THE STATE OF THE UNION
(a valedictorian expression of hope for the future)

The President’s last state of the union address to Congress was mostly a valedictorian expression of hope for the future…and not much else beyond that. At times, however, he did sound like a somewhat displeased headmaster castigating an obdurate student body which had not performed up to expectations during the school year. In some ways that tone was appropriate because, let’s face it folks, Congress has generally been as uncooperative and obstructionist as any in our recent history. If you don’t believe that…just look at the approval ratings we tax-paying voters have given it during his term in office.

Now, of course, since we’re in that full election year mode to pick who will be the next President to attempt to sheep-herd us forward from where we are today, we shouldn’t expect to see much serious legislative accomplishments to happen between now…and next November.

The President’s attempt to inspire us to do more, and do it better, for our future, reminds us of an occasion which occurred some forty five years ago, when our country was also in the midst of a similar period of conflict, with a Cold War between us and the Soviets, and a proxy “hot war” version of it in Vietnam, along with ongoing collateral confrontations with Maoist ruled China. That occasion was a speech we had to give at a joint American/ International Chamber of Commerce luncheon in Bangkok, Thailand, 1970-71, when it hosted Secretary of the Treasury John Connolly’s visit there, during his tour of Southeast Asia to drum up support for the Nixon Administration’s economic and foreign policies.

It is attached in annex to illustrate how we viewed the situation back then, much as we view the similarities of our situation we face today. That is, how to best confront the hostilities we face in the world at large, and, how to refurbish our own internal conditions so we can be in a better position to deal with them.

While we make no claim for having been prescient at the time about future events, it is gratifying to note we were fairly close to the mark about a number of things which would eventually come to be. Looking back on it, however, we think it was simply a case of being a bit more perceptive about trends at the time, and a bit more focused about “connecting the dots” within those trends than anything else.

CENTURION

Annex to Issue No. 8 – Jan 2016

TEXT OF A SPEECH PRESENTED IN 1970-1971:

By W.R. Taylor – Managing Director, McCaffrey Investment Assoc. Ltd., a joint venture and business development consulting firm assisting American and other foreign investment in Thailand, and other parts of Southeast Asia.
Taylor was selected on this occasion because it was customary for the Chamber to pick a member by lot to give a viewpoint speech at the end of such luncheons.

“Secretary Connolly, invited guests, and fellow members.

As usual, the Committee charged with presenting these luncheons has done a world class effort on this occasion. The only possible complaint we may have about it, however, is that it apparently decided it was my turn to provide the customary viewpoint speech by a selected member. After such a fine spread, I’ll do my best to not only be interesting enough to keep everyone awake, but also, to keep the level of postprandial shock within reasonable bounds. Even so, I notice that my Senior Partner, Hugh McCaffrey, and a number of others who are familiar with my generally contrarian views, winced when I took the podium, and are nervously eyeing the exits. Not to worry, gentlemen, in honor of our distinguished guest, I’ll be reasonably mild today.

First of all, I’d like to preface my remarks by saying I’m speaking as an American. While like most members here I’m a long term expatriate, and one with very strong internationalist views, especially about commerce and trade, I still have American concepts (or perhaps…misconceptions) about what our place and role should be in this world.

Simply and bluntly put, whether any of us like it or not, America is the pre-eminent economic and military power of the world today. Whatever it does, or doesn’t do, has ramifications all over the globe. That kind of power and influence places a very heavy responsibility upon it, a load which, unfortunately, our political leadership doesn’t always measure up to.

The present conduct of American policy, particularly as it affects our international trade and commerce, is misconceived and misdirected. I would go so far as to say it’s a non-policy, since we haven’t clearly defined what our vital national interests truly are, or should be. Until we can do that we will just continue to react like a weathervane, flipping and flopping in whatever direction the winds of events occur. In the process we thus create doubt and uncertainty about either our reliability or our motives among our friends and allies, while our actual and potential enemies are encouraged to miscalculate our willingness to confront and resist whatever power plays they may have in mind. That’s an extremely dangerous way to conduct policy because, if another Bay of Pigs type situation were to arise, what would happen if no one blinked?

It’s no way to run a business, much less a great world power. But the main reason the United States doesn’t have a carefully designed and long range plan from which a coherent foreign policy might then be crafted is because it has entangled itself for a number of years in a useless “containment” posture aimed primarily at the Soviet Union, and its occasional ally, China.

That has resulted in a so-called Cold War, with a nearly hysterical American fixation on whether some folks are dumb enough to wear Red underwear, or not. Thus, we’ve ended up with a world polarized into two mutually hostile and overly-armed camps, with the United States playing the part of the world’s police force in places like Korea and now, Vietnam. So, while we’ve been squandering billions to maintain that containment of an erstwhile “Red Menace”, our friends and allies have been left free to concentrate on their own vital economic interests. Nevertheless, it’s a measure of its economic capacity that, despite all that, the United States has still managed not only to do so, but also, maintain a reasonable standard of living for itself. The question is, how long can it continue doing so? Such a negative and defensive posture is doing nothing to establish a secure foundation for its own economic future.

In my view, therefore, it’s time for the United States to consider taking a radically different direction, unilaterally if necessary, to start building for that future.

A first step for that is to clearly state what our vital national and economic interests are. Most of them have very little to do with Europe, the Mideast, or even Africa. They lie first and foremost in the Western Hemisphere and in the Pacific World as a whole. That’s where we’ll belong in the future, and nowhere else. We just haven’t realized it yet.

With this in mind we should seriously consider disengaging ourselves from the various silly, dangerous, and potentially disastrous geopolitical endgames we’ve been playing with the Soviets. It is not producing any real returns for all those billions we keep squandering to that end. In the process we’ve isolated one of our potentially largest trading partners in the world, that is, China. That’s just plain dumb. We must not forget that the Chinese are Chinese first, and ideologues, second. Chairman Mao and his minions will ultimately fade away, one way or the other. So why not nudge the process along? Not with saber rattling, but by the sheer seductiveness of our economic capacity.

I once proposed such a concept to my superiors at USAID, saying that we should offer recognition to Mao and company, if, they would allow us to open a USAID office in every province of China. The way that program is managed and works, I was convinced that in less than 10 years we would so corrupt them, they would no longer think or behave like so-called Communists. Needless to say my superiors were not amused, and my career with USAID came to an early end.

Cuba is another example of what happens when trade and commerce become hostages to whatever geopolitical policy is expedient at a given moment. In that case, we emplaced a useless embargo against an undesirable regime, rather than doing to it what Mr. Kruchev once said he would do to us…burying it….by the sheer dynamism and productivity of our economic system, and by that example, make its misguided ideology redundant.

America would better serve itself, and thus the rest of the world, if it abandoned these kinds of negative measures in foreign affairs. Instead, it should be taking the initiative to show how well its economic machinery can, and does, out-produce anyone else. Mr. Servan Schreiber, of the French magazine –l”EXPRESS- once called it – the American Challenge -. I think he missed the mark.

We are so focused on internal markets we have little or no interest or motivation for international trade, even though we talk a good talk about it. In truth, only our multi-national businesses are actually challenging the rest of the world. Our home industries are not. And those multi-nationals have better understood than those at home in the States, that the world is changing, and that such change will greatly accelerate once the remnant conflicts of WWII, and their post-colonial debris, is cleared away. The Cold War is just a symptom of that process. When all these things have collapsed, or simply imploded from the weight of their inanities; then, at that moment, natural, logical, regional economic and trans-national coalitions will begin to form. The burgeoning EEC in Europe is one example of this, and the multi-nationals are harbingers of more to come.

At that point a globally structured economic world will become a reality, superseding the narrowly nationalistic system we have today. The question we need to ask ourselves is…where will America be or fit in such a world? Which brings us back to this: Will America realize where its future really lies, and, will it have the foresight to put down a foundation to properly support it?

To that end, it should be focusing on promoting and developing the equivalent of the EEC in the Western Hemisphere, from Alaska to Tierra del Fuego. If it is able to help create such an economic entity, and further, integrate it with all the economies of the Pacific region, the sum total of all its natural resources, industrial capacities, skills, talents, and capital, will be unmatched by any other bloc, or combination of blocs, elsewhere in the world. Such a development would then cause a significant shift of the geopolitical center of balance in the world, and from that, usher in the start of a Pacific Age. An age which might well do much to bring about a longer period of economic and political stability than the world has previously known in its history. And all because it will have managed to gather together the broadest array of countries into one symbiotic, even synergetic, mass.

I don’t believe in the concept of a “Third World”. That’s a euphemism for Colonialism. There can only be one world, and the broader and more diversified its membership, the better it will be for all. No one should be excluded because they’re “undeveloped” or “just developing”. That’s self-defeating. Everyone is developing in one form or another.

So, we’re on the threshold of a new economic age. If it’s to be for a stronger, happier, and more secure future for all, then we, especially in America, must abandon our outmoded habits of thought, and like the great adventurers and explorers in the Age of Discovery, we must prepare ourselves to launch out into an unknown and uncharted future without fear or uncertainty. There is a future out there, somewhere. It’s only a matter of what form it will take, and who will be able to exploit its opportunities when it gets here.

The question is, will America be among those that do? I must hope so. As an American I have to, because if America doesn’t prepare for such a future it will simply become an economic and cultural backwater, and ultimately, fade away. As an American, that is a fate I refuse to accept for it without doing everything possible to avoid it.

Thank you.”

FOOTNOTES:

  1. The membership’s reaction was generally favorable, except for our European friends who were horrified that we might even consider such ideas. Their nervous reaction just confirmed my belief in the merits of such a plan. If it scared them that much, it had to be valid. As for our Asian members, these were quite complimentary, but somewhat amazed that an American could think in such geopolitical terms. A Japanese business acquaintance (representing one of their largest daibatsus) smilingly inquired if I was familiar with the Japanese – Greater East Asia Co-Prosperity Sphere plan – I grinned back saying I was indeed. He replied…I thought I recognized the concept!
  2. Sec. Connolly’s reaction was interesting. Publicly he was just politely complimentary, while privately he was intrigued by the idea. Jokingly he asked if a Texan had prepared my speech. When I said, no, I’m from Missouri, he just shook his head and muttered…that figures!