news: U.S. imports, starting from a higher base, surged by 19.7 percent.

Result: The U.S. trade deficit in 2010 worsened by 33 percent, rising from $375 billion to $498 billion, the largest percentage increase in a decade. If Obama keeps this up, he may prove as big a disaster for U.S. manufacturing as his predecessor, although these are big shoes to fill.

As he has each February for years, Charles W. McMillion of MBG Information Services has compiled the stats on the industrial decline of his country under our free trade presidents. Here are but a few numbers for the decade from December 2000, the month before George W. Bush took the oath, to December 2010, the end of Obama’s second year.

In that decade, America ran a total of $6.1 trillion in trade deficits, more than our entire economic growth. To finance those 10 years of deficits, America had to borrow $1.553 billion every day.

And we wonder why China owns America.

In 2010, our trade deficit in manufactures alone rose 27 percent to $416 billion, far exceeding our trade deficit in crude oil. A decade of such deficits in manufactures has devastated the industrial states.

From December 2000 to December 2010, 22 states lost a third or more of their manufacturing jobs. Massachusetts, New York and Ohio lost 38 percent of their manufacturing jobs, New Jersey 39 percent, North Carolina 42 percent, Rhode Island 44 percent, Michigan 48 percent.

Political result: Free trader John McCain lost all seven, including the formerly “red” states of Ohio and North Carolina.

Trade in autos, trucks and parts, an industry in which America was dominant in the lifetime of many of us, tells the story.

Last year, the United States ran a trade deficit in autos, trucks and parts of $110 billion. The deficits with Germany, Japan, South Korea and Mexico account for that entire total.

Consider South Korea. Though she has an economy one-fifteenth the size of ours, she exported to us 12 times the dollar volume of trucks, cars and parts that we exported to her.

Rather than make a free trade agreement with South Korea, why not tell our friends in Seoul: We are tired of arguing with you folks about opening your markets to our goods. Since you folks buy less than $1 billion in autos, etc., from us, while you sell almost $12 billion in your cars and trucks to us, you keep your market. We’re taking back ours.

The point: Despite all the propaganda about exports being the future, the foreigners’ share of the U.S. market is $500 billion more than America’s entire share of the world market.

If, as we once did, we produced here all the manufactured goods we consume and gave up every other manufacturing market in the world, we would add millions of jobs and our gross domestic product would surge.

And it is not only traditional manufacturing where America is getting her clock cleaned.

In the critical items identified as “advanced technology products,” the United States has been running a deficit with the world, beginning in Bush’s second year, soaring from $16 billion in 2002 to $82 billion in 2010.

With China, the U.S. trade deficit in advanced technology products alone in the past four years has totaled more than $300 billion, with the 2010 deficit in ATP with China reaching an astonishing $92 billion.

Does it matter that manufacturing in America now accounts for one-tenth of our economy and one-tenth of our labor force, figures unseen since before the Civil War?

If you read the history of Britain in the industrial age, of America from 1865-1945 and of Bismarck’s Germany, you will think it does. If you listen to the scores of thousands of economists, none of whom ever built a great nation, you may think it does not matter who produces what where.

Is it possible America could become again the dominant manufacturing nation she was from 1880 to 1980? Not only possible but easy to accomplish — and within a decade.

Paul Otellini, CEO of Intel, has half the answer. “We should offer tax credits or a five- to 10-year tax holiday to companies, domestic or foreign, that want to set up or expand a factory in the U.S.”

How would we finance it? As most foreign nations impose value-added taxes averaging 20 percent on U.S.-made goods that enter their countries, put a tariff of 20 percent on all foreign goods.

Hundreds of billions would suddenly pour into the U.S. treasury. Imports would slowly shrink. Production in America would soar.

That’s how Hamilton, Madison, Clay, Lincoln, McKinley and T.R. did it, before America forgot how she became great.

Consider his latest excursion into the history of the republic, at Southern Methodist, where the Great Man’s papers are to be housed.

“What’s interesting about our country, if you study history, is that there are some ‘isms’ that occasionally pop up. One is isolationism and its evil twin protectionism and its evil triplet nativism. So if you study the ’20s, for example, there was an American-first policy that said, ‘Who cares what happens in Europe?’ … And there was an immigration policy that I think during this period argued we had too many Jews and too many Italians, therefore we should have no immigrants. And my point is that we’ve been through this kind of period of isolationism, protectionism and nativism. I’m a little concerned that we may be going through the same period. I hope that these ‘isms’ pass.”

Where to begin?

First, “America First” was the antiwar movement begun in 1940 and backed by the young John F. Kennedy and his brother Joe, Gerald Ford and ex-president Herbert Hoover. It had nothing to do with the 1920s.

In the Harding-Coolidge decade, America was deeply interested in “what happens in Europe.” It began with Hoover rushing U.S. food aid to the defeated nations of World War I and even to the USSR, for which Lenin personally thanked the Americans.

In 1921, President Harding called a Washington Naval Conference that produced the greatest disarmament treaty of modern times, in which America, Britain, France, Italy and Japan agreed to deep cuts and severe limits on the strategic weapons of the day, battleships.

In 1924, Charles G. Dawes advanced the Dawes Plan to ease the reparations burden on Germany, for which he won the Nobel Peace Prize.

In 1927, Coolidge convened a second naval disarmament conference to bring cruisers under the same limits as battleships — but the British balked.

In 1928 came the Kellogg-Briand Pact, by which scores of nations renounced war as an instrument of national policy. Undeniably utopian, it was hardly a mark of an isolationist America. Secretary of State Frank Kellogg won our country’s fourth Nobel Peace Prize.

In 1929 came the Young Plan to further ease a reparations burden on Germany then being exploited by the rising Nazi Party.

Wrote British historian A.J.P. Taylor: “American policy was never more active and never more effective in regard to Europe than in the 1920s. Reparations were settled; stable finances were restored; Europe was pacified, all mainly due to the United States.”

What is Bush talking about, and why is he trashing this Republican record like some court historian of FDR?

As for “protectionism,” Harding did approve the Fordney-McCumber Tariff Act of 1922, doubling rates to 38 percent. But he also slashed Woodrow Wilson’s income tax rates by two-thirds, back to 25 percent.

Result: Unemployment, 12 percent when Harding took office, was 3 percent when Calvin Coolidge left. Manufacturing output rose 64 percent in the Roaring Twenties. Between 1923 and 1927, U.S. growth was 7 percent a year. At decade’s end, America produced 42 percent of the world’s goods.

Compare this economic triumph with the fruits of W’s free-trade policy that wiped out 6 million U.S. manufacturing jobs, one of every three we had, and put America in hock to China.

The protectionism Bush calls “evil” was the policy of 12 Republican presidents from Abraham Lincoln to Coolidge, who made the GOP America’s Party and converted this country into the industrial marvel of mankind.

Is Bush oblivious to this? Did someone at Phillips Academy, Yale or Harvard Business School tell him Lincoln, William McKinley and Theodore Roosevelt were free-traders?

As for “nativism,” the term dates to the mid-19th century and had to do with hostility to Catholics and Irish, not Italians and Jews.

The 1924 Immigration Act, to end the Great Wave of the previous 30 years from Southern and Eastern Europe, did seek to preserve the ethnic character of the country. Yet, after 40 years of that moratorium, the Melting Pot having done its work, America was more united and socially at peace in the Eisenhower-JFK era than she has been before or since.

Is every immigration restriction law “evil,” Mr. Bush? Are Japan and South Korea evil because they have never accepted immigration? Has mass immigration benefited Europe, where David Cameron and Angela Merkel are bewailing the disaster of “multiculturalism”? Is your successor, Gov. Rick Perry, evil for calling for troops on the border to stop the invasion you failed to halt?

For eight years, Bush pursued interventionism, free trade and open borders. Result: two wars that have bled his country and reaped a harvest of hate, the deindustrialization of America and a republic on its way to becoming the new world order’s Tower of Babel.

Political result: A wipeout of the GOP in 2006 and 2008, and Bush going home to Texas with the lowest job approval in presidential history.
Bush ought to sue Phillips Academy for educational malpractice.

Missiles fired from the Chinese mainland could destroy five of the six major U.S. air bases in the Far East. So states a new report of the U.S.-China Economic and Security Review Commission, adding:

“Saturation missile strikes could destroy U.S. air defenses, runways, parked aircraft, and fuel and maintenance facilities. Complicating this scenario is the future deployment of China’s anti-ship ballistic missile, which could hold U.S. aircraft carriers at bay outside their normal operating range.”

Opposite Taiwan, China’s missile force has reached 1,600.

Beijing is also building rockets, submarines and surface fleets to extend her dominance out to the third chain of islands, enabling the People’s Liberation Army to strike U.S. carriers and bases as far away as Guam.

Since the demise of the blue-water navy of Russian Adm. Sergei Gorshkov, the Pacific has been an American lake. No more.

China lays claim to all the Paracel and Spratly islands of the South China Sea, all the Senkakus in the East China Sea, and all the oil and gas beneath and around those islets and reefs.

America’s offer to mediate these claims, which involve half a dozen other anxious Asian nations, has been rudely rebuffed by Beijing.

At the G20 gathering in Seoul, South Korea, Barack Obama got an earful from China about the Fed sinking the dollar and learned that Beijing would not be revaluing its currency to help with our chronic trade deficits.

As China holds a huge share of U.S. debt, Obama is not about to get sassy with our banker, who might just cut off the credit America, running a budget deficit of 10 percent of gross domestic product, desperately needs.

Napoleon said of the Middle Kingdom, “Let (China) sleep, for when she wakes, she will shake the world.” The shaking has begun.

So the question arises: Who put us in this predicament? Who awakened, fed and nurtured this tiger to where she is growling at all Asia and baring her teeth at the United States? Answer: the free trade uber alles Republicans.

Richard Nixon opened China. His 1972 Shanghai communique pointed inexorably to what Jimmy Carter did in 1979: break relations and abrogate our security pact with Taiwan, and recognize the People’s Republic as the sole legitimate government of China.

In 1982, the Ronald Reagan White House signed on to a communique with Deng Xiaoping’s China by which we agreed to reduce and eventually end all arms sales to Taiwan as tensions in the strait diminished.

Under George H.W. Bush, Beijing’s crushing of the Tiananmen Square protest with tanks was not allowed to interfere with business.

Repeatedly, Republicans voted to extend most-favored-nation status to China. Dissenters were castigated as “isolationists and protectionists.”

Under Bush II, the GOP made MFN permanent and sponsored Beijing’s entry into the World Trade Organization, despite China’s downing of a U.S. surveillance plane and incarceration of its American crew on Hainan Island. Colin Powell was forced to apologize.

For decades, corporate America championed investing in China and trade with China, though the massive transfer of U.S. factories, technologies and jobs was clearly empowering China and weakening America.

Now, with U.S. political, military, industrial and strategic decline vis a vis China manifest to the world, we hear the wails of American businessmen that they are not being treated fairly by the Chinese. And the politicians responsible for building up China are now talking tough about confronting and containing China.

Sorry, but that cat cannot be walked back.

Review commission chair Dan Slane says his members have concluded that “China is adopting a highly discriminatory policy of favoring domestic producers over foreign manufacturers. Under the guise of fostering ‘indigenous innovation’ … the government of China appears determined to exclude foreigners from bidding on government contracts at the central, provincial and local levels.”

Imagine that! The Chinese are ignoring WTO rules and putting China first. Don’t they understand how the Global Economy works? You’re not supposed to tilt the field in favor of the home team.

One knows not whether to laugh or cry.

The policy the Chinese are pursuing, economic nationalism, was virtually invented by the Republican Party. Protectionism was the declared policy of the GOP from the day its first president took office in 1861 to the day Calvin Coolidge left in 1929.

Free trade was the policy of a Great Britain whose clocks those generations of Americans cleaned, even as the Chinese are cleaning ours.

As for a U.S. policy of containment, we have no vital interest in China’s border dispute with India, or Beijing’s claims to islands in the South and East China seas, or in China’s claims against Russia dating to the ninth century.

Time for our Asians friends to take responsibility for defending their own claims. As LBJ said in 1964, “We are not about to send Americans boys 9 or 10 thousand miles away from home to do what Asian boys ought to be doing for themselves.” This time, let’s mean it.

The day of the globalist has come and gone.

The Chinese have just made a serious strategic blunder.

They dropped the mask and showed their scowling face to Asia, exposing how the Middle Kingdom intends to deal with smaller powers, now that she is the largest military and economic force in Asia and second largest on earth.

A fortnight ago, a Chinese trawler rammed a Japanese patrol boat in the Senkaku Islands administered by Japan but also claimed by China. Tokyo released the ship and crew, but held the captain.

His immediate return was demanded by Beijing.

Japan refused. China instantly escalated the minor incident into a major confrontation, threatening a cut off of Japan’s supply of “rare-earth” materials, essential to the production of missiles, batteries and computers.

Through predatory trading, China had killed its U.S. competitor in rare-earth materials, establishing almost a global monopoly.

The world depends on China.

Japan capitulated and released the captain.

Now Beijing has decided to rub Japan’s nose in her humiliation by demanding a full apology and compensation.

Suddenly, the world sees, no longer as through a glass darkly, the China that has emerged from a quarter century of American indulgence, patronage and tutelage since Tiananmen Square.

The Chinese tiger is all grown up, and it’s not cuddly anymore.

And with Beijing’s threat to use its monopoly of rare-earth materials to bend nations to its will, how does the Milton Friedmanite free-trade ideology of the Republican Party, which fed Beijing $2 trillion in trade surpluses at America’s expense over two decades, look now?

How do all those lockstep Republican votes for Most Favored Nation status for Beijing, ushering her into the World Trade Organization and looking the other way as China dumped into our markets, thieved our technology and carted off our factories look today?

The self-sufficient republic that could stand alone in the world is more dependent than Japan on China for rare-earth elements vital to our industries, for the necessities of our daily life, and for the loans to finance our massive trade and budget deficits.

How does the interdependence of nations in a global economy look now, compared to the independence American patriots from Alexander Hamilton to Calvin Coolidge guaranteed to us, that enabled us to win World War II in Europe and the Pacific in less than four years?

Yet China’s bullying of Japan is beneficial, for it may wake us up to the world as it is, as it has been, and ever shall be.

Consider.

China now claims all the Paracel and Spratly islands in the South China Sea, though Vietnam, Malaysia, Indonesia, the Philippines, Taiwan and Brunei border that sea. To reinforce her claim, a Chinese fighter jet crashed a U.S EP-3 surveillance plane 80 miles off Hainan Island in 2001. Not until Secretary of State Colin Powell apologized twice did China agree to release the American crew.

China’s claim to the Senkakus (the Diaoyu Islands to the Chinese) was emphasized last week. While these are largely volcanic rocks rather than habitable islands, ownership would give a nation a powerful claim to all the oil, gas and minerals in the East China Sea.

China has repeatedly warned the United States to keep its warships, especially carriers, out of the 100-mile-wide Taiwan Strait. On the mainland opposite, Beijing has planted 1,000 missiles to convince Taipei of the futility and cost of declaring independence.

When the U.S. Navy launched exercises with South Korea after the sinking of South Korea’s warship Cheonan by the North, China threatened the United States should it move the 97,000-ton carrier George Washington into the Yellow Sea between Korea and China. The carrier stayed out of the Yellow Sea and remained east of the Korean Peninsula.

In addition to her claims to sovereignty over all the seas off her southern and eastern coasts, China occupies a large tract of Indian land in the Aksai Chin area of India’s northwest. Thousands of square miles were seized by Beijing in the 1962 war with New Delhi — and annexed.

In 1969, China and the Soviet Union battled on the Amur and Ussuri rivers over lands Czar Alexander I seized at the end of that bloodiest war of the 19th century, the Chinese civil war known as the Taiping Rebellion. Leonid Brezhnev reportedly sounded out the Nixon White House on U.S. reaction to Soviet use of atomic weapons to effect the nuclear castration of Mao’s China.

China’s claims to her lost lands in Siberia and the Russian Far East have not been forgotten in Beijing, and remain on Chinese maps.
How should America respond?

As none of these territorial disputes involves our vital interests, we should stay out and let free Asia get a good close look at the new China. Then explore the depths of our own dependency on this bellicose Beijing and determine how to restore our economic independence.

Ending the trade deficit with China now becomes a matter of national security.

In 2011, said the Financial Times, China will surpass the United States as first manufacturing power, a title America has held since surpassing Great Britain around 1890.

Each year, China passes a new milestone.

Last year, China surpassed Germany as the greatest exporting nation. This year, China surpasses Japan as the world’s second-largest economy. This year, China became the first auto manufacturer on earth.

For a decade, China has been running history’s largest trade surpluses with the United States and has amassed a hoard of $2.3 trillion in foreign currency. She now holds the mortgage on America.

How has China vaulted to the forefront in manufacturing, trade and technology? Export-driven economic nationalism.

Beijing cut the value of its currency in half in 1994, doubling the price of imports, slashing the price of exports and making Chinese labor the best bargain in Asia. Foreign firms were invited to relocate their plants in China and told this was the price of access to the Chinese market. Beijing began looting these firms of technology, as she sent her sons to study in America. Industrial espionage and intellectual property theft became Chinese specialties.

And how has America fared in the new century?

One in every three manufacturing jobs we had in 2000, nearly 6 million, vanished. Some 50,000 U.S. factories shut down. We have run trade deficits totaling $5 trillion since NAFTA passed. The real wages of working Americans have been stagnant for a decade.

While China has resumed her 12 percent growth rate, the United States, with 25 million unemployed or underemployed, appears headed for a double-dip recession.

Yet even as the end of America’s tenure as the world’s first manufacturing power was being announced, The Wall Street Journal admonished us to keep our eyes on the prize: a new world order where it does not matter who produces what or where.

“The pursuit of some ideal global ‘balance’ in trade and capital flows is an illusion. … World leaders would do better to worry less about (trade) imbalances and more about whether their own nations are pursuing policies that contribute to global prosperity.”

There you have it — the conflict in visions between us.

For decades, America’s leaders have followed the Wall Street Journal ideology. We put a mythical world economy before our own economy. We put “global prosperity” before national interest. We forced our workers to compete, in their own country, against the products of foreign laborers earning a tenth of their pay. And we let in tens of millions of semi-skilled and unskilled immigrants, legal and illegal, to take the jobs of our countrymen.

And the Chinese? They put China first, second and third.

And who won the decade? And who is winning the future?

Inside the July 1 Washington Post is a small story about how the World Trade Organization finally ruled that European nations have been unfairly subsidizing Airbus — for 40 years.

While welcome, what good will it do now for scores of thousands of U.S. workers who built commercial jets for Lockheed and McDonnell Douglas, which Airbus took down, or Boeing, which was outsourcing jobs even before Airbus dethroned it as the world’s No. 1 aircraft manufacturer.

Why did some U.S. president not tell the Europeans when they started this: Either stop subsidizing Airbus to kill our U.S. aircraft companies — or start defending yourselves against the Russians.

The day the FT reported that China was sweeping past us to become No. 1 in manufacturing, The New York Times ran a front-page story on the closing of the Whirlpool refrigerator plant in Evansville, Ind., and the loss of 1,100 jobs. The plant is moving to Mexico.

The Times spoke with Natalie Ford, a worker, whose husband and son also worked at Whirlpool, as had her dad, “This is all about corporate greed,” Mrs. Ford said, “It’s devastating to our family and to everyone in the plant. I wonder where we’ll be two years from now. There aren’t any jobs here. How is this community going to survive?”

“My mom and dad told me that when they were young, there were jobs everywhere. They said we had Whirlpool, Bristol-Myers, Mead Johnson, Windsor Plastics, Guardian Automotive, Zenith. Now if you want to find a job, there’s nothing around.”

“Free trade! Free trade!” said Henry Clay in the tariff debate of 1833. “The call for free trade is as unavailing as the cry of a spoiled child in its nurse’s arms for the moon or the stars that glitter in the firmament of heaven. It has never existed. It will never exist.”

It will only place us, said Clay, “under the commercial dominion of Great Britain.”

Today, it is the dominion of China.

Patrick J. Buchanan is founding editor of The American Conservative and author, most recently, of Churchill, Hitler, and the “Unnecessary War”.

COPYRIGHT 2010 CREATORS.COM

By official count, 158 are dead, 1,080 injured and a thousand arrested in ethnic violence between Han Chinese and the Muslim, Turkic-speaking Uighurs of Xinjiang. That is the huge oil-rich province that borders Pakistan, Afghanistan and several Central Asian countries that seceded from the Soviet Union.

Uighur sources put the death toll much higher.

The Communist Party chief in Xinjiang has promised to execute those responsible for the killings.

In 1989, fear that what was happening in Eastern Europe might happen in Beijing produced Tiananmen Square. The flooding of Chinese troops into Xinjiang bespeaks a fear that what happened to the Soviet Union could happen to China. Unlike Mikhail Gorbachev, the Chinese, as they showed in Tibet, will wage civil war to crush secession.

Already, Beijing has struggled to ensure perpetual possession of Inner Mongolia, Xinjiang and Tibet — half of the national territory — by moving in millions of Han Chinese, swamping the indigenous peoples, as they did in Manchuria.

The larger issue here is the enduring power of ethnonationalism — the drive of ethnic minorities, embryonic nations, to break free and create their own countries, where their faith, culture and language are predominant. The Uighurs are such a people.

Ethnonationalism caused the Balkan wars of 1912 and 1913, triggered World War I in Sarajevo, and tore apart the Austro-Hungarian and Ottoman empires. Ethnonationalism birthed Ireland, Turkey and Israel.

Ethnonationalism in the 1990s tore apart the Soviet Union and Yugoslavia, and broke up Czechoslovakia, creating two-dozen nations out of three. Last August, ethnonationalism, with an assist from the Russian Army, relieved Georgia of Abkhazia and South Ossetia.

Russia has its own ethnic worries in Chechnya, Dagestan and Ingushetia, whose Moscow-installed president was nearly blown to pieces two weeks ago and where a Chechen convoy was ambushed last week with 10 soldiers killed.

The ethnonationalism that pulled Ireland out of the United Kingdom in 1921 is pulling Scotland out. It split the Asian subcontinent up into Pakistan, India and Bangladesh. Iran, Iraq and Pakistan are all threatened.

Persians are a bare majority against the combined numbers of Azeris, Kurds, Arabs and Baluch. Each of those minorities shares a border with kinfolk — in Azerbaijan, Kurdistan, Iraq and Pakistan.

Turkey has fought for decades against Kurd ethnonationalism.

If one were to wager on new nations, Kurdistan and Baluchistan would be among the favorites. And Pashtun in Pakistan outnumber Pashtun in Afghanistan, though in the latter they are the majority.

In Africa, the savage attacks on the Kikiyu by Luo manifest a resurgent tribalism, as did the horrors of Rwanda, where Tutsi in the hundreds of thousands were massacred by Hutu.

President Clinton may have apologized to the Africans for not sending troops to stop the genocide in Rwanda, but if the America of Obama is into interventionism to protect human rights, Africa in the 21st century should provide us plenty of opportunity.

Evo Morales in Bolivia, Ollanta Humala in Peru and Venezuela’s Hugo Chavez are stoking the embers, goading the Indian populations, the indigenous peoples, to take back what the white man took 500 years ago. They have met with no small success.

The contrast between insouciant America and serious China today is instructive. China is protectionist; America free trade. China is nationalist; America globalist. China’s economy is export-driven; America’s base is consumption. China saves; America spends. China uses its foreign exchange to lock up overseas resources; America uses foreign aid for humanitarian assistance to failed states. Behaving like ruthlessly purposeful 19th-century Americans, China grows as America shrinks.

Where Beijing floods its borderlands with Han to reduce indigenous populations to minorities, and stifles religious, ethnic and linguistic diversity, America, declaring, “Diversity is our strength!” invites the whole world to come to America and swamp her own native-born.

Observing the lightning breakup of the Soviet Union, the Chinese take ethnonationalism with deadly seriousness. American’s elite regard it an irrelevancy, an obsession only of the politically retarded.

After all, they tell us, we were never blood-and-soil people, always a propositional nation, a nation of ideas. Our belief in democracy, diversity, and equality define us and make us different from all other nations.

Indeed, we now happily predict the year, 2042, when Americans of European ancestry become a minority in a country whose Founding Fathers declared it set aside for “ourselves and our posterity.”

Without the assent of her people, America is being converted from a Christian country, nine in 10 of whose people traced their roots to Europe as late as the time of JFK, into a multiracial, multiethnic, multilingual, multicultural Tower of Babel not seen since the late Roman Empire.

The city farthest along the path is Los Angeles, famous worldwide for the number, variety, and size of its ethnic and racial street gangs.

Not to worry. It can’t happen here.

COPYRIGHT 2009 CREATORS.COM

It wasn’t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”

Publicly Goldman is not going on record, but trying to play down worries:

Goldman isn’t commenting publicly about any of this, though it seems the bank’s bosses want us to believe there’s no need to worry. On July 6, Dow Jones Newswires quoted a “person familiar with the matter” saying this: “The theft has had no impact on our clients and no impact on our business.” Note that this person was so familiar with Goldman that he or she spoke of Goldman’s clients as “our clients” and Goldman’s business as “our business.”

Weil notes:

All this leaves us to wonder: Did Goldman really tell the government its high-speed, high-volume, algorithmic-trading program can be used to manipulate markets in unfair ways, as Facciponti said? And shouldn’t Goldman’s bosses be worried this revelation may cause lots of people to start hypothesizing aloud about whether Goldman itself might misuse this program?

According to his attorney, Aleynikov admits to downloading the software, but denies intending to use it in any “proprietary way.” Aleynikov had left Goldman to work for fellow Russian emigre Mikhail Malyshev’s start-up company, Teza Tech. Malyshev has been sued by former boss Citadel, alleging he’s in violation of a non-compete clause. Malyshev specialized in–what else?–high-frequency trading, and according to the story linked above:

Malyshev, a Russian emigre with a doctorate in astrophysics from Princeton, left Citadel’s quantitative trading unit in February after the funds he helped run returned about 40 percent last year. Their performance stood out at a time when most hedge funds lost money and Citadel’s flagship portfolios tumbled 50 percent.

The quants shall inherit the economy.

To be fair, many free-trade defenders these days are real laissez-faire types fighting to prevent yet another assault on economic liberty, but so many who rail against “protectionism rearing its ugly head” seem to believe in an odd distinction: the government can intervene internally in the economy, heightening regulations, mandates, and subsidies; but once we get to the borders, hands off.

But even that gives them too much credit. Many “free traders” support subsidies for our exporters. My column today in the Washington Examiner looks at lobbying records and legislative records, and analyzes this odd dynamic:

For instance, newly confirmed Commerce secretary Gary Locke, during his two terms as Washington State governor, was very close to Boeing and Microsoft. In 2003, he pushed through a $3.2 billion package of special tax breaks for Boeing. More to the point, he heads an agency that spends taxpayer dollars to support American companies. Nevertheless, Locke has long espoused “free trade.”…

Last November, weeks after bailing out Wall Street and while pushing a $34 billion bailout for U.S. automakers, President George W. Bush, signed an agreement with other world leaders proclaiming, “we underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty.”…

But this mindset—protectionism bad, corporate welfare good—is inconsistent only if you look at it from a principled mindset. If you look at it from a practical perspective—that government ought to help our biggest multinational corporations—it’s perfectly consistent.

But the businessmen, I find, are not duplicitous in this way. I called Cal Cohen, CEO of the Emergency Committee on American Trade, whose members include the CEOs of Boeing, GM, and Caterpillar, and asked him if there was an inconsistency between the free-trade talk employed against “protectionism” and the bailouts and subsidies these companies enjoy. His response was frank:

“ ‘Free trade’ is a theoretical construct. What we’re talking about is practical business transactions.”

The Commerce Department, originally known as Commerce and Labor, is a Progressive era creation (1903) which more or less was created to enforce all the new business regulations and departments created by Congress and the Theodore Roosevelt administration. Today, it’s basically an umbrella grouping for any number of different agencies handling patents, international trade, economic statistics, the National Weather Service, the U.S. Census, etc. that could all stand on their own without a super structure of bureaucracy over them. Indeed, the Obama Administration proposed to do just that with the Census which supposedly triggered Jud Gregg’s reconsideration of his appointment as Secretary.  (No, I don’t believe that explanation either. Gregg’s reconsideration actually embarasses him more than it does Obama. What Administration did he think he was joining, Bush I’s?)

In fact, Sen. Gregg thought so highly of the department that he voted to kill it twice in the 1990s  back when Republicans were actually serious about such things.  And I doubt if one could name but more than a handful of Commerce Secretaries off top of their heads (as for me, I’ll go with Herbert Hoover, Jesse Jones, Malcom Baldrige, Robert Mosbacher and Ron Brown.) After a Wikepdia search, I find some familiar names like Harry Hopkins, Luther Hodges, W. Averrell Harriman, Henry Wallace, William Dailey, Pete Peterson, and Elliot Richardson. What do many of them have in common? They moved up to better jobs as soon as they got the chance.

So it is a position not worth much in the pecking order, even of the Washington establishment. It’s more of a administrative job than one that provides actual leadership within the U.S. business community and the only people who will take it are basically those waiting for another, more prestigious positions to open up within an Administration (you think Bill Richardson would have stayed on Commerce Secretary for four to eight years?).

In other words, it’s job that is not needed for a department that is not needed. Obama would do himself and country a big favor and instead of finding some office-seeker or placeholder to simply say “I am not appointing another person as Secretary of Commerce. In my first budget I am simply going to abolish the department.”

Sure, I know this won’t happen. But at least with post still open one can reopen the debate as to why we need a Commerce Department and I’m sure Sen. Gregg will back me up on this.

And like that predecessor he often identifies with, Bush showed a Trumanesque defiance of his critics — and a Trumanesque failure to understand what ruined his presidency.

He denounced protectionism, as he has with dismissive contempt since he went to New Hampshire a decade ago. But nowhere in his defense of free trade was there any explanation for how Middle America lost 3 million manufacturing jobs in his first term and a million more in the last year.

Nowhere does there seem an awareness that the ideas he absorbed at his father’s knee and the Harvard Business School had resulted in the de-industrialization of his country, an enormous and growing dependency on Japan, China, and Asia for the essentials of our national life, and, now, for the borrowed money to pay for them.

Someone once defined tragedy as what happens when a beautiful theory collides with a fact. And this is what has happened every time a great empire — be it the Spanish, British, or American — embraced free trade as its salvation.

President Bush says it was freedom that prevailed when he rejected the pleas of weak-sister Republicans and backed the surge. But what spared us a debacle in Iraq was an infusion of 30,000 combat troops, an uprising against the murderers of al-Qaeda and a U.S. decision to buy off the Sunni tribes, a strategy besieged empires have pursued for centuries.

Nor does there appear in Bush’s self-assurance any awareness of the cost of his Freedom Agenda. In Iraq, it is 4,000 U.S. dead, 30,000 wounded, hundreds of thousands of Iraqi dead, millions of refugees, a pogrom against an ancient Christian community, and a strategic victory for Iran and its Shia allies across the Middle East. When last heard from, the Ayatollah Sistani — the chief Shia cleric in Iraq, who has welcomed Iranian but not American visitors — was calling for Muslims to stand up against Israeli criminality in Gaza.

Like Woodrow Wilson before him, Bush appears to believe that the nobility of his goals — expanding freedom and bringing an end to tyranny in our world — validates and will sanctify his decisions.

Like Wilson, he is a utopian. He fails to understand that idealism has its delusions and disasters.

The war Wilson led us into “to make the world safe for democracy” gave us Vladimir Lenin, Joseph Stalin and 70 years of the most barbaric empire in all history.

The peace Wilson brought home led straight to Adolf Hitler, the Third Reich and a second world war far worse than the first.

The West’s road to hell has been paved with good intentions.

President Bush rightly denounces Europeans who see Israel as always wrong. Yet he behaves as though Israel can do no wrong. Sixteen days into the Gaza war, with the Palestinian dead and wounded near 5,000, and a humanitarian catastrophe at hand, has our “compassionate conservative” president uttered one word of compassion for those whose losses outnumber the Israelis’ 100 to one?

In defending his rejected immigration reform, President Bush clearly sees himself as in the vanguard of decency, and admonishes his party against being perceived as anti-immigrant.

But is this president oblivious to what is happening in his country because of his and his father’s failure to secure the border? Even in rich, liberal Montgomery County, Md., one reads over the weekend that there is a hardening of attitudes toward illegal immigration after a spate of crimes and killings. Working-class Americans pay the price of the idealism around the dinner table at the Crawford ranch.

In his first five years, Bush himself has admitted, 6 million aliens were arrested at the border, breaking into this country. One in 12 — 500,000 — had criminal records. Is it anti-immigrant to demand a halt to this invasion, even if it means troops on the border? Is it truly compassionate, or an act of cravenness, to insist that the answer is amnesty for 12 million to 20 million illegals and absolution for the businesses that hired them?

Choleric and cocky Harry Truman may be Bush’s role model. But it was Dwight D. Eisenhower who had to clean up the mess Harry left behind.

Six months into office, Ike had ended the Korean War. He had the courage no president has since shown to tell the Israelis they must get off occupied land. They did.

While surely repelled by Nikita Khrushchev, especially for the Hungarian bloodbath of 1956, Ike had him up to Camp David in 1959 because, wicked as the Bolsheviks were, they had nuclear weapons, and one must talk to them.

Prudence is the mark of the true conservative. Ike and Ronald Reagan had it. Neither Bush nor Truman did. And that is why the former left the country so much better off than did the latter.

Goodbye, Mr. President, and God bless.

COPYRIGHT 2009 CREATORS SYNDICATE INC