At it from an economic standpoint they make their shoes and they make our shoes they make their t. V. s and they make our t. V. s they make their car parts and they make our car parts so i think their economy the way we estimate it is that is their economy is absolutely you know massive you go any city in china they basically have new airports new roads New Buildings new schools so theres been a massive economic boom that probably is going to be difficult to keep up and you know what i personally believe chinas g. D. P. The last few years is much much lower than the official so looking at some of these technologies like 5 j what way they are leaps and bounds ahead so to get it can take on the sputnik moment you know we have the cold war 3 saul going on with the union that same to get the nasa Program Going which gave us a lot of new technologies and there was a huge boost to our economy. Should we look at this in the some other way and say look they are clearly had of us while way 5 g. They are ahead of us on. They are also way ahead of ai Artificial Intelligence should we should approach this you think absolutely theres a lot of areas in the economy where china has caught up or surpassed us you know the mobile payments markets 50 times the size of the us or over here still writing checks our Banking System is not innovated. 5 g. Weve kind of recently woken up the last couple years and go wow we dont even have a company that can make 5 g. Equipment hallways the 800 pound gorilla 5 g. Theyve been putting hundreds of billions of dollars behind this company they have 800000 engineers 50000. 00 engineers are foreigners theyve hired the best talent in that space to produce a 5 g. Equipment were so far behind the games over you cant catch up on 5 g. At this point with hallway and as geo political superpower that we are in the United States and where a competitor to china were seeing with 5 g. Because the u. S. Doesnt even how one single manufacturer of this tel and consequent we see germany we see brazil likely to do deals with huawei despite the u. S. Saying no what do you think of this well they certainly are putting pressure on on the europeans not to do 5 g. And indeed also the same question is confronting india right now the. President modi is also being pressurised not to adopt while weighs 5 g. Standard so the question is if you want to use the sputnik analogy the russians were ahead of us when they launched a man into space before we did and the us mobilized its considerable National Resources and ultimately caught up and did surpass the russians i would say that its not impossible that the same thing could happen but of course it would mean invoking things Like National industrial policy which is something we havent liked since the 1970 s. How much of this of course is to do with the fact that when you ship all your manufacturing overseas when you ship it to china it was always the thing. It was that theyre just going to do the the low value added jobs though t. V. s menial labor and theyll never do innovation and come up with the great ideas were going to innovate here but of course innovation happens on the factory floor and how and why did we send our factories over there what role to bill clinton do with basically fighting to have china be part of the World Trade Organization in 2000 he argued in front of congress in march of 2000 he said by joining the w cio china is not simply agreeing to import more of our products it is agreeing to import one of democracys most cherished values Economic Freedom of course this is the sort of lie we push on ourselves when we invade a country that were going to go liberate the women and here it was like were going to liberate their economy it was the the china fantasy the idea that somehow if they start to embrace capitalist forms of Economic Development their ultimate theyre going to evolve into a liberal democracy and thats turned out to be a complete delusion and fantasy in fact you can argue that even the idea that trade liberalization would ultimately work in our favor it has and theres been a number of studies suggesting that you know our Manufacturing Sector has been devastated by the manufacturing as a percentage of g. D. P. Is at its lowest point in 72 years so this idea that we retain the software but we all share the manufacturing thats going to be great for both sides when when its been a win win for china and its been a lose lose for the u. S. Right im like i have a quote from biden here one of the candidates of course who say quote chinas going to eat our lunch come on man yeah he has been doing particularly well in the polls and i think part of the reason for that is because he still uses a playbook thats about 20 years out of date politically and economically of course he was part of a government bill clinton that the great democrats shipped our jobs overseas and it is interesting that weve come full circle that robert light hisor who was almost the lone voice in the. Neo liberal American Economic and political system back in the late ninetys he said in a piece in the wall street journal the New York Times he warned that if it made it to the w. T. F. Can tell us china will become the dominant trading nation virtually no manufacturing job in the us will be safe he was right today hes now the u. S. Trade negotiator against china when youre reading the Chinese Press what how are they looking at trump how are they looking at robert like hisor in particular and their trade position against china so trump was kind of an x. Factor they didnt know how to deal with from i mean trump does not act like a normal politician they know how to deal with the biden family they gave they gave his son a 1500000000. 00 so thats you know how you can deal with some politicians trump is just is acting is all in negotiation he realizes back to the point of the Manufacturing Base you cant continue to innovate when you dont make anything all innovations happen on the manufacturing floor and we had the solution and a lot of it comes from academia these economists that you dont need to make anything manufacturings going away their reality is weve just had the greatest manufacturing boom in history the world it just occurred in china not the United States and weve got rid of all our jobs you cant meet have a country of 330000000 people and not be able to make anything for yourself realizes that and this is all part of the strategic kind of realignment were going to have to happen and to be fair i think there theres been a number of economists now that say in retrospect that that whole model was wrong even paul krugman has dared to admit that he might have overestimated the or underestimated the impact and allowing china to go into the w t o and the idea that free trade would somehow be great for both sides and im personally a bit regarding light hoser i think hes the best thing thats happened to the us economy and the government hes probably the most qualified guy in the the cabinet granted that setting thats not something exactly a high bar but hes an exceptionally. Talented trade negotiator and hes the 1st gone i that weve had in that position who dont leave the dominant voice he superseded treasury which was basically happy to offshore those jobs so long as you know the Capital Markets were happy but hes been doing this for over 40 years hes been doing this since the reagan years so the democrats arent discussing this issue in particular actually during their primaries but will it become a huge issue against them and in the race against certainly biden is the nominee will because you know he as you pointed out earlier he biden embodies the the the socalled washington consensus but there is there are signs that some of the other candidates are embracing a different approach notably Elizabeth Warren and she came out with a paper about economic patriotism and probing the manufacturing so she seems to be hearing a bit to that playbook and i think thats a rather hopeful sign as far as the democrats are concerned well aside from the economic advantages or disadvantages and shifting jobs overseas it does appear china is making a pretty aggressive move militarily and just looking at some of the trends coming out of there theyve perfected the rail Gun Technology that they can now put on a naval vessel you know ive been following the rail Gun Technology for a number of years now this is an electromagnetic projectile e. Fired into has a range of a missile what you can do with a rail gun is you can knock a satellite out of the sky which is. Way out aggressive they could start knocking competitor satellites out of the sky for one thing number 2 the u. S. Can build 2 submarines per year. It is the retiring 3 per year or meanwhile china is able to manufacture more submarines per year so theres a military advantage there as well as militaristically is there or should that be a something to you know i would say that youve got to consider the base from which it starts i mean we still spend on defense u. S. Spends on defense more than the next 10 countries come by. And so we spend a massive amount more money now we dont spend a particularly efficiently if you look at some of the boondoggle we have out there and the political engineering that comes down but i think we still have a qualitative edge the question is whether you want to continue to surrender that qualitative edge which you will do if youre prepared to wait this offshore manufacturing to get it to china but of course china and and the Republican Administration a trump hes hes met them head on in terms of trade the Previous Administration under obama said were doing the asia pivot and were going to confront them militarily the point max is making about the the fact that we can only build 2 submarines a year even with chunks new funds for the military because you know why because we rely on china for many of our right yeah and thats all part of the Manufacturing Base you have to get back all these technologies are interconnected castings for jeans electronics embedded you know systems these are all if you can make the cars you can make the systems in the plants then you can use it for the Defense Industry when you get rid of all that in the pentagon has come out with papers on this guys we have mostly one supplier for each type of our systems and these these defensive players have become completely dependent on federal government money and completely inefficient all right well were going to take a break come back talk a lot more about china on front running 2020. 1 else seemed wrong. But. Just dont call. Me. Yet to see how hes going to come at it. And in again. The trail. When something find themselves worlds apart. Just to look for common ground. But if she warned you posted by you can i do the dishes at the bazemore those g. s nudist beach and see me blue truth. And about that when you die zeke yes. It means i mean guys or that infants involved. A lot of people see sawing during fuzzy fights about 2 kids its not the most ardent. But as in the adults to me as if. The. Cabinet 5 days doing this is. A english lady a few people who simply do something new. You know world of big part of the lot and conspiracy its time to wake up to dig deeper to hit the stories that made the stream media refuses to tell more than ever we need to be smarter we need to stop slamming the door. And shouting past each other its time for Critical Thinking its time to fight for the middle for the troops the time is now for watching closely watching the hawks. Welcome back to running 2020 with max and stacy were talking about this. Moment between the u. S. And china well the u. S. Catch up can the u. S. Even catch up stacy without some kind of industrial policy exactly in order to compete on that sort of scale we need an industrial policy i would think because of course the Apollo Program which we introduced under j. F. K. To compete with russia it cost 600000000000. 00 in current terms but we have the manufacturing capacity at that time do we need an industrial policy an order to even rise to this challenge that china presents to us well in the world yes and we used to do the industrial policy very well until low growth and reagan came into office in the 1980 s. And said the government is the source of the problem rather than part of the solution but theres been a number of school of the works by people like Maryanne Demasi cut who pointed out for example that the i phone is a good example which was derived and stood on the shoulders of a considerable amount of government already and the idea that these things just magically appear through the magic of the free market is just a fantasy and given how Financial Lives are economies you cant rely on the free market alone to get us anywhere near to the right kind of policy to catch this is one of the things in the political season i dont understand because a lot of flag waving and a lot of usa usa from the. Poloi in the audience but then when asked about Economic Policy they hate the usa its like the usa cant do anything the government stinks its all about private corporations thats why we should throw out everything and the government can never accomplish anything in their very negative toward their own country and duplicity there and they dont understand that as you point out without the Us Government there would be no i phone there would be no. That there being no war when in world war 2 there would be no man on the loan right right so they dont seem to be a disconnect and if you look at things we fund we fund the wrong things right what do we publicly fund sun sports stadiums china funds chip factories so were trying to figure out what happened to 5 g. They just rolled out their 60 center 60 is going to be 10 x. Or 5 g. You know you look at electric vehicles right they pour hundreds of billions of dollars behind even battery maker who is now becoming the number one in the world control the space they have 4 percent of the penetration influx of us already which is twice the u. S. And theyre going to be 50 percent within a couple years they really know each charge and stations all over the country so they have a plan they have a policy its you know to dominate the century integrated circuits i mentioned the chip funds in the usa we used to make 25 percent the World Semiconductors were going down to 5 percent because we live in a world of finance capitalism and were getting played by china whos really plain state capitalism and we have done this before i mean in the 1980 s. There was a concern that the Semiconductor Chip market was going to be dominated by the japanese and the koreans and we set up something called cemetery which was the private Sector Consortium with the government and effectively the u. S. Was able to leapfrog and move to the next formal form of Semiconductor Technology was a very very successful project and it was profitable but somehow weve decided thats not a good model to follow anymore i would i would argue that thats exactly the kind of model that you can follow and you can use the military as well you dont have to pick winners and losers you can just how the military is saying you know we want a vehicle with these kind of specifications if you can build it for us we will guarantee you a market of x. And thats the way you can actually support private industry in that regard quantum computing another example levon 1000000000. 00 in a Quantum Computing Center we needed just under a 1000000000. 00 for quantum computing thats going to be the next you know the next big thing so yeah absolutely look at every technology. We need to have some type of plan around it for the end the absence of an industrial policy in america is quite apparent during this time of a trade war and has applied all these tariffs to chinese. And weve also had the tax cuts a trillion dollars of tax cuts where does everything go into share buybacks and yeah well thats it thats the state i mean the 1st of all the tax reform was a joke because it was basically a means for the companies to use the result in cash flow to do so there are stock prices because c. E. O. Compensation is basically predicated on what the stock price of the company does as opposed to the underlying operations which is why i disaster like boeing even though the Company Getting back to the china and apollo able to get exactly the point point is that you you have to direct these things in the right way and and the problem with trump is that you know hes hes got a handle on the the problem in the sense that he said he recognizes there is a problem but hes using the 19th century solution protectionism tariffs as a means of dealing with the problem in fact i would argue that instead of trying to dismantle chinas elaborate system of state support the u. S. Should be doing more to try to replicate it and copy it as they did for example under Alexander Hamilton when they the big competitor was the United Kingdom so i would agree and disagree on some of those points i think the tax cuts were good on the fortune 500 standpoint absolutely theyre not they werent paying the 30 percent Corporate Tax rate anyway theyre all offshore everything in us has become warehouse and distribution and you recognize your profits offshore small and medium size businesses thats actually important to get the tax rate to some type of competitive level from 30 percent down to 21 percent now we met sweden for instance in the Corporate Tax rate so its not we have the highest Corporate Tax rates in the world next to north korea that had to come down so its i think part want to trump strategy. 2 of the strategy is youve got to keep the tariffs on because youre going to drive the manufacturing back here youve got our it has going to drive it back here or not to vietnam or cambodia but it was a nice thing so a lot of Processing Technology to vietnam has gone to vietnam to close these types of things keep in mind. Doesnt have the population or the Manufacturing Base to absorb all that change i mean but you have lived in china for 20 years you did the china money report when the Chinese Government meets in the party me it and they do a 5 year plan a 10 year plan what sort of policy like what are they looking at what are they are they telling you know many families in michigan theyre quibbling to build this stuff yeah they do ive met with i dont know how many Chinese Government officials and theyre all impressive most some are engineers and if you look at the poll every put it comes from an engineering or science background they spend decades within the c. C. P. System you know start noting the provinces learn how to build economies learn how to support social systems and buy at the end of the end of the decades of a career when you know when theyre in their sixtys then they only get up to the top we have politicians whose last job was a bartender so thats where were getting schooled they have but i. Found task take leadership kerrison older people that you say are great theyre the ones that have failed us in the boomer generation has totally failed generation we have a generation of milan eels and generations e. Who are have their waitresses simply because the previous generation sent our manufacturing jobs to china how do you answer that the whole model is wrong that you cant keep you know the argument is youve got all shore manufacturing because youve got to compete against the you know the sweatshop labor in asia and therefore you pay your workers accordingly and thats the soft option and ultimately its a race to the bottom and in fact theres a another school thought here that there was a prominent political economist Seymour Mehlman in the 1960 s. True to the 1980 s. Who pointed out that if you didnt offshore your labor. And but labor was a constant you know rising costs that forced you to invest and move up the technological and gold for the higher boat value added type type of products and that for example is whats happened in japan and germany you know they clearly believe in the importance of an industrial ecosystem and i think we have to get back to that sort of thinking as opposed to saying well were going to all short all to low cost jurisdictions because ultimately thats just not going to get you to a position where you can compete in a viable way with china can u. S. Get off the decks to short termism yes or pay 500. 00 matter what company it is they go to the cash desk and they are going to financialization and they typically manipulate. Well you dont want to look beyond the next quarter part of that is the problem the introduction of the f. C. C. Rule 10 b. Which reagan introduced in the early 1980 s. Before that share buybacks were considered a form of state let us know the regulation across the board out there any errors that theyre going to use that if you dont banning the glass steagall. Getting a list right you have to really you have to define nationalize the economy but one of the ways in which you do that is by eliminating the incentives to. Share prices and that has to be a necessary 1st step ok now where of course in a trade war i there is that emerges sort of cold war which china 1st of all can maybe this a cold war do for American Manufacturing and innovation what the cold war at the last cold war dead but also this notion of China Holding so many u. S. Treasuries is that really an issue or if they does that give them any power over us and anyway you know i know what thats thats just a bogus you know the socalled Nuclear Option i mean the reality is if the chinese want to personally theyd be cutting their nose to spite their face to sell their huge stock of treasury and in the 2nd instance the reality is the Federal Reserve simply debits it from the savings account into the socalled checking account. Reserve account and boom the money is shifted back and they can do whatever they want but they seem to be doing an end run around that by buying gold along with well short of it but they certainly dont have the i just refuse to believe that they played us for suckers on this whole you know with that they can build on board treasury and that we have this they have this Nuclear Option the thing about Nuclear Options is when you start to use the nukes you know everything gets blown to pieces but i dont actually believe its a real problem and i want to move on to the fact that if were in a cold war of course you need propaganda and who owns hollywood is it the u. S. Or is it because theyre thats the biggest market yeah i mean you know the 2nd largest theater chain is cheneys own use they own a lot of the studios now own specially minority ownership some of them 1020 percent some higher there is a lot of pushback now on that that you know the lot of the censorship is actually moved from over there to over here because of this financial ownership and a lot of revisionism right so we send over this i dont think we want to send that suddenly its just the ending is different now. Looking desperate and they are censoring and editing but we dont need the chinese to help us with selfcensorship in the way when you have a high degree of corporate concentration as we do in the u. S. Right now and in media it will in a blaze circumscribed the range of views that you see but if were going to take on china in a race in this cold war era we need better propaganda like we had world war 2 hollywood was a star mantilla coming up with great propaganda films and if our propagandists are going to be working for the chinese is going to be. There is the problem i mean theres a certain degree of hypocrisy i mean google probably trumpets the fact for example that they wont work with the u. S. Plan to go on but they are perfectly happy to help china with that with Artificial Intelligence which of course is being one thats a factor heading into more contentious i mean im not a favor in favor of cold cold wars in principle but one of the nice things one of the good things about cold wars. Or even haunt was is that they do engender a broader set of patriotism and they they also do tend to override the launch computer or free trade and globalization you can start thinking about. Activities that are consistent with with with broader public purpose in your own country and the problem when you have you know the irony is that when you have a very very peaceful in environment and no external threat is that you know the billionaire class and able to ask like a bunch of sociopathic monsters and theres no theres no constraint because theres no external threat so thats the one thing you hope that if we do have a cold war 2. 0 that somehow there will be a renewed sense of embracing country to some broader public purpose ok flash round well this this but that china america moment be resolved peacefully or more warlike only its now too late to disengage from a cold war we also the issues of the 2 cities trapped right its the rising power versus the declining power we need to take a step back we need to reach industrialize here we get a focused policy and engage peacefully around the world hopefully that happens doesnt get out of control marshall the cold war one did not lead to a global conflict with the soviet union so i see no reason why the embrace of cold war 2 even if it does happen will invariably lead to a military conflict with china there will be competition but it certainly is not negative the u. S. If they do exactly as. Well thats going to do it for this edition out front running 2020 obviously the future is nothing but sunshine and chinese lollipops well stay tuned for our next episode will continue to dig deep into the issues of policy leading up to election until then. Medical use downs good leaks laws leak out to. You. When youre. Old doesnt that it would look at that is that it was more that the book knew that this about. Just its ghost balls that its about seem to mean that theres. Just too little chef. What politicians do you sometimes need to. Put themselves on the line to get accepted or rejected. So when you want to be president or injury. Or somehow want to. Have to do like to be for us this is what the before last 3 of them or cant be good that ive been interested always in the waters of the hottest. First 6. 2 pm sunday afternoon fifa join youre here in moscow and in the headlines the body of the assassinated iranian general money is returned home as tens of thousands lined the street is killing us put the world war alert after relations between the u. S. And iran to the lowest in years and bring you up to speed this week. Elsewhere. The cofounder during the sounds claims hes dying in prison clyde with sedatives and subjected to 23 hours a day of solitary confinement he made the allegations in a christmas phone call to a friend. Rang me because he spent christmas with me and my family in 2011 time ago