Peter L. Berger's Blog, page 192

Shale Isn’t OPEC’s Only Problem

When OPEC meets in Vienna next week to discuss an extension of the production cut agreement it brokered with eleven other non-cartel petrostates, America’s shale producers won’t be the only suppliers on its mind: a number of other non-OPEC nations are also notching production increases that, taken together, are counterbalancing the petrostate effort to reduce the global oversupply of crude. The WSJ reports:

Not counting the U.S. and the 24 countries in the OPEC-led coalition, the next five biggest producing countries are poised to increase their combined output by around 300,000 barrels a day, according to a Wall Street Journal survey of five oil research agencies and investment banks.

Canada and Brazil, the world’s seventh and 10th biggest suppliers, are projected to record the fastest production growth outside the U.S. this year as long-planned projects come online. Norway and the U.K. are also seen as raising production this year, though by smaller amounts. Of the five countries, only China’s output is expected to fall this year.

This is part of the new oil reality that Daniel Yergin recently described as one characterized by a “cost recalibration.” Outside of the petrostate stalwarts, producers are adjusting to today’s lower price environment by trimming the fat and reaping efficiency gains (enabled by information technology) to stay profitable even at $50 per barrel crude. We’re seeing that most clearly in America’s shale formations, but Brazil, Canada, Norway, and the UK are on the same track.

OPEC & co. will almost certainly agree to extend their cuts through the end of the year next week. Saudi Arabia and Russia, the two biggest producers by output in this makeshift coalition, have already expressed a willingness to constrain output through March of next year. At this point, a majority of OPEC’s membership has come out in support of more cuts, which could make next week’s summit “a bit of a non-event,” according to commodity analyst Jan Edelmann.

But if this plan had worked, it wouldn’t need to be extended—the fact that this group is being forced to continue to cede market share is in itself an admission of defeat. America may be this group’s enemy number one, but all around the world oil supplies are surging.

China and ASEAN Near A Code of Conduct?

Details are still emerging, but it looks like China and ASEAN have taken another step toward an understanding on the South China Sea, agreeing to a framework on a maritime code of conduct. :

After a meeting between Chinese and ASEAN officials in the Chinese city of Guiyang, China’s foreign ministry said the framework had been agreed upon, although it gave no details of its contents. […]

All parties “uphold using the framework of regional rules to manage and control disputes, to deepen practical maritime cooperation, to promote consultation on the code and jointly maintain the peace and stability of the South China Sea”, it added.

Chinese Vice Foreign Minister Liu Zhemin, in comments carried on state television, said the framework was comprehensive and took into account the concerns of all sides.

But he called on others to stay out, apparently a coded message to the United States.

“We hope that our consultations on the code are not subject to any outside interference,” Liu said.

China and ASEAN have been promising (and failing to achieve) a code of conduct for the past 15 years, so it may be premature to tout this as an achievement before the ink is dry. But the Chinese are already stating that the framework could be finalized by August, and they would probably not be raising expectations if a some kind of viable deal wasn’t at least within reaching.

As for China’s sharp rhetoric warning against external interference, it may well get its wish. The Philippines, which is chairing ASEAN this year, has lately been echoing Beijing’s line warning Washington to stay out of the South China Sea dispute. And the Trump administration has so far been missing in action, letting Beijing take the lead on bilateral talks taking a hands-off approach where the Obama administration got heavily involved.

Under these circumstances, China may try to seize the opportunity and wrap up these negotiations. The code of conduct will not be legally binding but will count as a diplomatic coup, demonstrating that China and its neighbors can resolve their differences just fine without Washington’s help.

Wisconsin Takes Aim at Occupational Licensing

In recent years, Republican governments in Midwestern states have taken the lead in cutting back on blue model bloat in areas like public employee unions and higher education. Now legislators in Wisconsin are looking to address another policy area where decades of bureaucratic decay has helped insiders at the expense of those trying to move up: Occupational licensing. The Associated Press reports:

A new council would be created to review the necessity of every occupational licensing requirement in Wisconsin under a bill being circulated for co-sponsors.

The measure unveiled Wednesday would require the submission of a report by the end of 2018 that recommends elimination of licenses and other changes rules and requirements. The Legislature in 2019 would then consider approving the recommendations.

There is a virtual consensus among economists that state-enforced training requirements for a variety of low to mid-skill jobs, from catering to hair-braiding to interior decorating, have grown excessive, exerting a major drag on economic growth and employment—especially for people who don’t have the time or money to take thousands of hours of costly courses to practice a basic trade that isn’t particularly dangerous and whose skills can easily be judged by consumers.

Licensing requirements for low-skilled work have exploded over the past decades for no other reason than that professional guilds have been able to capture state legislatures and used them to help entrench their market positions. Legislators in other states should follow Wisconsin in scrutinizing existing occupational licensing programs and assessing which ones actually serve the common good and which ones exist to protect narrow and well-connected interests.

Erdogan’s Goons Bring Turkish Violence to American Soil

Hours after Turkey’s President Erdogan met with President Trump, his security guards attacked a peaceful protest outside the Turkish embassy in Washington. As the New York Times reports:

Supporters and opponents of President Recep Tayyip Erdogan of Turkey engaged in a violent confrontation outside the Turkish ambassador’s residence in Washington on Tuesday night. Nine people were injured and taken to a hospital, the District of Columbia’s fire and emergency medical services said. [….]

The fighting sprawled into a park across the street as uniformed police officers, some in helmets and swinging collapsible batons, tried to restore order. Men in dark suits could be seen in the videos, punching and kicking protesters violently. The Anadolu Agency, a state-owned Turkish news service, reported that members of the president’s security team were involved in the fighting.

Sayid Reza Yasa, one of the organizers of the demonstration, said the protesters had not provoked the president’s supporters and were taken aback when they rushed through the police and across the street. Mr. Yasa said he lost a tooth and his nose was bloodied, as he was knocked to the ground and kicked repeatedly before the police were able to separate the two sides. [….]

“This is not acceptable,” Mr. Yasa, 60, said. “This is America. This is not Turkey.”

The video of the incident is harrowing:

#Erdoğan'ın korumaları kavgaya karıştı https://t.co/gsi1iQ68Ye #amerikaninsesi pic.twitter.com/Jv3g5E7AVA

— Amerika'nın Sesi (@VOATurkish) May 17, 2017

It also belies the blameless passive construction used by the Times and others in describing the attack. The women and old men being repeatedly kicked while lying defenseless on the ground were not “engaged in a violent confrontation.” Erdogan’s entourage, many of whom are visibly armed, used violence on American soil with impunity while the police did nothing to stop it.

This behavior from Erdgoan is not new. You might bring a group of violent security guards to the US once by accident and something goes wrong. Doing it twice means you mean it: it’s a demonstration of American weakness and of Erdogan’s sense of dominance over the ineffective loudmouths in Washington that will resonate through Turkey and the Middle East—and will be taken note of elsewhere.

Healthcare Is Too Expensive No Matter Who Pays For It

As Obamacare flounders, progressive Democrats have started to warm to the possibility of going even further and socializing health insurance altogether. Some commentators have speculated that the next Democratic Party presidential nominee will run on single-payer if the GOP has its way and guts the Affordable Care Act. But like many liberal social planning schemes, single-payer healthcare starts sounding much less appealing when accompanied by the mammoth tax bills that would be required to pay for it.

Reason reports on some fiscal forecasts for New York State’s proposed single-payer system:

The single-payer health care plan that cleared the lower chamber of New York’s state legislature on Tuesday would require massive tax increases to double—or possibly even quadruple—the state’s current annual revenue levels. […]

To pay for the single-payer system, [an advocate] suggested that New York create a new tax on dividends, interest, and capital gains that would range from 9 percent to 16 percent, depending on how much investment income an individual reports, and a new payroll tax that would similarly range from 9 percent to 16 percent depending on an individual’s income.

It was a similar prescription for massive tax hikes that sank Vermont’s experiment with single-payer health care in 2014. Funding it would have required an extra $2.5 billion annually, almost double the state’s current budget, and would have required an 11.5 percent payroll tax increase and a 9 percent income tax increase.

These eye-popping numbers point to a truth about healthcare that is often lost in Washington’s endless back-and-forth about how much the government should subsidize it: It simply costs too much no matter who is paying for it, and until we can find a way to sustainably bring down the cost of treatments and delivery, healthcare will continue to be an area of fierce contention and political warfare.

Yes, our policy should be oriented around expanding access to coverage in the near-term where possible. But in the long-term, our policy must be oriented around making healthcare cheaper—through new research programs, de-regulation, tort reform, intelligent immigration policy, and efforts to “push competencies down” so that medical professionals can do the same work with less training.

Ballooning healthcare costs are a menace to the middle-class and to public budgets. This is true now, and it would be true under single-payer. Our debate should be less focused on changing who pays for healthcare, and more focused on making it cost less in the first place.

China Spurs Submarine Spending Spree

A submarine race is underway throughout Asia, experts say, as China’s efforts to expand its fleet of submarines has the rest of the region scrambling to catch up. FT:

A rapid build-up of submarines in the western Pacific is fuelling Asian demand for vessels with advanced technology, defence groups say.

The number of submarines in the region is expected to rise to 250 from 200 within eight years, according to Singapore’s defence ministry, which warned this week of a growing risk of “miscalculations at sea”.

Quiet vessels with long-range firepower pose a challenge for planners seeking to keep Asian sea lanes open, said contractors and analysts gathered at a maritime defence exhibition in Singapore. […]

“If programmes proceed as projected, major change is afoot in the submarine operational picture in the region,” said Paul Burton, Asia-Pacific defence director at IHS Jane’s. “The common thread running through these developments is the introduction of increasingly modern, capable and quiet submarines.”

We’ve followed these trends piecemeal for some time now, but the FT gives the larger picture. It’s a story largely led by China, whose visible and rapid progress in expanding its submarine fleet have been spooking the neighbors. But as the FT piece makes clear, this is not a simple case of China against all, with a scary buildup from Beijing sending the rest of Asia into a tizzy. China has also been using the arms race to pull certain neighbors into its orbit, for instance courting Thailand with a controversial deal to purchase Chinese submarines.

In other words, this is as much a story about competing national defense industries as it is about a raw increase in capabilities across the board. In the current climate, where Asian countries are buying submarines from is nearly as important as the fact that they doing so—so that Australia’s decision last year to choose French contractors over the Japanese, for instance, was seen as a win for Beijing and a blow to Tokyo.

With Australia, India, Pakistan, South Korea, Indonesia and Myanmar all developing plans to expand their fleets, it doesn’t look like the submarine arms race will be slowing down any time soon. In the years to come, that will mean an increasingly volatile security situation in Asia, a lot more politically loaded defense lobbying—and surely some more industrial espionage, as China and its rivals seek to keep tabs on each other’s capabilities.

The Consolations of Ceremony

William Steig (1907-2003) was an American cartoonist. The cartoon that I like best showed a sad-looking man juggling a number of small balls. The caption read, “Most of the time I’m alone with my ritual.” I think I once encountered the living prototype of this cartoon character. I sat across the table from him at an academic conference. As soon as he was seated he took out all the objects in his jacket and trouser pockets—reading glasses, ballpoint pen, pocket diary, cell phone, some loose pieces of paper, wallet, clean handkerchief, keys on a key chain and, separately, car keys, English and Swahili pocket dictionary. He put all the objects in a line in front of him. He seemed troubled, kept looking up as if waiting for instructions, then re-ordered the objects on the table in a different sequence. That’s all he did repeatedly during the session, never said anything, and finally put everything back in his pockets and left the room.

I can claim no expertise on Confucianism, but I have wondered for a while whether some recent actions of the Chinese government can be explained in terms of Confucian rather than Marxist thought. So here goes. President Xi Jinping of China has taken some steps to re-institute the study of Marxist ideology in the Communist Party, including “scientific atheism.” Young party members are encouraged to sing the songs of the Cultural Revolution and stage the performances of its propaganda machine (“The East is Red”). The situation is changing with regard to official religion policy, though that policy varies from province to province. Thus in one province Christian crosses and other highly visible religious symbols were forcibly removed, while less conspicuous symbols were left undisturbed. President Xi has spoken favorably about religious traditions deeply indigenized in Chinese culture—Taoism, Buddhism—as contrasted with Christianity and Islam. Taoism is a rather obvious case for Xi’s preference, Buddhism less so (given its affinity with Tibetan “splittism”). I think it is correct to say that the regime cannot quite make up its mind, especially about Protestantism. The obvious problem with Catholicism is its foreign headquarters. The case of Protestantism is more complicated as seen from Beijing: On the one hand, the Protestant ethic is supposed to be good for modern economic development—something that Beijing fervently wants. (Some six years ago, when I had a conversation with the head of SARA, the State Administration for Religious Affairs, housed in what used to be the palace of an imperial concubine, he startled me by mentioning Max Weber’s view of Protestantism.)

On the other hand, Communist functionaries, then and now, are well aware of the role played by Protestants in agitating for human rights and democracy—something not wanted at all by the Party. This role is still important in Hong Kong, South Korea, and other uncomfortably close-by places. I will make the assumption that President Xi is a very intelligent politician, free of Marxist ideology, who recognizes that it can be used at times as li (ceremony) to legitimate the only thing that truly interests him—the continuing monopoly of power by the Communist Party—without giving credence to the empirical presuppositions of its absurd “theory.” Ceremony will not be allowed to interfere with the cold interests of Confucian statecraft. Everything will depend on how those interests are perceived at any given time. Come to think of it, politicians in Western democracies have an intuitive understanding of the relation between power interests and the symbolism of ceremony—as when Nancy Pelosi a few days ago said that Democrats should become a bit more flexible on the issue of abortion in order to win back the white working-class people who were wooed away by Donald Trump’s “populism,” or when Evangelicals voting for Trump despite his alleged lechery fell back on the old ritual of Christian forgiveness (after all, none of us is perfect and all of us sinners must be washed in the blood of Jesus).

I’m quite confident that Confucianism in its early history understood li as not just symbolizing the cosmic order but as maintaining and altering it. For example, if drought was caused by the failure of seasonal rains to appear at the appointed time, the imperial court had rituals at hand to force the rains to do what they were supposed to do. Ritual has the purpose of maintaining and restoring the tao, the proper cosmic order, in what we call nature, the political order, the family, the built-up world (architectural ritual), the human body (traditional Chinese medicine). A special multifunctional ritual is the taichi, well described as a meditational dance, in which human bodies direct their spiritual power into the real world. Confucianism rested on the foundations of the much older magical worldview of Chinese folk religion and the separate cult of Taoism. Confucianism, the product of a cultural elite, tempered the cruder magical aspects of the earlier worldview. It is some 300 years older than the Common Era by which we organize time. It should not surprise that the original worldview brought forth different, sometimes contradictory schools of thought.

Two important Confucian offsprings were the schools of Yun Kuang (a.k.a. Xunzi) and Mengzi (called Mencius in the West). Both sprang up during the turbulent period of the Warring States (c. 313-228 BCE). They differed in their views of how human nature relates to the cosmic order. Mencius had a more optimistic view, of a sort of natural law inscribed in all human beings. There is the most famous parable of Mencius: Even the most hardened criminal, coming upon a toddler playing perilously close to a ravine, will have the impulse to pull the child back into safety. An orderly state can be built on this beneficent human nature. Xunzi had a more pessimistic view of human nature, even when it is faced with the endangered toddler. After all, there are evil men who enjoy their capacity to hurt an innocent child. And some men will want to know whether the child belongs to their own tribe, or the enemy tribe on the other side of the lake. Xunzi has been called the founder of the legalistic school: One cannot rely on social order to be directly built on li, meaning the natural law in the hearts of Mencius’s compassionate criminal. One must have positive law to establish and enforce the proper order. This li supports the state, which is itself the source of law. If my idea of Marxism serving the Communist state has any validity, that is certainly an application of Xunzi’s pessimistic legalism, far removed from Mencius’ belief in the inherent goodness of men.

Tu Weiming has been in the forefront of the recent revival of Confucian thought in the United States and China, and elsewhere as well. This school of thought has produced an impressive package of scholarship, but for Tu and some others it has gone beyond objective scholarship to an affirmation of a Confucian faith. After teaching Chinese philosophy at Harvard for many years Tu became director of the newly established Institute for Advanced Humanistic Studies at Peking University. Though he moved to Beijing Tu retained a tie with Harvard, and continued to be both an expositor and an advocate of Confucianism. Over the years Tu has strongly criticized the widespread view that Confucianism is not a religion but only a system of social and political ethics.

Tu argued that a much more profound humanism can be based on a cosmology of interconnectedness between the human world and all other worlds. He was critical of the modern worldview in which man is alienated from all these connections. Beginning in 1956 Eric Voegelin (1901-1985) started gigantic project—a philosophy of history as a huge move from compactness to differentiation, away from the kind of cosmology which Tu admired. The first three volumes came out quickly, dealing with the ancient Near East and classical Greece, each of which broke up the primordial unity through what Voegelin called “leaps in being.” The original project intended to cover all the great civilizations, including China and Rome, and conclude with the modern world. Voegelin was a genius, but the project was too much even for him. It was never finished, but it placed the Chinese case in a very different conceptual scheme than Tu’s—and, I think, a more balanced one. Tu and I got into a rather sharp debate (though we always remained friends): I said that I had a big stake in the alienation he deplored, but which I valued as the precondition of individual freedom.

It is many years ago since I first landed in Chinese territory, though it was not on the mainland (that came somewhat later) but in Taiwan, at the beginning of my series of East Asian discoveries. It was also my first experience of the distinctive trans-Pacific jetlag. I arrive in Taipei barely conscious, took a taxi to my hotel, and promptly fell asleep. Of course I awoke early, went to the window and had my first glimpse of a prototypical Chinese scene. I looked out at the large hotel garden. About twenty elderly men and women were doing something I had never seen before. In the faint light of early dawn the little group went silently through the graceful movements of the taichi. I was very impressed and said to myself—“Oh my God, I am in China!”

The New Oil Reality

The global oil market is so different today as compared to what it was three years ago that it’s borderline unrecognizable. These changes are being hammered out in a battle between petrostate producers on the one side pushing for a rebalancing of supply and demand by cutting their own output, and a group of upstarts on the other, led by U.S. shale companies, that want to fight to bring the costs of production down permanently from their previously high ($100+ per barrel) levels. No one is more qualified to put this in its proper context than the famed oil historian Daniel Yergin, and in a recent piece for the WSJ he traces what he calls a “cost recalibration” that’s affecting producers not only in America’s shale formations, but outside of the United States as well. He writes for the WSJ:

This cost recalibration is happening everywhere, as a new analysis by IHS Markit shows. Canada’s oil sands have always been among the highest-cost, yet some new projects can produce near $50 a barrel. In Russia, costs have come down more than 50%. Even deep waters offshore can now produce at less than $50. In March the CEO of the Norwegian company Statoil told the CERAWeek conference that owing to a wholesale redesign, a project in the North Sea that had originally required $75 a barrel to be economical now needs just $27 a barrel. […]

As oil producers get back to business all over the world, some of the big cost savings will be given back, which will support rebalancing—so oil prices will rise. But the entire business has been recalibrated to a lower price level. An industry that had become accustomed a few years ago to $100 oil now regards that as an aberration that will not recur absent an international crisis or a major disruption. The lessons about costs since the price collapse are not going to go away. They are too powerful to forget, and too painful.

From Yergin’s expert point of view, the days of $100 oil are behind us, barring some unforeseen catastrophe. That is a major shift not only for the oil market, but also for how we think of energy in the 21st century. While not entirely diminished, fears of scarcity are being replaced by concerns over downstream bottlenecks and how best to handle this newfound abundance of hydrocarbons. These are, as they say, good problems to have.

There’s another thought here: one of the big drivers in the falling costs of oil production is the use of information technology at all levels of the production process—from looking for likely places to drill to the design of rigs and all through the pumping and refining process. These enhanced efficiencies are likely to continue as the full impact of IT is only beginning to be felt.

It’s hard to exaggerate just how striking this is. The oil industry is more than 150 years old, and oil ‘should’ be getting more expensive to find and to pump, not less. The most obvious oil fields should have been found first, and the most promising wells dug long ago. We should now be living in a world of diminishing returns, with more and more money chasing less and less oil. It was this prospect that led so many doom and gloom thinkers in the 20th century to agonize over ideas like “peak oil”.

All that may happen some day, but apparently not soon. The information revolution is so powerful that it can reverse what would otherwise be the natural tendency of the oil market.

But this points to two even bigger stories. One is that the same forces that are making oil and gas so much cheaper and easier to find and extract will also be affecting other commodities. We can expect mining to become more efficient as well, and in fact there’s already evidence of that happening.

And there’s more. One of the big mysteries of the information revolution is the question of productivity. We keep using all this tech that clearly lets us do more with less, but instead of galloping higher, productivity levels have stagnated. What’s going on?

It’s possible that the productivity increases are appearing as lower prices rather than as higher incomes. If the price of oil falls from $100 per barrel to $50 per barrel due to increasingly cheap and efficient methods of production, then everybody in the industry is more productive in terms of barrels of oil per hour of work, but since the oil price has gone down, that productivity increase won’t be captured by statistical methods that calculate productivity in terms of money.

And that is just part of the larger story: that the extraordinarily deep and sustained collapse in the price of information is disguising the enormous increase in the productivity of everyone who works with the defining product of our time. Journalists, to take one (for the staff here at TAI) depressing example, are producing much more “information” than ever before. Armed with the internet, the TAI writers can cover a range of subjects with a wealth of detail on a daily basis in a way that a much larger staff simply could not have matched 20 years ago.

On the other hand, the very explosion in the productivity of writers generally has meant a rapid collapse in advertising revenue. Measured in units of information processed and produced, the TAI staff is much more productive than past generations of journalists; but the very abundance of supply caused by the productivity of the sector leads to a crash in values that, again, makes the productivity revolution invisible to methods of measurement that look solely to revenue per work hour.

At the same time, the collapse in the cost of information helps disguise the enormous increase in living standards for most people. Anybody connected to the internet and using a smartphone today devours quantities of information today that medium sized companies could not produce in the 1970s. The African villager with a solar powered smartphone has more access to more information than Louis XIV in the halls of Versailles.

But since the cost of this product is falling so quickly, the rise in living standards we are living through isn’t measured.

Just as the industrial revolution forced economists and businesses to find new ways to measure output, the information revolution is likely to lead to revolutions in the way we measure economic performance in the 21st century.

Pakistan: China’s Next Economic Colony?

An official Chinese document recently leaked in Pakistan, detailing Beijing’s long-term plans for the China-Pakistan Economic Corridor (CPEC)—and it’s causing serious concern in India. The Hindustan Times has more:

According to the details, thousands of acres of agricultural land will be leased to Chinese enterprises to set up “demonstration projects” in areas ranging from seed varieties to irrigation technology, and a system of monitoring and surveillance will be built in cities from Peshawar to Karachi, with 24-hour video recording of roads and busy marketplaces for law and order.

A national fibre-optic backbone will be built for Pakistan, not only for internet traffic but also for terrestrial distribution of broadcast TV, which will cooperate with Chinese media in the “dissemination of Chinese culture”.

The Dawn reported the plan envisages a deep and broad-based penetration of most sectors of Pakistan’s economy and society by Chinese enterprises and culture. Its scope has no precedent in Pakistan’s history, in terms of how far it opens up Pakistan’s economy to participation by foreign enterprises.

CPEC is the $46 billion flagship of China’s One Belt, One Road (OBOR) initiative, and it’s been causing India anxiety for some time now, combined with Beijing’s other recent overtures to Islamabad. Indeed, New Delhi went so far as to boycott this weekend’s Belt and Road Forum in protest over CPEC. India’s objections were partly about specific projects—one that runs through Kashmir in particular, and another that will lease Pakistan’s Port of Gwadar to a Chinese state firm for the next 40 years. Its more fundamental complaint, though, is that China’s strategy amounts to an immense debt trap, intended to ensnare neighbors like Pakistan in order to bring them into Beijing’s orbit and encircle India.

The leaked document is certainly reinforcing that perception within India. In a typical reaction, the India Times claims that China’s proposals “would do the East India company proud,” turning Pakistan into an “economic colony of China” and amounting to a “virtual ring-fence of India.” From New Delhi’s perspective, Beijing’s plans threaten to create an unholy alliance between its two main strategic rivals, allowing China to project influence deep into India’s backyard under the guise of a benign infrastructure push.

It’s of course still an open question whether Beijing’s grandiose plans will ultimately come to fruition. Many Pakistanis, after all, also object to the scope of China’s ambitions in their country, and local unrest has already caused early headaches complicating China’s best-laid investment plans. The Chinese document itself acknowledges as much, citing Pakistani security concerns, terrorism risks and tribalism as obstacles to the realization of China’s ambitions. (Some even suspect that Modi himself is exacerbating tribal tensions to frustrate Beijing’s goals.)

The thing is, China’s initiative doesn’t even have to succeed for it to shape events in India’s neighborhood for the foreseeable future…

Don’t Kick Voice of America When It’s Down

The Voice of America (VOA) celebrated its 75th anniversary in March, but it didn’t have much time to savor its diamond jubilee. Just a month later, the U.S. government-supported news and information agency was engulfed in controversy over the abrupt termination of a live television interview with exiled Chinese businessman Guo Wengui. The target of a PRC-initiated “red notice” on Interpol, Guo is no dissident or conscience-stricken whistleblower; on the contrary, he was a player in the Chinese system who, having decamped to New York in 2015 after a failed acquisition deal, is now waging a one-man campaign against a long list of his former partners in cronyism.

Guo’s alleged shady business dealings, however, don’t make him any less newsworthy. In April the New York Times and the Economist reported on his claims, treating them, appropriately, not as facts but as unsubstantiated allegations. Two Chinese-language television channels, Mirror Media in Long Island and the VOA Mandarin service, hosted live interviews. And on May 6 the Australian stated, “Guo has a massive Twitter following and threatens to trigger a political earthquake.”

Should that earthquake occur, VOA will be part of the story—but not in a good way. VOA deserves kudos for being one of the first U.S. news organizations to pay serious attention to Guo. But because of missteps in the planning and execution of the interview, the agency’s many critics at home and abroad are now accusing it of having yielded to pressure from the Chinese government.

Here’s what happened. In early April, the VOA Mandarin service contacted Guo, who insisted that the interview be live and held in his Manhattan penthouse. As seasoned journalists, the VOA team members were not happy with these terms, but, judging the interview important, they agreed—while also setting their own terms, which included examining Guo’s documents in advance, conducting a lengthy pre-interview, and warning him that they were going to challenge his claims and cut off any unfounded accusations against named individuals.

On Friday, April 14 (five days before the scheduled date), VOA began promoting the interview as a three-hour program, the first hour broadcast live on VOA’s satellite television channel, and the second two hours live-streamed on VOA’s Facebook page. The following Monday, April 17, the Chinese Foreign Ministry invited the chief of the VOA Beijing bureau to “tea,” meaning a friendly chat that just happened to include a subtle hint that, if the interview went ahead as scheduled, VOA staff might lose their visas and other “conveniences” provided by the Chinese authorities.

That same Monday (12 hours later on the east coast of United States), the VOA team members were driving to New York when they received a call from upper management expressing concern about the interview. Accounts differ, but everyone I spoke to agreed that no decision was taken at that time, either to shorten the interview or to record it in lieu of doing it live.

That decision was short-lived. The next day, Tuesday, April 18, the VOA team received more calls from Washington, as well as an email from VOA director Amanda Bennett, who was visiting VOA outposts in East Africa. Here again, accounts differ. But the gist seems to be that VOA’s leaders were worried about possible blowback from the interview, while the journalists were upset at having their professionalism impugned.

On Wednesday, April 19 (the day of the interview), the Chinese Foreign Ministry admitted ordering an Interpol red notice against Guo. The United States rarely acts on such notices, especially when initiated by authoritarian regimes. There was a time when Interpol itself refused to issue notices that were political in nature. But that seems to be changing, especially now that the new Interpol President (elected in November) is Meng Hongwei, a former Deputy Minister of Public Security in China.

In the end, the VOA interview proceeded as planned for the first hour, but twenty minutes into the Facebook part, it was shut down—not by the censors in Beijing, but by the higher-ups in Washington. Chronology is not causality, but let’s not kid ourselves. Amid a domestic political climate that is, at best, indifferent to the kind of work that VOA does, the optics here are bad.

That’s why I want to end with a defense of VOA. As the largest of five networks in a $778 million media organization providing news and information in 61 languages to 100 countries around the world, VOA is hardly the Cold War relic some believe it to be. On the contrary, both it and its sister networks (Radio Free Europe/Radio Liberty, Radio Free Asia, and others) are highly adept at using every existing media platform, from radio to television to digital to mobile, to reach audiences in some of the poorest and most closed societies on earth.

Indeed, these networks may be more skilled in this respect than their commercial counterparts, which do not even try to reach such audiences, they do not constitute lucrative markets for advertisers. That’s why VOA needs government support. But that doesn’t make it a “government mouthpiece.” Along with fellow public broadcasters PBS and NPR, not to mention the hallowed BBC, VOA strives to reconcile editorial independence with a mission that extends beyond the commercial incentives of most private-sector media, as well as the political priorities of most state-owned media.

Simply put, that mission is to further the nation’s agenda as forcefully as possible without engaging in propaganda. This is nothing to apologize for. Despite the occasional mistake, VOA has always sought to uphold the American tradition of truth-based persuasion, rooted in constitutionally protected freedoms of speech, press, and debate. That tradition is now imperiled in every corner of the world, including the United States. So by all means, let’s investigate what went wrong with the Guo Wengui interview. But please, not in a spirit of recrimination.