The bumper sticker mentality that dominates our political discourse risks our future.
Countries that sell stuff to each other don’t shoot at each other. At least that’s the long-standing premise of the Golden Arches Theory of Conflict Prevention, which Thomas Friedman coined 20+ years ago in The Lexus and the Olive Tree: no two countries whose economies are so developed that they can sustain the infrastructure of a McDonald’s will ever go to war, because war is less profitable than peace.
As long as corporations have major “international supply chain” operations, their home country will never engage in armed conflicts that might disrupt those. Peace is good for business, and business is good for peace. Another win for capitalism.
Terms like America first or isolationism can get misused in our modern political discourse, thrown around a lot, but often without any real context. The U.S. must avoid the traps of going too far one way or the other — projecting American strength but neither misusing it nor undermining — to make sure we play the role in the world that is our responsibility to bear.
Making sure that we participate in international business the right way puts America first. For example, while some mistakenly accused former President Trump of isolationism because he rejected trade deals like NAFTA, rather he replaced it with a better deal.
The world is more complicated than the bumper sticker-mentality that dominates our political discourse. Anyone paying attention understood that Trump was reasserting America’s role in the world, rather than withdrawing from it, after years of neglect, apathy, and diplomatic rot from Washington. But with Mr. Trump it was easy to confuse his style with his intent.
So there’s a two-sided danger now: one is MAGA leaders who may understand Mr. Trump’s style but not the nuance of his actual policies — like the one that brokered a peace deal between the UAE and Israel — and Democrats who want to project the weakness abroad 24 hours a day, seven days a week.
The U.S. can’t withdraw from world economic affairs. Doing so is neither good for the US nor a world that depends on our beneficial collaboration across all sectors, including infrastructure, commercial goods and services, new technology, health care innovations, and even defense capabilities. Foreign partnerships have long been beneficial in our nation’s historic economic growth and are vital in the 2021 recovery.
We just have to make sure that we engage in the proper way, a scary prospect when the person dictating that from the top thinks we can get hostile powers to not cyber-attack us by asking nicely.
It was a foreign virus that brought three years of economic record-breaking to a halt, not foreign business. The pandemic cut US GDP by 3.5 percent in 2020 — the biggest drop since World War II — and it allowed China to surpass the US as the No. 1 destination for foreign investment. One imagines that people would rather send their money here, as our institutions and rule of law are little bit more reliable than Beijing’s.
Problems started before then. In 2019, new foreign direct investments dropped 37.7 percent — from 2018, which suggests that the US relies more heavily on long-term relationships, and must focus more on cultivating new ones to continue growing.
At the same time, direct international investment in the United States rose by $331.2 billion to $4.46 trillion at the end of 2019, according to the Bureau of Economic Analysis, up from 2018, when foreign-owned firms invested $66.9 billion in American R&D. About $157.3 billion of this increase in the position from Asia and Pacific, from partnerships with companies like Toyota, ST Engineering and Samsung Electronics. Clearly, people in Asia would rather do business with the U.S. than China in the globe-spanning economic recovery following the COVID-19 pandemic.
Foreign investment can be beneficial for all involved, and many iconic American brands are now foreign owned, like Popsicle, Budweiser, Vaseline, Hellmann’s and more. The business of America is, and always should be, business.
The stock market is sputtering since the new administration came in. D.C. needs to realize that international business can help get it back on track. Doing so drives progress across all industry sectors, provides necessary jobs at home, and maintains our global position. One imagines we won’t be selling oil to the Middle East anytime soon, but let’s make that our goal.
• Jared Whitley has worked in the U.S. Senate, the Bush White House and the defense industry.
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