China Finds It Can Live Without the U.S.

Hawks in Washington speak of ‘decoupling.’ Xi Jinping is already busy doing that—his way.

A China hand and former Treasury Department colleague told me before the 2016 election that officials in Beijing preferred Donald Trump to Hillary Clinton because they thought Mr. Trump would be an easier negotiator.

Yet Mr. Trump has proved to be anything but—and in ways that ill serve U.S. interests. Through a series of vacillating threats and entreaties that often seem to be decided on a whim, he has shown President Xi Jinping that he is an unreliable negotiator. Mr. Trump’s public bullying makes it hard for Mr. Xi to accept any deal while saving face, which is very important to the Chinese. Thus Mr. Xi is no longer earnestly negotiating, merely going through the motions.

The Costs of China’s Crackdown on Hong Kong

The new buzzword in Washington discussions of Sino-U.S. negotiations is “decoupling.” From the Trump administration’s perspective, they are threatening Beijing with the prospect of disentangling the U.S. and China entirely and creating two distinct economic systems, similar to the bipolar world of the Cold War. Many in Mr. Trump’s orbit believe that blocking China’s access to U.S. technology would thwart China’s attempts to surpass the U.S. on the world stage.

This approach is naive and probably counterproductive. It is accelerating rather than slowing the Made in 2025 program. Mr. Xi has jettisoned Deng Xiaoping ’s established strategy: “Hide your strength, bide your time, never take the lead.” From his perspective, decoupling is not only an American threat—it’s the new Chinese strategy.

Nowhere is this more evident than Huawei’s case. The Trump administration has temporarily cut off most transactions between U.S. companies and Huawei, and China hawks are pushing the president to make this decoupling permanent. Meanwhile, Mr. Trump dangles access to American-made components as leverage to get Mr. Xi to buy American soybeans. But Mr. Xi does not appear interested in tactical détente as he was last year, when he asked Mr. Trump to save ZTE, the other prominent Chinese telecommunications firm. Instead of giving in to Mr. Trump’s demands, Huawei recently introduced its own operating system, Harmony, an alternative to Android that will reduce Huawei’s reliance on U.S. technology.

I do not contend that China is benign or even that Mr. Trump has misdiagnosed the problem. Rather, my concern is that the president’s erratic approach has aggravated the situation by encouraging Mr. Xi to embrace decoupling on his own terms. After more than two decades of globalization, severing the integrated supply lines of the world’s two largest economies will necessarily be messy. For the U.S., Mr. Trump’s approach makes it even messier.

Dividers, Not Uniters

In a new book, Steve Kornacki looks back at the 1990s — and finds the roots of today’s polarization in the Clintons’ ascent.

..  the 1990s was until recently an invisible decade. “The holiday from history,” it was called, a “lull” where nothing much really happened, a candy-colored coma between the Berlin Wall’s fall on 11/9 and the 9/11 attacks less than a dozen years later.

.. The Red and the Blue, is a political procedural that sets out to explain how we went from giga-landslides in the ’60s, ’70s, and ’80s to Electoral College squeakers today, how Republicans disappeared from the coasts and Democrats died their final deaths in the South and Midwest.

.. it benefits from the context provided by Trump’s ascent, which has clarified that one big reason we’re seemingly reliving the 1930s today is because both the Left and Right spent the 1990s and early 2000s rehashing the culture wars of the 1960s and early ’70s.

.. Because cable and the Internet have so completely transformed American culture over the past two or three decades, it’s easy to forget (and younger people can’t even remember) just how norm-shattering Bill Clinton was, compared to the Greatest and Silent Generation leaders who came before him. To social conservatives and foreign-policy hawks, Clinton’s election was downright triggering, and deserved nothing less than full-on #Resistance. Historian Steven Gillon famously interviewed one who succinctly fumed that Clinton was “a womanizing, Elvis-loving, non-inhaling, truth-shading, draft-dodging, war-protesting, abortion-protecting, gay-promoting, gun-hating Baby Boomer!”

.. aside from Gary Hart, whose ill-fated career was recently reexamined in the Jason Reitman movie The Front Runner, America hadn’t had a youthful, truly sexualized major-party presidential nominee since JFK — until Clinton came along.

  • .. The Federal Reserve’s preference for financialization and neoliberalism was at its very peak under the influence of Paul Volcker and Alan Greenspan.
  • Nearly half of Americans still thought “sodomy” — never mind same-sex marriage or civil unions — should be illegal.
  • And while America was pro-choice, huge percentages of voters demanded restrictions to abortion-on-demand.

The Red and the Blue gives an excellent Gen-X-plaining of just how systemically, institutionally, and culturally impossible it would have been for Democrats to move even farther leftward than they did back then — of how much damage their “too far left” brand had done to the party in the ’80s and of the disastrous political consequences of Bill Clinton’s attempts to govern from the left in 1993–94, as epitomized by Hillary’s attempt at health-care reform. He reminds his readers with his trademark aptitude for facts and figures that America in the 1990s was still very much living in what Sean Wilentz called The Age of Reagan.

.. He manages, for example, to nail the most salient point of the abusive relationship between Bill Clinton and Newt Gingrich: that it was at heart a love story, and/or a co-dependency worthy of Dr. Phil. One man could simply not have managed to stay in office without the other.

.. It was Clinton hatred on the social right that gave us Gingrich, and it was Gingrich’s surefire ability to trigger the libs that protected Clinton year in and year out. “Do you want him – or me?” became the basic campaign pitch of both men.

.. his Officer Friendly approach to the media is just too naïve by half, especially for someone who is a cable-news host with considerable experience in online journalism. In Kornacki’s telling, reporters merely report, offering just the facts or serving as quickie Greek choruses and footnote sources. This might work for a tenth-grade term paper, but for a book that seeks to illuminate the decade that saw the rise of the Internet, the birth of Fox News, unprecedented media consolidation, and what Eric Alterman called “the punditocracy” at the height of its influence, it’s entirely inadequate.

From highly influential anti-Great Society “Atari Democrats” like
  • Michael Kinsley,
  • Joe Klein,
  • Sidney Blumenthal, and
  • Robert Samuelson and proudly un-PC pundits like
  • Camille Paglia,
  • Ben Wattenberg,
  • Bill Maher, and
  • Andrew Sullivan to donor-funded think tanks like
  • Heritage and
  • Cato, an entire intellectual infrastructure was shaping the national narrative for what became Third Way Clintonism well before the Clinton era began. Yet most of these people and institutions do not even appear in Kornacki’s index, or if they do, they’re curtly dispensed with in one or two lines.

.. It’s possible that with Donald Trump’s attacks on the press (and with some people using criticism of “the media” as an anti-Semitic dog whistle), Kornacki didn’t want to even go there.

.. But a book on 1990s polarization that omits Steve Jobs, Roger Ailes, and Bill Gates from its index? One that effectively ignores the O.J. trial, Maureen Dowd’s gendered, campy, sexist (certainly by today’s standards), Pulitzer-winning coverage of Monicagate, and Clarence Thomas vs. Anita Hill?

.. writers as far apart as Ann Coulter and Eric Alterman blamed Al Gore’s loss in 2000 on the media’s hatred of him (and his hatred of them)?

.. Limbaugh’s pioneering tactic (soon perfected by Gingrich, Coulter, and Karl Rove) of branding anyone whose politics were even slightly to the left of, say, Sandra Day O’Connor or Dianne Feinstein, as a Loony Liberal, Radical Leftist, or Femi-Nazi. From Clinton and Dubya well into the Obama years, red-meat conservatives intentionally fuzzed the line between corporate social-liberals and the true hard left of Michael Moore, Pacifica Radio, and Thomas Frank, and Kornacki captures their strategy perfectly.

.. Aside from the Obamas themselves, no other politician would even remotely disrupt or challenge Clintonistas’ hold on the Democratic party for another ten or 15 years. But Clintonism could only continue as long as the true far-left remained repressed, and as long as the economy kept humming.
.. When a fist-shaking socialist senator from Vermont lined up an army of Millennials in formation behind him eight years after the dawn of the Great Recession caused in no small part by Clinton-era financial policy, it became crystal clear that Newt Gingrich had won the war.
.. When they exited the White House, the Clintons left behind a Democratic party that working class, rural, and/or religious whites had become almost allergic to, one more dependent on African-American and Latino voters than ever.
.. Donald Trump cruised to triumph in 2016 using all of the dog whistles and wedge issues that Gingrich, Rove, Buchanan, and Ross Perot had refined to perfection.
.. And just as education-conscious, socially liberal white professionals reacted against Gingrich’s and Buchanan’s reactionary rhetoric in the late ’90s, Trump’s Republican party has now been effectively evicted from places as once-synonymous with the GOP as Long Island, Maine, New Jersey, San Diego, and Orange County.

How to Debate a Populist

In the 1960s, much like today, people with opposing viewpoints struggled to communicate with one another. Yet there was a civility to that era’s public debate that is nowhere to be found today, owing to liberal elites’ understanding that refusing to engage would only reinforce the “us versus them” mentality that fuels radicalism.

.. Dutschke tried to “unmask” Dahrendorf – the liberal establishment intellectual – as exploitative and undemocratic; Dahrendorf countered that Dutschke’s revolutionary rhetoric was naive, more hot air than substance, and ultimately dangerous.
.. The debate began with Thadden detailing his political views, offering an unapologetic assessment of Germany’s role in WWII, and explaining the rise of the NPD. Dahrendorf, a sociology professor, followed with an analysis of the NPD’s diverse membership, which included old Nazis, disillusioned identity seekers, and opportunistic anti-modernists.
..  Dahrendorf was adamant that the NPD’s fate should be decided by the voters, rather than the courts, which had declared the Communist Party illegal. Kaul reiterated this idea in a passionate statement (which had undoubtedly been agreed in advance by East German leaders) about the exclusion of West Germany’s Communists from the debate. Other panelists agreed. A liberal democracy, Dahrendorf concluded, cannot exclude radicals on one side, while tolerating those on the other.
.. It is hard to imagine today’s mainstream politicians and public intellectuals engaging publicly in such profound and mutually respectful debates with today’s radicals and upstarts, whether populists, economic nationalists, Euroskeptics, or something else. Those on the far left and the far right certainly are not engaging one another in this manner. Each side would rather preach to its own audience, accessible within media bubbles where there is little demand for genuine discussion of opposing views.
.. Many establishment leaders nowadays – the so-called elites who are the standard-bearers of the liberal democratic order – seem to believe that the risks of engaging with radical figures are too great: more exposure could mean more legitimacy. But this stance is itself highly risky, not least because it has translated into a willful blindness to the social changes that have fueled extremist ideologies – an approach that comes across to many as arrogant.
.. Recall US Democratic presidential candidate Hillary Clinton’s flippant assertion that half of her rival Donald Trump’s supporters comprised a “basket of deplorables.”
.. One cannot simply wish away extremists. Letting radical movements run their course, as some have suggested, is both reckless and dangerous, given the amount of damage they can do before they fail. To fulfill their responsibility as stewards of the public good, cultural and political “elites” must eschew elitism and find formats and formulas that enable more constructive engagement among diverse groups, including – as difficult as it may be – radical and populist movements.
.. Dahrendorf rightly proclaimed that extremists’ success was a measure of democratic elites’ failings. Like the NPD in the 1960s, the far-right Alternative for Germany (AfD) owes its success in last September’s federal election to the refusal of the country’s political, economic, and academic elites to engage constructively with the public, much less with those the public believed were willing to address their concerns.
.. Defenders of liberal democracy must debate the populists not to change the populists’ minds, but to make the public understand what each party really stands for, not simply against. Yes, this could mean giving populists more airtime, and it risks normalizing extreme views. But the threats associated with an aggressively polarized public sphere – one that extremists have proved adept at exploiting – are much greater.

Behind the Messy, Expensive Split Between Facebook and WhatsApp’s Founders

After a long dispute over how to produce more revenue with ads and data, the messaging app’s creators are walking away leaving about $1.3 billion on the table​

How ugly was the breakup between Facebook Inc. FB -0.18% and the two founders of WhatsApp, its biggest acquisition? The creators of the popular messaging service are walking away leaving about $1.3 billion on the table.

The expensive exit caps a long-simmering dispute about how to wring more revenue out of WhatsApp, according to people familiar with the matter. Facebook has remained committed to its ad-based business model amid criticism, even as Facebook Chief Executive Mark Zuckerberg has had to defend the company before American and European lawmakers.

The WhatsApp duo of Jan Koum and Brian Acton had persistent disagreements in recent years with Mr. Zuckerberg and Chief Operating Officer Sheryl Sandberg, who grew impatient for a greater return on the company’s 2014 blockbuster $22 billion purchase of the messaging app, according to the people.

.. Many of the disputes with Facebook involved how to manage data privacy while also making money from WhatsApp’s large user base, including through the targeted ads that WhatsApp’s founders had long opposed.

.. Messrs. Acton and Koum are true believers on privacy issues and have shown disdain for the potential commercial applications of the service.

.. Mr. Zuckerberg and Ms. Sandberg have touted how an advertising-supported product makes it free for consumers and helps bridge the digital divide.

.. When Facebook bought WhatsApp, it never publicly addressed how the divergent philosophies would coexist. But Mr. Zuckerberg told stock analysts that he and Mr. Koum agreed that advertising wasn’t the right way to make money from messaging apps. Mr. Zuckerberg also said he promised the co-founders the autonomy to build their own products. The sale to Facebook made the app founders both multibillionaires.

..  Small cultural disagreements between the two staffs also popped up, involving issues such as noise around the office and the size of WhatsApp’s desks and bathrooms, that took on greater significance as the split between the parent company and its acquisition persisted.

..  During the height of the Cambridge Analytica controversy, in which the research firm was accused of misusing Facebook user data to aid the Trump campaign, Mr. Acton posted that he planned to delete his Facebook account.

.. David Marcus, an executive who ran Facebook’s other chat app, Messenger, confronted his former colleague. “That was low class,” Mr. Marcus said

.. When Mr. Acton departed Facebook, he forfeited about $900 million in potential stock awards

.. Mr. Koum is expected to officially depart in mid-August, in which case he would leave behind more than two million unvested shares worth about $400 million at Facebook’s current stock price. Both men would have received all their remaining shares had they stayed until this November, when their contracts end.

.. It is also the antithesis of what WhatsApp professed to stand for. Mr. Koum, a San Jose State University dropout, grew up in Soviet-era Ukraine, where the government could track communication, and talked frequently about his commitment to privacy.

.. Mr. Koum, 42, and Mr. Acton, 46, became friends while working as engineers at Yahoo Inc

.. WhatsApp, which launched in 2009, was designed to be simple and secure. Messages were immediately deleted from its servers once sent. It charged some users 99 cents annually after one free year and carried no ads.

.. Mr. Zuckerberg assured Messrs. Koum and Acton at the time that he wouldn’t place advertising in the messaging service, according to a person familiar with the matter. Messrs. Koum and Acton also negotiated an unusual clause in their contracts that said if Facebook insisted on making any “additional monetization initiatives” such as advertising in the app, it could give the executives “good reason” to leave and cause an acceleration of stock awards that hadn’t vested

.. Mr. Acton initiated the clause in his contract allowing for early vesting of his shares. But Facebook’s legal team threatened a fight, so Mr. Acton, already worth more than $3 billion, left it alone

.. said the WhatsApp founders are “pretty naive” for believing that Facebook wouldn’t ultimately find some way to make money from the deal, such as with advertising. “Facebook is a business, not a charity,”

.. At the time of the sale, WhatsApp was profitable with fee revenue, although it is unclear by how much.

.. Facebook told investors it would stop increasing the number of ads in Facebook’s news feed, resulting in slower advertising-revenue growth. This put pressure on Facebook’s other properties—including WhatsApp—to make money.

.. That August, WhatsApp announced it would start sharing phone numbers and other user data with Facebook, straying from its earlier promise to be built “around the goal of knowing as little about you as possible.”

.. Some of the employees were turned off by Facebook’s campus, a bustling collection of restaurants, ice cream shops and services built to mirror Disneyland.

.. After WhatsApp employees hung up posters over the walls instructing hallway passersby to “please keep noise to a minimum,” some Facebook employees mocked them with chants of “Welcome to WhatsApp—Shut up!”

.. “These little ticky-tacky things add up in a company that prides itself on egalitarianism,” said one Facebook employee.

.. Messrs. Koum and Acton proposed several ideas to bring in more revenue. One, known as “re-engagement messaging,” would let advertisers contact only users who had already been their customers.

.. None of the proposals were as lucrative as Facebook’s ad-based model. “Well, that doesn’t scale,” Ms. Sandberg told the WhatsApp executives of their proposals

..  Ms. Sandberg wanted the WhatsApp leadership to pursue advertising alongside other revenue models, another person familiar with her thinking said.

.. Ms. Sandberg, 48, and Mr. Zuckerberg, 34, frequently brought up their purchase of the photo-streaming app Instagram as a way to persuade Messrs. Koum and Acton to allow advertising into WhatsApp.

.. “It worked for Instagram,” Ms. Sandberg told the WhatsApp executives on at least one occasion

..  Mr. Zuckerberg wanted WhatsApp executives to add more “special features” to the app, whereas Messrs. Koum and Acton liked its original simplicity.

.. Mr. Zuckerberg and Ms. Sandberg also wanted Messrs. Koum and Acton to loosen their stance on encryption to allow more “business flexibility,”

.. Mr. Acton—described by one former WhatsApp employee as the “moral compass” of the team—decided to leave as the discussions to place ads in Status picked up.