Imagine my shock to, gulp, agree with Sarah Palin on anything at all. But the one-time vice presidential candidate is absolutely right to call Donald Trump bribing Carrier to keep jobs in the U.S. “crony capitalism.”
Asia is Exhibit A as to why. The president-elect’s stunt won the news cycle, and that was the point. In saving 1,000 Indiana jobs (for now, at least), Trump got more credit and hype than President Barrack Obama did for creating 16 million since 2009. But Trump’s methods — and the $7 million price — came right out of the playbooks of China, Japan and Indonesia and set American capitalism back in ways Republicans refuse to admit. It’s also a reminder that Team Trump learned the wrong lessons from Asia these last 20 years.
Saving Carrier: You’d think Japan alone would have settled this one for a self-described “great” businessman. Tokyo’s bureaucrats have long blurred the lines between public and private sectors, believing that the broader national good outweighed the economic imperatives of companies. Saving a pile of jobs over here is great politics, but it doesn’t fix the pile of headwinds undermining them over there. Tossing money at Carrier won’t make U.S. labor more productive, only sage policymaking and training can do that. Palin is right to worry that “picking and choosing” which companies receive “corporate welfare” is a “hallmark of corruption” and, ultimately, “socialism.” Lawrence Summers, the former U.S. Treasury secretary, argues that using the “state’s monopoly” on corporate interests like this “is the world of New York City under Tammany Hall, of Suharto’s Indonesia, and of Putin’s Russia.” He writes in The Washington Post that “like Hong Kong, as mainland China increasingly imposes its will, we may have taken a first step toward a kind of reverse transition from rule of law capitalism to ad hoc deal-based capitalism.” Asia offers ample evidence the large tariffs on struggling companies and tossing largess at executives is a recipe for economic malaise.
Hello, Taiwan: It’s unclear what’s more frightening — Trump’s call with Pakistan’s Nawaz Sharif or Taiwan’s Tsai Ing-wen. The readout from the former smacked of Alec Baldwin as Trump picking up his smartphone and asking: “Siri, what is Pakistan?” Trump fawning over Islamabad’s diplomatic sobriety must have caused many sleepless nights among India’s 1.2 billion people. But Trump’s chat with Tsai, a leader already in Beijing’s cross hairs, boggles the mind. Was taking the call a gaffe? Or is Trump trolling China’s Communist Party? Does he even know? Thing is, I have no problem with the U.S. shifting a “one-China” policy based more on cognitive dissidence than sustainable reality. Signaling one on the fly before entering office, though, is irresponsible, amateurism and quintessential Rodrigo Duterte. The Philippine president has already bonded with Trump. But Duterte’s 160 days in office are a cautionary tale of a leader making profound policy shifts on the fly — and simply because he can. So annoyed was he by Obama criticizing his bloody war on drug dealers and users, that Duterte turned his 100 million-person nation toward China in ways the Philippines may long regret.
Attacking the media: One of Shinzo Abe’s most chilling policies in Japan has been muzzling free speech with a draconian secrets bill and old-school intimidation. In Seoul, Park Geun-hye suing journalists, intimidating rivals and squelching protests led to this July Foreign Policy headline: “Is South Korea Regressing Into a Dictatorship?” Malaysia is experiencing an inquisition as Prime Minister Najib Razak curbs reporting on billions of dollars of missing state funds. China’s Xi Jinping is turning the No. 2 economy into even more a black box, while Thailand’s generals are taking their own great leap backward. And, sadly, the U.S. is next, as Trump assails media efforts to keep him honest and trains his sights on First Amendment free speech. His threats to “open up” libel laws, deport flag burners and a call by one of his surrogates to arrest the editor of The New York Times are decidedly chilling. The press could be a powerful ally in Trump’s pledges to “drain the swamp” of corruption. Instead, he appears to be refilling it by casting billionaires as Cabinet secretaries and cowing the media into China-style self-censorship.
The CEO president: Trump’s sprawling businesses and disinterest in national security briefings have many calling him America’s Silvio Berlusconi. An even better parallel may be Thaksin Shinawatra. I’ve always found the close involvement of Trump’s adult children to be very third-world — the stuff of developing Asia, Africa or Latin America. Genuinely separating Trump Inc. from the Oval Office seems virtually impossible. Here, think daughter Ivanka sitting in on the Prime Minister Abe meeting and joining a call with Argentine President Mauricio Macri; his son holding talks with Russian officials; loans from Bank of China; building projects in India, Indonesia, the Philippines, South Korea, Taiwan, Turkey and elsewhere. Thaksin got ousted in a 2006 coup partly because of perceptions the billionaire put Shin Corp.’s profits ahead of the nation. South Korea offers its own cautionary tales of leaders ignoring firewalls between government and business. Could the result be a China-inspired state-capitalism-with-U.S.-characteristics model? Only time will tell, but Trump will ignore the lessons from this region at his own peril. America’s, too.
William Pesek, executive editor of Barron’s Asia, is based in Tokyo. www.barronsasia.com
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