CommentsCOMMENTARY - In 1930, John Dos Passos wrote that America is many things: it is a “slice of a continent”, “the world’s greatest river valley”, and “a set of bigmouthed officials with too many bank accounts”.
“But mostly,” he wrote in The 42nd Parallel, America “is the speech of the people”.
Almost a century later, America is still not confined to Washington, the Manhattan upper classes, or Silicon Valley oligarchs. America is still the American people — and that is a cause for some hope.
Yes, America is deeply divided and most Americans, with reason, fear the country is decaying both politically and economically. But overall, Americans are far more patriotic about their country’s virtues than in any European country. If the fight over the future of liberalism against China and Russia — a fight that now threatens to turn a cold war into a hotter one — is going to be won, it is here.
America’s cognitive elites may seem enamoured with China’s state-controlled political system, but for much of the country, this remains the land of Jefferson and Lincoln, not the Yellow Emperor. Despite the pandemic, new business formations rose from roughly 3.5 million in 2019 to 4.4 million last year. Self-employment, pummelled at first, has recovered more rapidly than conventional salary jobs; more than 500,000 Americans reinvented themselves as entrepreneurs.
Arguably the greatest test for American renewal lies in manufacturing, precisely the place China has based its ascendancy. Here Trump’s “America First” mantra is echoed in the demands of Biden’s progressive agenda: in just the past three months, Congress has passed The BuyAmerican.gov Act, The Make PPE in America Act, as well as recent legislation banning the import of good produced using slave labor in Xinjiang.
This is not only good policy but good politics; Americans, at least theoretically, are willing to pay higher prices for domestically produced goods; an overwhelming majority, according to one recent survey, would even fork out 20% more for products produced at home. No doubt this desire to reshore production reflects the pain associated with the mounting deficit on trade goods, which has enriched many of our leading manufacturing companies — notably Apple — but has also cost an estimated 3.4 million job losses since 2001.
That also goes some way to explaining why America’s industrial revival is occurring largely outside coastal affluent ‘mini-Europes’. Between 2017 and 2020, five states — Arizona, Texas, Oklahoma, New Mexico and Nevada — accounted for 30% of all manufacturing job growth. Perhaps more important is the fact that, along with reviving Midwest states like Ohio, Iowa and Indiana, these states tend to have lower taxes, housing costs and less regulation than their coastal counterparts.
And this formula is being rewarded. Almost all the new electric vehicle and battery facilities, demanded most by Democrat politicians, are being built east of the Sierra and Cascades. Meanwhile, multi-billion dollar facilities from Intel, Samsung and Taiwan Semiconductor are popping up in growth states such as Arizona, Texas and, most recently, outside Columbus, Ohio. The impact of such growth cannot be underestimated: thanks to these new technologies, American companies are able to produce better and often cheaper products, crafting parts that, in many cases, have been largely sourced in China and other countries.
This industrial renaissance is critical if the West is to address its ruinous dependence on China — made all too evident during the pandemic and the current supply chain crisis. And yet it is also likely to elicit opposition from our own largely pro-China elites, who seem more willing to appease rather than confront Beijing.
This is epitomised by Apple’s astounding $275 billion deal with Xi’s regime, an agreement that grants China continued control of production while also selling off advanced technology to the autocratic regime. Meanwhile, Wall Street figures such as Michael Bloomberg, Ray Dalio, Jamie Dimon of J.P. Morgan and even Blackrock’s Larry Fink seem to spot no contradiction between their craven progressive outpourings at home and China’s brutal repression in Xinjiang, Taiwan or Hong Kong — not to mention the Middle Kingdom’s greenhouse gas output, which totals more than the rest of the developed world combined.
At the same time, many of the same pro-China oligarchs also support draconian energy prices that undermine efforts to bring industry back home. Many have adopted the notion of “de-growth”, essentially a policy that seeks to reduce consumption and lower middle-class living standards to “save the planet”. Such campaigns — both corporate and within the clerisy — make little sense if companies end up shifting ever more production to high-carbon supply chains in China.
What makes this even more galling is the fact that now is a time of strategic opportunity for the US, particularly in terms of rising energy prices. Yet President Biden, obsessively seeking to please his green zealot supporters, insists on assaulting US production of natural gas and other fossil fuels. This seems particularly ill-conceived, given the US is the largest producer and China the biggest consumer. There is a competitive edge to be exploited here, not thrown away by begging for cheap oil from Russia or the Gulf states.
Perhaps even more important is another window of opportunity: now is the perfect time for America to attract foreign business. The increased threat of CCP government interference and higher operating costs are causing companies such as Sharp, Sony and Nintendo to begin move out of China — part of an exodus of more than 1,700 companies who upped sticks last year alone. Softbank, the giant Japanese based venture firm, has seen its revenues plummet as its Chinese investments fell due to government clampdowns and has suspended future investments there. A number of American entrepreneurs who came for the Sinic gold rush have pulled out as well, no longer seeing China as at the economic vanguard.
So it is not too late to constrain China and its global string of motley allies, including Putin. But this necessitates accentuating our differences; it means creating better conditions for smaller tech firms, and constraining the oligopolies who benefit from China’s squashing opposition and seek to create their own dominion at home.
For this is about more than America. Elsewhere in the West, its allies now seem hopelessly passive in the face of bureaucratic control at home, and with many of them willing to accede to authoritarians abroad. Predictions of inevitable American decline have been popular, particularly in Europe, since at least the early Seventies. Yet here we are a half century later, and the US remains the world’s hegemonic economic, technological, and military power.
As Europe is now discovering, no country on the continent, including Germany, has the wherewithal, mentally or physically, to stand up to Putin’s Ukraine gambit — much less Xi’s more menacing attempts to repress Taiwan and Hong Kong. Germany’s boneheaded energy strategy has now effectively turned it into a satrap of the Sino-Russian “neo-Eurasianism” – an arc of autocracy.
Germans and other Europeans may not much like our recent Presidents — nor do I — but is that an excuse to coddle long-time autocrats like Putin and Xi? Whether they like it or not, when searching for the best hope to resist the rising autocratic tide, the West will find only one viable alternative to China’s domination: the United States.
(Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His new book, The Coming of Neo-Feudalism, is now out from Encounter.)
