May 1, 1997
Washington, D. C.
May 1, 1997
Political Update
“May Day! May Day! How many dirty limericks do you know that start that way?”
“May Day” is, of course, an international code for distress – at least in the old movies. That is what John Major will be forced to use today. “Why did he select the international labor day to hold his election when he was
running uphill against the Labor Party New Labor Party ?”
But here in the USA, there should be no sign of distress;
1. The stock market is back up – the Dow Jones Average closed above 7000 again yesterday.
2. The President and the Senate leadership are close to a budget deal that will produce the lowest budget deficit in twenty years.
3. The economy is zooming. The first quarter Gross Domestic Product increase of 5.6% stunned observers. The increase in business activity will help the President and Congress close their spending differences by projecting substantially higher government income from the taxes on all of this stronger activity.
4. The President and the Congress (at least the Senate) have begun to learn how to deal with one another. The ratification of the Chemical Weapons Treaty and the confirmation of the new Secretary of Labor were both sticky problems on which honorable compromises were reached.
5. US-Japan relations seem on the high road after a successful trip by Prime Minister Hashimoto to Washington. The announced summary of the private meetings stressed that the talks were mostly about Asian regional political and security issues, not about economic problems. That was a bald-faced lie, but it says that the White House is trying to make things look good.
6. Speaker Newt Gingrich has covered his fine to the House of Representatives and is now only indebted to his old competitor, Bob Dole, who loaned him the $300,000.
7. For us in Washington, Spring has finally come; our basketball team made the playoffs for the first time in nine years and played competitively with the champions – the Chicago Bulls – before being eliminated; and it seems to be a great year for our beloved Baltimore Orioles. They are tearing up the opposition with the added starters picked up over the
winter.
8. First Daughter Chelsea Clinton has selected Stanford University as her college of choice. The president said he was not losing a daughter, just opening up another bedroom.
China – Domestic Politics Interferes in Diplomacy
During this critical period in US-China relations, domestic politics is intruding into the decision making process. And the problems are coming from different direction – the liberals and civil libertarians want more progress in China on human rights problems; the far right has entered the fray. They do not want this godless, communist society that is a major exporter of weapons to the world’s bad guys being treated well; and then there is the allegation that China may have tried to engage itself in the US political process through contributions to the Democratic Party and its candidates.
It is time for the renewal of Most Favored Nation trading status for the PRC. For the past several years, this event has been contentious in the Congress, particularly from human rights activists and some labor supporters who fear the job competition from Chinese manufacturing.
Business interests with big stakes in China, like Boeing, Westinghouse, and the like, have rallied to lobby and support extension of MFN. It is usually close, but it has always passed.
This time, with the addition of the religious right, it will be tighter than before. They add a dimension from a totally different part of the political spectrum, a part of the spectrum from which so many new Republicans emanate.
Speaker Newt, a newly minted Asian expert, fresh from a nice long trip through the region, has suggested that a shorter term extension of the MFN should be approved. He suggests a six month extension rather than one year. That, he says, will keep the heat on Beijing to handle the Hong Kong transition positively and to see whether they begin to be better traders.
On a broader front, these same groups will make US support for China’s entry into the World Trade Organization more difficult.
This is terrible timing for the US public opinion to sour on China. There is much to do, with both great opportunities and great risks ahead as we begin to develop positive long term relations with this emerging economic and political power.
Much of the concerns of Americans about the new China derives from ignorance about the country. The US Ambassador to Beijing, former Senator Jim Sasser, gave a speech to a meeting of the Managed Futures Association in Hong Kong recently. I wish every American could have heard it. He put China in perspective from an economic standpoint, from a political standpoint and from the military side. He pointed out that:
China’s economy is making great strides. But look where it is coming from and where it has to go before it meets the basic needs of its 1+billion inhabitants. China will challenge manufacturers of goods requiring low wage producers, but little else. On the positive side, the modernization of China will require billions of dollars worth of technology, equipment, services and commodities from the rest of the world. The United States is very competitive in the items China needs. It should be a big boost to many major American companies.
Politically, China is a power to deal with. It is a permanent member of the United Nations Security Council the corresponding veto power. Its size and economic power make it an essential player in Asian tranquillity. The west has many common goals and interests in Asia with China and political accommodations with Beijing are important to any political initiative in the region.
There is no major military threat from China. It is spending an announced $10 billion on its military this year. Even if other estimates of $40 Billion are correct, it ranks low in the spending race. The US is still spending more than a quarter of a trillion dollars per year on its
military. Much of China’s budget goes to feeding, housing and retirement
benefits for the People’s Liberation Army. China has no forward projection capability. Its ability to successfully invade Taiwan at a distance of less than 100 kilometers is questioned. It is not a current threat to the United States and cannot be for decades.
One of the Ambassador’s major problems in Beijing is coping with the outrage of the political leaders at the accusation that they were pranking
around with the 1996 presidential election. Today’s paper explained a
huge part of his problem. The FBI yesterday briefed NSC chief Sandy Berger on the issue for the first time – and, of course, only on significant national security issues. Nobody in the administration has been able to talk sensibly about the issue with the Chinese leaders because nobody has known what the FBI has. It is a massive foul up – thanks to the Director Louis Freeh. (I wouldn’t buy futures in Freeh’s case. This problem, plus the FBI laboratory debacle and other items have brought him to the top of Clinton’s most wanted list.)
People who know the Chinese are astounded at the allegations that the government of the PRC plotted and planned to contribute funds from its own accounts to American congressmen, senators and to the Clinton campaign.
That simply is not their style. They are jealous of the success of the Taiwan lobby and are frustrated at their inability to build a similar support network in the US, but no one who knows and works with them can imagine the political contribution story is real.
Remembering Franklin Delano Roosevelt
Tomorrow, the Monument to President Franklin Delano Roosevelt will be dedicated by President Bill Clinton – the first president since Roosevelt who was not alive during his 13 years in the White House. Roosevelt was my first political hero. I remember the shock and concern when his death was announced some 53 years ago.
The monument is a tribute to the haggling of Washington Bureaucrats and arts people. It was begun more than 30 years ago. But the monument is beautiful, in a most attractive setting, on the Tidal Basin, just West of the Jefferson Monument. Roosevelt had suggested that all he wanted in a monument was a plain marble tablet about the size of a table with his name on it. That tablet has been in place for many years.
The Washington Post has been running a series of remembrances this week from people who knew him, or were touched by his career and life. Here is the one vignette that I liked best. It is something that I can now associate with:
FDR was an avid newspaper reader. These included all five of Washington’s pre-war papers: the Post and the Herald in the morning; the Star, Times and News in the afternoon. Before retiring, the president frequently scanned the early “bulldog” editions of the local papers.
One night, confined to bed with a cold, a Post headline caught his
attention: “FDR In Bed With Coed.”
A cub reporter, Barry Sullivan, was on the city desk when the phone rang.
“This is Frank Roosevelt,” the familiar voice chuckled. “I’d like 100
copies of that first edition. I want to send it to all my friends!” But
the circulation department had discovered the error. FDR never got his 100 copies.
Venezuelan Politics
For anyone who really likes political puzzles and intrigues, I commend a report I made on the current state of the 1998 race for President of Venezuela. The race is the granddaddy of all political campaigns from a standpoint of confusion and possible scenarios. If you are interested in Venezuelan politics, or if you just like to read how other nations become embroiled in political conundrums, hit on our web page where it is stored under “From the desk of…”. The web site is: http:\\www.gsgroup.com.
Robert J. Keefe, Chairman – TKC International, Inc.
Washington, D. C. – 202 638-7032 – Fax: 202 638-6784 E-mail:
Update reports on Brazil, Canada, Japan, Spain and Venezuela – as well as this report – can be read on the Global Strategies Group web site:
