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Clyde Prestowitz is founder and president of the Economic Strategy Institute. He has played key roles in achieving congressional passage of NAFTA and in shaping the final content of the[…]

We’re depleting our resources and innovative energy in order to develop specialized products and technologies we don’t actually want to use.

Question: What has our military superiority done to the other rnaspects of our power? 

Clyde Prestowitz: Well, two rnthings. We spend more on the military than the rest of the world rncombined so we are, without question, the premier military power. And rnthat has a lot of implications. For one thing, it tends to distort our rnindustry. It means that we spend a lot of time and effort and research rndeveloping specialized products and technologies that we actually don't rnwant to use; that we hope we'll never use, and that have very little rnapplication for our wealth-producing capacity. But yet it soaks up rnengineering talent and scientific talent. More important than that, rnbecause of our hegemonic security role, we tend to find ourselves in a rnposition in which, number one, our leaders… For example, when our rnPresident wakes up in the morning the first thing that he looks at is a rnnational intelligence report. Now, when the President of Singapore wakesrn up in the morning, the first thing he does is look at how much new rninvestment Singapore is getting that day. 

So, the mindshare of rnU.S. leaders is pretty much focused on geopolitics, and at any rnparticular moment the need for us to have support from our allies—or rneven from countries with whom we have difficult relations, will tend to rnoverride our economic interests. A good example: President Obama went torn China in November and he stated in a press conference that the United rnStates would attempt to assist China in developing and building its new rnregional commercial jet. 

Now, when I heard that I kind of shook rnmy head, I thought, “Wait a minute, we make jets. We make commercial rnjets. We’re supposed to export something, and airplanes is one of the rnthings that we export. Why are we helping China develop this?” And then Irn realized that well, the President wants Hu Jintao to help him out with rnNorth Korea. He wants him to help him out with Iran. He wants him to rnhelp him with global warming. So there are all these issues, and he rnmakes an economic concession in order to get them. Or, if you go to the rnWeb site of the Polish Embassy in Washington, you’ll see the Polish rnEmbassy reporting that it has been able to achieve the offset productionrn of about $8 billion worth or high tech U.S. military equipment. And rnoffset means that the Poles buy American fighter jets and in order to rninduce them to do that, the U.S. agrees that we will transfer the rnproduction of a large portion of the jet to Poland. So in effect, we payrn Poland for the privilege of defending them. So this geopolitical rnpriority emphasis tends then to take away any thought of promoting our rneconomic interests.

Recorded on May 10, 2010
Interviewed by Jessica Liebman