According to the CIA, Australia is running a $10 billion a year trade deficit with America...an impressive feat considering America itself is running a deficit of over $600 billion a year with the rest of the world.

Thanks for that, David.

Monkyboy's understanding of economics is probably on par with the rest of his knowledge base. But I could be wrong. So tell us, bright boy, just what do those numbers mean - and what sorts of circumstances might explain it?

Well, Joe, it's not like economics is a real science, but there's a lot of common sense in it.

What explains our current circumstances?

Chinese workers save almost 40% of their income. They are happy to lend their savings to Americans so we can buy the products the Chinese are producing.

The U.S. government is running a huge deficit, and for the first time since the Great Depression, American families are now spending more than they earn.

It's hard to say where this will end.

Debt represents claims on future income.

If the income is there, no problem. If it's not...huge problem.

Considering the U.S. economy hasn't grown at the global annual average of 4.5% in many years...I'm thinking...huge problem.

#2 from Grim: "Thanks for that, David."

Thank you, Grim. I'm just learning to post stuff. That was the first article I put up myself, and Joe is still teaching me how to do stuff like "categories". So it's encouraging to find that my first post was welcome to someone who has himself posted a lot of good stuff. :)

Do you (does anyone?) know where there's information on what other coalition countries thought the goodies were, how they aimed at them and how they went?

I thought about comparing Australia with the United Kingdom and Poland, but as far as I know nobody has published anything on (a) what they most wanted, in terms of military links, intelligence cooperation or whatever, and (b) when they started doing what to get what they wanted. What was the plan?

Without knowing what their wish list was, and without some notion of how they thought it might get filled in, an article saying "Poland doesn't feel sufficiently rewarded" doesn't do me any good for this purpose. There were plenty of such articles, but what was your plan, Stan? "Nothing comes from nothing; nothing ever could..."

My impression has been for a while (and Greg Sheridan strongly confirmed it) that Australia, like most countries, pretty much has the relationship with America it chose and went for. America is so busy and distracted, it's responsibilities are so heavy, that it is likely to take as final anything consistent with its own interests and values that its weaker partners push at it. (Assuming you can get the Americans' attention in the first place, which is why George W. Bush was worth champaign and Albert Gore, successor to William Jefferson Clinton, who had been no friend of John Howard's, would not have been.) If you want a great relationship, fine: the American president will stand there and say "I'm George Bush and I endorse this alliance" or words to that effect. And if you want a relationship based on hostility, gratuitous insult and contempt, as Hugo Chavez, President of Venezuela evidently does, you can have that too. As far as I know, the Americans didn't even answer his speech.

I think America's default foreign policy is: "Whatever. Next!"

The idea, which I've seen pushed in the blogsphere most passionately by French posters, that America is a big bully that tries to dictate every little aspect of your country's policies (for, implicitly, no reward or payoff) strikes me as crazy. Who in the American executive has time for that? If you are a serious player, how can you possibly have hours in your day to spend on the French? In fact the French have chosen their relationship with America, with American diplomacy having little to do with it. I think that's normal.

I can point to one guy who wanted something, went for it, and got it. That's Vladimir Putin. He wanted America to shut up about Chechnya. He firmly supported an American right to (and need for) revenge after 11 September, 2001. He got what he wanted. And that was pretty much that. This game does not seem hard to play.

But I don't have good, documented examples with allies, other than Australia, to back my opinion up.

Here you go David:

Poland wanted a nice chunk of Iraq's oil, and Bush gave it to them (very generous). At least the Poles were honest, which should count for something...

http://news.bbc.co.uk/2/hi/europe/3043330.stm

Thanks for the relevant link (link), monkeyboy.

David,

I think you're onto something there, though I don't know of anyone who's done quite what you're suggesting. I know it would be useful information, however.

My own work has mostly been in the PACOM region, so I'm not qualified to answer for the UK/Poland. I think you're right on the money for Australia, and for that matter Thailand and Singapore -- two other US allies in the region who can basically ask for whatever they want, and probably get it, or at least most of it. Thailand, for example, got 'promoted' to the status of Major Non-Nato Ally over the last few years, which means that they are able to purchase certain kinds of US technologies we don't freely sell to everyone.

I do think that there is a caveat: Australia may be the limit case. It would make sense if they got more out of the relationship than other ally nations, because they are our single most solid and reliable ally. While that may change if the rise of China means that Australia has to triangulate more than it has in the past, to date Australia has been the best friend America has in the world. Australia has been with us even more than the UK, which most Americans would probably name if asked for 'our single best ally.'

Friendship over generations is the sort of thing that ought to be rewarded. It would only be fitting if Australia found us unusually generous and willing to grant it good terms in our relations.

Still, I think you're on to something good here. The US approaches international relations as a sort of transaction, rather than as matters of honor or prestige. I think this is for structural reasons. We have a government in which power is divided between Congress and the Executive, for example; and in which the political parties change places from time to time. What one administration thinks is the most important thing may become totally unimportant in a few years; or a Congress that is supportive of administration endeavors may become hostile to them. Thus, it's hard for the US to do international relations except as a right-now transaction.

Those nations that, like Australia, approach their relationship with the US as a simple good-faith transaction will probably do very well. I think even China is trending toward that model of relations with us, though the issue of Taiwan continues to make it hard for us to achieve that good-faith understanding. If that issue is ever peacefully resolved, China and the US have a lot more to gain through interacting in that way than either could hope to gain through competition.

Apologies for my tardiness. I suggest three further readings:
. Howard's address to the Australian Strategic Policy Institute (ASPI) conference last Tuesday (26 September)
. Rod Lyon's ASPI monograph on the Alliance, titled Alliance Unleashed; and
. Jacob Levey's piece on the similarities in strategic outlook between Australia and Poland.
I'd add links to all but the last, but having even troubles posting as it is.

cheers

qoz

Thanks, qoz, and good luck.

Howard's address to the Australian Strategic Policy Institute (ASPI) conference, 26 September, 2006 (link)

I wasn't able to find links for the other two.

#8 from Grim: "I think you're right on the money for Australia, and for that matter Thailand and Singapore -- two other US allies in the region who can basically ask for whatever they want, and probably get it, or at least most of it. Thailand, for example, got 'promoted' to the status of Major Non-Nato Ally over the last few years, which means that they are able to purchase certain kinds of US technologies we don't freely sell to everyone."

Thanks for the kind words, and I agree that Singapore and Thailand are good examples and interesting cases. I suspect it helps that the Singaporese are, to quote a Navy friend "very slick". You should bring something to the party.

#8 from Grim: "I do think that there is a caveat: Australia may be the limit case."

What you say adds up right for me, though I think Americans who point to the United Kingdom as America's best ally are well guided.

The weight of the contribution the United Kingdom has made to Operation Iraqi Freedom and the subsequent struggle is beyond impressive, it's startling, even if you have a high opinion of the British already. While a lot of that is pure Tony Blair, obviously the political contribution is, the British are prone to throwing up great prime ministers from time to time. The description of the British in the little U.S. Marines book on strategy continues to be valid.

#8 from Grim: "The US approaches international relations as a sort of transaction, rather than as matters of honor or prestige. I think this is for structural reasons. We have a government in which power is divided between Congress and the Executive, for example; and in which the political parties change places from time to time. What one administration thinks is the most important thing may become totally unimportant in a few years; or a Congress that is supportive of administration endeavors may become hostile to them. Thus, it's hard for the US to do international relations except as a right-now transaction."

This is all very smart.

Another thing I would add is that the Americans are very talkative, and this is not just a natural expression of their positive, optimistic, outgoing temperament: they need to talk a lot to get things done, their system is set up that way.

So when you tell them to shut up, in effect you're telling them not to think. They don't like that, and it also means they tend to forget you and also forget rewarding you. This is not helpful for countries operating in a different diplomatic tradition where everything happens behind closed door. Think of the famous scene in Blazing Saddles (1974) - there's gratitude for the Black sheriff, but he has to keep it secret so as not to shame the grateful citizen who's being nice to a Negro. I don't think that works very well with the Americans in a diplomatic sense.

In Operation Iraqi Freedom, there was a growing swell of excitement and discussion in America about the Polish contribution and the Polish alliance. The Poles disliked this, and more or less told the Americans to shut up about it. This was respected, and the topic was dropped, but at the time I thought: you realise of course that when the Americans stop talking about you, they'll forget you? Nobody can pronounce Polish names anyway, which makes it even harder. Later I was not surprised to see some articles saying the Poles did not feel they had gotten as many goodies as they wanted.

#8 from Grim: "Those nations that, like Australia, approach their relationship with the US as a simple good-faith transaction will probably do very well."

I think so too.

#8 from Grim: "I think even China is trending toward that model of relations with us, though the issue of Taiwan continues to make it hard for us to achieve that good-faith understanding. If that issue is ever peacefully resolved, China and the US have a lot more to gain through interacting in that way than either could hope to gain through competition."

I think that's just because George W. Bush is a two term president with steady nerves and good diplomacy in Asia. I think a new American President will be tested out with a crisis early in his term, as William Jefferson Clinton was and as George W. Bush was. This is good medieval thinking: you get all these wars of succession, because the first thing you do when there's a change of power is find out if the new guy is there to be had, or if the country is so divided there's no effective succession at all, in which case all your old ambitions regarding that country get moved out of the "latent" category. If the new American President proves to be a sucker who can be baited and bluffed, American-Chinese relations won't be all about simple good faith transactions.

Yes, I agree that the Chinese aren't above using their power to bully other governments. I recall how they handled Malaysia during that 'photos of a Chinese tourist strip searched' scandal. Of course, the prisoner in question turned out to be a Malay, but all the same China managed to get an official apology out of Malaysia for it.

The Chinese system does offer the property of longetivity. Their leaders are going to be around for a while, and change is going to be slow. That allows them some strategic advantages versus the US, where a President maxes at eight years, and has to defend his right to continue mid-way; and the legislature can change over every two years. No doubt the Chinese leadership, who are quite good at diplomacy themselves, leverage those advantages as well as they can.

Still, I think that China takes the long view, and in the long view there's more to gain from cooperation than fighting. The power of the US/China trade relationship is what is driving the world economy, and there is no reason China would want to poison that. If they can get a few concessions out of a weaker president, without disrupting the general relationship, certainly they would do so. I think, though, that the transactional relationship is the wave of the future -- assuming that the Taiwan question is resolved in some peaceful way. Too much has been invested by China in the matter of Taiwan for them to walk away from it.

The peaceful resolution of the Taiwan question is course, an assumption that cannot be made. My prediction is largely without value, as a result, but perhaps still useful as an overview of what I see as the dynamics involved.

Dave

still having trouble with comments. Lyon's piece is available on the ASPI site at www.aspi.org.au (scroll down to 'Alliance Unleashed'). I think the Levy piece I've been thinking of is 'Down but not Out', in The New Republic, to which I no longer have access,

cheers

qoz

Ah: Alliance Unleashed (link).

Thanks again, qoz.

I don't have access to The New Republic either.

Rod Lyon's ASPI monograph on the Alliance, titled Alliance Unleashed seems very good.

I agree with its main points, but for Greg Sheridan's reason rather than for Rod Lyon's reasons.

That is, I agree with Rod Lyon that it would be better in a straightforward organizational sense to bring as much of the expanding, more pro-active and "fine motor skills" alliance under the ANZUS heading. But I don't think that matters much. As long as we are carrying on the alliance in the right spirit we can get by with less efficient methods, with a system of pure accumulated ad-hocery if need be.

The sole vital threat to the alliance, as Greg Sheridan says, is the visceral anti-Americanism of some of our elites, in the media, in academia, in what might be called the human rights establishment and so on. To guard against that as best we can is the most important thing we can do.

The main battle is of course simply to persuade the public that our view is right: the alliance is a good thing (that is already accepted by the public), and to meet our practical challenges it should grow new capabilities.

But there are lesser battles in keeping us on track to winning the jihad wars, and entrenching the alliance formally as much as possible is a good thing to do, so that one man like Mark Latham (who on his own account secretly wanted to ditch the alliance if he won power) can't ruin the relationship without taking positive actions that could be discussed and perhaps contested.

We want to get as far as we can away from a situation where one eccentric and unreasonably anti-American man, walking into meetings late and without necessarily having done much reading or consultation, could willfully neglect or contradict the needs of the alliance and thereby destroy it, as effectively as the New Zealand government got rid of its real role in the alliance in the 1980s, while pretending, with the help of a biased media and academic establishment, that nothing very important was happening and/or that the Americans were over-reacting.

Here is a short, fast to load, easy to read summary of Howard's latest position on the alliance. Australia Sees U.S. as Its Most Crucial Ally by Richard Halloran, at Real Clear Politics (link)

It's the same as Howard's previous position, and that's a Good Thing. The alliance thrives on constancy and cumulative development, not political stunts.