All right, y'all, welcome to the Scott Horton Show.
I am the Director of the Libertarian Institute, Editorial Director of Antiwar.com, author of the book Fool's Errand, Time to End the War in Afghanistan, and I've recorded more than 5,000 interviews going back to 2003, all of which are available at scotthorton.org.
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All right, you guys, introducing David R. Henderson.
He's a regular writer for us at antiwar.com.
His column is called The Wartime Economist.
He's a research fellow at the Hoover Institution and Emeritus Professor of Economics in the Graduate School of Business and Public Policy at the Naval Postgraduate School.
He's the author of The Joy of Freedom, An Economist's Odyssey, and more.
Check him out at original.antiwar.com slash Henderson, where his latest is called Is China an Economic Threat?
Welcome back to the show.
David, how are you doing, sir?
Good, Scott.
How about you?
I'm really good.
I'm happy to have you back on the show.
And at antiwar.com, we just have the splash page to the full piece is published over there at the Hoover Institution, Is China an Economic Threat?
And I think you sum up the concern pretty well at the beginning here that people regret maybe not even just Clinton and Gingrich bringing China into the World Trade Organization, but maybe they even regret Nixon and Kissinger going over there and opening up China in the first place and sending Milton Friedman to teach Deng Xiaoping about markets and these kinds of deals, because now we've created a monster and it's the red dragon rising, and they're going to conquer the whole world.
And I know your piece is a more limited context about their economic competition with the United States, but there's an overall feeling that you're addressing here that we somehow have created a monster with the new post-communist, still communist party, dictatorship, political and economic regime over there in China, right?
Right.
Right.
And of course, as you say, I don't address some of those foreign policy things.
China's the more limited one about economics.
But it seems to me when I read people, economics is a big part of it.
And somehow they don't get the basics of gains from trade, that if China is producing something that people here buy, we benefit, they benefit.
Gains from trade don't stop at the border.
Right.
Okay.
But now, so the obvious objection is, if the owners and managers of American companies have so much of their junk produced offshore, that Americans and Americans no longer have those jobs producing that stuff, then we're unable to buy it, even at lower prices.
Well, if that were true, it wouldn't be a problem, even from their viewpoint.
Right.
In other words, if we're unable to buy it, then we aren't buying it.
The fact is, we are buying it.
So there's something wrong with that argument.
All right.
Well, so then what's the big concern?
It's the standard concern, whether it be trade with China, trade with Europe, trade with Canada, trade with Mexico.
When we buy something that we can get for a given quality cheaper abroad or for the same price but higher quality abroad, people in the industries that compete, the domestic industries that compete with those products, lose jobs.
And when they lose, they lose a substantial part of their income for at least a few months, maybe a year, maybe more.
We can show, economists can show, and they've shown over and over, that the gains to consumers, the tens of millions of consumers, outweigh the losses to those workers.
But because each consumer gains only a little on a given trade in an industry, a given product, the consumers have virtually no voice in the policy process.
It's not even a whisper.
Whereas the workers, either thousands or tens of thousands, depending on the industry, who lose their jobs, have a big voice.
And so they lobby.
And so we get this distorted view that says we aren't gaining from trade with China, whereas in fact we are.
Now, the other interesting thing I point out in the piece, citing some studies on this, or one particular study on this, is that the people who gain disproportionately from trade with China are lower income people.
And so, first of all, lower income people even have less of a voice in the policy process.
And so we don't hear from them.
And so this is a net gain to lower income people, but that's not mentioned by the critics of trade with China.
All right.
Now, and it's interesting, right, because whether it's labor or management, in terms of those interest groups, and supposedly represented on the political left and right there, they both represent the supply.
Whereas in capitalism, it's the customer that's king, only as you say, the customer doesn't have a powerful lobbying group.
The customer is, you know, sort of all of us diffused the masses.
Whereas the suppliers, whether management pushing for these deals or labor opposing them, they are much smaller, but much more organized and much louder in getting their interests represented by Congress, by power.
And I would just add, management often pushes against these deals.
In other words, it's laborers and managers together in a given industry that's threatened by imports that try to push to limit imports.
So you look at the steel industry, you look at a lot of other industries, and they're working together with the unions or with the laborers, and often they're unionized to oppose these deals.
Right.
And, you know, personalities on TV, news, and whatever, always kind of carry away the imaginations of the people and all of that.
But it seems like in 2016, there was a really strong economic argument from Bernie Sanders on the left and from Donald Trump on the right, representing some of labor and some of management there, different factions, I guess, that all of this, you know, trade with China has really hurt the American middle class.
You say it's benefited the poor, maybe there's more poor because they can't get a good middle class job making a thing.
And those narratives seem to be really powerful.
They seem to really resonate with people, that their lives have really changed for the worst because all their jobs have gone to Mexico and to China.
And so you're saying that's an illusion, but a lot of people sure seem fooled by it.
I'm not saying it's an illusion.
I actually, in the article, agree with that point, that there are some people who are worse off in the short run because of trade with China.
And that's just a fact.
Well, but I guess it's how many is that some, you know, and is it enough that the high end estimate from this guy, David Autor at MIT and his colleagues is two million jobs lost.
The low end from Brad DeLonge, who's also kind of on the left at UC Berkeley, is a net of 300,000 jobs lost.
That's a pretty wide range.
And of course, over time, people do get jobs.
They just might be a little less good.
Right.
And you do make that point here that when you have somebody who had a pretty high paying blue collar job, the chances that they're just going to go work the drive through Taco Bell are pretty low.
They're going to find something that's within the range of their expertise.
You know, the short run job they get and then they get a, you know, a better job in the longer run, especially, by the way, if they're willing to move.
What's really striking, I didn't talk about this in the article, but a lot of people now aren't willing to move.
And if you aren't willing to move, you're going to have to settle for a less good job.
Yeah.
Well, and I've read, too, where people say their studies and say, you know, a lot of this is tied to the government benefits and that kind of thing.
Once you're so poor, you need welfare.
Now you can't.
You've limited your mobility or you'll lose your subsidies and that kind of thing.
Well, I got you on that.
That's a good point, which, again, I don't talk about in the article, but unemployment insurance is typically a state function.
And so you're unemployed in Ohio.
You move to Arizona where there might be a better job, but you'll be unemployed for a while.
I'm pretty sure you don't get unemployment insurance in Arizona.
So that is a that that kind of sticks people where they are.
Yeah.
Well, now, but we do have a major change in our society.
It seems like, I don't know, two million.
I don't know how to measure that, but it seems like we have we went from a very protectionist state to a very low, not non-existent tariffs kind of a country sort of all at once in the 1990s there.
Right.
And at least people people say, you know, entire towns, the Rust Belt, they call it used to manufacture stuff.
Now it's all just what once was.
So three hundred thousand to two million sounds low.
I don't know.
Your statement is incorrect.
OK, we move gradually from high tariffs to low tariffs.
The big Kennedy round named after John F.
Kennedy in the early 60s moved it moved tariffs down.
And then there was the Tokyo round in the early 70s.
So it gradually fell.
We are one of the freest trade countries in the world.
Our average tariff rate on goods from other countries is around two to three percent.
After World War II, it was around 30 to 40 percent.
So so it gradually fell.
Here's the big thing that has nothing to do with tariffs that led to a huge increase in international trade, the box, the container.
And so there's a guy who wrote a whole book about this.
It's a fantastic book laying out how containerization and putting these containers on ships dramatically reduced the cost of transportation between countries over the ocean.
And it did it in a couple of ways.
It's cheaper than to just have it all in a box rather than all these individual items.
But the other way is there was a huge amount of theft by workers as they're pulling the things off the boats.
And now that theft is essentially zero because they can't open up the box easily and steal things from it.
And so those things together dramatically reduce the cost of transportation.
And that was probably more effective in the last 20 or 30 years than any particular drop in tariffs.
You know, Sheldon Richman has written a lot about robots and automation, too, and how, you know, I think people I think he says people even overestimate the extent to which that causes downward pressure on wages and and eliminates manufacturing jobs.
But that as far as it goes, automation is much more responsible for the loss of those kinds of jobs than offshoring to Mexico or Mexico doesn't count as offshoring.
But, you know, moving jobs to Mexico or to China.
No, that's absolutely correct.
In other words, so again, I have limited space in this article, but if I'd had more space, I would have pointed out that most of the jobs, job loss and manufacturing in the United States is due to technology, not due to trade.
Roughly 15 percent of the jobs lost are due to trade.
The other 85 percent are due to higher productivity, which comes with things like robots and even more normal things, just more equipment that an individual worker works with.
To give you a couple of facts about that, a worker now in the steel industry produces five times as much steel as that worker did in 1960.
A worker in the auto industry produces five times as many cars per worker as that worker did in the in 1960.
So those are the big, big drivers of job loss.
But by the way, before this whole lockdown pandemic thing, our manufacturing output.
In real terms, in other words, in inflation adjusted dollars was at its highest level or very close to its highest level ever.
So it's not that we aren't manufacturing, we're just doing it with fewer workers.
Well, so I guess the problem is then people really do feel like they're just left behind entire towns.
They had one big factory or two big factories that really the whole town was built on and then they're just gone.
And so it's in people's lives.
It's this huge disruption.
And, you know, you hear Tucker Carlson, for example, denouncing claiming essentially that libertarians have been in charge of America's economic policy all this time and that for us, business is business and screw those people when we need a good conservative protectionist policy to prop up those communities, because that's more important.
Right.
He does argue that.
And again, it's the seen versus the unseen.
First of all, I think he's exaggerating because, as I mentioned, it's often just you can do it with fewer people, but there is something to it.
In other words, some of those jobs are lost due to trade.
But what's unseen is all the gains to consumers.
And many of those consumers are low and middle income also.
Yeah, well, and we are talking about it is pretty hard to quantify, I guess.
I mean, I don't want to work on a line anyway, but yeah, but, you know, as far as like you say, with the seen and the unseen, you go to Wal-Mart, you get what you need and you leave.
It's hard to imagine how much more expensive it might be if it hadn't have come here on a ship from somewhere else or that kind of thing.
Yeah, but it's substantially more expensive.
I mean, actually, it's hard to imagine, but economists have studied those things.
So so there's this guy, Jason Furman, who was the chairman of the Council of Economic Advisors under Obama, and he once wrote an article on Wal-Mart.
And of course, Wal-Mart gets a huge percent of its goods from China, saying that there's no policy he, Jason Furman, has advocated in his life that gives as many benefits to the average American family as Wal-Mart does.
I mean, he estimates something like a gain per American family of around three thousand dollars per year, which is a large number for many families.
Yeah, sure is.
Hold on just one second.
Be right back.
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Let me ask you this.
I've heard about this anecdotally, but I'm sure you've got your fingertips on all the studies and that kind of thing.
I've heard it said, for example, that, oh, well, you know, the ex giant corporation that I work at, that if only we had just maybe one or two percent fewer regulations dictated to us from D.C., then we wouldn't have moved to China.
That was our margins, a small percent.
But it's a lot of money, you know.
And so at the end of the day, we had to move to China just because the Americans just regulate us to death.
And if and essentially if they would just back off a little bit, that would have been enough to stay.
But so I wonder whether you how overregulated is American business, and do you think that amounts to much of a margin when it comes to offshore?
Well, I think we're heavily overregulated.
I'll give you a couple of facts in a minute.
But if if you actually just backed off the regulations, one or two percent, that wouldn't do it.
You'd have to back them off 20 or 30 percent.
The Council of Economic Advisors under Trump has actually done admirably at producing a good economic report of the president, despite President Trump.
And they had a chapter on regulation in the economic report a couple of years ago.
And I was at the Council of Economic Advisors under Reagan.
So I'm one of the people who reads these things every year.
And they had a chapter on regulation in which they ranked our regulation relative to other countries, including lots of them in Western Europe.
And we are we're only about in the middle.
We are more regulated than, say, industries, companies, the economy in the Netherlands, for example.
And so it is true that there are a lot of very damaging regulations.
And that certainly is a factor.
I don't know that anyone has carefully studied, say, a particular industry and been able to account for, you know, why it would move.
If I were to look, I think the place I would start looking is regulations in places like California, where I live.
California essentially already has the Green New Deal in some respects, because they say, you know, you can't have this kind of equipment because it produces too much carbon and so on.
So I know a guy with a big construction firm and he had to sell a lot of his equipment.
I think he sold it in the Philippines because he couldn't use it here anymore.
So there are things like that that probably matter.
I don't know generally for the U.S. economy.
Yeah.
Now, so part of the argument, too, I guess, right, is that China, you know, kind of ironically, sort of being a totalitarian police state, that means that their government can make political decisions about what business can get away with that are extremely beneficial to certain businesses.
And in some cases, you know, even they make American prison labor look like nothing compared to what they force convicts and other types of slaves.
And in some circumstances, I'm not exactly sure how bad, but these are, you could argue, artificially low wages that not just because they're coming up for Maoism, but because they still have this crazy dictatorship that then they let Chinese companies and American companies get away with murder over there in a way that Americans shouldn't have to compete with.
No, that's true.
That's true.
But I don't know.
I don't know empirically how big that is.
In other words, when I look at the Chinese economy, they have a close to doubled sorry, close to 10 toppled output per person in the last 30 years.
And so it's not mainly about slave labor.
That's mainly about people moving from very low productivity agriculture to high productivity manufacturing and other things and services and things like that.
Right.
So in other words, you're right about your your factual point.
Empirically, I don't think that's a major factor in all this.
All right.
So now there are a couple other issues you raise in your piece about their theft of American intellectual property and also them spying on our children through tick tock and stuff like that.
You want to talk about that for a minute?
Yeah.
Yeah.
So my colleague John Cochran at Hoover was in this.
So John Cochran is a is a well-known economist who is at Hoover now.
He made most of his career at University of Chicago in the business school.
And and he and I'm a Hoover person.
So he has two colleagues.
They're colleagues of mine, H.R. McMaster, who I'm sure you're familiar with, who's a national security guy.
And Neil Ferguson, N.I.A.L.L.
Neil Ferguson, the historian.
And they have something called good fellows.
They're all senior fellows.
So it's a little take off on on that where they have a discussion every week or every two weeks.
Not sure.
And they had a discussion in August about various issues.
And the whole idea of tick tock came out and H.R. and and Neil were just really upset about it.
And John just calmly said, what's your evidence?
What's the evidence that tick tock is this major threat?
And they really had trouble coming up with any.
I mean, tick tock.
And I hadn't really known about tick tock.
I mean, I've read about it, but I didn't exactly know what it was.
And then I looked into it when writing this article.
And a lot of it is just simply just videos of young women dancing.
And and one of the I think was H.R. said, well, they can use this against them.
Or maybe it was Neil said they can use this against them 10 years from now.
How like you didn't dance?
Well, like how how is that a threat?
And they might have said that they were like collecting intelligence on the background of like getting, you know, look, the Hoover Dam is in the background of this girl dancing and they're going to stitch that into their eyes somehow.
I can make up scarier stories than these guys are pushing.
Yeah, I thought it was more the background of the people.
I didn't realize it was the physical background.
But like Neil's best argument, Neil Ferguson's best argument was, well, it's addictive.
Of course, it's addictive.
Get video games are addictive, but that has nothing to do with China.
And then H.R. said, well, they want to weaponize data.
And I'm sure he's right.
But I pointed out one of the worst places they weaponized was on stuff that I had to turn over to the federal government.
I was a federal employee until 2017.
And every seven years, we're supposed to fill out this form.
And it's an incredibly intrusive form.
And one of the questions was, have you committed adultery in the last seven years?
Well, fortunately, I'm a faithful husband, so I was able to answer no.
But why do they want to know that?
The argument was, well, we want to know if you can be blackmailed.
Well, guess what?
Now a lot of people can be blackmailed because the federal government had very poor security and the Chinese, I think it was Chinese, got the data on, I think, 24 million federal employees, if I remember correctly.
And so now they can be blackmailed.
And so this is an argument, you know, for for maybe the federal government, not the U.S. federal government, not being so intrusive into federal employees lives.
But it has nothing to do with TikTok.
Right.
All right.
Now, so now what about the intellectual property?
We teach them how to build some kind of wafer for us and then they steal it and things like that.
Yeah, so the that's been exaggerated.
Well, actually, and again, there's with my limited number of words I was given for this article, there's something I want to mention I didn't mention in the article.
A lot of cases where the Chinese firms got intellectual property from U.S. firms was where they did it contractually.
In other words, they were told, if you want to do this deal, you have to give us your intellectual property.
Well, that happens in the United States between American firms.
They might make good decisions.
They might make bad decisions about giving up intellectual property.
I gather some of the people who've done so have regretted that.
But that's like any business decision.
But the other thing and this is what Scott Lincecum was a first rate trade analyst at the Cato Institute pointed out in a really good article that I linked to is when one of the advantages of having China in the WTO, the World Trade Organization, is they are subject to those rules.
And when other when people in other countries, United States and other countries have gone after China for unfair trade practices, and they often win and when they win, the Chinese firms often comply.
But you just don't see that on the headlines.
And so, again, I think it's a huge exaggeration.
And it's not it's just not the big issue that so many people think it is.
All right.
Well, so, I mean, I can guess your bias where you're coming from on this, but I wish that you would really break down for us what it means, the difference between Americans trading with Chinese versus America trading with China or not.
And it seems like, for example, the current president of the United States seems to think that we are in competition with them.
And whatever advantage they're getting is at our expense.
And so we've got to stop that.
They're rising as our empire is falling for some reason, David.
And everyone in D.C. is really upset about it, apparently.
Yeah, well, we aren't competing with China.
And by the way, Paul Krugman, who no longer really writes like an economist, had some fantastic articles in the 1990s in which he laid out the fact that in economics, countries don't compete with each other.
It's firms competing with firms.
So it's an American firm competing with an American firm or an American firm competing with a Chinese firm.
And competition is good.
And it doesn't become less good because it happens across the border.
And the other thing, I gave a talk to the to fifty five newly christened, if I can use that word, or maybe newly chosen admirals at their one week boot camp back in Maryland in 2010.
And I said to them, I don't care if China five tuples its income per capita, if we can double ours, both sides are better off.
And so it's just it's not this zero sum game.
And I think one of the things that Trump is most sincere about and also most wrong about is his idea that this is a zero sum game game, that if China gains, we lose.
And of course, trade is positive.
Some both sides gain from trade or else they wouldn't do it.
Well, and I think part of this, too, on their part is because we're not just talking about free economies.
We're talking about countries with very powerful governments, China's and America's.
And they see that, well, just like America can the American people can.
Well, I don't know.
You tell me when the debt comes due or whatever.
But seemingly we can afford this massive Navy that they might be able to as well.
And they are building, you know, a stronger and stronger defense.
Anyway, the American side admits that it's defensive, their buildup.
But it is a buildup.
And sometimes they talk about, you know, China wants to fill the power vacuum and dominate the world.
And so it's not just trade, but that they're going to be the global military hegemon at some point as America is forced to retreat.
Are you concerned about that?
I'm not.
And let me just say a couple of things.
Let's say they tripled the size of their military and we have the size of ours.
We would still have ample defense.
And I emphasize the word defense, not offense.
And we've got this great thing protecting us from China.
It's called the Pacific Ocean.
It's very hard to come up with any reasonable scenario in which the Chinese invade us.
Now, could they threaten us with nuclear weapons?
Yes.
And they absolutely can do that.
U.S. government can threaten them with nuclear weapons.
I'm not comfortable with that.
But that's a very, very different issue.
And they've got that anyway without any more expenditure on military.
And as far as them dominating China and dominating Central Asia, maybe they'll build a railroad to Lisbon and rule all of Eurasia.
Then what?
We'd have to go to war with them then.
Right.
Again, I just think the scenario of just dominating Western Europe is just so unlikely.
I mean, Western Europe's economies altogether are still larger than than that of China.
And and so, again, it's just hard to imagine.
It's hard to imagine that scenario.
OK, so here's something that I wonder if you dealt with at the Hoover Institution or in your studies on these economic issues is what about the interest groups of the corporations that trade with China in mostly just civilian goods of whatever description versus the military industrial complex firms whose highest priority is selling weapons to the U.S. government?
It's obvious why the latter would want to pick a fight with China all the time.
And frankly, I've been relying on the former to keep the peace because I don't know what other there is no other interest group in America who, you know, has any power preaching cooperation other than hopefully these massive corporations with billions of dollars on the line.
Right.
And their futures on the line.
But I wonder, it doesn't seem like they ever stick their neck out and fight very hard for keeping the peace and keeping, well, the old status quo for, you know, compared to the rising hawkishness and Cold War against them.
But it seems like who who in America other than the Navy and the Air Force and the people who sell them ships and planes have an interest in any kind of increase in tensions between our country and theirs?
Well, I think one interest group that doesn't get talked about enough, and actually I think Doug Bondo and IAWare.com is talking about it more now, I think he calls it the blob.
And I do think they're probably, I'm going to guess, 2000 foreign policy analysts who make a good living by kind of stirring the pot.
And and they are intellectuals.
They are smart.
They are productive.
And so they can have a big, big impact.
And and I think that's a factor.
That's an interest group that is underrated.
I'll give you an example.
I have this friend for obvious reasons.
When I tell the story, I'm not going to name him, but he's a he was a colleague on campus.
I'm no, I'm retired now, so I'm not there.
But his specialty was the Middle East.
And about 10 or 15 years ago, I ran into him and said, hey, I'll call him X.
Hey, X, how are things going?
He said, oh, great.
There's all kinds of unrest in the Middle East.
So in other words, when there's more crap happening, there's more to write about.
There's more to be asked about.
There's more to go on talk shows about and so on.
So I think that is a factor.
I would point out one thing, though, and we don't know this.
We may never know this.
But do you remember back in April of 2001, Bush had been in office for about three months.
And there was that whole incident with the U.S. plane with the electronic surveillance on it.
Right.
Yeah.
I almost mentioned that because that was when Colin Powell, apparently representing Wall Street, went, hey, everybody cool it instead of you better give us our plane back.
Well, there you are.
You already know more than I do.
I always wondered, did someone at Wal-Mart go and talk to Bush?
Because he he dealt with that beautifully.
I mean, he just I'm just thinking a bunch of major corporations must have gone to him.
Maybe they did it through Colin Powell and said, hey, you know, cool it, buddy.
We can work this out.
And they did work it out.
Right.
Yeah.
I mean, that obviously should be the model.
You know, who knows?
Maybe Dick Cheney was just seething through that.
In fact, you know what?
I think it's in the Norman Solomon documentary.
OK, that OK, that Cheney and and Libby and his guys, they reacted so badly to that because Colin Powell took such charge of it and they were like, yeah, that'll be the last time that you get your way around here, pal.
And that was, you know, unfortunately, he blew all his political capital right there on saving us from a war with China.
He was unable to stop the one with Iraq.
Which was very valuable.
By the way, to put in perspective, about a couple of years after that happened, I again, I was teaching at the Naval Postgraduate School.
I taught a distance learning course.
And one of my groups of students was up at Whidbey Island in Washington state.
And I actually went there and taught in person once and I get talking to them at lunch.
And this one woman had been on that airplane.
And I remember saying to her, you know, were you scared for your life?
And she said, no, not really.
They treated us pretty well.
And it's like, holy cow.
That is just so interesting.
Yeah.
Boy, I'd take those days back.
You know, one thing that Doug Bondo says, too, is that, you know, the current guy is probably the worst dictator they've had, you know, since Deng Xiaoping and the right took over the country and the death of the real communists back in the 70s.
But he's going to die someday, too.
And there's no reason to think that really the whole Communist Party is as totalitarian as he apparently is.
But even then, as we've seen over and over again, ruthless domestically, psychopathically murderous, even domestically doesn't necessarily translate into a dangerous foreign aggression at all.
No, that's right.
And I think Stalin's an example of that in his last few years.
One of the most horrible people ever in the world, certainly competitive with Mao and Hitler.
And yet he, you know, he he he ran a fairly conservative foreign policy ultimately.
And thank goodness for that.
It wasn't too much gray area to work with at that time.
Yeah.
Which, by the way, this is kind of a funny way to end the interview.
Have you ever read Daniel Ellsberg's latest book, The Doomsday Machine?
No, I read his previous one, but I haven't read this one.
OK.
Yeah, I think you'll like it.
It's all about the H-bomb and his days as a nuclear war planner.
And so Confessions of a Nuclear War Planner is the subtitle.
And I'd be interested in what you think of that, because it's really something else.
I'll tell you what.
And I think I'm gathering you think it's really good, right?
Oh, yeah.
I'm continually impressed by it.
I think about it all the time.
I probably should read it again.
There's so much great stuff in there.
Yeah.
Yeah.
But yeah, when you talk about the Cold War, that's the context that for for any discussion of of any, you know, activity anywhere in the 50s and 60s that the truths in that book should always be, you know, the background.
For sure.
Yeah.
Yeah.
Yeah.
Anyway, and I think if we have a nuclear war, it's more likely to be by accident.
As you probably know, we've had close to we've had a few of those that almost blew up.
Well, you know what?
So I'm glad you say that.
I think I'm starting to disagree with that.
But here's why it sort of makes sense.
And you see this all the time in the case of Russia and China, but more and more in the case of China, where they talk about, oh, yeah, we're building up all of our war plans and all of our capabilities.
And we are preparing for war with China.
That was one of the headlines earlier.
And what it is.
This sounds stupid, but it's my best explanation, as far as I understand, anyway, is it goes like this.
Everybody knows they have H-bombs.
Of course they have H-bombs.
It goes without saying that they have H-bombs.
But then that means that in reality, it goes unsaid that, well, yeah, but they have H-bombs.
And so they actually can go about spending years drawing up plans for some massive conventional war with China.
And here's how fun it'll be.
We'll use our B-1s.
That was the new Reuters piece the other day.
Yeah, they can hit our carriers.
It's true.
So we'll just hit them with our B-1 bombers from Guam and coming up with all of these things.
But as though we're not talking about nukes, we're not talking about, you know, a World War Two worth of casualties in an afternoon, which is exactly what would happen if we had a real war with China.
It's like virtually 100 percent certainty that it would turn to nukes if we had a real, you know, full scale war with bases being bombed on both sides and stuff.
Right.
And so I don't know, it seems like it could be like with Iraq.
It's a very kind of unreality that rules the conversation.
Yeah.
Yeah.
I don't know that it's a certainty.
Well, I think it's not a certainty, but I do think there's a there's a substantial probability.
But still, I think that either side knows they do that.
And then the other side retaliates.
And it's it's horrible.
Yeah.
Well, one thing was they shot those ballistic missiles, the aircraft killed aircraft carrier killers, they call them when America was doing exercise in the South China Sea two weeks ago or one week ago, and they fired two of those.
And I think the Americans got the message that we don't have a defense for that.
Yeah.
And they know what it would be if they lost an aircraft carrier to the bottom of the sea there.
That that would mean I mean, can you imagine what Donald Trump would do if he lost what, 7000 guys?
Yeah.
In an instant like that.
Yeah.
So I guess then that was I think why they put that article out about the B1s.
They said, you know what?
Check.
You got us.
We can't we can't use our carriers, but we can use our long range bombers.
So what are you going to do about that?
I mean, it's just nuts.
Anyway, I thought I think it was Churchill who said in the First World War before the First World War, when the Kaiser was building up his Navy, that Churchill said it was a luxury Navy.
In other words, it just didn't make a whole lot of sense.
I think our carriers are a luxury, our luxury Navy.
In other words, it just you actually think about how easy it would be to sink a carrier.
And it just doesn't make sense to spend 12 billion dollars on it.
Yeah.
I mean, especially because you have the supersonic sea skimming cruise missiles, which they at least have some defense against with the, you know, high powered radar and machine guns.
But you talk about taking out a supersonic missile with machine guns.
You got to really fill the air with lead with many gun type.
That just doesn't sound reliable.
Anyway, you might get lucky some.
And then for the ballistic missiles coming from above, they have no defense at all for that.
And the Chinese apparently have figured out successfully how that they can target them within the width of an aircraft carrier deck.
And so it sounds like that's the end of that discussion right there.
I don't know.
But yeah, but back to the thing about the sorry about this.
I'll I'll ask you this one last thing and then I'll be quiet and let you go.
Is there does it seem to you back to the Colin Powell thing with the spy plane?
Does it seem to you like there are interests in American corporate capitalism that would urge restraint and the old status quo and would urge against this new kind of hawkishness and protectionism?
Or they're afraid to stick their neck out and get too political on that.
They're just going to let the hawks deal with it.
Or is do you know at all what's going on there?
If there's any kind of pressure there?
Yeah, I don't know.
But if you if I watch Tucker Carlson a few nights a week and he certainly thinks there are companies that really want good relations with China, he thinks that's bad.
I think that's good.
That's a pretty big difference.
But yeah, I think I mean, I think there's something to what he's saying.
He just we just evaluate it very differently.
Yeah.
Yeah, I think we really need some, you know, I don't know which American capitalists of some stature to explain, you know, not not in a elitist to populist sense, but, you know, to the other elites that what you guys are doing here is wrong.
You know, yeah, you need to sell Navy ships, fine.
But you're pushing this too far.
You have to ratchet this down, you know?
Oh, yeah.
No, that's right.
I'm trying.
All right.
Well, listen, I sure appreciate the job you're doing in this great piece here.
It's called Is China an Economic Threat?
It's at the Hoover Institution.
And it's also running, of course, at antiwar dot com at original antiwar dot com slash Henderson.
Thanks very much again for your time, David.
Thanks, Scott.
The Scott Horton Show, antiwar radio can be heard on KPFK 90.7 FM in L.A.
APS radio dot com antiwar dot com Scott Horton dot org and Libertarian Institute dot org.
