Pawlenty in China: Governor says some of his controversial positions are inspired by high-growth Asian economies

Gov. Tim Pawlenty touring the Shanghai World’s Fair on Sunday.
MinnPost photo by Adam Minter
Gov. Tim Pawlenty touring the Shanghai World’s Fair on Sunday.

SHANGHAI, China — On Sunday, the most densely occupied section of Shanghai was a roughly quarter-mile square at the center of the Shanghai World’s Fair. There, beneath the towering red inverted pyramid that serves as the China pavilion, and a black umbrella borrowed from the St. Regis hotel, Gov. Tim Pawlenty waited in the rain for the Singaporean Prime Minister to finish his official visit to the iconic structure. In this he was joined by a busload of Minnesotans and thousands of impatient Chinese tourists.

Fact is, Pawlenty may be instantly recognizable in Minnesota and, increasingly, across the United States, but in Shanghai he’s as anonymous as any of the 42 Minnesota farmers and small manufacturers accompanying him on this, his second trade mission and third overall trip to China. None of the 350,000 Chinese who decided to attend the six-month World’s Fair on Sunday (outside of the United States, more commonly known as Expo 2010) gave him a glance in his yellow shirt; and even the trade mission delegates appeared to have grown accustomed by the near-constant presence of a national Republican widely expected to be a presidential contender in 2012.

Glamorous, this trade mission is not: Pawlenty is accompanied by three burly state troopers who look as much as tourists as he does, and exactly one reporter — MinnPost’s. The rest of the media — Chinese, U.S. national, and Minnesota — either weren’t interested in, or couldn’t afford, coverage of Pawlenty abroad.

Perhaps they should have made more of an effort. Earlier in the day, over the course of an exclusive interview at his hotel, Pawlenty provided MinnPost with a candid and sometimes gloomy assessment of the challenge that China poses to the U.S. economy and quality of life. To an extent that he hasn’t done so before, he explained that many of his best-known and most controversial policy positions — especially his stands against new taxes — are in large part inspired by his travels and exposure to high-growth Asian developing economies that are overtaking and out-competing economies throughout the developed world.

“[S]ometimes for people who are in the United States or Minnesota, they have this mistaken impression that Asia is just this commodity-producing low skill low education backwards place,” he explained. “It’s way, way beyond that.” In the course of our half hour conversation, he repeatedly noted: “They’re not racing us to the bottom. They’re racing us to the top.”

The facts are stark: China’s economy is growing at a rate that U.S. economy hasn’t enjoyed in decades; Chinese living standards are rising while U.S. living standards have stagnated; and China suddenly has an expanding pool of money for schools, infrastructure and other social improvements that U.S. state governments must now cut back.

Silver lining
That’s the bad news. The silver lining is that, during Pawlenty’s eight years as governor, increasingly wealthy China has moved from the fifth largest export market for Minnesota goods, to the second largest. And, among many of Pawlenty’s staff and cabinet, and especially among the Minnesota farmer who have driven much of that export growth, there’s little question that at some point in the not-so-distant future, China will surpass next-door-neighbor Canada to be the state’s top export market. Minnesota, as a producer of agricultural goods and quality manufactured products is starting to benefit from Asia’s rise: total manufactured exports from Minnesota to China now total in excess of $1 billion, annually, up from $14 million in 1987.

In the context of Pawlenty’s soon-to-end eight years as governor, his thoughts on China, trade, and America’s competitive future could be viewed as valedictory and mildly interesting. But Pawlenty is much more than an outgoing governor, he’s a potential Republican presidential candidate, and he has the potential to shape both the Republican and national dialogue on how to respond to the quintessential American question of the next decade: how does the United States respond to an economically vibrant and competitive Asia?

In that sense, his comments — one of his first extended interviews on a foreign policy topic — are quite interesting, indeed. Unlike many of his Republican counterparts, he views China as a competitive economic threat that needs to be confronted now, both on the international level, but also with fundamental shifts in how the United States, and its states, operate. These thoughts are worth taking seriously: Pawlenty may be anonymous at Shanghai’s World Fair, the chances are reasonably good that — at some point in the near future — he won’t be.

As Chinese cities go, Shanghai is relatively young. As late as the mid-19th century, it didn’t turn up on most maps. But then, in the late 19th century, as foreign funds started pouring into its strategically located port, the city expanded, and has continued to expand (for simplicity’s sake, ignoring 1950 — 1950) right through to the present day. In 2010, it’s all but impossible to visit any part of the Delaware-sized metropolis, population perhaps 20 million, and not have someone point to a cluster of high-rises, a highway, or a subway line, that wasn’t mere farm fields just a decade ago. Pawlenty is aware of this narrative.

“[T]wo million people moved into Beijing since the Olympics,” he tells me over black coffee in a meeting room at the St. Regis Hotel in Shanghai, where he’s staying and which — just a decade ago — was a farm field. “Point is, with [Minnesota’s] five million people, we’re not going to be the biggest place in the world, and we’re not going to have that small base of demographics or population [to] generate the marketing opportunities for our businesses. So we have to have business that are outward looking and can sell into these rapidly growing markets.”

Across the room is P.T. Anderson, Pawlenty’s deputy chief of staff, checking email on his phone, and downstairs the trade delegation is milling about the lobby, getting ready to board the buses that will take them to the Expo. For the most part these are small to medium-sized exporters — or prospective exporters — relatively new to the idea of trading with China, and in need of some help.

The governor and his staff don’t promise deals and dollar amounts on trade mission, but that’s not the point of these trips: “[T]hey’re about how do you build understanding, awareness, and information relationships that will serve our economy well over decades.”

So, specifically, the trade mission is often a series of meetings and introductions between delegates and potential business partners, government officials and — often overlooked — expats, who can help Minnesota businesses connect with an often indecipherable foreign market. The governor’s role in these meetings is often minimal, but his presence is essential: high-level Chinese officials don’t show up for low-level state officials.

Minnesota firms go global
To a large extent, Minnesota’s thriving trade with China is the result of a conscious decision by Minnesota companies to become more global. But in another sense, they didn’t have a choice. During our discussion, I mentioned to Pawlenty that Shanghai is home to an increasing number of young Minnesota entrepreneurs who’ve chosen to set up their business in China rather than Minnesota, in part out of the belief that the long-term growth prospects are better in Asia.

He didn’t disagree. “If you’re in business, and you’re looking for exceptional growth, you’re going to want to focus your marketing and distribution and sales and production on areas that have exceptional demand,” he told me. “China is one of those places. And you can’t look at the history they have of double digit GDP growth, the plans that they have for migration of entire segments — their version of a rural agrarian economy to a suburban or urban middle class economy and concluding anything other than as a business you want to be in that market. It’s powerful. I mean they’re transitioning more people from their version of agrarian lifestyles to their version middle class lifestyles over the next fifty years than we have in the history of our whole country times two.”

Pawlenty is quick to point out that comparing China to Minnesota, or even the United States, is an “apples to oranges” exercise on many levels. But he doesn’t dismiss the competition, either. “So you have to look in the mirror and say: what is your comparative advantage? … [F]or Minnesota and the United States our costs aren’t going to be as low as some other places around the world because of our lifestyles and standards of living and our commitment to things like decency in labor laws and the like.

Pawlenty was met at the Shaanxi pavilion by two provincial officials, and then led onto a stage where he posed for photos with performers in traditional costumes.
MinnPost photo by Adam Minter
Pawlenty was met at the Shaanxi pavilion by two provincial officials, and then led onto a stage where he posed for photos with performers in traditional costumes.

“That being said, we can’t be so smug about how special we think we are or how insulated we think we may be from all of those forces to think that we can price ourselves out of the market without it having a consequential effect. And I think that’s a lesson that the United States and Minnesota is going to have to come to terms with.”

From Pawlenty’s perspective, the cost of doing business in Minnesota — and across the United States — enters into that cost equation. Labor prices will, to an extent, be dictated by the market. But the price of government and regulation is — to a degree — open to adjustment. Pawlenty cites permitting, regulation and above all, taxes, as controllable costs inhibiting American competitiveness with China and other developing economies. And, to a very real extent, he’s right: low labor costs aside, it’s largely indisputable that the cost of doing business in China is lower. More important, the pace of doing business is quicker: it’s not unusual to see a large factory operating in China just a few months after a company announces an intention to build it. That simply doesn’t happen in the United States, and it’s a serious cost advantage for companies operating in china.

“That’s why I’ve been so adamant as governor when I say we’re not making it worse and over time we’ve gotta make it better,” he explained, his words gaining pace. “And sometimes the Star Tribune or others kick me in the shins and say, ‘Well, you know, it’s just politics [that] he doesn’t want to raise taxes.’ Other people think I’m nuts for not wanting to raise taxes. I’ve looked at this stuff, I’ve looked at it hard for 18 years, 10 years as a legislator and eight as governor and I’m telling you — Minnesota’s costs, we can’t afford to push them up any higher. In fact, we’ve gotta push them lower.”

Economic nationalist
Despite the fact that Pawlenty’s thinking on taxes and competitiveness is — he acknowledges — shaped by visits to developing countries, he’s not outside of mainstream Republican orthodoxy. But when the discussion turns to how the United States should confront China in the near term on trade and economic policy issues, and especially on what many economists portray a purposely undervalued Chinese currency, Pawlenty begins to sound more like an economic nationalist along the lines of Sen. Charles Schumer, than a national Republican.

“We all agree from an American perspective that the Chinese manipulation of their currency and pegging of it to the dollar is inappropriate and unfair,” he told me. “That concern has been raised and mostly ignored over the years … [I] think the United States has to continue to be very aggressive on putting that front and center in the relationship with China.”

The use of the word “manipulate” in the context of the ongoing argument between China and the USA over the Chinese currency is highly provocative, and has real power: every year the president must submit an annual report on what countries are “manipulating” their currencies to achieve trade advantages against the United States (a devalued currency makes Chinese exports cheaper, and more competitive, and American exports more expensive, and less competitive). If a country is determined to be manipulating, the Treasury Department is required to open negotiations with the offending country.

To the uninitiated, that sounds mild enough, but in the case China, which views attacks on its currency policy as a direct threat to sovereignty, a “manipulation” determination has the potential to become a major diplomatic spat, if not a trade war. In 2009, Treasury Secretary Timothy Geithner set off a mild sell-off in United States treasuries, and a minor diplomatic spat, when he told senators, during his confirmation, that President Obama believed that China was “manipulating” its currency. And earlier this year, during one of the worst periods in years for U.S.-China relations, the Treasury Department delayed issuing the currency report altogether, lest it make a bad situation worse.

When I asked Pawlenty if he was content with the Obama administration’s approach to China, he implied that — current distractions aside — more could be done. “I think the shift of attention from Asia to other things is partly understandable when you’ve got an Iranian situation percolating or continued concerns about Iraq and Afghanistan. But as you know, the rise of Asia is going to inevitably and irreversibly occur, and we need to make sure we do all we can that it happens in a way that’s helpful to the United State and not threatening to the United States.”

Pawlenty on China: “China is both an opportunity and a challenge. But this notion that the United States can’t rise to that challenge and overcome it and compete is hogwash.”
MinnPost photo by Adam Minter
Pawlenty on China: “China is both an opportunity and a challenge. But this notion that the United States can’t rise to that challenge and overcome it and compete is hogwash.”

Pawlenty’s is a stark, highly competitive view of the U.S.-China relationship, and the impact that it may very well have on Minnesota living standards. It’s not exactly a twilight struggle, but it’s certainly no Sunday touch football competition (Pawlenty says, ideally, it’s a “friendly competition”) and, toward the end of our interview, he seemed to recognize that it was, in fact, too stark of a vision.

As he walked me out of the room, he asked me to turn on my voice recorder, once more, so that he could address “disgruntled expats” whom I mentioned were nervous about Minnesota’s future as compared to China’s. “Japan was going to kick our butt,” he told me. “It didn’t. You know, the EU was going to kick our butt. They didn’t. China is both an opportunity and a challenge. But this notion that the United States can’t rise to that challenge and overcome it and compete is hogwash.”

Reverting to a sports metaphor, he added: “Right now, we’ve got a big lead, but instead of playing like a sports team sitting on a big lead, but play like a sports team that’s hungry and wants to keep scoring points.”

There’s little question that Pawlenty is anxious about the fast-growing Asian economy outside of the hotel doors, and its impact on Minnesota’s quality of life. As governor, he’s been aggressive and sincere in promoting Minnesota exports (partly as a means of growing Minnesota businesses that can’t grow at home) and — so far as he can — cutting what he views as excess costs from doing business in the state. But as his vision widens (and during our interview, he repeatedly shifted from talking about Minnesota, to talking about the United States)  it’s clear that he’s ready to embrace a more aggressive approach to America’s strategic competitors than what’s being practiced in Washington — home to a mostly bi-partisan China policy — right now.

Jammed with tourists
On Sunday, after waiting 20 minutes for the China pavilion at Expo 2010, the governor and trade delegation were led inside. On the way, a Chinese official shook his hand and exchanged cards with him. Once inside, the group was handed off to a tour guide who led them into a large, empty theater. There was a brief moment of silence — just long enough to give the group the impression that they’d be watching the film alone — and then the doors flew open and hundreds of Chinese tourists came storming — some sprinting, full-speed — into the space, grabbing every available seat and even placing themselves in the aisles on small portable stools that they carried with them. As the room filled, and people became more desperate, the tourists began rushing down the governor’s aisle, careening past the obviously shocked and nervous chief executive of Minnesota, until one of his state troopers put an end to it by jamming his umbrella into the middle of the aisle, like a stake.

Later, the governor descended, with no help from the Chinese hosts, through several exhibits jammed with tourists, and into a large exhibition space where each of China’s 33 provinces is allowed a small house-sized pavilion. The governor’s destination was the pavilion belonging to Shaanxi Province, for nearly 30 years a sister state to Minnesota, and source of long-term trade, education, and cultural exchanges. No Minnesota governor has ever visited Shaanxi (Pawlenty was scheduled to go there until his tight travel schedule prevented the trip), and so the Expo pavilion would have to serve as a stand-in.

The provincial pavilion was crowded in a way unique to China. For comparison’s sake, imagine the Minnesota State Fair’s Dairy Building on a Sunday afternoon, packed tight with visitors escaping a thunderstorm. Now triple the number of people and add a live Chinese opera being broadcast at deafening volume over the PA: that’s the China provincial building on a Sunday during a typhoon season storm.

Pawlenty was met at the Shaanxi pavilion by two provincial officials, and then led onto a stage where he posed for photos with performers in traditional costumes. From there, he was led through the exhibits — packed with people — by a tour guide who spoke to him through a microphone that broadcast out of a speaker worn around her waist.

At one point, as Pawlenty, with trade delegation in tow, was practically trapped between a video screen and a Chinese opera performance, one of the Shaanxi officials — an English speaker obviously embarrassed that more care hadn’t been taken in preparing for their distinguished visitor, turned back with a smile. “Sorry,” he said. “Too many people.”

Pawlenty smiled at him. “It’s OK,” he said. “It’s China.”

Adam Minter is an American writer in Shanghai, China, where he covers a range of topics, including religion in contemporary China, the Chinese environment, and cross-cultural issues between the West and Asia. He can be reached through his blog, Shanghai Scrap.

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Comments (15)

  1. Submitted by Paul Udstrand on 09/13/2010 - 10:33 am.

    Ya know, for a guy who thinks he’s going to be President some day, you’d think someone would think about what he’s wearing. I think we’re supposed to look at this photo and imagine him as President. I look at this and all I can imagine is a used car salesman.

  2. Submitted by Hillary Drake on 09/13/2010 - 10:44 am.

    (disclaimer – I work in international business, including in the past companies that are exporters.)

    I’m skeptical about breaking national trade statistics down to the state level because of the way they’re collected. They’re generated based off shipper’s export declarations, which only have to be filed for HTS numbers valued over $2500 per shipment. Geographically, you file if it was made in the US or abroad and the state from which it started its journey to port. So if a MN company buys something from WI, stores it for a month at their warehouse in Eagan and then exports it, it shows up in MN’s exports. But if it’s trucked straight to Long Beach to go on a vessel, it goes in WI’s export statistics.

  3. Submitted by andy on 09/13/2010 - 11:06 am.

    “[S]ometimes for people who are in the United States or Minnesota, they have this mistaken impression that Asia is just this commodity-producing low skill low education backwards place,” he explained. “It’s way, way beyond that.” In the course of our half hour conversation, he repeatedly noted: “They’re not racing us to the bottom. They’re racing us to the top.”

    That’s really funny, since Timmy’s policies going way back to his legislative days show’s he’s been bent on destroying our educational system since day one. Are we supposed to meet the Chinese coming up while we’re on our own self imposed trip to the bottom?

  4. Submitted by Paul Udstrand on 09/13/2010 - 11:52 am.

    Again, Pawlenty’s apparent ignorance about economics is stunning. Any attempt to compete with China by matching their economic environment is doomed to failure, and simply idiotic. Show of hands, how may Minnesotans are will to work 60 hours a week for a total annual income of $3,700? No matter how cheap it is for business to do business, an economy that pays Minnesota full time workers $3,000 a year is a broken economy that makes this recession look like the biggest boom in history. Just imagine what the economy would have to look like if the median income in MN was $3,700 instead of $55,000. How much to do you think your house would be worth in that economy?

    GDP per capita figure from Wiki:

  5. Submitted by Andrew Zabilla on 09/13/2010 - 12:06 pm.

    It’s not about reducing regulations, it’s about smart regulations.

    Sure, you can reduce lots of regulations, but who here would be willing to drink milk from China or buy toys with lead paint on them from China? How about Beijing’s smog? Would you want to breathe that every day?

    At the same time we have a legislature that voted to force businesses to put up signs saying that if your dog eats the landscaping material, it may get sick.

  6. Submitted by Bill Coleman on 09/13/2010 - 12:07 pm.

    I am especially interested in the speed of business discussion. It seems that after 8 years of Pawlenty, the MN government mechanisms should greatly enhanced in speed of permitting and regulatory approval. Yet, we do not hear anything from him or from the business community citing any improvement in this area.

    From my perspective, government regulations can be set at a high standard, but should be implemented with certainty and in a timely way.

  7. Submitted by Greg Kapphahn on 09/13/2010 - 12:28 pm.

    I can’t help but wonder why the State of Minnesota is paying for a trip which seems, as much as anything, to be an effort for King Timmy to burnish his international credentials for his presidential bid.

    That being said, I remember a time when the United States was substantially self sufficient in nearly all areas of raw materials, labor, and manufacturing. Then some of our rich friends realized that they could move from very comfortable levels of wealth into stratospheric wealth if they just found the cheapest possible labor off shore, imported their products from places where workers would keep working even if they were starving, and pocket the difference.

    Over time, this approach has, indeed, produced untold wealth for a comparatively few individuals, while the middle class in the US, much of it made up of unionized labor, moved from stagnant wages – an intentional byproduct of their jobs being “off shored” – into being taken advantage of by unscrupulous mortgage lenders and credit card companies – easy credit allowing them to ignore their sinking standard of living by propping it up with debt.

    That easy credit allowed a different group of wealthy individuals to profit massively by legally stripping the middle class of trillions of dollars of their hard-earned assets, not to mention the retirement assets stripped away by Wall Street bankers and Investment Executives paying themselves massive salaries while providing no growth and even massive losses in the retirement savings they were supposed to be managing on behalf of their investors.

    The rise of China has been largely created by Americans as they sold out their fellow citizens pursuing the hope of unreasonable levels of profit.

    The trouble is, the level of personal bankruptcies, home foreclosures, and debt (for those who are still able to make their payments) has ensured that many of our citizens have learned to guard their pennies so carefully (or are having to do so because of the payments they’re making on their existing debts), that our consumer economy can no longer support itself.

    The new habits created and the terms of the debts still being paid mean people will NEVER again spend freely in most of our lifetimes.

    This was, of course, inevitable, even if those working their sleight-of-hand thievery on the ever-shrinking American middle class maintained complete denial over the fact that they were cutting their own throats by economically ruining the majority of their customer base.

    Forget about the welfare (and I use that term purposefully) of business here in the US. Forget about what’s happening in China (we can’t impact it in any appreciable way except to stop providing the capital for it). If we don’t begin to restructure the economy here in the US and in Minnesota so that we recapitalize and rebuild the middle class and if we don’t do the vast majority of that within our own boundaries where other nations are unable to interfere, we will become the economic equivalent of the Ottoman Empire.

    Those who, like King Timmy, will have economically destroyed our state and nation in their endless pursuit of a “better business climate” which amounts to nothing more nor less than their endless pursuit of unreasonable profit for themselves with no regard for the cost to our society, our environment, or their fellow citizens will have destroyed us all (while, no doubt, blaming everything and everyone but themselves for the destruction they’ve wrought will still not feeling satisfied that they ever gained as much wealth as they deserved to have).

  8. Submitted by Hénock Gugsa on 09/13/2010 - 12:33 pm.

    What is this now, the nth time, that Pawlenty has been to China?

    Pawlenty seems to love to travel, or else he loves to ex-paw-se himself at Chinese trade expos as much as possible. He probably has figured out that there is not pawlenty to do for him right here in Minnesota.

  9. Submitted by Paul Udstrand on 09/13/2010 - 01:01 pm.

    //From my perspective, government regulations can be set at a high standard, but should be implemented with certainty and in a timely way.

    Actually, my experience with regulatory agencies and those who run them exposes a paradox. You’ll notice that the more Republicans get the chance to implement their small government dream, the more inefficient the government actually becomes- think Katrina, Paul Bremer, etc. It’s a paradox, what’s the cause?

    The problem is the basic structure of most regulatory agencies, they are all set up with an inherent conflict of interests. With the exception of actual law enforcement agencies like the police and the FBI, every state and federal regulatory agency has built into it’s charter a mission to regulate AND promote whatever it is it’s supposed to be regulating. This creates a mountain of inefficiency, it’s built in. For instance, the FDA cannot share information regarding it’s investigations even with other government agencies because of rules intended to protect industry. This kind of thing creates huge complications and delay’s when there are problems with the food supply for instance.

    The reason things get worse when Republicans are in power is that Republicans bend the system even more in favor of industry, they’ve even gone so far as to try to bend the science in many cases. It’s a nuts and bolts thing. You try to smooth the process by eliminating regulation, but in the real world the way you actually implement that is by creating barriers for regulators that make the system more not less inefficient. Whenever you look a major government screw up whether it’s bad toothpaste, oil well drilling permits, or hurricane response, you’ll see that the problem was over compartmentalization, lack of communication, and risk aversion most often caused by attempts to make agencies defer to business interests at the expense of public interests. The reality of de-regulation is that when it’s actually implemented it’s always an effort to interfere with regulation, and that causes inefficiency. You make regulations weak by weakening regulators, you weaken regulators by crippling regulatory agencies, and that mean making them inefficient.

    The single greatest thing we could do to simplify the entire regulatory structure would be to either completely eliminate the promotional mission of regulatory agencies or break it off into completely separate agencies. If agencies could simply focus on the regulatory side they would be 300% more efficient. The fear is always that such agencies would become dictatorial but that’s an ideology driven fear, not supported by history. We live in a democracy, we know how to protect rights and enforce the laws at the same time.

    Personally, I think the promotional components can be dropped altogether and the money could be used elsewhere. There is no lack of promotion for business and commerce. Every country, state, county, and city has it’s chambers of commerce. All of these entities have bureaus of economic development. We all have state departments, economic development schemes, and sympathetic politicians. We have TIFFs and breaks, and grants, and loans, and junkets like the one Pawlenty is currently on. And every industry has it’s own well funded trade and promotion associations. We can easily eliminate the business welfare component of the regulatory agencies and get more efficient government out of the deal.

  10. Submitted by Bernice Vetsch on 09/13/2010 - 03:01 pm.

    You could call Pawlenty’s philosophy Race to the Bottom. He may have adopted his anti-tax position “in large part” because of what he’s seen in Asian countries, but I would say he did it in LARGER part because his policies have been not only anti-tax but anti-worker (and especially anti-union), anti-government and anti poor people.

    The answer should not be to drag the U.S. and Minnesota down to the level of a third world country, but to help all the world become a better place, with fairer economic systems for ordinary people. Pawlenty and friends hate the idea of unions promoting the idea that all countries should adopt a minimum living wage for all workers, but it surely would go a long way toward achieving economic justice for all.

    Economic inequality hurts everyone, but it hurts the poor and middle classes the most.

    (Mr. Minter asks why other media didn’t make this trip. Why did MinnPost?)

  11. Submitted by Ray Schoch on 09/13/2010 - 03:58 pm.

    Well said, Paul.

    Ultimately, an economy – any economy – based on growth is unsustainable. As long as populations were small and technology limited, humans and the planet could both cope. I think that period is drawing to a close. The planet has finite resources, and unless we’re all eagerly awaiting the translation of “Soylent Green” into reality, religious dogma against birth control might easily prove our undoing.

    Pawlenty’s thoughts sound pretty reasonable, actually, until they begin to take shape in policy. The easiest way to reduce costs in most business settings is to reduce wages. Goodbye, middle class. Goodbye, consumer economy (perhaps not altogether bad). Goodbye, expensive techno-gadgetry in every household, including my own.

    Leaving aside Paul’s analysis for the moment, costs could be further reduced by eliminating troublesome regulations. We’ve seen how that works with the repeal of Glass-Steagall, and the resulting recent effects on Wall Street. The EPA is also frequently the target of annoyed executives, so let’s get rid of that, too, as well as the already ineffectual FDA. More oil spills anyone? More e.coli, anyone?

    In short, the Pawlenty/Republican mantra essentially eliminates the 20th century for Americans, except for the very few who will make a fortune in the 21st – and delude themselves into thinking they’ve earned it. China is going to run into its own developmental wall at some point, and then perhaps the challenge will be India, or some other area. It won’t matter. The foundation of industrial society is cheap energy, which for the past century has largely been in the form of fossil fuels. That energy source is on the downslope of the discovery/production curve, and we shouldn’t be surprised to see oil companies buying major holdings in solar and wind energy technologies. They don’t really believe in competition unless they can somehow rig the game so that they win. They don’t want competitors, they want market share.

    Pawlenty IS thoughtful. It’s just unfortunate that most of that intellect is devoted to a business/corporate-oriented mind set. Businesses, whether American or Chinese, don’t care about what’s best for society, or even what’s best for humanity. They exist to make money. I’ve seldom seen in a single article a better representation of why Republican “business-friendly” ideology is dangerous for a democratic society.

    If China is able to adapt more quickly – we can debate whether that’s really the case or not some other time – it’s because China is decidedly NOT a democratic society. It would be quite a bit more efficient if the U.S. government, instead of placing troublesome regulations in the way of business, instead required that segments of the population move around the country as needed by business and industrial interests. China’s long, long history of authoritarian government makes that fairly easy to do there. I wonder how it would go over with the electorate here?

  12. Submitted by Thomas Swift on 09/13/2010 - 06:59 pm.


    It appears, from these comments, that local leftists are perfectly happy to have the Democrat party borrow trillions of dollars from the Chinese, but are loath to see some trade go to Minnesota businesses.

    What is wrong with this picture?

  13. Submitted by Thomas Swift on 09/13/2010 - 07:15 pm.

    You know, I gotta laugh.

    It’s clear that the faithful leftist readers of “the Glean”, as well as the aggrigators themselves, are united in defense of the poor, beleagured Muslim faith.

    But given that the faith makes just everything the leftist holds near and dear a “Hadd” offense, I wonder how you all will re-write this chapter without having your heads explode.

  14. Submitted by Paul Udstrand on 09/13/2010 - 07:18 pm.

    //Leaving aside Paul’s analysis for the moment, costs could be further reduced by eliminating troublesome regulations. We’ve seen how that works with the repeal of Glass-Steagall,

    Picking up that thread form Ray, in Panama they have a saying: “Sometimes cheap is expensive”. The first big economic bomb to go off under Reagan was the Savings and Loan disaster. You have to remember, in economies capital moves around, it doesn’t just disappear. So you give yourself a tax cut to reduce government spending and end up spending even more. For want of a 40-50 million dollars in government saving Reagan almost eliminated the federal office that was overseeing the Savings and Loans. The result? A 123 billion dollars government bailout. We’re still paying for that. And we’ve had now many other bailouts since then?

  15. Submitted by Ray Schoch on 09/14/2010 - 08:06 pm.

    Not so on both counts, Mr. Swift. I’m not at all happy to see us borrowing billions from the Chinese, but that fiscal necessity didn’t originate with Democrats, and Republics during the Bush years did all they could to have the country live on credit by reducing taxes without doing the necessary – and unpopular – spending cuts.

    I’m happy that Minnesota businesses and farmers can market their products to the Chinese. That does, after all, do something to lessen our current trade imbalance, largely brought about by “pro-business” policies of Republic party politicians and lobbyists.

    As for Islam, I don’t defend it at all. Most of what right-wingers believe is also a serious offense in Muslim societies that aren’t democratic, which is most of them. But then, if Christian fundamentalists had their way, most of the Constitution would be tossed out just as rapidly as if Muslim fanatics were in charge. “Tolerance” and “fundamentalist” don’t generally belong in the same sentence, regardless of the particular theology in question.

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