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

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

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

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

Recorded on May 10, 2010
Interviewed by Jessica Liebman

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