Pat Choate’s book, Dangerous Business: the Risks of Globalization for America, is a sobering warning to Americans to retreat from the economic policies that have concentrated power in the hands of the few, hamstrung United States’ national security, and threatened the safety of our food supply, or else lose our national sovereignty and prosperity.
Choate is an economist and the former vice presidential running mate of H. Ross Perot in 1996. An expert in American manufacturing and the North American Free Trade Agreement (NAFTA), he not only chronicles chilling examples of the threats of globalization, but also offers pragmatic solutions that can reverse the damage, like how to restore the American manufacturing base and still remain competitive in a global marketplace. He oft quotes Adam Smith’s Wealth of Nations, which cautions against straying from sound economic principles that protect a nation from corruption and collapse, but Choate eschews Smith’s later views on free trade.
Dangerous Business, first published in 2008, continues to resonate in today’s economy. The book is laid out in three parts. Part one discusses what Choate calls the three ‘megaforces’ of mercantilism, corporatism, and elitism. Then he moves into the history of America’s journey into globalism, which includes the sale of America’s infrastructure to private, even foreign, entities, and the outsourcing of national defense. Lastly, Choate lays out a viable path forward to restore our nation’s economic independence and prosperity.
Choate’s book is more academic than political, though politics is inevitably part of the narrative of how and why we got here. Whether examining Teddy Roosevelt’s trustbusters, the role of NAFTA in America’s lurch toward globalism, or Congress’ role in passing key legislation that doled out monopolistic and regulatory advantages to big corporate interests, Choate deftly exposes the players, including the culture of corruption gripping Washington.
Dangerous Business answers these three critical questions posed by Choate:
- Why did the government of the United States…choose to integrate its economy with the rest of the world without providing the most basic safeguards for the nation and its people?
- Can the United States maintain its standard of living, pay its debts, retain its sovereignty, and ensure its national security under its present policies?
- Can the United States gain the benefits of globalization without plunging into economic ruin?
No nation can survive if it cannot defend itself and produce the goods and jobs necessary to sustain itself. Dependence on other countries for national defense, food, and supplies needed for daily living is not a path to prosperity, but defeat, failure and poverty.
Choate documents how George Washington’s isolationist trade policies spurred “the mightiest industrial power in the world” by forcing the United States to produce its own weapons, food, and jobs. The War of 1812 revealed the grave need for American self-sufficiency. Choate argues the globalization of America began under Woodrow Wilson and blossomed again in the 1930s under FDR’s Secretary of State, Cordell Hull, a free trade ideologue, but advanced most rapidly with NAFTA under George H.W. Bush, Bill Clinton, and George W. Bush and continued unabated under Barack Obama. Choate debunks the notion that protectionist trade policies like Smoot-Hawley, or the Tariff Act of 1930, caused the Great Depression since the Depression began 9 months prior to the Act’s enactment and there was no foreign trade retaliation as feared. It was the backlash to Smoot-Hawley that cowed Congress into giving up its constitutional authority to regulate commerce to the State Department (a part of the executive branch of government), that still crafts the majority of U.S. trade agreements today.
In his discussion of corporatism, Choate points to the sale of America’s infrastructure to private corporations through the use of public private partnerships (P3s) as a blatant example of corporatism in its most basic form. It’s the least known plank of George W. Bush’s corporatist initiatives – the other two were privatizing Social Security and the outsourcing of national defense, both of which received wide national attention. But P3s quietly absolve politicians of responsibility for taxation, such as toll roads, by handing control over to private entities.
Choate uses the battle over the Trans-Texas Corridor, a NAFTA superhighway system of toll roads, toll rail, and pipelines and utilities of all sorts, to illustrate the threat P3s pose to property rights, national sovereignty, transparency, control over taxation, and freedom to travel as well as the heavy-handed tactics used to implement them without the public’s consent. P3s allow a single corporation a true monopoly, which Choate notes is complete control of something everyone must have – in the case of roads it’s a monopoly over mobility. There are plenty of industry cartels that create their own monopolies, too, and it’s how globalism is allowed to take root.
The purpose of these key NAFTA trade corridors was to increase and ease the flow of cheap imports into the U.S., originally from Mexico into the United States and Canada, but Chinese goods quickly eclipsed Mexican imports. Mexico is now just the transporter of goods rather than the manufacturer.
Choate points out that how the Security and Prosperity Partnership (SPP) was negotiated demonstrates the profound disregard the world’s ruling elites have for the consequences of its actions on the public. The aim of the SPP is to more deeply integrate the economies of Canada, Mexico, and the United States. It’s all done in secret within the executive branch of government and without congressional oversight having far-reaching implications for the citizens of these three countries. An extension of NAFTA, the SPP seeks to shore-up migration and labor policies, consolidate the ‘North American economic community,’ devise a trilateral approach to energy within trade corridors, allow Mexican trucks full access to U.S. highways (which Obama granted last year), and prospectively extend NAFTA into the Free Trade Area of the Americas.
A news release from the Council on Foreign Relations task force report with its recommendations later showed a push for full labor mobility, a common security perimeter (hence erasing U.S. borders), a North American biometric border pass, a single North American economic space, a common external tariff – essentially a complete integration of the three nations into one. All without any public notice much less input. However, input by major corporations from key sectors of the economy coordinated by the U.S. Chamber of Commerce and the America’s Society-Council of the Americas were invited to participate under the umbrella organization designated as the North American Competitiveness Council – again pointing out the coziness of big government with big business.
No discussion of globalization and trade would be complete without an analysis of the emerging dominance of China, Choate wrote in 2008 – and it remains relevant today. From lacing baby formula and pet food with poisonous melamine to tainting pharmaceutical drugs with chemicals known to cause death, this trade ‘partner’ is one America can do without.
Yet, the globalist trade policies of the United States have launched headlong into deep integration with China, a country Americans are now dependent upon for nearly all of the goods they buy. Though politicians continue to downplay the U.S. trade deficit with China, Choate makes a compelling case as to why it will unravel the economic prosperity and independence of America, if current policies continue unchecked.
The dominance of the Chinese from economic and trade policy to issues of national defense is the little known, but, consistent thread and threat throughout Dangerous Business. While the U.S. is pursuing aggressive, imbalanced ‘free’ trade that hurts U.S exporters and gives unfair advantages to importers, the Chinese pursue mercantilism, which was once responsible for America’s secret path to prosperity, although Choate is not advocating its return. While the United States elevates trade to such a degree that it imperils its own national defense, the Chinese buy-up America’s debt, exploit its massive trade surplus, and steal U.S defense secrets with impunity.
Choate argues, U.S. leaders appear to be blind to China’s nationalistic, mercantilism mistaking it for the gradual shift to market-driven capitalism due to opening-up certain industries to foreign-direct investment. But foreign direct investment is simply China’s method of updating its economy by bringing in foreign expertise – foreign investors are never allowed to have any decision-making powers or majority ownership in Chinese assets.
China’s subsidized industries, undervalued currency and cheap labor give it an unfair price advantage over virtually every product made in the world. China is also the world leader in piracy and counterfeiting, which not only contributes to its huge price supremacy, but also to building its national defense by systematic theft of U.S. defense technologies and secrets.
Conversely, unbeknownst to the American public, many of our weapons continue to be dependent upon Chinese technology, posing a tremendous threat to U.S. national security. Choate also reveals that China has turned to Wall Street firms like Goldman Sachs to help guide its strategic U.S. investments. They’ve ingratiated themselves with former U.S. presidents and use their Wall Street connections, the influence of trade associations of industries invested in China, and its U.S. political connections through U.S. lobbyists to wield untold influence with our government and policymakers. Because of the laissez faire economics in America, the Chinese can and are quietly buying-up huge portions of key economic sectors Americans depend on for daily living without their knowledge or protection of the U.S government.
Choate warns that the Chinese have systematically purchased every U.S. defense supplier of high-tech motors used in precision-guided bombs – and that was the case just four to six years ago; today it’s far worse. We are now wholly dependent upon China for key materials in our weapons systems. Currently, no U.S. sources exist for essential items in ammunition production.
Chinese cyberattacks have consistently hacked into the Pentagon giving them access to sensitive military technology and secrets that can be used against us, not to mention the threat of Chinese computer viruses implanted in U.S. defense computer components that could be used to trigger a cyberattack that shuts down our defenses at any time. So business and industry integration make America equally vulnerable to attack as does economic integration.
But lest Americans fear the worst, Choate poses serious, practical solutions to unwind the downward spiral we find ourselves in. He fires with all cylinders – from equalizing the Value Added Tax, bringing back the trust busters, and getting proper congressional ratification, to rebuilding the American manufacturing sector, beefing up intellectual property and patent protections to encourage innovation, and taking care of our human capital with good wages and benefits.
The Appendix to Dangerous Business is just as meaty as the book, as it reveals a detailed list of the pay-to-play revolving door exchange of money for influence that has plagued American policy-making. Dangerous Business is a must-read, timeless book essential to understanding how unfettered globalism and corporatism will spell the end of America.
Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of eight turned citizen activist. Ms. Hall is also a contributor to SFPPR News & Analysis.