← Victor Davis Hanson: In His Own Words
Victor Davis Hanson: In His Own Words
America Lost Its Maritime Power and China Filled the Void | Chris O’Dea
00:58:06
China has created “the operating system for the globalized economy,” putting other countries at its mercy.
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The Chinese, they've constructed the operating system for the globalized economy. The Trump administration said, well, we're going to put a bunch of extra fees on Chinese ships docking in America. That'll raise money for us to be able to build our own ships and start fighting back against the Chinese. The Chinese have other ideas. Where we end up now as a result of this situation is that China really has embargo power and not just to stay to one country or one product line or something, but they have the ability to say okay to an entire shipping line.
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Well, hello ladies and hello, gentlemen, and welcome to Victor Davis Hansen in His Own Words, one of these rare Issues episodes. I got a Magazine on the brain. I still think of issues episodes without Victor. Victor as you all know, folks who are regular viewers and listeners to the podcast, Victor's doing two episodes a week, but he's asked that we continue on Jack the other two shows every week, get someone important, worthwhile and meaningful on as a guest, someone who has something important to say. And today that someone is Chris o'. Day. When this effort started a few months ago, Chris is someone I've asked on from the beginning and he's finally able to join us. And Chris is a friend. I met him through some National Review events way, way back. And he is a man that I think it's fair to say knows more about the maritime power of China and its threat to America and America's own diminished capacities in this regard and why maritime economy is the world's economy. And he's got a lot of important things to say. Folks, you should pay attention. And when we come back, I'll give you a little bio of Chris. And then I'm going to start asking five, six, maybe even 10 questions. I'll mumble through them. Chris, you'll just have to suffer offered up for the souls in purgatory. And we'll get to you and these important this really truly important topic when we come back from these important messages.
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Since the founding of America 250 years ago, many things have changed, but some things never do. The commitment of husband and wife, the importance of passing along our values to our children. The faithfulness of God. Some wonder how we can ensure America will continue to thrive as long as we keep first things first. First, we've only just begun. America the Beautiful.
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We are back with Victor Davis Hansen in his own words. Chris o' Day is the is an adjunct fellow at the Hudson Institute. He's written for National Review for Strategica, which, as again, fans of Victor know, is the online journal that he oversees at the Hoover Institution. And Chris has also participated in Victor's. I have to read it here, the working group on the role of military history in contemporary conflict. And Victor is a fan of Chris and his work and he's very happy that he's on. Chris is on pinch hitting. Chris is writing a book and it's called Ships of State. And let me get my other note here, Chris, because the subhead is truly important. By the way, you graduated from Brown.
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I did.
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And you kind of majored in maritime history, correct?
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Well, I majored in history and as you might know, Brown has a kind of flexible way of doing credentials, et cetera. And you can kind of do almost anything as a sort of a final project. And I happened to write a long paper about what was called the triangular trade in the old colonial days of the early United States. So I've kind of been looking at these things on and off for a long time.
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Well, if someone said I was an expert on maritime law, if I said I was an expert on maritime law, people say you're a liar, get lost. I'm going to say you are not law, just maritime affairs. And I don't think anybody has the chops you do. So this book you're working on, ships of State, I'm going to give away the subtitle because I think that's sexier, scarier, and maybe more meaningful to our discussion. It's how China's state owned shipping companies turned the global logistics network into the economic battlefield of the 21st century and why China is winning. So, Chris, shipping is not just shipping, right? It's just not getting that plastic spoon from Shanghai to Baltimore. It's a lot more than that. So I want you to talk about, give us a general idea of what you're writing about. It's more than a scholarly. I mean, it is a scholarly work, but it's what you're working on is really more popular also. And then I want to ask you after that about the infamous Belt and Road initiative that I think a lot of people, they've heard of it, they think it has something to do with China. Maybe it has something to do with radial tires. I don't know Belt and Road, but they're aware of it. So you tell us about what you're working on and then we'll get into Belt and Road.
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Okay. Well, thank you, Jack, and thank you for that very, very kind introduction. And I now will try to live up to it. Whether it's five or 10 or 20 questions. I guess just to jump right off, I was working on the book. I have finished the book, so it's ready to go. We're in discussions actually with publishers at the moment. We got very close, like some rom coms, got all the way to the altar with one and it just couldn't work out. So we're in a couple of other discussions at the moment and look forward to having that pinned down, pinned down in a specific date and time very soon. We were looking at October of 26, but at any rate, we think that that is sort of a minor hiccup in the overall, in the overall history of getting this project brought to the public. So the, I guess the, to try to put a. It does relate very much to the Belt and Road. Well, we'll get back to that in a few minutes. I mean the Belt and Road was sort of Xi Jinping's kind of branding exercise for what China has been doing. So what I noticed, I came at this from the perspective of the industry. I was last in the investment management industry. I was writing for several international infrastructure and institutional investment journals. Especially after the crash, people were in large institutional portfolios, pension funds and things like that. When interest rates were zero, they started looking around for things that would pay them a long term good contracted interest rate and these things called infrastructure, railroads, bridges, toll roads, seaports, container terminals, very, very large multi billion dollar assets. Well they fit the bill because they were 30 and 40 year contracts. So what I noticed in the particular area of ports, seaports and then roads and rail radiating in and out of seaport locations was that there were these Chinese companies that were involved. This goes back to probably post crash 09, 10, 11. So pre belt and Road era and there were the same handful always. Well not always, but in the great majority there were these Chinese state owned companies. So I started taking notes on this, as is my habit, having been an old reporter and started keeping track of that and eventually put together some files on it and wrote a long piece for the US Naval War College Journal, the Naval War College Review. So I have to say the reviews there and everything I'm saying here, just from that connection, they're all my own. It's not official policy. But they did want the article because the point I realized was that the Chinese were using these commercial installations and commercial maritime logistics in the broad sense as you alluded to. It's not just shipping to get that spoon that's involved with getting that. That's really, it is really like an iceberg type of situation to get that plastic spoon from Shanghai to, you know, a 711 or a target somewhere in the Midwest. There are many pieces and steps involved. So I started again kind of looking at that. Who are these companies and you know, how, how are they so involved in buying these, these concessions? And that was so I quickly arrived at basically to put it into a nutshell, you know, my core operating idea was the importance of logistics in basically in warfare. That's something that, you know, Victor's group and you know, pure military historians are very well versed in. But kind of rule number one, you don't want to lose control of your own logistics. And unfortunately that's the big problem that's facing the United States. We've lost control of our own logistics. And the worst part is that it was China exploiting American inventions, primarily containerization in shipping as well as a couple of other kind of financial markets, innovations, kind of private capital markets, and the sophistication of, of issuance and creation of contracts to run these massive and very important economic installations for 20 to 40 years. So these are the things that open the door to China being able to establish the maritime power it has now. I guess the well known story is the sort of manufacturing offshoring that took place starting in the 70s and 80s. Well, the US as the US has historically done, turned to China as a source of labor. And after the oil shocks, raised prices and inflation across the Western world, well, the fastest, cheapest, fastest, easiest way to lower cost is to just move a lot of labor out. And that's what happened. And this was possible because of the other American innovation containers which made it so easy to package things up into tidy little boxes and just deal with them and move them in a very efficient way. And the Chinese historically have been very, very good at this, at sort of modular packaging and production for export. In the book I go into how they've been doing this with the porcelain industry back in the 1700s and 1800s and even earlier. And the. So these are, these are kind of long term, you know, these are long term societal, societal capabilities. And so after the, after the World War II, the export economy that China started working on in order to make that work, well, one thing they needed was ports and shipping and logistics just on their own end. And initially these were very rudimentary, but the United States was aware of it and aware of the priority that the Chinese were putting on these things. There are senate reports from 1984 with all sorts of reports from various Pentagon and CIA and other Bureau analysts documenting in great detail. The priority that China was putting on this, especially the whole seaport area, which interfaced out to the wider world. So then the United States and the west shows up and we want to start manufacturing there. Well, this was great for the Chinese and the. Again, containers made it possible. So they became experts over time, over decades in logistics and shipping and packaging and then building all of these components that go into that system, building the containers, the cranes, the ships, as well as all of the stuff, the merchandise that goes in and then they deliver it and then they build the docks on the other end, the receiving end. Well, this was the big problem with containerization and why it took a long time to get going. It's expensive to put all of this equipment in. And a lot of countries around the world, especially after World War II, containerization was invented in 1956 and much of the world was still not in very good shape that soon after World War II. And the. So that the cost of that was enormous. It wasn't starting in the 50s or the 70s, but certainly by the late 90s into the 2000s, the Chinese were starting to fund some of these operations and say, okay, well, we'll build you the port. We can help you, and we can build some of the installations. So I basically call that China's one stop shopping strategy. And it's like, okay, we can, we can build it. We can help you design this stuff. We can build it, make it, package it up, put it on the boat, send it over there and we'll. If you don't have a loading dock called a seaport and a terminal, we can build that for you too. And so that's an incredibly powerful position. As a result, the Chinese, excuse me, have at least my view is that they've kind of construct. They've constructed the operating system for the globalized economy. And if you think about this in the context of your phone, nobody thinks about the operating system on the phone, right? Many people are watching this unless it doesn't work, or your computer, if you're watching it on a laptop, nobody really thinks about it. And you get the message that says update your os. So you hit the button and you let it update overnight. Well, China is running the operating system for the containerized manufacturing kind of distribution, you know, world that we live in for so many products that societies need just to function. That was driven home in a big way during, During COVID if you remember, with the PPE being kind of the tip of the iceberg with like, you know, no, the medical equipment, masks Gloves, et cetera. But then below that, other types of medical goods. Pharmaceuticals.
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Pharmaceuticals, yeah.
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Remember all that. Well, now America's kind of, you know, that's kind of passed and, you know, we've kind of gone back to sleep. And the pharmaceutical news is all, is GLP1s and weight loss drugs. Nobody's really worried about, you know, not having access. The scare we got was last summer with the rare earth minerals where the Chinese were. Xi Jinping said, well, we're going to cut off these rare earth minerals exports, Mr. Trump, if you don't, if you don't back down from the maritime program that you've espoused, and I'm sure we'll get to that later. Sort of discussing what America is doing about this problem. The Trump administration said, well, we're going to put a bunch of extra fees on Chinese ships docking in America. That'll raise money for us to be able to build our own ships and know, start fighting back against the Chinese. Well, the Chinese have other ideas and said, not so fast. And so those things were put on hold as of October or November 1, technically. So there's a bit of a, there's a bit of a truce there. And that's just the idiot. That's a little bit of the tip of the iceberg along with what happened in the, in the COVID period. Where we end up now as a result of this situation is that China really has embargo power and not just to say to one country or one product line or something, but they have the ability to say okay to an entire shipping line. You could pick one of the, say the Danish or the German or South Korean. They have to play ball with China because they need to get to China and Chinese ports. Now some of that's shifted to transshipment. It gets a little technical trans shipping from China out to Southeast Asia, Malaysia, Indonesia, as companies have gone to this China plus one manufacturing, where they do more assembly in Vietnam and other places. But the core products and designs and things still come from the Chinese. And the Chinese are the vessels and the ports and again, the cranes and containers that are actually moving the goods, no matter whose goods they are. If you're a big shipping line, you need to, if you're a Maersk or Hapag Lloyd or one or one of those shipping lines, you need to be able to have access to Chinese ports and or Chinese terminals that they run in Southeast Asia and really around the world. Otherwise, you know, you can run into a lot of problems. Some of these companies also have Large fixed assets that are on the ground in China. So those are subject, if push comes to shove, those could be subject to nationalization being closed for various violations that might just suddenly appear. A lot of things that you can do with your regulatory apparatus in a situation of hostilities. So there's really an embargo risk that's sort of lying behind this. I mean, an embargo in a large sense where if you, if pushed, the Chinese, I think it's very conceivable, would take a very, very broad and probably thorough and aggressive approach and not just kind of deal case by case, but tell a lot of countries and a lot of shipping lines will be happy to provide you with your goods and all these things that you need for your society and to preserve civil order and ppe to furniture, to consumer goods, et cetera. But we're only going to do it on the condition that you just stop going with it supporting, you know, the unreasonable Americans.
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Right.
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So that, that, that, I mean that's not a war scenario, but it's an, it's an economic war measure that China is able to, is able to undertake. Now whether this actually, whether they actually do this, you know, when do they do it, how do they do that? You know, I, I think it's maybe subject to some debate, but I think they have the capability, they're in the
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position to do it if they, yeah,
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they, so if they say to do it and if you look, care, if you look carefully through many kind from various analysts and things, you know that it's, it's kind of, that kind of thing is included in there. And then you know that, that has to do with control. See, that, that's what I, I believe China's built is sort of, it's conceptually, it's one stop shopping program and it has kind of a new, a new strategic triad. They've got control of the, of the, of three things. Kind of the base is the physical, the physical and, and what I call the digital networks of the world. And that gives them a large amount of influence and power on the governance aspects of the world. Because these seaport concessions, these are very much like the treaty ports that the west imposed in the 1840s on the Chinese and said they're treaty port concessions. You're going to concede to us the ability to do our trade and live under our laws on your territory. Well, the Chinese, needless to say, you know, didn't like that scenario. And so what you've got now these can ironically, I guess these contracts are Called concessions. And in some ways they are. They're concessions to the, to the Chinese to come in and to build a terminal or to build an entire seaport. In the case of Piraeus, Greece, that's kind of the top of the tree. That's the worst one because they actually took over and actually bought a public governmental authority that was like listed on the stock market. There isn't any other situation, I'm aware of that where anybody has done that.
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Well, I'm going to read. I have to read an ad. We have to pay for all this and happily pay for all this. But then I want to get into that, the terminals and things abroad and the Belt and Road program. But Chris, first, since we're talking about water, you know. Yeah, well, I love drinking it. I don't like drinking lousy water. And here in Connecticut, you know, there's a funk in the water. You just don't. When I grew up in New York City, it was fine, you know, it was fine. But here it's not. So folks should know about COVID Pure. And if you're watching this on YouTube, maybe you could see over my shoulder. I have a Cove Pure machine in my office. No, it's not on the kitchen counter, but I'm in my office most of the day. And I love my Cove Pure. I love the, the purity of the, of the water, the no taste of it. And I use my Cove Pure for just about everything, by the way. Hot, cold, normal, however much you want. 2 ounces, you want filled 20 ounces, it does whatever you want. It purifies the water. You know, when I fill up a kettle to put in the well in this, in my Cove Pure, as I'm filling up the kettle, I. I can smell the kind of chlorine coming out of it. So I'm glad to not be drinking that anymore, nor anything else that comes in your, in your water. All kinds of little pharmaceuticals, pfas, microplastics, fluoride, et cetera. I use it for drinking, for coffee, for any cooking ice cubes. Even George, my dog is treated to Cove Pure water. We don't give them any water out of the sink anymore, none of that. So I really encourage folks to get, to get a Cove Pure and I'm going to read you a little call to action here. So COVP Pure makes it so easy to get pure water with the push of a button. So this year, make a well, you've already made your New Year's resolution, so make a March resolution and make it stick. Improve your health because pure water does do that with clean water. And right now you can get $200 off for a limited time if you use the link@covpure.com v d h that's covepure c o v e p u r e.com vdh and start the new year or halfway through or March Madness, start it right with Covefior. We're very glad, happy, thrilled that Covefior is sponsoring Victor Davis Hansen in his own words. Just a kind of a wrap up question here is that to be clear, logistical power is power and is power without firing a shot. You know, there's no, there are no turrets with guns on these chips. But this, there's a sense of an economic occupation almost. Maybe that's not, maybe I'm overstating it, but.
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No, I don't, I don't think, I don't think you are overstating it. I mean that, that, that's, you know, kind of one way I've put it. They've kind of reverse engine, they're known for reverse engineering. You know, they've reverse engineered the logic of conquest instead of, you know, they've gone right for kind of winning the peace, you know, then they've, they've, they've taken over the political and economic influence benefits which previous empires secured by, you know, by warfare, by conquest and then saying, now you will accept our economic operation and politically go along with us. But the Chinese have not done that. They've kind of gone in and they've made these political, they've made these political deals, these concession treaties. And I think you can really think of them almost as the modern version of the old 19th century Concessionary trade treaties. Because the Chinese are there running the operation, making and I call it one stop shopping because to the local operation this is a great deal. The Chinese, they come in and they'll build the port. And this was to get to Belton Road and Piraeus in Paraeus. The Chinese were involved as early as 2008, even a little before they were poking around. So four or five years before Xi became, took power and started the Belt and Road initiative. But their port was sort of just really not working. It was ranked maybe 40th in the EU. And the Chinese are at least, my view is from the investment world. They're very good distressed situations, investors. And they go in and they find something that has just like distressed company purchases. You find something that has either a good brand name that's beaten down or you find where they haven't really marketed it well or it just needs, you know, kind of some refurbishment and some investment. Well, that's what the Chinese did in Piraeus and they were able to get in there at a pretty low price given the cost of these things. They took over one port, one terminal, just one dock, and then they parlayed that into being able to really run the whole port. And they do that, you know, again under these, under these treaty agreements. So the Piraeus situation after the Chinese started the Belt and Road, everything about Piraeus, all the press releases from, from Costco Shipping, which is the company that, that took over that port, all the press releases and announcements from Costco Shipping and, and Piraeus Port Authority, which was the subsidiary that they owned in Greece. Suddenly there's a Belt and Road paragraph at the end of the press release that this will help advance the Belt and Road program initiatives.
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Yeah, let's, let's, let's use this point right here to just take a quick break and then we're going to get into the fuller description of that. So we're going to hear more about Belt and Road when we come back from these important messages. We are back with Victor Davis Hansen in his own words. And I have a pinch hitting for Victor today. Chris o' Day is an adjunct fellow at the Hudson Institute and the author of forthcoming books Ships of State. And Chris is a great admirer of Victor and Victor is a great admirer of Chris and his particular expertise in a really massive and important issue, maritime trade and China's projection of power through that. So Chris, you were starting to talk about, tell us, what is Belt and Road? We've heard of it. What exactly happens? Does something happen? What does it describe? How vast is it?
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Well, you mentioned something at the top of the show. It really doesn't have anything to do with tires. Yeah, you can drive on the road. No, that's a question people had. Belt and Road in one sense is a branding operation and not just in the pejorative sense, but it puts politicians and administrations in the U.S. and the west do this as well. They want to put their particular name or spin on what the government is doing on various programs. China has been investing overseas in these large development projects. Really? As long as you've had the CCP since 1949, they've been investing a lot in Africa, some in South America. A lot of it was with the Comintern countries to have a real throwback organization that was what was available to Communist China. And they were doing shipping agreements and Trying to build ports and roads and things, you know, where they could on a very limited basis. Well, fast forward a bit. You know, you get through the modernization, you get through the, you know, the horrors of the Mao era, you get through the modernization, starting to kind of reach out, develop and suddenly Xi Jinping is in charge. China has been doing a lot of these things anyway, so he's decided that Belt and Road basically, it pulled all of this under sort of one umbrella and stated it as actual, you know, the foreign policy goals and articulated this as what China intends to do as opposed to what they had been doing, which was working through different ministries, different industries and things like that, doing some of the same projects. But it kind of put an overall package around it and the, the Belt and Road program still exists. It's sort of, it's sort of, you can, some people say it's smaller than it was in the first, say 10 years, but it's not, it's not really any smaller. It's just that, it's just that they haven't been putting as much money into really truly, you know, massive multi billion dollar airport, port and road and bridge projects. Right. Part of that is because, you know, they've already done that. I mean, they've invested in a lot of these and you know, there's only so many of those sites around the world.
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About how many are there that you could say fit under Belt and Road,
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There are varying counts, but there are high hundreds of numbers of large projects, infrastructure projects, and now they're working on, they're doing, you know, kind of smaller, they're doing smaller projects under the Belt and Road heading and saying in terms of, it's more cyber investments, security, software, educational initiatives and things. But what, what's important to convey is that pre BRI and now later years of bri, the substance of kind of China's desire to kind of go out into the world, invest and become influential, that really hasn't changed. What they've done is adapt what type of projects they're doing and to some extent how they do it and how they kind of how they publicize and trumpet it. Some of the, some of the aggressive kind of public relations activity around Belt and Road projects didn't kind of landed with a thought in terms of public perception and public reception. There were a couple of analyst reports this week pointing out like in Africa, large investments in the, in Chinese tv, trying to cctv, trying to build a network and things down there. It really didn't really work and people are very kind of Skeptical and it sounded like government propaganda, but because it was, it was, and the, and the, and the government yet, yet the, the reaction and the overall reception is, is still pretty good diplomatically and politically for China because, you know, they, when they just kind of, when they stick with, to the substance, okay, we built this road, we built this bridge or railroad, you know, that then it has some, it has some traction. But when they go beyond that and start, you know, kind of talking about how well, you know, you, if you sign up to the Belt and Road initiative, you know, it'll be this, you know, great, wonderful future of all good happiness for mankind. You know, it's, it's a little over the top.
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Yeah.
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So that, that's the gist, that's the gist of the Belt and Road. And initially it really, it threw. I, I thought of it as kind of one of the biggest head fakes in history really for a while because, you know, the people said, what is this Belt and Road? And you know, you can, there's a whole cottage industry of books and reports trying to say what it is. And initially there was a lot of reaction from kind of the US Especially saying, you know, where's the rule book for this thing? You know, we can't keep track of it the way we keep track of, you know, a Western lending program and things. And part of that was because it was, again, it was a wrapper around many things that Chinese development institutions and state banks and state owned companies had been doing already. So it was kind of hard to go back and kind of impose like an Excel spreadsheet that they all had to, had to report into. So it made it hard to keep track of it. And then in order to try to get government support, anybody who, you know, from local governments to state owned companies to even private companies, anybody kind of doing anything, especially overseas, said it was a Belt and Road project and it was a belt and Road initiative because, you know, you had to or you knew you weren't going to get any government support or government subsidies. So that was the early years. But the, the bottom line is that it helped, it helped China, I think, learn a lot about how to operate in the world. And it has, you know, as a result all of all of this lending, all of this investment, much of which they, they might have done anyway. I think, you know, they now have a lot of situations and relationships around the world where they, where, you know, they, they're an ongoing presence and they're
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involved, they're there and people are there.
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Economics and finance yeah. So all the predictions that China was going to collapse under the weight of the belt and road debt, there were a couple of Western financial publications that was kind of their drumbeat for five or six years or so. None of that proved to be true because the whole idea, the concept behind that was that it was a debt trap. And there were a couple of very good reports done by some analysts. I think one was at. I think it was at Boston College pointing out that, you know, there really was no evidence that it was a debt trap. With the idea being we're going to lend you so much money, we know up front you can't possibly repay this, and then we're going to repossess the port or the train line. That is a tremendously inefficient way to try to obtain assets. And it's. There's just so many problems with that. I mean, coming out of the infrastructure world, I never thought that was. Had really any. Made any sense. And instead, what they've done is what most Western institutions have done. They've extended the terms of the loans, they've lowered the interest rates. You know, they. Or they've done a combination of factors to kind of keep the project, you know, going somehow, rather than forcing repossession.
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Yeah. And as a communist country, they have the wherewithal to do that and not spook the markets back home. So. Hey, Chris, I'm going to need to get back to your thoughts on what is a maritime power not. But first, I want to let our listeners and viewers know that if they've studied enough history, they start to see a pattern. Nations don't lose their way overnight. They drift through debt and division until one day you realize the foundations you thought were permanent were never permanent at all. And today, America is spending at levels once reserved for wartime. We've normalized deficits that would have stunned earlier generations. And policymakers now debate whether the only path forward is more intervention, more printing, more distortion. But there's a historical truth. Every society that pushed its currency beyond discipline eventually paid a price. The wise, though, never waited for collapse. They prepared for correction. And that's why so many thoughtful Americans, especially those nearing retirement or in retirement, are reallocating part of their wealth into something that has outlasted every paper experiment in human history. Physical gold, not as speculation, but as insulation. And our reputation matters here at Victor Davis Hansen, in his own words. And that's why we've partnered with Allegiance Gold, a company distinguished by integrity, reliability, and an A rating from the Better Business Bureau. And for years they've guided Americans through transparent education and long standing relationships built on trust. Right now they're extending a special liberty offer to our viewers and our listeners to help you get started with real gold, whether you're a funds or in a retirement account or sitting in a bank or maybe like Chris o', Day, maybe in the mattress, I don't know. So if you believe as we do that the best time to reinforce your position is before the storm becomes obvious, call 8447-909191-84479, 09-9191 or visit protectwithviktor.com 844-790-91911 more time 844-790-9191 or visit protect with victor.com History rewards those who take the long view. Hey, Chris, you not more lewd. You said hey, this was happening and all this is happening in plain sight. America is watching. America thinks, does it really think, does it still think it's a maritime power while China is doing this? What is a maritime power? I mean, I would think even, especially if you had two oceans, you'd have some ability. We're going to talk later. Don't get into the data on shipbuilding yet, but you think you'd have some means of projecting it or actually being it. So is America, let me ask this, is America a maritime power?
- [39:02]
A
I don't think so. Not anymore. We're a naval power. You just mentioned kind of the key, a key term there, projecting it. And we're seeing great example of that right now in the Middle East. We're projecting just truly staggering, intense, enormous amounts of power. And not just in terms of ordinance quantities, but in terms of the technological capability of being able to direct this power in ways that really have never been able to be done before. And really until maybe even a decade or less ago, you couldn't even conceive of the pinpoint accuracy of these things. Now do things go astray? Certainly they do. It's not perfect, but to be able to target the things with the level of accuracy and the consistency and the quantity of ordinance being delivered, it's really truly a revolutionary, I think display. Now the problem is there, that's, you know, that's military and that's good and that's essential. You know, you want to be, you need to be able to have, you need to be able to have both elements of maritime power. We're in naval power, yet we still have, we have difficulty getting a lot of these naval vessels built. You know, we don't have a great shipyard industry by any means. We have enough to do this. But, you know, all of the naval
- [40:36]
B
vessels really, why don't, why don't we, why don't we have a ship?
- [40:40]
A
Because that's all, that's what we specialize in. And we, we, we've. The US after World War II, really let the commercial shipbuilding industry and, and there's actually a long history of this after, after wars where we've used a lot of naval power. The United States tends to go back to, you know, we want to get back to, you know, industry life, making money, doing American things, pursuing happiness. And so the naval operations tend to get sold off. They sell. They did it after the Civil War. You know, early in the history of the country, there's a book called Six Frigates. I mean, the US Realized, well, we have to, you know, we do need some warships. We better go build some, because they didn't, they really didn't have any. And yet after the Civil War, they really kind of closed down a lot of the naval operations operations sold off ships and things. So it's very expensive. Congress didn't want to pay for this. And what happened in there in that period, you know, that a younger cadre of naval officers came along and wanted to have a, you know, for their futures and things. They kind of revitalized in a shipbuilding in. In the United States to be able to build the vessels that eventually became, you know, kind of the steam powered Great White fleet, et cetera.
- [41:57]
B
Manila Bay. Right.
- [41:58]
A
Yeah, and all that. We had a similar situation around World War I. Only in 1914, only about 10% of U.S. goods were carried on U.S. flagged merchant vessels, which is, I think it's actually a little bit more than the situation now, but very low. The rest was all European. And as those were all sunk or pulled into the war effort, well, you know, we were stuck. So there was some emergency shipbuilding measures were taken as part of the outcome of that whole period. They came up with this, with this ship maritime act that's known popularly as the Jones act for the senator who sponsored it. Well, good idea. Hasn't worked actually in practice because it was supposed to make sure that we didn't come into the situation that we're in now not having sufficient commercial shipping and commercial shipbuilding ability to have the, the, the ability to carry our own goods and support our own navy. Because in addition to the warships, you know, that you need a lot, you need a lot of support vessels around these things. So, so that, that is the same situation we're in now post World War II Liberty Ships, which were something kind of done modular construction and all without getting into too much of that detail. But the Liberty ships, you know, we kind of sold those off. And the US Adopted this doctrine of kind of called effective control, which basically was an assumption that because there's so many ships around the world, we'll always be able to get our hands on the ships we need in wartime from the, you know, the worldwide shipping market initially. My understanding is that back at that time, the Navy was not in favor of really of this doctrine because, you know, they were the ones who were going to be on the hook. Right. Forgetting for making sure you have those ships and. And to have oilers and all the specialized vessels that they just learned in World War II that they needed in order to conduct, you know, global maritime operations and all of the landings and the things that won the Pacific War and the landing ships and the things that led to be able to execute the D Day. So that was perhaps. That was kind of the basis of perhaps not the wisest decision. So from that point on, there was a steady decline after World War II in US shipbuilding, and it's just really never recovered.
- [44:25]
B
Well, I want to ask you about that. We've got a few more minutes left, and I want to get in some of the data on that to give perspective on what would it take. So let's do that. When we come back from these final important messages, we are back with Victor Davis Hanson in his own words. I'm so grateful Chris o' Day is here sharing this really troubling information, but the truth will set us free, I guess, supposedly, or at least we'll know what's happening as we go down with the ship. Chris, you and I have been communicating for several years and you've sent me all kinds of data and the idea of America somehow or other picking itself up here when it comes to restoring its maritime, I don't know if it's greatness, but at least something in that direction, as you say, requires shipbuilding, so requires shipbuilding facilities. But if I wanted to build a container ship and I could build one in America, I guess I could build one now. Could I build one of these big honking ones that China builds? And if. If I could, how much. How much more, how much cheaper is it to build in China? Or maybe not even only in China they build these big. They build these cruise vessels right in Finland and Italy and Germany. So how expensive is it to. For America to get back into the game here?
- [45:59]
A
It's a Heavy lift. It's very expensive. The, and it just may not be feasible. The, most of the big, big container ships are built in South Korea or China. The US for example. Some recent. We built small container ships for what they call Jones act routes, which is really servicing from the US mainland to Hawaii, Alaska, Guam and Puerto Rico. And a lot of it is just kind of moving fuel cargoes. But the, they're on the order of about 4,000 containers. And those recently delivered ships, the cost was about 250 or 260 million. You can get a ship like that built overseas for about 75 million. These are kind of general numbers from recently reported deals. So the, the, it's a very very, you know, it's a very, very large price and cost discrepancy for that same 275 or so million, 250 million you can get from South Korea or China. You can buy One of the 24,000 container, ultra large container vessels that use things that. Yeah, yeah, they always put it on the, on the news and then, and they put, you know, showing all of the containers etc.
- [47:33]
B
Yeah.
- [47:34]
A
So those, so they order them in groups of seven or 10 and the price usually, you know, work, you've got, you know, they're, you're not getting like a sticker price from a vehicle, but the pricing usually works out to around 250, 275 million a ship. So if they were, you know, if they order eight or ten, they're usually in the order of kind of a two and a half billion dollar order. And it'll take, you know, it'll take three years or so to start delivering those and those, those things. I mean they're, they're big. And now what they're building is what they call dual fuel vessels that will run on methanol ethanol. And you know, they're looking at cleaner fuels and more advanced ships. Now the, the American ones that are built, I mean there could be, you know, good technology, clean vessels and things, but we just, we just can't build any of those large ships. And those are the things that carry the vast quantities of goods around, around the world. So the nature of the problem is if, if we, I've talked to some Japanese shipping people who came over and wanted to discuss this problem with me. You know, how can we ensure like for our allies that there's, that there's shipping capacity in the event of a war with China or an embargo, to be able to supply various societies and various, and, and, and various goods? You know, there are particular Goods channels. And then, you know, China like 96, excuse me, in Japan, I believe 96, maybe more percent of what they have in the country. And so much is imported there in Japan. So that's really kind of a problem. And we import still, you know, we still import an awful lot of goods from, from China or China, plus one areas around Southeast Asia. So it's a, it's a problem that I think we should figure out how to solve. And you mentioned, you know, kind of the broader historical trends. The historical trend I've kind of cast this situation in is, is this. When I looked at this problem and saw what was going on, I said, gee, the shipping line Cosco, which is the big Chinese state owned company, the ships are blue, it says Costco, and their mascot is a friendly little panda bear dressed in a captain's suit. But this is an arm and support arm of the People's Liberation Navy. You know, he's, he's, it's, he's a dual use panda bear. Yeah, he's, I mean he's supporting both sides. But the key thing is Costco is an enormous global operation. And you know, in, in order to be able to put that in some context in terms of what they're doing, I thought, well, it's, it reminds me, it looks a lot like the, the Dutch East India Company known as the Vocal. And a lot of people said, well, how did you come up with that? What was your database that led you to that? I said it was no database. It was reading a lot of history and looking at sort of mechanically, what is it they're doing. I mean, they have a. China has an army and a navy. So Costco doesn't have its own army and navy. They have a lot of communist officials within the Cosco organization. They certainly have security forces, but they're going around the world. They're, they're setting up essentially, you know, bases. They're not bombing their way in the way that the VOC did with, you know, military attacks, but it's a very aggressive, very expansive, state funded operation that's advancing the national strategic aims of China. And I said that that's, you know, that's a dangerous kind of organization to be dealing with.
- [51:23]
B
Yeah, let me wrap this up, Chris, because we've come to the end. But I'll give you like 2 minutes to answer this. This is one of my fears. Maybe I heard say something, but the actual containers themselves are they things. They're not just metal boxes that are neutral. Right. Are they somehow wired to be threats to our security or global. Global security.
- [51:50]
A
Well, I guess technically they, they could, they are metal boxes. Yeah. The problem is the Chinese, not cardboard Chinese, make these metal boxes. Again, that's part of their components. Yeah, 85% of them. So. But, but you can put a lot into those. And there are, you know, there, you can put trackers in them. And that, that's part of the fear with the cranes and especially the cranes and the, and the containers, you know, the fear that the Chinese could be implanting, you know, various types of surveillance and eavesdropping equipment into those. I mean, there have been reports of that. I haven't, you know, I haven't seen anything that showed definitively that they, that they found something. And some of the gear that they found on the cranes was, you know, equipment that could be used for remote monitoring, you know, of industrial machinery. So again, but again, that, that's a gray area. That's, that's where you would insert things if you wanted to. Yeah. If you wanted to do. If you had nefarious purposes.
- [52:50]
B
Yeah. Well, I just live in permanent fear that my refrigerator and toaster are listening to me. And since they're made in China, why not?
- [52:57]
A
So what about your headphones?
- [52:59]
B
Yeah, well, they definitely are. Hey, Chris, this is, you know, I don't mean to be glib about anything here because this is really quite important topic. You are the American, I believe, that really knows his onions on this. And I've quite appreciative that you've come to share that here on Victor Davis Hansen in his own words. And I hope folks have been educated by this and I hope they share it also, because this is a. I mean, who, who would think that. That maritime logistics is the straw that stirs the global drink? But, but it is.
- [53:37]
A
Well, it is. And if anybody has questions, I'm easily found at. My Hudson Institute site has an email on there if anybody wants to get in touch, ask questions, make suggestions. So thank, thank you, Jack. I really appreciate your having me on. And, and thank you, Victor. And he's, you know, when you talk to him, convey my thanks. I have not wanted to, to try to, you know, impose on, on his recovery time.
- [54:05]
B
People show up at his house, Chris, you know, they just do. Anyway, you've been terrific. Thanks so much. Thanks. Thanks folks for watching. Thanks for listening. We'll be back soon with another episode of Victor Davis Hansen in his own words. Bye bye.
- [54:20]
A
Thank you for tuning in to the Daily Signal. Please like share and subscribe to be notified for more content like this. You can Also check out my own website@victorhansen.com and subscribe for exclusive features. In addition.