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The Ominous Ally Quarrel That's Giving Washington a Headache

July 29, 2019 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

One of the problems a great power faces is how to handle
situations where two or more allies quarrel and adopt antagonistic
policies towards each other. The United States faces that challenge
now, as Japan and the Republic of Korea (ROK) engage in escalating
disputes involving both economic and security issues. Their spats could scarcely come at a
worse time. President Trump is pursuing a delicate policy of
rapprochement with North Korean leader Kim Jong-un. For that
initiative to have even a reasonable chance of success, both Tokyo
and Seoul need to be supportive and not undermine Washington’s

This is hardly the first time that an American leader has dealt
with headaches caused by allies or security dependents that seem to
loathe each other. Since Turkey and Greece joined NATO in 1952,
they have frequently pursued conflicting foreign policy
goals—most notably with respect to the Bosnia and Kosovo
conflicts in the 1990s. Worse, they have nearly come to blows on
several occasions. The worst incident occurred in 1974 when the
military junta ruling Greece helped unseat the moderate president
of neighboring, majority-Greek Cyprus in a bid to orchestrate a
merger of the two countries. Turkey responded by invading Cyprus on
the pretext of protecting the Turkish ethnic minority there, and
proceeded to occupy nearly 40 percent of the island, expelling the
Greek inhabitants. Washington was barely able to prevent a war.
Even before the Cyprus incident, Turkey had made a habit of sending
its warplanes into Greek airspace, stoking tensions. These
antagonisms continue even now: there were some 36 violations
on a single day in December 2018.

A desire to preserve their security ties with the United States
against a larger, more powerful potential aggressor was the major
factor that inhibited Greece and Turkey from letting their own
rivalry spiral out of control. A similar situation exists with
Japan and the ROK. During the Cold War, worries about North Korea,
China, and the Soviet Union compelled a degree of unity as
Washington put both countries behind the U.S. security shield. In
the post-Cold War years, concerns over Pyongyang’s volatile
behavior muted the animosity between Japan and South Korea.

Nevertheless, there is no love lost between these two countries.
Many Koreans have never forgiven Japan for the abuses Tokyo
committed between 1910 and 1945 as Korea’s colonial master. Forcing
young Korean women into sexual servitude to the Japanese military
was only the most egregious of the offenses, and Tokyo’s reluctance
to apologize for that outrage and compensate the victims has
exacerbated the resentment among South Koreans.

Other quarrels flare up from time to time. One …read more

Source: OP-EDS

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Congress Should Bring 'New Starts' to an End

July 29, 2019 in Economics

By Randal O’Toole

Randal O’Toole

In 1991, Congress created the “New Starts” program to help fund
the construction of new transit infrastructure. Unfortunately, New
Starts has done more harm to our cities than any federal program
since the urban renewal projects of the 1950s.

On July 16, the Subcommittee on Highways and Transit of the
House Transportation & Infrastructure Committee held a hearing
on New Starts, which will expire in 2020 unless it is reauthorized.
Transit agencies attending the hearing told the subcommittee that
New Starts has helped them build high-capacity transit projects
that have generated economic development, provided mobility for
low-income people, and helped protect the environment. None of this
is true.

New Starts is an “open bucket” fund that requires local matching
funds, and the more expensive the project, the more money is
provided by New Starts. This has led cities to plan increasingly
expensive projects to get “their share” of federal

For example, the average, inflation-adjusted cost of new
light-rail lines has increased from $17 million a mile in 1981 to
more than $200 million a mile today. To provide local matching
funds, transit agencies have imposed large increases in taxes and
gone heavily into debt.

Worse, light rail is an obsolete form of transportation because
buses are not only less expensive to buy and less expensive to
operate than light rail, they can move far more people per hour. In
fact, light rail is by definition low-capacity transit because, for safety
reasons, light-rail lines can only move about 20 trains per

By comparison, busways can move hundreds of buses per hour,
enabling them to move more than twice as many people per hour as the highest
capacity of any light-rail line in America. Because of this, a
recent report from the Institute for Transportation & and
Development Policy concluded, “there are currently no cases
in the US where LRT [light-rail transit] should be favored over BRT
[bus-rapid transit].”

Streetcars, as illustrated by Washington’s H Street streetcar,
are even worse than light rail and commuter trains are no better.
Most new commuter-rail lines carry so few riders that it would have
been less expensive to give every daily round-trip rider a
new Toyota Prius every other year for the life of the project than
to build and run the rail line.

Contrary to claims that rail transit generates economic
development, research funded by the Federal Transit Administration
concluded, “Urban rail transit investments rarely
‘create’ new growth, but more typically redistribute
growth that would have taken place without the investment.”

This hasn’t stopped transit agencies from claiming that
everything that happened to be built near a rail …read more

Source: OP-EDS

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Andrew Carnegie Claimed to Support Unions, But Then Destroyed Them in His Steel Empire

July 29, 2019 in History

By Christopher Klein

The magnate with humble roots claimed to be pro-union, but his actions didn’t match his rhetoric—especially during the Homestead Strike.

With his quintessential rags-to-riches story, .

In appreciation for his pro-labor pronouncements, the Brotherhood of Locomotive Engineers named a division in Carnegie’s honor and anointed him as an honorary member.

Carnegie Pushes to Get Rid of Unions at His Mills

In spite of his public pronouncements, Carnegie did not want unions in his steel mills. Carnegie claimed in his autobiography that he never employed strikebreakers, yet he did so repeatedly.

He followed a simple business philosophy: “Watch the costs, and the profits will take care of themselves.” Few costs were greater than the wages of his workforce, and he drove his employees to work longer hours without corresponding pay increases.

Just months after his declarations in Forum magazine, Carnegie demanded that laborers at his original steel mill—the Edgar Thomson Works in Braddock, Pennsylvania—return to 12-hour shifts and be paid on a sliding scale that tied their wages directly to the price of steel. Workers walked off the job in protest until they were forced to give in to Carnegie’s demands after five months without a paycheck.

The Homestead Strike

An illustration from Harper’s Weekly depicting the Homestead Strike of 1892 showing Pinkertons, escorted by armed union men, leaving the barges after surrendering.

After Carnegie purchased the massive Homestead steel works in 1883, he spent millions transforming it to become the heart of his steel empire. When he purchased the steel mill, it was already home to lodges of the powerful Amalgamated Association of Iron and Steel Workers, and Carnegie ultimately took steps to eliminate the union from the Homestead plant.

The man who wrote of his support of unions now put his opposition in writing on handbills distributed to Homestead employees in April 1892: “As the vast majority of our employees are Non-Union, the Firm has decided that the minority must give place to the majority. These works therefore, will be necessarily Non-Union after the expiration of the present agreement.”

With Homestead’s labor contract set to expire in the summer of 1892, Carnegie sailed across the ocean for his annual vacation in Scotland and left the negotiations in the hands of his general manager Henry Clay Frick, who was notorious for using hardball tactics to bust unions in the coal mines. “We all approve of anything you do, not stopping short of …read more


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A US-China Trade Deal Needs Some Balance and Cooperation with US Allies

July 29, 2019 in Economics

By Inu Manak, Huan Zhu

Inu Manak and Huan Zhu

Tariffs have been the trade policy tool of choice for the Trump
administration as a strategy to gain concessions in trade talks,
imposed on allies and rivals alike. The Trump administration has
used tariffs on steel and aluminum under the Section 232 statute,
as well as tariff threats on autos and auto parts, as leverage in
trade negotiations with Korea, Canada, and Mexico, as well as the
European Union.

Tariffs are weak pressure point

Most recently, the administration has used tariffs to put
pressure on China, but negotiations have sputtered, and no deal has
yet been reached. While the United States has valid concerns
regarding China’s trade practices, the approach taken so far
in addressing them may not yield the best results. If President
Trump truly wants to close this deal, he should reconsider using
punitive tariffs as a negotiating tactic, and instead take a more
balanced approach, working with US allies. Doing so could lead to a
long-term and politically viable deal that the Chinese leadership
could accept.

While the Trump administration may have had limited success
pressuring Korea, Canada, and Mexico with tariffs, it is unclear
how many concessions the strategy actually delivered. Regardless:
China presents a more difficult negotiating challenge. It is a much
larger economy than that of Korea and Canada – and will therefore
be better able to cope with the impact of tariffs. Its domestic
politics presents a unique challenge. It cannot make concessions in
the name of preserving a military alliance.

China is currently in the midst of an internal debate between
economic reformers, on the one hand, and those who support the
status quo and may view the United States as a rival, on the other.
While the reformers may want to push for more significant internal
economic changes, they also are conscious of appearing too
accommodating to US requests, which could hurt them in their
overall reform efforts.

Supporters of the Trump administration’s trade policies
insist that tariffs are an effective tool. Though the Trump
administration has been able to get China to the negotiating table,
it is not clear that the Section 301 tariffs will be enough to
secure an agreement.


Recent talks have reached a stalemate, with the United States
accusing China of “reneging,” by
walking back from its previous concessions. Chinese officials, on
the other hand, criticized the deal as being unbalanced, and said
the United States’ insistence on changes to domestic Chinese
law as part of the agreement goes too far. While there are likely
significant gaps in consensus over substantive issues, there are
also differences in negotiating styles.

This would be a …read more

Source: OP-EDS