Financial Times: Chinese Officials “Awed” by Trump’s “Skill as a Strategist and Tactician”

A Financial Times article, The Chinese are wary of Donald Trump’s creative destruction, by Mark Leonard, director of the European Council on Foreign Relations, is so provocative, in terms of the contrast with Western perceptions of Trump, that I am quoting from it at some length.

According to Leonard, quite a few key players in China see Trump as having a coherent geopolitical agenda, with reducing China’s influence as a key objective, and that he is doing an effective job of implementation. From his Financial Times piece:

I have just spent a week in Beijing talking to officials and intellectuals, many of whom are awed by his [Trump’s] skill as a strategist and tactician…..

Few Chinese think that Mr Trump’s primary concern is to rebalance the bilateral trade deficit….They think the US president’s goal is nothing less than remaking the global order.

They think Mr Trump feels he is presiding over the relative decline of his great nation. It is not that the current order does not benefit the US. The problem is that it benefits others more in relative terms. To make things worse the US is investing billions of dollars and a fair amount of blood in supporting the very alliances and international institutions that are constraining America and facilitating China’s rise.

In Chinese eyes, Mr Trump’s response is a form of “creative destruction”. He is systematically destroying the existing institutions….as a first step towards renegotiating the world order on terms more favourable to Washington.

Once the order is destroyed, the Chinese elite believes, Mr Trump will move to stage two: renegotiating America’s relationship with other powers. Because the US is still the most powerful country in the world, it will be able to negotiate with other countries from a position of strength if it deals with them one at a time rather than through multilateral institutions that empower the weak at the expense of the strong.

My interlocutors….describe him as a master tactician, focusing on one issue at a time, and extracting as many concessions as he can. They speak of the skilful way Mr Trump has treated President Xi Jinping. “Look at how he handled North Korea,” one says. “He got Xi Jinping to agree to UN sanctions [half a dozen] times, creating an economic stranglehold on the country. China almost turned North Korea into a sworn enemy of the country.” But they also see him as a strategist, willing to declare a truce in each area when there are no more concessions to be had, and then start again with a new front.

For the Chinese, even Mr Trump’s sycophantic press conference with Vladimir Putin, the Russian president, in Helsinki had a strategic purpose. They see it as Henry Kissinger in reverse. In 1972, the US nudged China off the Soviet axis in order to put pressure on its real rival, the Soviet Union. Today Mr Trump is reaching out to Russia in order to isolate China.

In fact, Trump made clear on the campaign trail that he wanted to normalize relations with Russia because he saw China as the much bigger threat to US interests, and that the US could not afford to be taking them both on at the same time. He also regarded Russia as having more in common culturally with the US than China, and thus a more natural ally. Given the emphasis that Trump has placed on US trade deficits as a symbol of the US making deals that are to America’s disadvantage, by exporting US jobs,

However, even if the Chinese are right, and there is more method to Trump’s madness than his apparent erraticness would have you believe, there are still fatal flaws in his throwing bombs at international institutions.

As anyone who has done a renovation knows, the teardown in the easy part. Building is hard. And while the young Trump that pulled off the Grand Hyatt deal had a great deal of creativity and acumen, early successes appear to have gone to Trump’s head. He did manage to get out of the early 1990s real estate downturn in far better shape than most New York City developers by persuading lenders that his name was so critical to the value of his holdings that creditors needed to cut him some slack. But the older Trump has left a lot of money on the table, such as with The Apprentice, by not even knowing what norma were to press for greatly improved terms.

The fact that the half-life of membership on Trump’s senior team seems to be under a year does not bode well for establishing new frameworks, since they require consistency of thought and action. And the fact that Trump has foreign policy thugs operatives like John Bolton and Nikki Haley in important roles works against setting new foundations.

So even if the Chinese are right and Trump has been executing well on his master geopolitical plan, Trump is at best capable of delivering only on the easy, destructive part, and will leave his successors to clean up his mess.

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98 comments

    1. Louis Fyne

      Trump is called GEOTUS by many of his fans, God-Emperor of the United States.

      (for any literalists out there, no, Trump fans aren’t monarchists. It’s a sarcastic joke that stuck.)

      Reply
      1. pictboy3

        It’s a Warhammer 40k reference. It absolutely tickles me that there are people out there who take it seriously.

        Reply
          1. pictboy3

            Possibly, but the meme’s I saw rolling around in the run up to the 2016 election had a decidedly 40k aesthetic. In either case, that anyone takes it seriously is hilarious.

            Reply
    2. Code Name D

      I’m sorry, but I just can’t rap my head around this. It reads like a union piece. “Trump brilliantly does nothing in the face of oncoming challenges.” Thanks to our insane foreign policy, when Trump doses anything with a modicum of intelligence, it must seem like “brilliance” to the outside world.

      The trick to playing poker isn’t having a good hand – but convicting the other players that you have a better hand than theirs. And when Trump isn’t smart enough to know when he has been dealt a bad hand? You have to look out for two kinds of players – the ones who know what they are doing, and the ones who don’t.

      Reply
  1. Tomonthebeach

    If the Chinese are saying they are in awe of Trump’s brilliance as a strategist/tactician then we are witnessing the Great Khan (con?).

    Reply
  2. Harry

    I got a similar impression. He went to see that old scumbag Kissenger who i am sure would have told him to cosy up to Russia.

    Reply
  3. vlade

    I suspect that they suffer from overprojection, i.e. can’t believe he would not be rational, and project on Trump what they would do in his position. Not unusual behaviour when one meets with a chaotic behaviour.

    Reply
    1. Nate Walker

      Yeah. Some of the smartest and most politically astute people in China are all suffering from projection.

      Or maybe they know how to set emotions and BS aside and make rational analysis, even of their perceived opponents, because they really want to win…as opposed to the democratic party being in a bit of a bubble and being shocked when Trump won the presidency and continuing to be confounded by his successes and growing approval rating.

      If you consistently underrate the opposition you give them an advantage, so you have to ask yourself – do you want to rant or do you want to win against this person? No offense but I think the conclusion of this article Leans more towards an unrealistic side. The Chinese are a highly intelligent people who can be dispassionate when necessary. I’d listen to them, even (or especially if) opposed to Trump.

      Reply
  4. PlutoniumKun

    It doesn’t really surprise me. In China there is still a sort of awe attached to the ‘big man’ with power who throws his weight around, even if its not always with subtlety. In my experience, many Chinese are quite fascinated with Trump, and were so even before he became POTUS. So it doesn’t surprise me that they tend to put the most positive spin on his blunderbuss approach to international affairs. On the flip side, I also found that the Chinese never shared the rest of the worlds awe of Obama, they saw him as weak and vain.

    That said, I’m pretty sure the strategists in Beijing are well aware of Trumps weaknesses and will work out (if they haven’t already) how to manipulate him. For now, broken institutions may well suit China very well.

    Reply
    1. John k

      I doubt it. They have been rising like a rocket as they manipulate institutions like WTO, if this breaks they will do ok one on one with small countries, but poorly wrt Eu and us.

      Reply
    2. Tomonthebeach

      I doubt seriously if anybody in China is impressed by Trump’s brilliance. Like all world leaders, they have realized that if you stroke Trump’s ego, he’ll sit up and beg – woof.

      I suggest reading Hilda Hookham’s “A Short History of China.” Though published in 1972, the history of China dates back millennia. From that book, I note that China has cycles of domination followed by economic implosion (often triggered by revolution – most recently Mao) and a slow crawl back. It has been going on for centuries. Some of it is endemic to the Chinese culture (how they view the world), and some of it is likely due to the limits of central control when the country is just too huge to govern. If Hookam’s observations are correct, then we should expect a financial meltdown at some point. After all, China’s personal debt level is high and their housing bubble is ginormous – the sort of thing that generates recessions.

      Reply
      1. Lorenzo

        have you, or for that matter any of the commentarait, ever heard of Kyle Bass? he’s a hedge fund CIO, the few times I’ve seen him speak he came across as a smart fellow indeed, knew his macro stuff very well, and has focused on China for a few years now. He points especially to their over-leveraged banking and shadow lending sectors as a big source for concern.

        Reply
  5. The Rev Kev

    If this is all the case, it may be partially working. The EU just agreed to buy more soybeans to make up for what US farmers lost in orders to China as well as offering to build more facilities to take in US LPG shipments which is by its nature is much more expensive and less reliable than that coming in from Russia. So the EU has basically surrendered to Trump’s demands.
    The implication of this article is that Trump would spend his first term smashing up things and the second term securing all these you beaut deals to secure his legacy. I doubt that Russia will go along because they know that the US is not only incapable of keeping an agreement but can trash a deal and impose all sorts of sanctions in a matter of days. Iran is already experiencing this. China may be taking note.
    I think too that the deep state is also working against this model. I am going to throw out a theory that what they want is to see the formation of a second Tripartite Pact but this time between China, Russia and Iran hence the constant pressure against these three nations. With that in place, it would guarantee ever-increasing defense budgets for decades to meet this ‘united threat’. In addition, China may want to be cautious here. Once you pay ‘danegeld’ it never stops.

    Reply
    1. Pookah Harvey

      According to the WaPo it appears Juncker gave Trump a non-concesstion concesstion:

      Trump also touted an agreement by the Europeans to buy more American soybeans and liquefied natural gas. But Juncker in a speech later Wednesday indicated the gas purchases would only go forward “if the conditions were right and price is competitive.” (Anthony Gardner, a former U.S. ambassador to the E.U., said in a tweet it was “absurd” to believe liquefied gas could compete with what the continent pipes in from nearer by.) And the E.U. was already looking to import more U.S. soybeans, since China — in its own trade fight with the Trump administration — has been buying more from Brazil, driving up the price of the product there.

      Reply
      1. Joe100

        The economics of North American LNG to the EU must look compelling now as for example is seen in the proposed Goldboro, Nova Scotia LNG terminal at the end of the pipeline built to bring Sable Island gas (that has essentially “run out”) into the US. This project has a German government loan guarantee and the first “train” of production has been sold to a German gas utility. I suspect that the gas source will be the US Marcellus basin .

        Reply
    2. John Zelnicker

      @The Rev Kev
      July 26, 2018 at 4:19 am
      ——

      “…they want…to see the formation of a second Tripartite Pact but this time between China, Russia and Iran”

      It is a basic necessity for the MIC (in which I include the “deep state”) to have a worthy opponent to continue producing and selling their weaponry to all of the other countries of the world, or at least the ones on “our” side. Such an opponent also justifies the continuing massive funding of the surveillance agencies.

      The Soviet Union served for decades as the worthy opponent, but since 1991 the US has been looking for another worthy opponent, i.e., a credible threat. Saddam Hussein served that purpose for a short time, and then the broader War on Terror. However, neither one of those was sustainable as a credible threat.

      A Tripartite Pact v2.0 would create a very worthy opponent, keeping the MIC companies very busy and profitable for many years to come.

      Reply
    3. Yves Smith Post author

      See Links today. Politico reported that everything that Junkcer promised to Trump (save maybe soyabeans but not sure there) is stuff the EU was doing/going to do already. So Trump got nothing new.

      Reply
      1. Nate Walker

        Of course they did. The name for that is sour grapes. Otherwise, which one of them reported this before his meeting with Juncker? Not one.

        Reply
    4. Seamus Padraig

      I think too that the deep state is also working against this model. I am going to throw out a theory that what they want is to see the formation of a second Tripartite Pact but this time between China, Russia and Iran hence the constant pressure against these three nations.

      If so, they would probably be making a huge mistake. Handling China by itself will soon be more than a chore for an ever-declining west. Handling a “tripartite pact” would be way, way out of our league. A Russo-Chinese-Iranian alliance in the Eurasian heartland would have Mackinder turning in his grave. That’s why the neocon strategy is so stupid: it just pushes the Russians further into the arms of the Chinese. Say what you want about Trump–at least he understands that much.

      Reply
  6. nervos belli

    Trump, especially in his foreign policy is very rational if chaotic. Chaotic can still be rational.
    He saw what e.g. Obama tried to do. Obama wanted to curb down on US global force projection, less US instigated wars on 7 continntes. He did it poorly, was stupid even. And when he didn’t want to start new wars, the deep state including the state department (Hillary) or his allies (France/UK) drew him into new conflicts anyways: Ukraine, Syria, Lybia.

    Trump saw this and therefore uses a different strategy, basically a crazy Ivan. Be so outrageous, chaotic, etc, that the US is simply not welcome anymore. Not in Syria, not in Ukraine, but even more important: not with their own allies. UK/France could be sure their ally US would bail them out when it was clear that Lybia was a total clusterfuck for them. Would any NATO ally be able to depend on Trump today for one of their stupid wars anymore? Exactly.
    Trump is no pacifist of course. He still likes to sell weapons to anyone who pays, but the crucial difference is, Saudi-Arabia and UAE pays, it’s not a “deliver weapons for free via CIA” as before to some shitty terrorist cel^W^Wfreedom fighter.

    On the tradefront it’s the same: he ruthlessly tries to exploit the hegemonial position the US still enjoys here. That’s why he asked Merkel several times about a bilateral trade agreement in the beginning. He knows in one on one treaties the US always has the advantage due to its size. I’m sure he asked everybody he ever met that. Germany loudly and publically declined and pointed to the EU for that, but maybe not every country would: eg. Poland or any other eastern european country might agree to a quiet “we protect you from Russia, but we need a consideration for this” treaty mafia style.
    He will try to exploit every kind of advantage like this all the while giving the impression of being a moron, crazy or both.
    Same with his constant tries to bring back industry to the US any way he can, gutting NAFTA, etc. He doesn’t care if he pollutes to high heaven, for him it’s actually bringing the industry back first and foremost. You cannot really have both which sucky but that’s physics. The left however wants both, and gets neither btw.

    This is a high risk strategy, and far from certain it will work, but it’s much better than the constant decline over the last 20 years with perpetual wars draining the coffers, generating unrest at home, hobbling the economy in the process only lining the pockets of the rich and creating two worldwide major economical crises. Not counted the by now millions of deaths the US is almost solely responsible for.
    It actually uses the power that the US still has fairly optimally cause when the power is totally gone, it’s too late. We all know free trade and globalism do not help “the economy” much less the common man, so when someone is actually doing something practical instead of writing useless books so the NC commentariat can gripe or fap to Mr. Hudson in an embarassing fanboi way, then he’s vilified.

    You can vilify him for his corruption, e.g. his self serving tax reform, the personal credit for his private ventures from UAE/Saudi Arabia or ZTE, gutting of financial oversight or EPA, but especially his foreign policy has some method in his madness.
    Of course he is not a shining liberal progressive saviour, but a right wing reactionary evil capitalist so the way he does it is his way the evil way. The US already tried a compassionate, smiling “peace for all mankind” ineffective moron from 2008-2016. It didn’t help, it made it all around much worse everywhere and was indistinguishable from the criminal evil moron before him.

    Reply
    1. Loneprotester

      There are pearls of wisdom mixed in with a goodly dose of horse hooey here. You would do well to consult a dictionary on questions of spelling (it’s not LYbia, but Libya; not hegemonial but hegemonical, etc.).

      Like the FT piece itself, it is hard to parse what perspective you are coming from. I will focus here on the piece itself, which I read yesterday. The FT piece could be genuine: “Hey, look at this guys! The Chinese really seem to think Trump is a genius strategist!” It could be a CYA operation by an increasingly hostile FT editorial board worried by the increasing vehemence of commentators on both ends of the spectrum and some of its columnists who appear to be suicidal over the rise of Trump AND Brexit. Or, the 3rd option, it is a concerted strategy by the Chinese to appeal to Trump’s vanity in a way that calls to mind a brilliant episode of South Park where Pokeman is a mind control plot by the Japanese to take over America and the worried parents keep getting distracted from their efforts to get to the bottom of it by Japanese proclamations of wonder at the size of their male members. Classic!

      Time will tell. But one thing is certain, Trump is not a fool, at least not in the classic sense of the term. For my part, I get the sense of someone who has a map of the minefield and is deftly maneuvering through it, but whose luck could run out at any time. In the meantime, the world as a whole finally gets a chance to see the minefield, which we have been told repeatedly does not exist.

      Reply
      1. integer

        You would do well to consult a dictionary on questions of spelling

        FWIW it’s Pokémon, not Pokeman. Orthography aside, I agree that Trump has shown the world the “map of the minefield”, although my preferred metaphor is that Trump has sent (and continues to send) impulses through the liberal international order, and in doing so, has revealed the liberal international order’s impulse response function.

        In signal processing, the impulse response, or impulse response function (IRF), of a dynamic system is its output when presented with a brief input signal, called an impulse. More generally, an impulse response is the reaction of any dynamic system in response to some external change. In both cases, the impulse response describes the reaction of the system as a function of time (or possibly as a function of some other independent variable that parameterizes the dynamic behavior of the system).

        In all these cases, the dynamic system and its impulse response may be actual physical objects, or may be mathematical systems of equations describing such objects.

        Since the impulse function contains all frequencies, the impulse response defines the response of a linear time-invariant system for all frequencies.

        I’m not sure whether the liberal international order is a linear time-invariant system though, but “The End of History and the Last Man” appears to suggest that it is.

        Reply
    2. marym

      Trump and his appointees have no policies that will benefit the common person, and many that will do them great harm. There’s no path from smashing “globalism” to the common good under such a regime.

      Reply
      1. John k

        Balanced trade is better for our workers than the status quo.
        And reduced immigration is similar… all this is the unwind of the Corp push, aided by both parties, to push down wages because profits. Unwinding means breaking agreements.
        It is not news that we have let other countries take advantage of our workers, or that, as trump said, winning trade wars is easy, given that you’re the big importer. Or that in trade wars it is the exporter that is hurt the most… in the 30’s it was the us. True, Apple might get hurt since most stuff is made in Asia, so what? How many us workers do they have? Not like GM.
        Trump certainly wanted his tax cuts, but it seems he has not forgotten flyover.

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        1. marym

          What hurts workers is predatory capitalism. That’s why we don’t have good wages, safe workplaces, universal healthcare, robust social programs, sustainable food and energy supplies, clean air and water, infrastructure maintenance and improvement….etc.

          Trump and his appointees are neglecting or working against all those things now. Why would that change under protectionist capitalism, even for the white flown-overs who attend his rallies and cheer his bigotry, let alone the rest of the common people?

          Reply
          1. Loneprotester

            “Predatory capitalism” is not a thing in and of itself. It is the end product of globalisation breaking all the old rules of reciprocity and communal obligations/rights. Trade unions got a (deservedly) bad rap in post-war America for hindering productivity and making off-shoring attractive to management. What gets less play is their place in western labor/economic history where they held the line against robber barons, big finance, and their political cronies as a link in a chain going back to the Middle Ages, when noblesse oblige was an actual thing and not a vague concept. When we focus too much on one player in a complex chess match, we lose the importance of the shared authority of both sides. JohnK is correct. Trump is not merely mouthing platitudes about farmers or workers or the Rust Belt. He is bringing them back into the game for the first time in ages, and the other side (who considered them dead and gone) is furious. You cannot claim to be for the working class and not cheer a little, if you are being at all honest.

            Reply
            1. Left in Wisconsin

              Trump is not merely mouthing platitudes about farmers or workers or the Rust Belt. He is bringing them back into the game for the first time in ages, and the other side (who considered them dead and gone) is furious. You cannot claim to be for the working class and not cheer a little, if you are being at all honest.

              While I agree with this in principle, what matters is actual practice, not principle. The farmers here in Wisconsin are going berserk. The commodity soybean producers are seeing their Chinese market go away. The dairy farmers are losing their undocumented help while dairy prices stay depressed. While we have a relatively large organic and small scale farm sector compared to many other places, it is still peanuts in the grand scheme of things and no one in that sector believes Trump is out to help them.

              But it should be different in manufacturing, right? Well, I’m not sure what to make of it but an old auto industry acquaintance I know to be union friendly just wrote this:
              http://thehill.com/opinion/finance/398312-by-any-measure-25-auto-tariffs-will-cost-americans-dearly

              According to the Center for Automotive Research’s (CAR’s) latest trade briefing, applying a 25-percent tariff on all automobile and parts imports would result in 2 million fewer U.S. vehicle sales, 715,000 fewer U.S. jobs and nearly $60 billion in lower U.S. economic output.

              I was stunned to see that and still don’t quite know what to make of it. But the argument is basically, there is no real way to ramp up US auto production without investing in new capacity, which the auto companies are not going to do, period. And since domestic steel and aluminum capacity has already been decimated, and the domestic steel and aluminum producers are even more unwilling to add new capacity than the auto companies, the only effect of the tariffs is to dramatically raise materials costs.

              Reply
              1. Loneprotester

                I do not wish to make light of the real pain of real people, but there was always going to be short to mid-term disruption to “the system” to stop the outflow of capital and redirect growth domestically. It’s like trimming a tree or pruning a grape vine. The branches that were growing are definitely feeling the pain and would protest if they could. But the productivity and long term prospects of the plant and/or crop are infinitely improved.

                You cannot negotiate with a gun to your head, and if the gun is pointed by your supporters and political opposition, it is nevertheless potentially lethal. Were he the most popular political leader ever, Trump would still face this backlash, and the backlash is legitimate. He is NOT the most popular, so this is very dangerous. But if he succeeds? Wow.

                Reply
                1. Left in Wisconsin

                  But if he succeeds? Wow.

                  If you mean success the way I mean success, there will need to be some sort of fundamental change to US/MNC corporate leadership. I don’t see how Trump achieves this. Not even convinced he really wants it.

                  Why would a rational person believe this is anything more than a ploy from a bullsh1tter to win votes? Or that Trump cares about anything beyond 2020 (if that far out)?

                  Also, I think your (best case) argument only applies to manufacturing, not farming. For better or worse, US agriculture is heavily export oriented. And I have never heard Trump mutter one word about growing our own food.

                  Reply
              2. lyman alpha blob

                From what I understand the US has been overproducing dairy for quite some time now which benefits the big midwestern farms and hurts the smaller farms, like those in New England. When the New England diary compact came up for renewal by Congress several years ago they declined to renew after pressure from the larger corporate dairy enterprises.

                My family has milked 60 cows for decades now no matter what the price of milk is. Others have expanded their herds when prices go up, thinking they would cash in, which annoys my father to no end. As long as we’re under a capitalist system, increasing production without increasing demand is going to cause prices to drop. I don’t know how all the other farmers in Vermont did over the years, but I do know that my family’s farm is still milking 60 cows while all up and down the road nearby other barns are crumbling to dust. My family has never hired any undocumented workers and very few documented ones either, and none in the half century I’ve been around. The herd is kept to a size they can manage by themselves.

                I believe someone here linked the astronomical amount of government cheese we currently have lying around that nobody wants. What exactly is the point of all this overproduction? No small farmers I know are retiring early from any great windfall they’ve received.

                Now if Trump’s idea was to cut production and decrease the perceived ‘need’ for undocumented workers, I’d be all for it. Without the US overproducing cheap dairy and dumping it on other nations, the undocumented might be able to begin farming in their own countries again. But since Trump seems to want Canada, which has evidently managed its dairy industry much better, to start accepting cheap US dairy, I don’t think that’s his plan. I’m still not convinced he has a coherent strategy on anything, despite what the Chinese think.

                But if the result turns out to be less overproduction and less illegal immigration, fewer corporate farms and a return to the smaller family farm, that can’t be a bad thing.

                At this point global warming can’t be denied. If these policies result in less overproduction which means less industrial activity and fewer overall large ruminants with their own food requirement, I would count that as a victory.

                Staying the course means capitalism ruins the planet even quicker.

                The system needs to change. I’d much rather have someone other than Trump doing the changing, but there seems to be almost noone else in DC willing to upset the apple cart (or the milk wagon) for fear that their corporate bribes will dry up. If someone could convince Trump of a little MMT, and make sure all the workers who do lose their jobs when overproduction is cut will be taken care of, then I think we’re on the right track.

                Reply
                1. Left in Wisconsin

                  I’m no dairy expert. But I found a very informative article in the local ag rag from Sept 2017: Total dairy farms in Wisconsin were just less than 9000, down 500 from the year before, with an average herd size of 142. (That average masks a number of 5000 cow mega-dairies.) Compared to 1997, when there were 50,000 dairy farms with average herd size of 37. 1.8 million total dairy cows then, 1.2 million now producing twice as much milk per cow. (In 1957, 103,000 dairy farms in the state.)

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                  1. lyman alpha blob

                    Interesting stats – thanks! I’m guessing BGH has something to do with the increased production.

                    Reply
            2. Synoia

              against robber barons, big finance, and their political cronies as a link in a chain going back to the Middle Ages, when noblesse oblige was an actual thing and not a vague concept.

              Noblesse Oblige was more of a guideline than a practice. It certainly was not law.

              Reply
              1. Loneprotester

                Not true. There were wide variations depending on country and period, but the vassal/liege model replicated all the way down society. Nobles who broke customary law could face serious uprisings and when agricultural labor was in short supply, as after a plague outbreak, their serfs might simply run away, leaving them with worthless estates.

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            3. Yves Smith Post author

              No, you have it backwards. Predatory capitalism, if you want to call it that, goes back to the Thatcher/Reagan revolutions, which received legitimation from the raiders of the 1980s, who took overdiversified conglomerates that were trading at a discount, bought them with tons of debt, and sold the parts for more than the purchase price. All the money they made was depicted as a victory for entreprenurship over corporate norms of considering the needs of all of what would now be called stakeholders, not just shareholders.

              The actions of the raiders and the gospel of “maximizing shareholder value) predate the globalization/outsourcing fetish, which really took hold in the 1990s.

              Reply
      2. Seamus Padraig

        There’s no path from smashing “globalism” to the common good under such a regime.

        Maybe. But there’s definitely no path from globalism to the common good, so Trump is just a risk we’re going to have to take. One thing is beyond dispute here: we gave those jokers in Washington (and Brussels) a full eight years after the economic crash of 2008 to fix the situation, and they did nothing. Not a damn thing! Now the situation is really dire, and it looks like we might have to–forgive the metaphor–break a little china.

        Reply
        1. Yves Smith Post author

          Trump has zero interest in the welfare of ordinary workers save for optics to fool the rubes. If you think he’s breaking things for your benefit, you are smoking something very strong.

          Reply
          1. John k

            But he does want to be re-elected.
            Dems refuse to consider giving up any income stream from donors, trump, though beholden to Sheldon and Israel, will toss any Corp group save real estate under the bus if that helps. M4a would do it, so I think he might get the reps to give up that income stream.
            And could be very gradual, two years down every year.

            Reply
  7. skippy

    “creative destruction” – sigh….

    So were back to applying GT to humans in a multivariate T&S matrix and then laying claim or extenuating the results to meaninglessness.

    Reply
    1. Synoia

      extenuating? Or extrapolating?

      In a chaotic system extrapolation is unwise. Extrapolation assumes some form of linear behavior.

      Reply
      1. skippy

        Sorry I hit the dyslexia speed bump, meant externalize e.g. outcomes deemed disadvantageous are externalized vs. claiming. Per se AUD was supposed to go boom for the last 2 years, shorters nightmare, mostly due to ideological perceptions about currency. This cogdis manifests by externalizing their bias fail rates and claiming simultaneously ev’bal forces at work.

        Yet at the same time completely missed Brexit FX or worse thought it would appreciate long term – for some reason correlated the crypto crowd and associated right wing ideological camps.

        Persoanly I think Trump – is – the proverbial dead parrot and we are left to watch the buyer and seller argue about its state of being via bias projection. I would go so far as to say that he knows this and milks it for all its worth i.e. he likes being a mirror for others to reflect their visions on, both good and bad, as long as he has some control over the refraction.

        Reply
  8. Jim Haygood

    ‘They think Mr Trump feels he is presiding over the relative decline of his great nation’

    And he is, of course, as a nearby post about the downwardly mobile middle class makes clear.

    Unfortunately flake-o-nomics will not make America great again. The Republican party’s crackpot fiscal stimulus pumps hundreds of billions into negative rate of return global military domination during Trump’s first and only term.

    This is money flushed down the toilet which should have been invested in fixing the substandard features of America’s late-Soviet-era economy: failing infrastructure, failing education, a failed health care system. It’s high times for looters defense contractors though.

    Don’t mistake Chauncey Gardner Trump for a very stable genius.

    Reply
    1. Anarcissie

      I would expect the domestic money hoses to be turned on for the 2020 election. By the way, education and medical care are weird sinkholes of very large amounts of money now and the hosemasters may try to avoid them. If you waste billions on a highway at least at the end of the process you may have a highway, whereas it’s clear that the education and medical care industries can make infinite amounts of money vanish leaving behind no tangible signs of their passage.

      Reply
      1. Synoia

        It depends on the speed at which the Chinese can build a self-sustaining consumer economy. That is, become an Autarchy.

        Their imports are raw materials and Oil. They will solve the oil problem, as most oilfields are associated with large rivers, and the Chinese have a number of large rivers where they can explore for oil.

        Reply
      2. OpenThePodBayDoorsHAL

        Chinese have a trump card: a sovereign currency. Like one other nation: Ecuador. When the state issues the scrip (and not commercial banks) it gives you many options. Michael Hudson is one of the very few to point out the importance of this glaring fact.

        Reply
  9. athena

    I think there’s also a chance the Chinese are just lying, because whatever he’s doing is something where they feel it actually gives them the upper hand. It’s impossible to say either way at this point, as far as I can tell.

    Reply
  10. Disturbed Voter

    So much projection by readers, so little time until the next election. Shouldn’t y’all spend more time promoting the right kind of populist candidates and getting them elected? Focusing on Trump is taking your eye off the ball (again).

    Yes, the Chinese are mercantilist, and so is Trump. They recognize their own. Kissinger has never sold a single ice cube to a single Inuit. Followers of Plato’s Republic, frequently are mesmerized by academic nonsense.

    Get back to work, I would like some populists to vote for (not same as progressives).

    Reply
    1. Carolinian

      Agreed that the all Trump all the time focus of much of the left is fruitless. The reality is that nobody knows for sure what Trump is up to including, perhaps, Trump himself. Speculation about a strategic plan is mostly useful for curbing the hysteria that says Trump must be stopped, now, immediately, and that’s all that matters. Even Sanders has fallen prey with his recent denunciation of the Russia summit. It makes one wonder whether Sanders has a plan either.

      And while Kissinger was certainly amoral and had his own crackpot notions, his “realist” view of foreign policy would be a refreshing change from the fake solicitude that says we have to bomb one country after another in order to save them.

      Reply
      1. Newton Finn

        Sanders’ capitulation to the Russiagate narrative was sad, as was his capitulation to Clinton and the DNC after knowing they stabbed him AND THOSE WHO SUPPORTED HIM in the back. As one who worked hard for Bernie and deeply appreciates what he did for America–demonstrating that an effective national campaign can be crowd-funded, and that socialism is no longer a dirty word–I hope that he does not run the next time around. He was John the Baptist. We await “the one who comes after” to carry the revolution forward and take it home. Horizontalism and the grass roots have their important places, but history shows that nothing happens, nothing changes, without the key ingredient of leadership

        Reply
        1. drumlin woodchuckles

          Unfortunately, Leadership can be assassinated and a movement which depends on “the one who comes after” to “carry the revolution forward and take it home” can be immobilized by a decapitation strike against the “one who comes after” leader.

          So what to do in the teeth of that fact?

          I hope Sanders fights through the 2020 primary season. I hope some other tolerable nomination-seekers do so as well. Hopefully meddling by the Dollar Democrat operatives in Dollar Democrat headquarters can be exposed and arsonised quickly and thoroughly. And then let the most Darwinianly fit-to-survive nomination seeker be the one to seize the nomination. I hope it will be Sanders or someone similar. Win or lose, Sanders will assist in growing a movement with too many microleaders to immobilize the movement by assassinating the microleaders.

          Reply
      2. pretzelattack

        well that’s what he did to chile, via coup rather than bombing, there’s a quote about “not letting chile go communist due to the irresponsibility of its own people”. sanders’ capitulation on russia gate bothers me a great deal.

        Reply
        1. Carolinian

          True, so amoral “realism” can be just as bad as (effectively) amoral R2P.

          But in this particular case Kissinger has said that Russia should be given its sphere of influence and given Russia’s nuclear status it’s hard to see why that isn’t sensible and true. It’s hard to see what the American interests would be in the Ukraine.

          Reply
          1. Anarcissie

            That depends on what you think America’s interests are. That is, its ruling class’s interests. If one conceives of America’s interests as dominating a weakened Russia, then of course one wants to get them kicked out of Syria and the Middle East in general, and to turn Ukraine into a hostile pro-Western bastion by whatever means necessary. The risk that these moves would result in hostility and countermoves was accepted, and some of the threats have now come to pass. From my point of view, it was stupid to provoke them, but as government seems to attract psychopaths, perhaps inevitable.

            Reply
  11. BillS

    I think this article misses the fact that the Chinese are far more subtle than P45 could ever understand. They may appear “awed”, but they are not the least bit fooled. If P45 reads any book before dealing with the Chinese, it should be the Art of War.
    *****
    Allure the enemy by giving him a small advantage. Confuse and capture him. If there be defects, give an appearance of perfection, and awe the enemy. Pretend to be strong, and so cause the enemy to avoid you. Make him angry, and confuse his plans. Pretend to be inferior, and cause him to despise you. If he have superabundance of strength, tire him out; if united, make divisions in his camp. Attack weak points, and appear in unexpected places.

    Reply
    1. MyLessThanPrimeBeef

      I think Xi violated the Art of War a while back, with

      1. Proclaiming Made In China 2025
      2. One Belt One Road.

      To appear ‘awe,’ again, also seems to go against Mao’s “the barrel of the gun” strategy that raw power matters more.

      Reply
  12. Brumel

    Strategy or tactics aside, on the math Trump’s retraction of his tariff menace against Europe, at the price of a few bags of soybeans, seems a huge victory for Juncker, right?

    Reply
  13. Brooklin Bridge

    Teasing out Trump’s merits is a little like diving for quarters in the sewer. You’ll find some for sure, but…

    As to the Reno analogy, if the frame of a building is rotten throughout, then tearing down walls even by temper tantrum appears strategic in that it’s guaranteed to uncover issues that must be addressed. The established method of diplomacy, for instance, has become so formalized and drawn out that for all it’s merits in caution, the simple act of a human meeting between one leader and – GASP – the POTUS can contribute significantly to unexpected success. It’s not easy to tell if Trump upsets the apple cart of protocal because he’s a spoiled brat who thinks he’s the greatest negotiator ever to walk upright, or because he has an intuitive grasp of human nature or a bit of both.

    Glen Greenwald strikes me as one of the better Trumpticians who can discuss Trump intellegently without having to put on a wet suit. He presents the facts and highlights the positives and let’s the cards fall where they may as far as merit goes and indeed it puts a certain shine on Trump which he may or may not deserve and even then without necessarily being a great tactician.

    (recently in links): https://theintercept.com/2018/07/16/a-spirited-substantive-debate-on-the-trumpputin-summit-russia-and-us-politics/

    Reply
  14. Louis Fyne

    It’s good to hear that Chinese official-dom believes that it’s dealing with a rational, but unconventional, US.

    Countries who feel that they’re dealing with rational actors tend avoid shooting first and asking questions later.

    Reply
    1. MyLessThanPrimeBeef

      Who is going to have more luck

      1. The Chinese with this,

      or

      2. Sanders who said Helsinki was embarrassing?

      Reply
      1. Brooklin Bridge

        Now that’s a good one…

        I’ll go for Sanders cause we can all make mistakes… ? Is there a right answer? All of the above? None o the above? All of the above and none of the above simultaneously?

        Reply
    1. Louis Fyne

      so true.

      that’s what i like about reading the comments here. lots of people more witty than me cranking out quality lines before i’ve even finished my 2nd coffee

      Reply
    2. MyLessThanPrimeBeef

      I am trying to come with up a historical Chinese example where flattery won a dynasty.

      The first emperor – through sheer military might

      There was the Feast at Hong Gate (https://en.wikipedia.org/wiki/Feast_at_Hong_Gate), and Liu Bang escaped with the help of an insider from the opposition (treason) to later establish the second Chinese dynasty – the Han empire.

      The Qing conquerors did not win with flattery – with again through the treasonous act of a Ming general guarding the gate to Manchuria (Shanhaiguan).

      Throughout Chinese history, I can recall, at this moment, only flattery on the part of the subservient Mandarins or eunuchs, presuming a superior and inferior hierarchy.

      And it worked sometimes, and failed disastrously other times, for the flatter.

      Reply
  15. John k

    Couple points…
    Your earlier point was that his modus was to keep firing until he is happy with his team… I can imagine his not being happy yet. And he has to keep hiring people he doesn’t know.
    Minefields…certainly deep, msm and dems are making it as difficult as they can to be nice to Russia, and to pivot from China to them. He’s got to keep both the base and elected reps reasonably happy, lots to juggle. Amazing how Twitter keeps to base engaged and opp off guard.
    China… they really, really don’t want existing world order upset or broken, they’re doing well, and change that leads to unemployment can slip into revolution, given their only excuse to rule is ever rising living standard. There are always thousands of protests that need suppressing. So why would they say anything that encourages his behavior? Sounds like grudging admiration.
    Omelettes… require breaking eggs. Reversing 40 years of wage repression attacks profits… Bernie wants 15/hr, but stopping immigration while balancing trade would naturally push up wages without mandate. And, of course, push down profits… Apple and others in jeopardy.

    Reply
    1. Left in Wisconsin

      Amplifying:
      The US corporate class does very little business with Russia. They have little to lose by siding with the neocons on Russia. Also very good for defense budgets, military contractors.

      The US corporate class is deeply invested in China. The neocons obviously see this and tread much more lightly on the China issue. Also, “we need to protect the WTO and the world trade order” so that our allies see us as a “responsible” trade partner and aren’t driven into the arms of China – even though our corporate class is completely wedded to China at this point. Inconsistency on China also not bad for defense budgets, military contractors.

      Where does Trump fit in all this? Hard to say. I have been surprised by his continued willingness to push the trade issue despite the complete opposition of the corporate class. On the other hand, I don’t see how he actually benefits the working person if the corporations refuse to reinvest in the USA. And I see no evidence that they are or ever will again. So my conclusion at this point is that he simply sees it as an electoral winner even if no substantive change is ever achieved. And my second conclusion would be to follow Trump’s money. I’m still of the opinion that Trump taking on the “community” is more about knee-capping their ability to dig into, or at least do anything about, his finances than about any geo-strategic America-first thinking.

      Reply
      1. John k

        25% tariff brings a lot of car mfg, whether our own or Japanese or Europe… japan now labor short anyway, they can quickly expand.
        Grant that trump doesn’t care about working class, but he clearly wants to be re-elected. Most dems still aren’t paying any attention to working class, all about Russia, a losing strategy even from Bernie.
        I could imagine trump pushing m4a thru, great for his hotel workers, not clear even Bernie could beat him if he does. Why not? He’s already going against most Corp in attacking China.
        Course he makes mistakes, but shouldn’t let personal distaste convince you he’s stupid.

        Reply
        1. Left in Wisconsin

          I posted this (with link) above. Not saying it’s gospel but the link between tariffs and domestic manufacturing runs though the US corporate class, who seem very disinterested in US mfg:

          According to the Center for Automotive Research’s (CAR’s) latest trade briefing, applying a 25-percent tariff on all automobile and parts imports would result in 2 million fewer U.S. vehicle sales, 715,000 fewer U.S. jobs and nearly $60 billion in lower U.S. economic output.

          I was stunned to see that and still don’t quite know what to make of it. But the argument is basically, there is no real way to ramp up US auto production without investing in new capacity, which the auto companies are not going to do, period. And since domestic steel and aluminum capacity has already been decimated, and the domestic steel and aluminum producers are even more unwilling to add new capacity than the auto companies, the only effect of the tariffs is to dramatically raise materials costs.

          Reply
        2. marym

          He would need someone to explain how Medicare works, and how it would be expanded to M4A. Probably not the person he appointed to administer it though.

          Top Trump health official slams ‘Medicare for all’

          Verma said the focus of Medicare should be on seniors and disabled individuals and that expanding the program to cover younger, healthier people will drain the program of funding and deprive seniors of the coverage they need.

          “By choosing a socialized system, you are giving the government complete control over the decisions pertaining to your care or whether you receive care at all. It would be the furthest thing from patient-centric care,” Verma said.

          Verma also said the CMS would likely deny waivers from states that seek to implement their own single-payer systems.

          Reply
  16. coboarts

    Trump’s been developing real estate in New York and running casinos. He doesn’t need to read the book by Sun Tzu. Underestimation is mentioned where as a recommended strategy? I think Trump has planned his work and is working his plan. That’s for strategy. The tactics develop in play. I also think that Mr. Pompeo will be around for a while. Take out your pens. History is being written, and yes, it involves risk.

    Reply
  17. herm

    I wonder how much of this would be gaslighting on the part of the Chinese, or at least a hint the direction they would like to nudge Trump. What made me wonder that was the all too true quip tearing down is easy, building is hard. As someone who has gone through renovation I can attest to that! But it’s not only me, in the aftermath of WWII America was the only ‘great power’ that hadn’t been shattered by the war, and can thank its postwar dominance on that fact. Even the USSR, though victorious, had lost millions of lives and been thoroughly ravaged by the Nazis. And the best the US could come up with against this fairly broken rival was Cold War!

    The thing is, today no other ‘great power’ is in such as state as they were after WWII. None are at the mercy of the US the way they were then. Trump can take swings and smash stuff, but will not be able to rebuild anything on his own terms because the situation is nowhere near the same. In fact, the more damage Trump does can only put the US in a worse position. We become the loose canon that may vote in another Trump at any time, who may again overtly smash things and try to be more aggressively dominant in the world, and China can portray themselves as a model of stability in comparison.

    Reply
  18. john c. halasz

    “Creative destruction” is so 1980’s. It’s all about “disruptive innovation” nowadays!

    Reply
  19. Summer

    “…even if the Chinese are right and Trump has been executing well on his master geopolitical plan, Trump is at best capable of delivering only on the easy, destructive part, and will leave his successors to clean up his mess.”

    What you refer to as a mess, may be the next stage, following the Chinese perception that there is a coherency to the chaos.

    Over and over again, it’s been shown that the allowed choices by the establishment are neoliberalism (what is currently defined as liberal democracy) or its kissing cousin (maybe siamese twin) overt fascism.

    “Overt” is an important word doing a lot of work here.

    For the USA, Trumps alliances with supporters of theocracy means the cleanup is going to be a baton pass to actual ideologues with a horrifying domestic agenda that we are not prepared for.

    Reply
  20. Pelham

    Maybe it won’t be so much a matter of cleaning up a mess as just modestly building international linkages that don’t stupidly favor a bunch of leech-like allies.

    Reply
  21. cbu

    If Trump destroys the credibility of the U.S. in stage one, then there is not much he can accomplish in stage two.

    Reply
  22. Susan the other

    In spite of the face-saving flattery, I think the Chinese are right. But I also think that this is pablum for the egos of us Americans who don’t understand the world anymore. If they say rational things about Trump it makes it easier for the US public. I must wonder what Rachel is gonna make of what almost appears to be an orchestrated, cooperative international effort to adjust trading relationships and, clearly, to avoid war. The Chinese know full well they have exported a fatal dose of deflation to the American economy; they knew it would happen as far back as 1980. And so did our big corporations – which explains why they dumped American labor like garbage. I really think the fix was in back then and it is in today. Our European allies are behaving interestingly, calmly. In Canada they all gathered around a sitting, stubborn looking Trump for a photo op that depicted them all wanting to talk reason – all the while following a set plan. Notice how they stood by us when China wanted to do trade treaties with them that harmed us. And they have been very patient with us over Russia – they didn’t rush into Ukraine even though Vicki publicly said “Fuck the EU” and they didn’t turn their backs on us when we asked for 2% NATO payments. And Russia has really kept her powder dry…. it all looks orchestrated to me. The big question is Where to now? Germany just advised India to buy oil from Iran (because Germany is in on the Saudi pipeline no doubt). We and Europe are acting like a big family – and I just heard the most profound description of “family” – it is where “things are left unsaid.” I certainly hope that is the reason nobody is talking about what an emergency global warming is – and that they are actually getting ready for some big changes. Always hopeful.

    Reply
  23. Lambert Strether

    > In Chinese eyes, Mr Trump’s response is a form of “creative destruction”. He is systematically destroying the existing institutions

    So, “volatility voters” have brought forth a “Volatility Executive.” If you’re playing in a rigged game and losing, the upside comes from kicking over the table….

    Reply
    1. John k

      Absolutely.
      Maybe delayed on account of Russia Russia, but he seems to have consolidated power and might be on course now. Granted vol voters don’t have absolute control over a vol exec, but his moves so far likely encourage them.
      I personally doubt dems will get enough house seats by appealing to moderate reps.
      And it’s also granted trump moves have huge Corp and political enemies, flyover knows this, IMO will be patient.
      I’ve been talking to HK expats in Toronto, they didn’t know what flyover meant, but quickly understood the shift in voter pref. My point to them is that the side hurt the most in a trade war is the big exporter… they don’t need to be told China is particularly vulnerable, can’t take unemployment. We’re used to it here…

      Reply
    1. MyLessThanPrimeBeef

      I think Beijing is just acknowledging it’s a new world…kind of like the people during the last years of the Han dynasty.

      That was when the famed Three Kingdom Period commenced. One of the two or three greatest Chinese novels was written in the late Yuan/early Ming dynasty – more than 1,000 years later and Chinese adults and kids still remembered – about the battles of wits, strategizing and brave deeds of various heroes during that period. The novel is called Romance of the Three Kingdom

      How the three kingdoms played one off another would be quite relevant today, with three major world powers trying to cope.

      Reply
    2. Yves Smith Post author

      I got the impression these remarks are being made in private. If the Chinese leaders wanted to flatter Trump, they have official organs for that.

      Reply
      1. vlade

        Unless they knew it would leak anyways, and wanted to make it look more sincere.. Games in games in games.. all the way down. :D

        Reply
  24. stefan

    Trump is very good at getting people’s attention. What he does with that attention remains to be seen. Statecraft is a long game.

    Reply
  25. Tuan

    Ah so grasshopper, you are finally getting it… Confucius advised to laud your stupid opponent to the heavens, so that he is unaware of the moment when you bury him alive in his grave…. bwahahahaha

    Reply
    1. MyLessThanPrimeBeef

      China knows Trump is the first American (or Western) leader, in a long time, and likely to be the only American one in the foreseeable future, to stand up to Beijing.

      That they don’t just say that, but have to say this, indicates the game has changed for them.

      And to think one can bury one’s stupid opponent by lauding him can be not too smart. It implicitly under-estimate that opponent, by presuming.

      Reply
      1. MyLessThanPrimeBeef

        Among the three kingdoms

        Wu – near the Yangtze Delta – was productive.

        Shu – in Sichuan – had great generals and the greatest strategist in Chinese history (more famous than Sun Zi), Zhuge Liang.

        Wei – in Honan, near the old Eastern Han capital of Luoyang – had all the official institutions, as the first Wei king’s father, Cao Cao, was the first Shogun, who ruled for the child Han emperor. So he controlled those institutions (equivalent to today’s UN, IMF, World Bank, reserve currency, propaganda centers like Hollywood).

        As it turned out, Wei provoked Shu and Wu to war against each other, with the latter killing a great general Guan Yu (who was honored by later Chinese through even today as the Martial Saint/Duke/God). Not much later, Wei first defeated Wu and then conquered Shu.

        Reply

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