Guatemala Doesn’t Need Bernie Sanders

Central America has already tried his style of social justice and found it wanting.

In a Democratic debate last week, Vermont Sen. Bernie Sanders argued that to deal with the migration crisis at the U.S. southern border, “we’ve got to ask ourselves, ‘Why are people walking 2,000 miles to a strange country where they don’t know the language?’ ”

It’s a sad day when a septuagenarian U.S. senator can’t grasp the reason for Central American poverty.

The migrants were born in countries that lack rule of law, respect for private property, and economic freedom. The nations of the Northern Triangle—El Salvador, Guatemala and Honduras—instead have pursued Sanders-style social justice as a path to prosperity. It’s hardly a surprise their citizens enjoy neither.

Environmental mobs close down mining projects and chase away investors. Activists block roads to shake down the government; they invade farms and steal electricity with impunity. Well aware that upward economic mobility is nearly impossible, Central Americans vote with their feet.

The prospects for change aren’t promising. Ideas matter, and for generations the global left—mostly from Europe and the U.S.—has treated the region as its sandbox, where it goes to play with policies that don’t sell at home. Central America is macerated in the collectivist bunk of this elite, who promise utopia and deliver special-interest mercantilism and corrupt statism.

This is one reason Guatemalans were freaked out Friday when their Prensa Libre newspaper reported that Speaker Nancy Pelosi would lead a congressional delegation to Guatemala City this week “to meet with civil society, businessmen and other sectors.” Her office declined to comment for security reasons. But if she is going, it is worth asking why she would visit in the week before the Aug. 11 presidential runoff election.

The election is an important milestone in Guatemalan politics, and the deciding factor may be urban turnout. Despite a solid lead in a recent poll, center-right Vamos Party candidate Alejandro Giammattei isn’t a shoo-in. If voters in the big cities stay home, social democrat Sandra Torres of the National Unity of Hope Party could prevail.

Ms. Torres was first lady during the presidency of Alvaro Colom (2008-12) but divorced him in 2011 in an attempt to circumvent a constitutional prohibition on consecutively following a spouse into the executive office. The high court didn’t buy it, but she did make an unsuccessful run in 2015.

Ms. Torres is a left-wing populist. Her party, which is known as UNE, dominates rural and small-town Guatemala. Pocketbook issues are a priority in these parts and machine politics are the name of the game. By promising things like child and elder subsidies and tin roofs, UNE maintains a solid base.

Mr. Giammattei is by no means the first choice of Guatemalan conservatives. That designation goes to Zury Ríos, daughter of the late Gen. Efraín Ríos Montt, who held the presidency for less than 17 months after a 1982 coup. Ms. Ríos is a popular politician and made her own run for the presidency in 2015. This time around, the constitutional court blocked her candidacy because of her father’s role as a military dictator.

Yet Mr. Giammattei ran the prison system and pledges a tough-on-crime agenda. He says he will bring investment to the country. With UNE controlling Congress and much of the judicial branch, voters may prefer an executive check on social-democrat power.

Both candidates oppose the immigration-cooperation framework agreement that President Jimmy Morales signed with President Trump in July. The accord is short on detail, but as protocols are added, the expectation is that it will oblige Salvadorans and Hondurans who try to move north to the U.S. to apply for asylum in Guatemala. Speculation was running wild last week that Mrs. Pelosi’s visit was partly aimed at derailing the agreement for domestic American political reasons.

Both candidates promise to fight corruption, but voter apathy implies a high degree of public skepticism. The United Nations International Commission Against Impunity in Guatemala—a k a CICIG—was supposed to bring about the rule of law. But somewhere along the way the left realized it could use CICIG, accountable to no one, to grab power without the fuss of elections. A judicial reign of terror, designed to silence opposition, ended only in January, when President Morales kicked CICIG out of the country.

The media ran news stories for nearly a decade that read like CICIG press releases. But in March the Guatemalan attorney general petitioned the court to arrest CICIG’s closet Guatemalan collaborator, former Attorney General Thelma Aldana, on corruption charges. As the country’s top prosecutor, she ought to have protected civil liberties. Instead she permitted the commission’s abuses while it refused calls to investigate her. Guatemalans are still trying to recover confidence in their justice system.

Ms. Aldana, who had presidential aspirations, says she is being politically persecuted. But she has fled the country rather than face trial. If voters are uninspired by their political class, and afraid of help from Democrats, who could blame them?

U.S.-China Trade Standoff May Be Initial Skirmish in Broader Economic War

The United States is increasingly wary of China’s emerging role in the global economy and the tactics it uses to get ahead, including state-sponsored hacking, acquisitions of high-tech companies in the United States and Europe, subsidies to crucial industries and discrimination against foreign companies.

The Trump administration has begun trying to limit China’s economic influence in the United States and abroad, warning about China’s ambitions in increasingly stark terms. Mike Pompeo, the secretary of state, compared China’s ambitions to Russia and Iran in a speech in London last Wednesday, saying Beijing poses “a new kind of challenge; an authoritarian regime that’s integrated economically into the West in ways that the Soviet Union never was.”

China, whose ambition is to dominate industries of the future, is pushing back. A column on Saturday in the Communist Party’s People’s Daily newspaper stated, “The United States is again waving the club of tariffs after misjudging China’s strength, capacity and will, further escalating trade friction between our two countries.”

The piece was written under the pen name Zhong Sheng — the “voice of China” — a name used when the paper publishes comments on foreign affairs that are authoritative.

Restraining China’s ambitions and methods is a tricky task — and there is concern that the Trump administration’s effort is creating a new red scare, fueling discrimination against China and its citizens that could ultimately hurt the United States. As many as 30 Chinese professors have had their visas to the United States canceled in the past year, or been put on administrative review, according to Chinese academics and their American counterparts.

“We’ve got decades of painful negotiating with China ahead,” said David Lampton, a China scholar at Stanford University. Mr. Lampton said a trade deal, if reached, would do little to resolve the bigger conflict. “It’s just a skirmish in an ongoing battle.”

.. While a trade deal could calm some tensions and establish more good will between the two nations, it is unlikely to achieve many of the ambitious goals that the administration has set for itself. Mr. Trump’s advisers, in particular the United States trade representative, Robert Lighthizer, have been focused on what the administration calls China’s practices of “economic aggression.”

But the administration has struggled to address the immensity of the problems in the text of a trade deal. People close to the talks say that the negotiators appear powerless to force any changes that aren’t in China’s interest.

Mr. Liu, who is leading China’s team in the trade negotiations, hinted at that uphill battle in a video statement released by the official Xinhua news agency.

Instead, a trade deal between the two countries seems more likely to bring change around the margins — tens of billions of dollars of soybean purchases, some tariffs lifted and changes to the text of Chinese laws or regulations that the country might ultimately disregard, particularly once another administration occupies the White House.

This is a decades-long endeavor,” said Robert Daly, the director of the Wilson Center’s Kissinger Institute on China and the United States. “This can’t be waved away over cake at Mar-a-Lago.”

The notion that the United States has one last shot to change China’s behavior is held by an array of people on both sides of the political spectrum. But it is an aggressive notion of American power to upend a rival system that has delivered prosperity for its people and put China on course to be the world’s largest economy.

Many in China see the United States as a declining power bent on enforcing its will on a world that no longer cowers before its hegemonic might. The troubles in American democracy and the long economic slump after 2008 persuaded many in China that its instincts to chart its own course were correct. In the eyes of many Chinese, their country is simply reclaiming its historic status as a dominant regional power in Asia.

It has also projected power across Asia, Africa and elsewhere while the United States has, on many fronts, retreated from its post-World War II commitment to the global order. But it has done so with little application of military force, in sharp contrast to what many in China see as American militarism.

Many in China have sought to avoid a trade conflict, which could have a larger impact on their economy than the United States’. But they have long thought the United States would have a difficult time accepting a true peer in economic, technology and military power, so consider the management of conflict with the United States to be an inevitable result of their own rise.

While the Trump administration accused China of breaking a trade deal, China’s resistance to the emerging terms stemmed from its belief that the United States was asking too much and offering too little in return. Many of the changes the United States seeks would limit what Chinese officials regard as a tried-and-true approach of using tens of billions of dollars from state-owned banks and government investment funds to turn previously small industries like car production or solar panel manufacturing into the largest industries of their kind in the world.

And the Chinese view some of the Trump administration’s demands as infringing on their sovereignty and giving America too much power over their economy — including requiring the country to codify changes through legislation in the National People’s Congress. To the increasingly nationalistic public in China, the American requests are reminiscent of 19th century history of unequal treaties forced on the country by foreign powers.

Mr. Trump on Saturday suggested China was simply delaying a deal in the hopes that a Democrat would win election in 2020 and continued his pugilistic approach, saying “the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!”

In the United States, China’s unwillingness to bow to America’s demands is uniting lawmakers like the Democratic Senate leader, Chuck Schumer of New York, and Senator Marco Rubio, Republican of Florida.

That is a significant shift from the prevailing view in the United States since the death of Mao Zedong in 1976 that close economic engagement with China would produce an increasingly democratic country that would be closely tied to an international economic order founded mainly on Western liberal ideals.

That has not happened.

China has indeed grown in prosperity, leaping into the ranks of what the World Bank defines as upper-middle income countries. Its economy is now bigger than any other country except the United States. Its manufacturing sector is now bigger than those of the United States, Germany and South Korea combined.

But in the last five years, China has veered toward increasingly repressive authoritarianism at home and a rapid military buildup. The State Department estimates that Beijing has put 800,000 to two million Muslims in hastily built internment camps ringed with barbed wire in northwestern China. The Chinese government has built an archipelago of air bases on artificial islands in the South China Sea in between Vietnam, Malaysia, Indonesia and the Philippines. And China now has the world’s largest navy and has conducted

China has indeed grown in prosperity, leaping into the ranks of what the World Bank defines as upper-middle income countries. Its economy is now bigger than any other country except the United States. Its manufacturing sector is now bigger than those of the United States, Germany and South Korea combined.

But in the last five years, China has veered toward increasingly repressive authoritarianism at home and a rapid military buildup. The State Department estimates that Beijing has put 800,000 to two million Muslims in hastily built internment camps ringed with barbed wire in northwestern China. The Chinese government has built an archipelago of air bases on artificial islands in the South China Sea in between Vietnam, Malaysia, Indonesia and the Philippines. And China now has the world’s largest navy and has conducted military exercises as far away as East Africa and the Baltic Sea.

On the economic front, the competition is even fiercer. Trump administration officials warn that China is trying to dominate the global 5G infrastructure that will be the basis for future mobile communications and is competing to set other technological standards that will determine which global companies win.

China is extending low-cost loans and building infrastructure around the globe through its One Belt, One Road program, which critics warn is making poorer countries beholden to China. It is out-investing the United States in some high-tech industries, and is gaining dominance in certain segments, like mobile payment, new energy vehicles and areas of artificial intelligence.

While American companies have long hankered for access to China’s growing market, their position has begun to shift as they see China’s practices and treatment of foreign companies. A survey released by the American Chamber of Commerce in China in February showed that the majority of its members favored retaining tariffs on Chinese goods while trade negotiations continued.

China’s own experts say that the Beijing leadership has been caught off guard by the pace of change in American perceptions of Sino-American relations.

“Even if there is some kind of agreement between Xi and Trump, in the long run the strategic bilateral relationship is already in trouble,” said Zhang Jian, a professor in the School of Government at Peking University. “There is no coming back, even if there is a deal.”

Airbus’s Lesson for Young Socialists

Its A380 debacle shows how hard it is for state planners to outguess markets.

Years ago, when an editor asked me if Boeing would be around to pay off a 100-year bond it had recently offered, I flippantly replied that 100 years was only two product cycles for the company.

I underestimated the duration of its products. The Boeing 747 first flew in 1969 and a freighter version will continue to be built near Seattle at least through 2022. The Boeing 737, which first flew in 1967, faces an order backlog that extends through 2027. An all-new replacement for the commuter workhorse is unlikely to appear until the 2030s.

Which makes all the more anomalous Airbus’s decision to end production of its impressive and giant A380, which has been flying only since 2005.

Socialism is currently in vogue. If the word means anything in today’s context, it means projects of unusual government ambition, built on our globally shared capitalist technological and commercial base. The A380 was exactly such a project. Underwritten by massive European government subsidies, the plane was an engineering sensation. Passengers loved the roomy jet. Yet now it’s kaput. What went wrong? Or to phrase the question more usefully, what technological and commercial realities would its sponsors have had to overrule to assure its success?

The list is not a short one. They would have had to overrule the desire of passengers to fly direct, bypassing the crowded hub airports (like London’s Heathrow) for which the A380 was built.

They would have had to overrule the preference of business travelers for frequent departures. With 535 seats to fill, the superjumbo was hopelessly matched against operators offering more convenient schedules by using smaller planes.

Most of all, they would have had to overrule the public’s appetite for lower fares. On a per-seat basis, a new generation of super-efficient twin-engine planes such as the Boeing 787 proved cheaper to operate even though the four-engine A380 could accommodate twice as many customers.

In the end, enough socialism could be mobilized to get the plane built, but not enough to make it commercially viable. Europe’s governments would have needed to extend their dominion beyond their own taxpayers who financed it. They would have needed to dictate to the world’s airlines and travelers and even the aerospace industry’s global supplier base, which proved unwilling to develop a new fuel-efficient engine for a plane with a doubtful future.

This should guide us in our thinking about what kind of “socialism” is possible today. Governments can tax their own people until they rebel at the ballot box, refuse to pay, or emigrate. They have no power, in our world, to dictate what kinds of goods and services and technologies (green or otherwise) the global marketplace will accept.

Robert Mugabe’s Long Shadow

The despot of Zimbabwe was ousted in 2017. But much remains of his tyranny and misrule.

This month, after President Mnangagwa raised the price of gasoline by 150 percent, protesters hit the streets. Mr. Mnangagwa arguably had no choice, since the government could not continue subsidizing fuel, and the protests were inevitable. The problem was that security forces replied with all the viciousness of the Mugabe era — a crackdown like what Mr. Mnangagwa used to mete out when he was in charge of internal security and earned the nickname “Crocodile.” Soldiers and unidentified thugs went door to door in Harare beating and arresting scores of people at random; 12 shooting deaths were reported; the internet was shut down.

.. Whether he ordered the crackdown remains unclear; one rumor is that his vice president, Constantino Chiwenga, a hard-line former commander of the army who backed Mr. Mnangagwa in the coup, was trying to undermine the president for his own ends.

It almost doesn’t matter. What does is that many Zimbabweans — and potential international investors — concluded that things had not changed with the exit of Mr. Mugabe. The ZANU-PF political machine that the old dictator ran since independence in 1980 was still in command and up to its old ways.

.. A few weeks later he was in Davos, spreading the word that Zimbabwe was “open for business.” At home, he declared that “the people’s voice is the voice of God,” and he promised free elections.

..the 40-year-old challenger, Nelson Chamisa, claimed fraud, and when his supporters gathered in protests, government forces crushed them mercilessly.

.. The economic challenges before Zimbabwe are enormous: vast debts, a battered infrastructure, hyperinflation, soaring unemployment. Confronting them will require foreign aid and investment, lifting the international sanctions imposed during Mr. Mugabe’s rule and restoring a glimmer of optimism for the future in a population that will be asked to make more sacrifices, like the fuel price increase, before things can get better. Under American law, removing sanctions requires a nonpartisan army and respect for the rights and freedoms of all people.

It is far from clear whether Mr. Mnangagwa or ZANU-PF are up to the challenge. But if they have any hope of surviving in office or lifting Zimbabwe out of the mess they helped create under Mr. Mugabe, the time to start is now, by immediately reining in the security forces and opening the dialogue Mr. Mnangagwa has pledged with the opposition and civil society. The United States and other potential donors could create an incentive by preparing a major package of assistance once the Zimbabwe government shows it is really committed to change.