The Wheatley Institution

It’s Half-Time in America: Major International Challenges Ahead

General Amos A. Jordan
September 19, 2013

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At the 2012 Super Bowl Clint Eastwood said, "It's half-time. Both teams are in their locker rooms discussing what they can do to win this game in the second half. It's half-time in America, too. People are out of work and they're hurting, and we're all scared, because this isn't a game…The fog of division, discord, and blame makes it hard to see what lies ahead." Then he went on to assert that we can and will find a way, pulling together to win in the second half. He added "We find a way through tough times, and if we can't find a way, then we'll make one."

Despite the formidable challenges now facing our nation, I share Eastwood's basic optimism. This evening I will discuss several of those outstanding challenges and ways to meet and master them.

The first and most immediate challenge—the overwhelming challenge facing us—is getting our national house in order. This task has a number of dimensions. I will tackle only two of them, the most urgent ones tonight: the nation's fiscal mess and the status of our k-12 education. Other important ones, such as chronic high unemployment, the growing gap between the rich and the poor in our society, and our decaying national infrastructure also merit attention, but we don't have time to tackle all of them tonight.

Our fiscal problem stems from the fact that, as a nation, we have—for about three decades—been spending more dollars than we have been taking in through taxation and other revenue measures. We have been making up the very large shortfalls by borrowing— in many cases from abroad—mostly from China, as well as from American bond buyers. These years of the locust have produced a national debt that is almost overwhelming in its dimension. It's approaching 17 trillion dollars.

Now I don't know about you, but I have a hard time grasping the idea of a "trillion." I can think in terms of millions, maybe billions, but I just can't get a hold of the idea of a "trillion". President Reagan had the same problem, so he had his aides provide a metaphor. They told him that if he had a stack of one-thousand dollar bills four-inches thick, he would be a millionaire. If that stack of one-thousand dollar bills was 300 feet high, he would be a billionaire. To be a trillionaire, the stack would reach into the stratosphere, some sixty miles. To measure our current national debt, the pile of one thousand dollar bills would have to reach about a thousand miles deep into space. That illustration does not exaggerate our problem.

We have been annually adding about a trillion dollars of further deficits to that huge debt. Just now—thanks to sequestration this year—it will not be quite that bad, but these imbalances simply cannot be allowed to continue. Otherwise, the value of the American dollar will plunge, foreign trade will implode, and we will no longer be able to find other nations willing to cover our borrowing. We must get our fiscal house in order.

But our political system refuses to face the facts. Spending cannot be reduced substantially without cutting huge, for now politically untouchable entitlements­—Social Security, Medicare and Medicaid. Controlling escalating health costs for Medicare and Medicaid is particularly important. Unfortunately, the new health care system, so-called Obamacare, finesses—does not meet—this problem of escalating costs.  

Facing the challenge of increasing revenues is equally or even more difficult than cutting spending. Politicians and tax increases simply do not inhabit the same universe. The only time you hear a politician talk about taxes is when he is talking about cutting.

It is clear that we have to have a complete reworking of our tax system.  Eliminating or sharply curtailing "tax breaks" that protect various groups or interests from taxes is one of the most important things that has to be done. It would not only permit overall lower rates, but would also promote fairness. But every tax break is guarded zealously by the favored groups or interests and their expensive lobbyists.

Still, with political courage and effort the challenge can be met. Last year, President Obama appointed a bi-partisan commission, named after its co-chairs—generally called the Simpson-Bowles Commission—to tackle the fiscal problem and to lay out a balanced program to sensibly manage a transition to solvency. The commission did so. But sadly, its recommendations were shelved—they quietly disappeared—because political courage was in short supply.

A renewed effort akin to Simpson-Bowles is needed. We have to bite the bullet, not only for the present, but for the future national solvency that your generation will need. Your political leaders, particularly your senators and congressmen, should hear from you about deficits and debt.

Putting our national financial house in order is also required because our national position in the international system rests on our economic strength. That economic strength is the basis for our military and political strength. Our ability to secure our interests, both at home and abroad, rests on economic strength. Our ability to provide aid to allies and to meet the threats that are constantly arising; all such prime interests are underpinned by economic strength. National economic health is absolutely essential.

Turning to the topic of education: there is now considerable attention to education arising out of a growing awareness that our nation system of K–12 education does not provide students adequate preparation for college or for careers in a globalized world—a world in which graduates from Provo High will not be competing for jobs with Seattle High but with Shanghai High or Singapore High. Those foreign graduates are the ones that we have to be aware of and competing with.

Moreover, the quality of our K–12 education varies wildly in this country, from state to state. Students in West Virginia or Mississippi for example are generally short changed badly when compared with students from Oregon or New York. Our international ranking for K–12 education puts us in the middle of the international pack, next, I think, to Bulgaria. We cannot continue to be a world leader if we are in the middle of the pack. A coalition of educators, business leaders and state governors has developed a national program to meet this challenge. This is recent. It is called "Common Core". The Common Core standards provide a series of academic benchmarks that set the minimum skills a student should acquire at specific grade levels.

Although all but four states have adopted Common Core, there continues to be scattered opposition and confusion, partly arising out of misperceptions and the erroneous idea that with Common Core, teachers across the nation will be required to teach a uniform curriculum from common materials and common course work. But Common Core does not require that level of specificity. We will still have local control of education, it will just be measured against benchmarks that will show us how well we are doing.

Putting our national house in order in terms of finances and education—which at first blush seem to be largely domestic challenges—are ones with enormous international ramifications. These are not the only priority task before us; there are a host of other first order challenges: coping with climate change or countering terrorism, for instance, that also demand our attention. But there is not time to tackle all of those tonight.

Let's look at a different kind of challenge, one that's provided by various nation states. Again, the list of possible challenges to examine is long. From the list I have chosen two, China and Iran, that pose particularly interesting problems. If you have other candidates we ought to examine, perhaps we can discuss them in the question and answer session.

China leads the list of states that we need to examine. It's size– one billion, three hundred million people—is about four time our size. Its remarkable rapid economic growth, its booming international trade, its vigorous search for energy and other national resources, its seat on the United Nation's Security Council, its growing military strength, its vigorous diplomacy, its status as the second largest economy in the world—second only to ourselves—all these combine to make it a primary force in the international order. We must also focus on China, for it will become an even more important actor in the future. Its economy is growing now about three times as fast as the United States'. It has recently slowed down, but for   three decades it increased its gross national product about 10% a year. Now that growth is down to 7.5%, still about three times our rate.

I was asked at one juncture, a few years ago, to be part of a group of international experts to come to Beijing for two weeks to examine China's next Five Year Plan. Because I had been lecturing and writing widely about international energy topics, I was invited to join as the group's energy expert. I have a strong interest in China, have had for many years, and have visited there many times, so I jumped at this opportunity to get to know the current planners and the new plan.

After ten days of working with and analyzing the Five Year Plan and its planners, our group was asked to debrief China's top leadership on our findings and recommendations. I was to focus on energy. The debriefing room was relatively small so that when I stood up to debrief Deng Xiaoping, who was the undisputed paramount leader of China, I was only 3 or 4 feet in front of him. I said in my report that the Plan called for coal production and consumption ­­­­­­­­­­­­to rise rapidly over the next five years. Given that Chinese coal is mainly of low quality and full of sulfur, I told Deng Xiaoping that burning more of it would result in major pollution, both in China and in Korea and Japan, where acid rain would be falling. I urged him to have China develop its natural gas, which was being neglected. It could be an alternative to coal—at least for household consumption. I wasn't thinking then of global warming, which I probably should have been. But global warming obviously would be a major danger as well.  

Deng Xiaoping's vigorous response to my report was surprising. He was holding an 8 or 10 inch long ivory cigarette holder with a burning cigarette in it. He excitedly and repeatedly jabbed at me with it while he was exclaiming, "You American's burned coal when you were industrializing. Your railroads burned coal while you were industrializing. China will burn its coal as it industrializes and as its railways expand." That of course is what it has been doing and I am sure will continue to do.

I read recently, I've not had a chance to check the facts yet, but I've just read that China is now emitting as much greenhouse gas as the rest of the world combined. I suspect that is true, given the speed of its industrialization and given the quality of its coal.

Because of its coal, not exclusively but largely, China has a major environmental crisis on its hands. Its air and rivers are badly polluted; no one swims; no one eats river fish. You may recall that because of pollution China shifted a number of factories out of Beijing at the time of the 2008 Olympics.

In view of these pollution facts, it is not surprising that an environmental movement has begun to develop across China, but it has an uphill battle. Some limited ground may be won by those pushing environmentalism, but the increase of pollution will continue unless and until a combination of external pressures and popular distress will build a sufficient counter force.

The development and application of counter pollution measures and technology is an arena in which the United States and China could readily share experiences and cooperate. We need to seize such opportunities for collaboration. In the first instance, we should do so because we have a number of common problems and common interests that can best be tackled jointly, such as pandemics, global warming, piracy, and so forth. We should also do so because we need to put our relationship with China on the basis of coevolution, not just episodic cooperation. The term "coevolution" is borrowed from biology. It means two entities evolving together in a way that is mutually beneficial. Adopting this concept for the United States-China relationship does not mean that we will somehow, to some extent, submerge our national interests. Rather, we can continue to stand strongly for those interests while we seek for a commonality of dealing with growing interests with China. Coevolution means we are prepared to negotiate and cooperate continually in search for mutuality of interests. Whenever we do not have an underlying conflict, it should be possible to find ways to cooperate. The world needs us to do so.

In all our dealings with China we need to remember that its leaders view it as a rising power and the United States as a declining power, but a dangerous declining     power. The Chinese leaders are hard-headed realists. They are men of substance. They are men that have been tested. China has a meritocracy system within the Chinese Communist party that is amazing. Had it been applied in the United States in 2008 or 2012, I do not know who would have been chosen as president, but it would not have been Mr. Obama. In view of his relative inexperience, he would have been running at most a province in the Chinese system.  

The Chinese view the world differently than we do and will take every opportunity to shape that world favorably to China, either by direct or indirect means.  We are dealing with supremely qualified, driven leaders intent on making China number one. We can have no room among our analysts or our policy makers for panda huggers. We need hard-headed realists such as China has.

Beginning about three years ago, China adopted a much more assertive, even aggressive, foreign policy. It is now at loggerheads with Japan over a number of tiny, rocky islands in the East China Sea. More importantly, it has been increasingly assertive about its claims for dominion over the South China Sea and all the resources beneath the sea. Now that's a large body of water and China has only a weak historical and geological basis for its demands for control. But despite this weakness, it has labeled control of that sea as a "core interest". "Core interest" is a policy ladened term, one that it uses for Taiwan and Tibet. That claim for control is already causing ship-to-ship collisions and conflicts between Chinese naval vessels and Philippine fishing boats. The international community, including the United States, insists that the Sea is an international waterway, as it has always been, and that claims regarding it have to be negotiated multilaterally.

Senior Chinese have responded officially that if we insist that the waterway's nature is multilateral and claims concerning it have to be settled multilaterally, that insistence is tantamount to a declaration of war against China. We are in a situation where we cannot back off. It is hard to predict how this will evolve, but we can be sure that the South China Sea will be a future danger zone.

In addition to problems arising from China's assertiveness on the South China Sea, we have a relatively new significant problem of increasing Chinese cyber attacks on American business and government. These have been escalating. China denies responsibility for these, but the evidence—even pointing to a specific building in Shanghai as the source of the attacks—is conclusive.  This is not a matter of individual unofficial hackers, this is China.

We should also note that to back up its recent assertive diplomacy, China has begun a large scale military modernization program. By its nature, that modernization is clearly aimed at pushing the United States out of the Western Pacific. It is also aimed at disabling American military forces by blinding them, if open conflict should occur. Last year China shot down one of its dead space satellites to demonstrate its ability to cripple American forces which are heavily dependent on space communication. Of course, the American military is preparing measures to counter possible Chinese offensive actions.

Despite China's attempts to conceal much of its military modernization efforts, American intelligence has largely pinpointed them and their vulnerability to Western countermeasures. China's military muscle flexing will be  a source of continuing and probably broadening and escalating tension, I suspect for decades of your lives.

We have strengthened various defense cooperation measures with our allies in the Western Pacific, to include stationing a small Marine force in Australia. The countries of East Asia, and particularly of South East Asia, are anxious to develop joint military exercises with us and otherwise strengthen defense cooperation with us as they sense growing Chinese pressure.

Now let's turn to a second country briefly: Iran. It presents perhaps the most urgent, pressing challenge we confront. The international community, including the United States, is strongly opposed to Iran's apparent drive to become a nuclear weapon state. Iran insists that its development of nuclear energy is purely directed to peaceful purposes. While it has a pair of small nuclear reactors, those do not begin to require the amounts of enriched uranium that Iran's centrifuges are now spinning and producing. Moreover, Iran has recently added a further number of centrifuges to those already in operation.

Despite its on-again, off-again cooperation with the watchdog International Atomic Energy Agency (IAEA), it seems plain that Iran is building the capability to become a nuclear weapons state. Whether it will proceed to that point is an open question. But given its malign activities in its neighborhood, including in Syria, and its sponsorship of terrorists world-wide, it is hard to take seriously Iran's claims that its nuclear activities are solely peacefully directed.  I should note that Israel views a nuclear armed Iran as an existential threat, which is not surprising, since former Iranian president Ahmadinejad once declared that Israel should be wiped off the map.

Bringing Iran to the negotiating table is difficult at this juncture, but the effort must continue, for otherwise disaster looms—Israel will surely attack as soon as it believes Iran has fashioned an atomic weapon—just the first bomb. To meet this danger, the United States is leading a further effort to strengthen sanctions on Iran. Sanctions aimed to persuade Iran to cooperate on nuclear issues are already having a disastrous effect on the Iranian economy. At the same time it pursues tough sanctions, the United States and its allies should mount a major public diplomacy effort to convince all Iranians that pursuing nuclear weapons will likely bring a devastating war.

There are some signs of hope on the horizon. We know that ultimate power in Iran is held by the Ayatollahs in Qom, not the politicians in Teheran. So the recent election of a relatively moderate president may weigh little. Yet his recent comments that he has the authority to negotiate with the West are most hopeful. The Ayatollahs may have concluded that perhaps the future of the theocracy is at stake. The Iranian public's obvious yearning for peace and economic relief may also be a factor. Even so, the adversaries—Iran and Israel—are far apart, and war may in fact come. We should try to hold Israel back from early strikes while we strive to help the IAEA and the international community to find a viable compromise.

I began this lecture by citing an unlikely philosopher, Clint Eastwood. Let me close by citing another somewhat more renowned philosopher, Winston Churchill. He was speaking during the dark hour for England in its conflict with Nazi Germany. He said, "We must push forward. Never retreat. Never, never, never." As you students face the challenges that I have listed and others that you will discover, I hope and trust that you will push forward. Never retreat. Never, never, never. Thank you.

Question and Answer Session:

Q: I had a question about the expansion of China's interests in their region and I was curious if things escalated to some type of military involvement. Who do you consider as China's greatest ally, and if things went on to a struggle who would they call on to help them?

A: At this point in time, China has no allies, except North Korea, which is of dubious value. Indeed the Chinese would gladly give it away if they could. China is able to count on Russia to walk beside it in a number of things including votes in the U.N. Although as a member of the U.N. Security Council, China can veto anything alone, it likes to have Russia beside it. But Russia and China have an uneasy relationship. I would certainly not call it an alliance as was the case before Nixon and Kissinger easily broke it apart. We have a situation in which China has vast population pressure and a thirst for raw materials, while Russia has vast open spaces in Siberia and the East and considerable natural resources. So there is the basis for cooperation there, but there is also the basis for conflict. I do not expect their relationship to be anything like a solid axis.

As for the North Koreans, the Chinese just shake their heads. With its dictatorial political system, North Korea cannot produce the fuel and food that it desperately needs, so it depends on China for those. China cannot risk North Korea's imploding because the Chinese are likely to get hundreds of thousands—if not millions—of Korean refugees across their common border. They certainly cannot cope with that, so they keep North Korea afloat, but its value as an ally is minus ten.

Q: General Jordan, my question is, what can you say about the wisdom or lack thereof of any involvement in Syria right now by the U.S. or an international coalition?

A: In my view, the more distance we can take from Syria the better. I do not relish the idea of our getting involved in another Middle East war. You can say that intervention can be very limited, provision of assistance for instance, to one side or the other, and I presume you would think such intervention would be to the anti-Assad forces. The trouble is it is like getting a little bit pregnant. You either are or are not. I'm afraid you start intervening there and it can't end well. Syria is a major problem but it is one that the international community needs to grasp or its neighbors need to grasp alone. It is not a nettle for us to grasp. Despite the President's waffling on this subject, and I'm not sure where he came out with the latest waffle, I do not think that there is any real prospect that we will plunge directly into that mess. Let the United Nations sort out the question of the chemical weapons, let the international community decide how to cope with those findings, and if the international community cannot do it, the United States should not step unaided into the fray.

Q: General Jordan, you expressed some concern about the national debt. We have economists and policy makers who just say they are not worried about the national debt in comparison with the help we need in society. So they are saying we need to go forward and keep borrowing money until the economy gets back on its feet. Why are you more worried about the national debt than the economy?

A: Well, I don't think it is necessary to add to the debt in order to have economic growth. After all, until the 1960's we had a very small national debt and we had sustained periods of economic growth. The national debt is a burden that we tie around our necks that inhibits growth. It is not an aid to growth. It inhibits growth. So I am worrying about the national debt because I am worried about the solidity of our economy and our place in the world.

Q: Do you think of North Korea as an actual threat or are they just posturing?

A: The North Koreans do a good deal of posturing. It is one of the things they are very practiced at, and they don't have much else to offer. Their basic posture is to threaten and create problems and then expect to reap rewards when they decide to back off. That scenario, in fact, has happened a number of times. So they have learned that such behavior pays off. Just now we seem to have decided that we do not want to play that game again, so they are going to have to find another game. The foremost problem that North Korea has at this point, as far as we can see, is that the new leader— a man who is in his late twenties, Kim Jong-un—has no background and no apparent talent for international affairs or military affairs. Yet he is apparently in a place to call the shots or heavily influence them. That is the problem with the dynastic leadership that they have. You know he is the grandson of the founder of North Korea. Young Kim is a man who has had some western education. We had high hopes that he might bring some good sense to the office, but so far there has been absolutely no indication of that. We do not know how events are going to play out in North Korea.

The South Koreans are as strong minded, just as hard-headed, as the North Koreans. They are the best people to deal with the North. They are a strong ally of ours, and I think as we continue to work with them to make sure that they have at least equality with the North—and I think by this time they probably have superiority—in conventional forces. North Korea is not stupid enough to directly attack with conventional weapons or with nuclear weapons. It has relatively few nuclear weapons and it could be obliterated very quickly by a U.S. counter strike. So I think there is an awful lot of bluster there.  The North can cause all kinds of trouble by shelling isolated islands, by sinking Southern war ships. Both of those gambits it has already tried. They can be a terrible nuisance, cause real problems for South Korea, but they alone can't upend the stable relationships that we have with China, Japan and South Korea.

Q: How do you view Russia's role on the global stage and do you consider them a threat?

A: I certainly do not consider Russia as a global threat. Not by any means. Russia is still basically depending for most of its export earnings on oil and gas and therefore is in a vulnerable position should oil and gas prices fall. Russia has a military establishment that could not fight its way out of a wet paper bag—as shown by its poorly executed attack on Georgia. It has no friends in Central Europe, or Western Europe.

Moreover, it has the problem that so many countries are now beginning to experience—a declining birthrate, to the point that its workforce is now shrinking. Its population is collapsing. It is a country, in other words, that is not going to recover anything like the glory of the old Soviet Union. I certainly do not think of it as a threat to American national security, unless its leaders collectively lose their minds and attack NATO members.

Q: Lately there have been some conservative Republicans calling for a shutdown of the national government in order to defund Obamacare. I was wondering what could be some potential benefits or consequences from such a government shutdown?

A: It is hard for me to see any benefit to anyone from shutting down the U.S. government. Even the leadership of the Republican Party in both the House and Senate has said that it is not a good idea. What the Republican leaders have to cope with is their party's right wing, the tea party activated faction in their ranks. How they are going to manage that, I do not know. I suspect that the leaders will not try to use the debt limit or the continuing resolution to fund the government to shutdown the government, because I think most Americans will blame a shutdown on the Republicans. Certainly, the Democrats are doing their best to see that that happens, and the media are very much cheering them on. I think that level-headed people, that are neither left nor right extremists, think that shutting down the government is not a good idea. Nevertheless, they may do it; they may do it, but they will likely pay the consequences electorally next year if they do.

Q: General, how do you think China's rise will affect our relationship with nations like India and Indonesia?

A: It's a very interesting question about how China's rise affects our relationships with the other two major power centers in South and East Asia, namely India and Indonesia. India in the days of let's say 1940s, '50s—and right up into the '60s until Nehru died—the Indians and the Chinese were basically cooperating. "Hindi-Chini bhai-bhai", was the cry, that is "India and China are brothers." That slogan evaporated quickly when in 1962, the Chinese attacked India along its northern boundary over a dispute about that boundary. The Chinese were prepared for the conflict and the Indians were not. The Indians had to move forces up from essentially sea-level—a few hundred feet above sea-level—up to 13,000 feet; as a consequence, those forces could not fight for a week or 10 days. Consequently, the Chinese just ran over them. After the conflict, China pulled back on the northeastern front, but they did not pull back on the northwestern front. So they still occupy lands that the Indians claim, producing a continuing border quarrel between the two.

There is beginning to be naval rivalry too. China has decided it wants to become a sea power. So it is in the business of acquiring carriers, building submarines, producing relevant missiles, etc. The Indians, who believe that the Indian Ocean should be largely controlled by India, are very disturbed by this buildup and are beginning to build up their own naval forces.

There is also a rivalry over who is going to have the predominant influence in Southeast Asia. Indonesia and Vietnam are the principle nations concerned. In neither case do they welcome Chinese influence. Indonesia in the 1950s experienced a bloodbath during a revolution, a bloodbath in which Chinese were killed willy-nilly because of the activities of the Chinese Communist party and because so many of the rice traders were Chinese and so were hated.

Chinese were killed by the tens of thousands, maybe hundreds of thousands, so there is absolutely no love lost between China and Indonesia. The same can be said of Vietnamese hostility toward China, largely arising out of their 1979 conflict over Cambodia. Most of these countries in Southeast Asia are concerned about the growth of China's power and want to get closer to the United States. In some cases they are offering us port facilities and joint exercises.

Q: Recently we have seen a rise in politicians advocating isolationist style policies. How do you respond to America withdrawing from its international obligations and what would you suggest we do to help Americans reengage?

A: Well, it is hard for me to provide a really rational response to an irrational question. Not that you are irrational but people who pose that question often are. We may want to ignore the world, but the world is not going to ignore us. We are in it. We are of it. Our interests are wholly engaged. If we don't recognize that, but try to avoid it, we just beg for trouble, for other nations are not going to respect American abstention. They are going to pursue their interests, encouraged by the fact that the Americans are not going to be opposing them or in any way trying to frustrate them. So we would produce a more dangerous world if we tried to isolate ourselves. We have the probability that, if we began to pull back, the alliances that we have developed over the decades in the world would disintegrate and add another element of instability into the international system. Without American engagement and leadership, chaos may be the result.

We have not said anything at all about Europe in this session. The Europeans of course have more than enough troubles of their own right now, because they have still not yet recovered from the 2008 economic downturn. They are still mired in their various state-to-state difficulties. The European Union is fragile. It is perhaps too much to say that the Europeans are tottering, but many of them are weak and there is no sign of a quick and easy recovery.

We cannot now count on Europe to help with the various tasks in the international system except occasionally and in some cases such as Afghanistan. We can generally count on the British, Dutch, French, Germans, and the Poles—in many cases, but not all cases. It was interesting that even the Brits did not want to follow our President into any kind of Syrian adventure. Americans have a problem of maintaining an international system in which the other major players are not always playing or playing by the same set of rules.

The United States cannot afford any political or military weakening, cannot afford any dithering, and cannot afford any loose lips about what we are going to do in Syria or elsewhere. So all of you are inheriting a difficult world, but a world in which the United States has ample resources and plenty of bright people such as yourselves to cope with it. I wish you well in tackling its many challenges. Never, ever give up.

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