Op Eds

How to Rebuild America

by David Dreier

August 2020

    During the 2016 campaign, Hillary Clinton proposed spending $275 billion over five years on infrastructure, and Donald Trump promised “at least double” that. Now, the President says he wants to spend “at least $1 trillion” on infrastructure, and Joe Biden says promises $2 trillion in his first term. The ante is being upped, but nothing is happening, and America’s infrastructure keeps failing.

     Meanwhile, we desperately need to restart an economy ravaged by COVID. This is the time. Interest rates are at rock-bottom, and investors are ready to deploy capital in the world’s largest market. Massive investment in infrastructure will quickly put Americans to work at home improving roads, bridges, sewage systems, energy pipelines, an electric grid that ranks 26th in the world, airports that are a global embarrassment, and much more.

     What’s missing? Money.

      A 2017 report card on the condition of infrastructure from the American Society of Civil Engineers gave the U.S. a grade of D+ and estimated that $4.5 trillion was required by 2025 for remediation; that figure is now $1.5 trillion higher. While there is bipartisan will in Congress and the White House to address the problem, the cupboard is bare. The U.S. faces a record $3.7 trillion budget deficit this year.

     Reviving infrastructure, however, does not require taxpayer dollars. A new private institution can attract investment money from around the world and put it to work in rebuilding projects in the United States. That institution is a nationwide infrastructure bank that requires zero federal funding or loan guarantees. As a “non-bank bank,” it would take no deposits. Its model is the Federal Home Loan Bank (FHLB) system, which is privately owned, managed, and funded. With $1.3 trillion in assets, the FHLB has been a safe source of funds for the U.S. housing market for the past 88 years. During the 2008 financial crisis, for example, the FHLB provided $1 trillion in advances when other sources of credit dried up.

     The U.S. is the only major developed country without an infrastructure bank. The European Investment Bank (EIB) has helped Europe become “more adept than America at mobilizing private capital for public infrastructure,” writes Terrence Keeley, global head of the official institutions group at BlackRock, the largest investment management firm in the world. The EIB is credited with creating 1.7 million jobs.

     The U.S. has state infrastructure banks, but most are moribund or tiny. The proposed new private infrastructure bank would provide funding to help revive these state banks so they can put money to work. Funds, as well, would go to private-sector projects. According to a Cato Institute study, just 3% of fixed assets are held by the federal government, 19% by state and local governments, and 78% by private owners. No matter who owns the assets, every trillion-dollar investment creates 12 million new jobs, according to Georgetown University researchers.

     There are hundreds of important projects waiting for the funding an infrastructure bank could offer: the Camden Spaceport in Georgia, the Gateway Tunnels in New York and New Jersey, the Texas Central Railway (high-speed train line), the Sites Reservoir in California, and many more.

     Where would the money come from? The U.S. is a magnet for investors around the world — investment and pension funds, sovereign wealth funds, wealthy individuals, banks and other financial institutions. What these investors demand is a responsible manager for their money, a bank that can select and oversee the right projects to produce a profit.

     The federal government’s role — as outlined in a bill introduced just last month, the Infrastructure Bank for America Act — would be to charter the bank, oversee it, and offer a tax credit. The five-year credit would amount to 10% annually of the amount of equity an investor purchases in the bank. This is not an unusual incentive for directing funds to socially valuable projects, and the foregone revenues would pale in comparison to the hundreds of billions that the Treasury would receive in new taxes from the projects.

     The equity would provide the capital cushion that all banks need, and shareholders would elect directors, who in turn would hire management — all without political interference. The Federal Reserve would provide oversight for the bank, which would be designated, like any large commercial bank, as a SIFI, or systemically important financial institution, to ensure its safety. The Fed might also use funds from its quantitative easing program to buy infrastructure bank bonds – purchases that have no effect on the federal debt.

     A national private infrastructure bank will make America a better, more productive place to live – all the while generating millions of new jobs at no cost to taxpayers a time of high unemployment. The question now is whether Democrats and Republicans can get together in this time of crisis to rebuild America.

    David Dreier served 22 years in the U.S. House of Representatives, including 10 years as chairman of the Rules Committee. He chairs the Annenberg-Dreier Commission, which seeks to strengthen the free flow of goods, services, capital, ideas, information and people throughout the greater Pacific region.

Politicians need to focus on hospital, not drug costs

By Former Rep. David Dreier (R-Calif.), Opinion Contributor, The Hill--03/24/17

With the Congressional Budget Office’s scoring of revisions to the Affordable Care Act, the issue not merely of access but of soaring health-care costs is front and center. It’s a big problem, one that I tried to tackle with a bill to introduce Medical Savings Accounts 30 years ago. Unfortunately, health costs have more than quadrupled since then. But we can find long-term solutions if we follow common-sense economics. Here are two simple remedies: first, focus where the money is, and, second, remember that the basic rules of supply and demand still operate, even in a market with so much government intervention.

Out of the $3.4 trillion we spend on health, $1.1 trillion goes to hospitals and $684 billion to physicians and clinical services, a category that includes all outpatient services provided in doctors’ offices and clinics. Far behind in third place is spending on prescription medicines, at $347 billion, according to a study issued Feb. 10 by the Altarum Institute. So: one-third of hospitals, one-fifth on outpatient services, one-tenth on drugs.

Why is it, then, that so many politicians focus on drug costs and not on hospital costs? The average one-day stay in a U.S. hospital now costs $5,000. That’s seven times as much as in Australia. Heart-bypass surgery averages $78,000, compared with $24,000 in the U.K.

One reason for the obsession about drug costs may be political; every member of Congress has a hospital in the district but only a few have drug manufacturers. Another is the way health insurance works. Americans pay out of pocket just three percent of hospital costs, but, because of high deductibles and co-pays, 15 percent of pharmaceutical costs.

This insurance system is counter-productive. It discourages the use of lower-cost medicines that can keep patients out of higher-cost hospitals. Every additional dollar spent on diabetes medications, for example, saves seven dollars in other medical costs. And if a drug were invented to prolong the onset of Alzheimer’s by just five years, the estimated savings to the health care system would be $367 billion.

Hospital, physician and clinical spending rose $87 billion last year; drug spending, $13 billion. If you were the CEO of any business, where would you put your efforts to control costs?

Supply and Demand. When supply rises or demand falls, prices decline. On the supply side, the U.S. can, for example, have more well trained professionals provide care now administered only by physicians (such as chronic-disease management) and by speeding drug approvals and getting more generics to market.

But the demand side is key. The root cause of health spending is lack of health. People end up in the hospital because they are sick, and, compared with citizens of other rich countries, Americans are a lot sicker — often because of unhealthy living. If we could get healthier, we would reduce the demand for health-care services.

“A lot of these proposals being discussed about controlling health-care costs really don’t address the underlying issue, which is rising disease prevalence,” says Kenneth Thorpe, chairman of the department of health policy and management at Emory University. “You see this rise in chronic disease spending. Much of it is potentially preventable.”

The three diseases responsible for the most spending in the U.S. are diabetes, ischemic heart disease (heart attack and stroke), and lower back and neck pain, according to a comprehensive study. In most cases, the three can be prevented or mitigated through exercise, good diet, and smoking cessation.

The U.S. spends much more than other countries on health care, but we spend much less on the social services that can reduce health costs — just 19 percent of GDP, compared with an average of 30 percent for other developed countries. For example, services that help a disabled person recover quickly can reduce the time the patient is sick and racking up large inpatient and nursing-home costs.

Another way to reduce demand for more expensive inpatient and outpatient health services is better compliance. “Drugs don’t work in patients who don’t take them,” said the late Surgeon General Everett Koop. A typical large study found that for diabetes and high cholesterol, a high level of medication adherence was associated with lower disease-related medical costs.” Other studies have found that only 43 to 78 percent of patients with chronic conditions are compliant.

There is no need for despair. Part D Medicare, which provides seniors with a pharmaceutical benefit through the principles of competition, is an example of what we can achieve. While the inefficiencies of our system are complex, the good old economic verities still rule: focus on the biggest costs, increase supply, and decrease demand.

David Dreier is a fellow at the Brookings Institution. He served from 1981 to 2013 in the U.S. House of Representatives, including 10 years as Chairman of the Rules Committee.

Op-Ed:  Prop 20 May Be in Danger

By David Dreier and Bill Mundell, Contributing Writers

Orange County Register, February 27, 2015


In 1787, James Madison wrote that “the State Legislatures will sometimes fail or refuse to consult the common interest at the expense of their local conveniency or prejudices.”

In 2008, and again in 2010, California voters used ballot initiatives to virtually exclude the Legislature from the redistricting process and, in so doing, directly addressed one of Madison’s chief concerns.

Californians may be unaware, but the second of those measures, Proposition 20, which assigned the drawing of district lines for the U.S. Congress to an independent commission, may be in grave jeopardy. So may other popular, voter-enacted reforms.

On March 2, the U.S. Supreme Court will hear arguments in a case brought by the Arizona State Legislature that seeks to invalidate the state’s 2011 House districts. Like California, Arizona used an initiative to remove the Legislature’s final authority to draw the House maps. The Legislature, in Arizona State Legislature v. Arizona Independent Redistricting Commission, argues that this is unconstitutional.

In addition to determining whether the Arizona and California House maps can survive, a broad decision in this case could decide whether voters nationwide will lose their power to enact changes to election rules. Reforms as basic as Ohio’s 1977 initiative that made voter registration easier could be invalidated.

So could California’s open primary, which was originally passed by the Legislature and then approved at the ballot box, because once enacted, it may not be repealed or altered by the Legislature.

The principal issue the court will address is the meaning of the Elections Clause of the U.S. Constitution.

It says: “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations.”

Does that clause mean that only elected representatives acting as a body are the “Legislature”? Or does that word mean “the power that makes laws,” as it was defined by Dr. Samuel Johnson in the leading dictionary of the Framers’ era, and also in Noah Webster’s famous 1806 dictionary?

We have no way to discern whether the Framers would have included a law written by the people in their definition of “Legislature,” because the initiative was unknown in 1787. But we do know the Framers understood states sometimes acted via mechanisms other than their legislatures.

Although the initiative was still in the future, its cousin, the popular referendum, had already made its appearance. The Framers wanted each state to call a special convention to ratify the Constitution, rather than allow their Legislatures to act.

But in 1788, Rhode Island chose instead to submit the proposed Constitution to a vote of the people (in those days, the process resembled our Iowa caucuses, not our referenda with polling places and machines).

We also know that the Framers feared that state legislatures could abuse their authority. The second part of the Elections Clause, giving Congress the power to pass its own laws that would override state “regulations,” was added for precisely this purpose.

There was concern that if state legislatures could manipulate the membership of the House, they could control the new government. At the ratification debates, it was noted that states might create unequal voting districts or even balk at granting additional representation to rapidly growing areas.

A century ago, Congress acted to acknowledge and accept the changes that had taken place in state governance. In 1911, it amended the reapportionment statute, which had referred to redistricting by “the legislature of such state,” to provide that the redistricting should be done by a state “in the manner provided by the laws thereof.”

That change was made after a debate in which members discussed the recent adoption of initiatives and first heard about the idea of nonpartisan commissions. That concept had been suggested in an elite law journal in 1893, when one commentator said of a commission: “[I]t is hardly conceivable that it could produce worse gerrymandering than the present method.”

It seems unlikely that a Constitution intended to include checks on the unfettered power of state legislatures would have insulated them from other structural changes that constrained that power.

California’s redistricting commission has flaws, but they can be addressed before the next go-round in 2020. The commission was overworked and understaffed. The process needs to be stretched out over a longer period, with hearings held in more diverse locations to maximize public input.

Most importantly, transparency needs to be improved. The multitude of witnesses and groups that testified before the commission should have to disclose their employers and their sources of funding.

An adverse court ruling would deprive the states of the power to structure their own government in the way they choose, and would sentence California to a return to the days of legislative gerrymandering. We’ve already seen that movie.

David Dreier is founder of the Dreier Roundtable at Claremont McKenna College and chairs the Annenberg-Dreier Commission. A distinguished fellow at the Brookings Institution, he served in Congress from 1981-2013 and was chairman of the House Rules Committee. Bill Mundell is the former Chairman of Californians for Fair Redistricting and the executive producer of the 2010 feature documentary Gerrymandering. Along with three former governors, Charles Munger Jr., and the California Chamber of Commerce, he signed an amicus brief that was filed with the Supreme Court in this case.

Op-Ed:  Can we make Congress move?

By David Dreier

Los Angeles Times
July 21, 2014, Page A15

Things in Congress are bad, but how bad? Former Rep. David Dreier weighs in...

Throughout my time in Congress, and particularly since leaving the House of Representatives last year, the question I'm asked most often is some variation of “Just how bad is it really?” Frequently the question is answered before it is asked: “Congress is completely controlled by big money and special interests, isn't it? It's more partisan and dysfunctional than ever before, right?”

Public opinion polls affirm the general view that clearly underlies these questions: Congress is disconnected from the people. It is taken as axiomatic that ordinary citizens are unable to sway their representatives in Washington, that they are not listened to, that they do not count. The question “What's the secret to getting through to Congress?” is not unrelated to “Just how bad is it really?” Both indicate deep-seated negative views of Congress today.

How did we get here? For starters, the United States is large and tremendously diverse. Americans are opinionated and passionate. We have strong ideas about issues, we want our voices heard, we want results, and we want them now.

Further, we live in a nation founded in the aftermath of a revolt against tyranny. Our framers explicitly sought to ensure that no one individual, faction or institution could consolidate power. We have a Constitution that is, as one scholar put it, “an invitation to struggle.”

All of this results in a cacophonous, unruly, multipolar democratic process. Congress, as the body that represents the people, is the institution that most closely resembles the fabric of our nation and all the views, aspirations, resentments and passions that come with it.

This point brings us to a much more consequential connection between the two general questions described above. Getting through to one's congressman is quite easy, but that's equally true for each of the roughly 700,000 constituents that every House member represents.

In most representatives' offices, every single letter, email, fax, phone call and personal visit receives a response. These average in the hundreds every day. When particularly controversial issues come before Congress and groups mobilize to send in form letters, these contacts can spike to thousands in a day.

Mass mailings do have an effect. They raise awareness and signal strong support or opposition. But their effect is limited, and for good reason.

First, because controversial issues, by definition, have advocates on both sides. A blast of form letters from one side is usually followed by a blast of form letters from the other side.

Second, and more important, I found time and again that a flood of letters often masked majority views. Some issues, such as trade and immigration, are always inflammatory in certain quarters, with advocates that are well organized and highly motivated. If I had gauged opinion simply by counting letters I received, I would have had a warped view of public sentiment.

When I reached out to constituents, conducted telephone town halls and met with community leaders of all stripes, a very different picture emerged. I found wide support for greater engagement in the worldwide marketplace, as well as for humane, economically focused immigration reform. In other words, I found that many voices were absent from the debate.

As an elected official, there is no shortcut to gauging district sentiment. As a citizen, there is no shortcut to influencing the legislative process, and no escaping the fact that those with whom you vehemently disagree will have a say as well.

The work that Congress actually gets done is also often lost in the partisan din. One major area that has achieved a great deal of bipartisan success is the issue of free trade. Four major votes on free-trade agreements, and the granting of permanent normal trade relations, passed with big bipartisan numbers during my final term in Congress. Steady progress like that doesn't grab headlines, but it does demonstrate that breaking through gridlock is possible.

This picture of Congress is not one of perfection and great efficiency; it has never been perfect, nor was it ever intended to be efficient. It is, however, intended to give voice to a broad range of views and prevent the rise of authoritarian power. Its role is to be a forum for the ugly, messy, difficult process of democracy.

If Congress is deeply divided, it is because we Americans are deeply divided. Reaching consensus poses great challenges that must be met, not only by congressional and presidential leadership but by the nation. In the meantime, we should recognize that our voices as citizens are heard and that those in Congress are finding ways to move forward amid a divided public.

To answer the original question: Honestly, it's not really that bad.

David Dreier, a Republican congressman from San Dimas from 1981 to 2013, is a Brookings Institution fellow and founder of the Dreier Roundtable at Claremont McKenna College.

Copyright © 2014, Los Angeles Times

David Dreier: The need for immigration reform

By David Dreier/ Contributing Writer

Riverside Press Enterprise
Published: June 20, 2014

Orange County Register
Published: July 7, 2014

A familiar, tired and costly pattern is emerging again in our national discourse on immigration.

As momentum for reform builds, so too does the din of conspiracy theories and dire predictions of
betrayal of our core values.

These fears may be genuine, but are wildly misplaced. Our core values are not threatened by the
mainstream immigration reform proposals under discussion. America’s core interests, however, will
be threatened unless we seize the security, economic and social benefits of a responsible and
effective immigration policy.

Most Americans agree on the basic outline of what immigration reform should look like.

A recent Pew survey demonstrated that large majorities of both Republicans and Democrats want a
policy that secures our borders, strengthens America’s human capital and makes our nation more
competitive. They also want a policy that brings those here illegally out of the shadows in an
appropriate and humane way.

In this context, no word raises passions more quickly or ferociously than “amnesty,” but it is no
more than a straw man. Proposals under discussion in recent years reject amnesty and impose real
penalties. Such an approach does not threaten the rule of law.

The status quo, by contrast, does exactly that. The millions of illegal immigrants currently living
and working in the United States have been required to pay no fine, demonstrate no English
proficiency, or meet any other precondition that reform might

impose. Many spend their entire lives outside the scope of labor, banking, education, and
other laws, often paying far less than their full tax burdens.

This de facto amnesty in the absence of reform is the real threat to the rule of law.

Our challenge is not whether to impose penalties for breaking immigration laws – that question is
settled. It is how effectively and fully we can extend the law’s responsibilities and protections
across our entire society. That includes, as a practical matter, providing a formal way in for the
millions of families now here in the shadows, trying to earn a living.

Visa policy is a no less pressing part of immigration reform. This is probably the most globally
competitive moment in our history. Our visa policies are failing to facilitate entry for skills and
talent that can help propel America’s success and growth.

Far too many smart, ambitious young students, particularly in the STEM fields, have come to study
at our schools, only to be sent home upon graduation to become our competitors. We need to put the
development of human capital near the center of our immigration policy. That policy can help create
an economy and a workforce with an ever-expanding base of opportunity for all Americans, enhancing
our strengths in innovation and adaptation.

Sound immigration policy isn’t rocket science. It seems to be even harder, politically speaking.
Yet nothing could be more important to our country’s long-term security and competitiveness.

We need to understand the stakes more realistically in those terms. We also need to move beyond
pseudo obstacles like amnesty that have thus far constrained real progress.

At many points in our history immigration has been a bridge into America’s future, helping us grow
economically, innovate technologically and advance socially. It can be once again.

David Dreier, a Republican congressman from California until last year, is chairman of the
Annenberg-Dreier Commission and a distinguished fellow at the Brookings

China Belongs in the Pacific Trade Talks
This is a hinge moment for the global economy. Don't leave Beijing out

Wall Street Journal, April 12, 2013 By David Dreier

The last quarter-century brought the fastest and most profound geopolitical change and economic
growth the world has seen. It's time to go even bigger.

Just five years after the 2008 global financial crisis, 12 economies spanning the Pacific are
negotiating a colossal new multilateral trade agreement. The Trans-Pacific Partnership—with its
focus on a host of 21st-century trade issues, such as data flows, financial regulations and
intellectual property—will be the most sweeping and significant free-trade agreement ever.

Japan's impending entry into the TPP means that the deal's participants already account for 40% of
global gross domestic product. Yet an obvious and vital participant is still missing: China.

The collapse of the Soviet empire, the consolidation of a democratic Europe, China's entry into the
World Trade Organization, the integration of the North American economy, and the emergence of a
billion new members of the global middle class have all shown the power to transform the world
before our eyes.

Trade and the revolution in North American energy production are quickly undercutting false
narratives of American decline. U.S. manufacturing is expanding. The American culture of innovation and capacity for adaptation are boosting competitiveness. There is an opportunity to generate even stronger sustained growth. Prosperity in a globalized world is not zero-sum: The United States is a resurgent power in the 21st century partly because others are growing in influence.

That is why the next step must be to engage China fully in the Trans-Pacific Partnership. China's
foreign trade has increased to nearly $4 trillion today from $20 billion in 1979, as open
international markets and its peoples' labor fueled the country's immense economic growth.
China's growing political and economic power generates two reactions among its neighbors. One is a desire, which the U.S. shares, for close economic and trade links to Asia's largest economy. The
other is a desire among Asian nations for close security ties with Washington, as a hedge
against Chinese policies that many fear may turn increasingly aggressive.

The Obama administration's pivot toward the Pacific addresses those security concerns. Indeed,
American political and security relations across the Asian-Pacific region are generally excellent.

Yet the Trans-Pacific Partnership shouldn't be about hedging. TPP is at its core an affirmative and
inclusive initiative. Its members are working to shape a contemporary, open and rules-based system of trade and commerce that will drive global growth and opportunity for decades.
It is in the interests of the U.S. that China be part of this partnership. It is inconceivable that
either nation could thrive if the other doesn't.

Leaders in China, like everywhere else, have to respond to a changing world. This requires constant
evaluation of interests and policies, and decisions about how best to connect with a public whose
expectations are evolving rapidly. The recent opening session of the 12th People's Congress in
Beijing reflected a clear understanding of this dynamic. Leaders emphasized the importance of
strengthening the rule of law and ceding more economic space to the market.

This creates an important opportunity for China's new leaders. China can ultimately be one of the
biggest beneficiaries of the TPP and its high standards on investment, services and intellectual
property. Yet the country's leaders don't currently see their interests that way. This is an
important moment. The U.S. must find ways to talk to a wide spectrum of stakeholders in China—from entrepreneurs to Communist Party officials—on TPP and a shared future as leaders in global trade.

There were two hinge moments of history in the past century. In 1914, an era of technology- and
trade-driven globalization came to an explosive end. In 1945, another world war came to a close but
with a better turn—toward the gradual development of an international order that promoted growth, rights, security and stability.

We are again at a hinge moment. China and the U.S. are destined to be the two most important powers of the 21st century. As a practical matter, we must be able to reconcile somewhat divergent but not opposed views and interests. Today's opportunities are historic—and our response to them must be too.

Mr. Dreier, a Republican congressman from California until this year, is chairman of the Annenberg-Dreier Commission at Sunnylands, which focuses on trans-Pacific trade and exchanges.

China, US Can Drive Clean-tech Revolution

By David Dreier and Bill Mundell


Asia Times Online, November 20, 2013


Bold bets on international cooperation are often grounded in similarities. But, sometimes differences, or complementarities, can be more powerful drivers of common cause. There is probably no area that illustrates this better than the opportunity for US-China cooperation on clean-tech.


Both nations should be doing more together now to drive the innovation and commercialization of technologies that keep the planet livable and facilitate the growth needed to meet human needs. Matching China's needs, resources, scale, and incentives with the intellectual, technological, and managerial resources of US companies could be a Chinese, American, and global win.


China is accelerating along the learning curve of a toxic environment, facing the full implications of severe health risks and costly cleanup. The challenge is human, economic, and political - extending even to civil stability.


For us it gets personal too. We breathe mercury, sulfur oxide, ozone, and black carbon that can traverse the Pacific to California in mere days. The ripple effects of environmental degradation anywhere can pack a big security, growth, and health punch everywhere.


The US and China diverge on many things, but not on the critical need to develop and implement clean technology. This may be the most important hinge for a new model of public-private partnership between the US and China. That partnership would leverage common interests, but our differences are what would propel it.


China has the political ability to focus huge resources quickly - recently pushing its Clean-tech investment goals from a planned investment of US$375 billion through 2015 to $735 billion. China may be better at mustering the patient, long term, strategic approach our environmental challenges require.


Our ultimate goal should be a clean-tech revolution that fundamentally alters the way we harness and use energy, consume resources, and protect the environment. We have to manage this without crippling growth, destroying US jobs, and reversing the decline of poverty in China and elsewhere.


America's innovation capacity, start-up culture, and open society were big advantages in the creation of clean-tech. Much of what we helped build is now at risk. Public investment is dwindling, and with it the private funding that a longer term public commitment would have secured. The result can be big write offs and shutdowns of promising technologies, job losses, and a huge deadweight loss for society.


China's needs and investment reserves can save endangered US companies and game- changing technologies - and even attract new US private capital as China's long-term partnership provides new investment incentives.


If the opportunity is obvious, so are the obstacles, on both sides. They just aren't always what you'd think.

China tends to over-read American reticence to share technology, and perceive a desire to

contain China. Americans often overplay the national security argument. Reality is more nuanced.


The inter-agency Committee on Foreign Investment in the United States, or CFIUS, works. It is effective sifting fact from fiction on national security. The recent approval of Wanxiang's purchase of A123, an advanced lithium battery manufacturer, is a case in point: the sale proceeded after A123's direct government and military programs were separated out.


US companies in China are accustomed to the need to operate with Chinese partners. The reverse isn't standard. Chinese companies' often do a poor job have navigating our business and political culture. This often inhibits sound business and investment.


Recent developments, like negotiations for a bilateral investment treaty, are hopeful signs. These may reflect judgments about China's long-term evolution towards important shared standards.


Our clean-tech partnership can be a way, in the here and now, for both countries to instead capitalize on our differences.


To make this happen our countries need to build a new facilitating framework for clean-tech investment and cooperation. It's not rocket science - dedicated Chinese government fund meets seasoned US - based venture capitalists with core competency in clean tech. The Chinese acquire controlling interest in individual distressed companies while leaving a minority position for the original investors. Portfolio founders agree to relocate to China as part of the transaction, preserving continuity and allowing the Chinese to "import" the innovation they are so sorely seeking.


This would be a one of the boldest ways our countries could bet on each other's success.


Several months ago Henry Kissinger noted that neither the US nor China can solve global problems on their own, and that no big global problem can be solved without the US and China working together.


When Presidents Xi and Obama met at Sunnylands, California, a few months ago they talked about creating a new model of relationship between major states. Relationships like that cannot be proclaimed. They must be built. Clean tech can be a powerful part of that.


David Dreier is Chairman of the Annenberg-Dreier Commission at Sunnylands. Bill Mundell (www.billmundell.net), a Member of the Commission's Advisory Board is the producer of a forthcoming documentary on the US-China relationship.

(Copyright 2013 David Dreier and Bill Mundell)

Freedom Train:  A Tour of 1989

By David Dreier

World Affairs
Summer 2009

We have come a long way since 1989, that year of miracles when we felt, at least for a brief moment, that something fundamental about human freedom had been decided and that we had seen a permanent greening of the global political environment. History didn’t end twenty years ago, as some prematurely assumed; the clash of ideology became a clash of cultures and we still struggle over issues of threat and response, stability and security. Yet it would be wrong to feel so trapped in the moral grayness of the present that we fail to observe the landmark twenty-year anniversary we celebrate now and take a moment to recall what was accomplished by the inspired mechanics working throughout the 1980s in shop rooms of democracy around the world and how their work resonates today.

This much I know: history was set on fast-forward in 1989. Anyone even remotely involved in the great events of that year felt himself to be present at the creation. For me, there were two prestige moments. The first came six months before the fall of the Berlin Wall when I was in El Salvador as part of a U.S. congressional delegation watching a swearing-in ceremony for the country’s new president, Alfredo Cristiani. It was a moving ceremony, especially when the man Cristiani was replacing, Jose Napoleon Duarte, struggled to his feet to embrace his successor. Duarte, much vilified by leftists throughout Latin America and the U.S. for the uncompromising war he had waged against the Soviet-supported FMLN guerrillas who at one point seemed on the verge of taking over his country, was suffering from terminal cancer. He and Cristiani had been bitter rivals in the electoral campaign just concluded. Yet here, after two decades of bloody civil strife played out against the backdrop of the Cold War endgame, they were collaborating in the first peaceful transition from one democratically elected presidency to another in El Salvador’s history.

All of us who attended this dramatic ceremony knew that a stone had been tossed into history and that the waves it created would continue to lap on Salvador’s shores for years to come. But I doubt that any of us imagined that two decades later the FMLN would have laid down its guns in favor of democratic participation in the country’s future or that the neighboring Sandinistas, who had supported the Salvadoran guerrillas’ brutal campaign throughout the 1980s, by then would also have traded the bullet for the ballot.

The second unforgettable moment in the drama of 1989 came two days after Cristiani’s swearing in. I was on a plane for Krakow, Poland, as part of a congressional delegation led by Jim Denton, then head of the National Forum Foundation and later Freedom House—organizations that played pivotal roles in nurturing the growth of democracy movements throughout Eastern Europe—and now the publisher of this magazine. We arrived on the eve of the first free Polish elections, a concession Solidarity had extracted from the Communist government two months earlier after two generations of Communist subjugation. The decision to hold a vote had come suddenly and unexpectedly, and the members of our delegation were the only international observers present.

On the night of June 3, just hours before the polls opened, we were at Solidarity headquarters crowded around a small television set watching Chinese tanks lumbering menacingly into Tiananmen Square in preparation for a bloodbath. General Wojciech Jaruzelski’s junta had ordered the tape loop of the scenes from China to be played continuously to convey the not-so-subtle message to Poles about what might happen to them if the election didn’t produce the correct results. Indeed, the Solidarity leaders worried aloud that they wouldn’t get 50 percent of the vote. Yet, the next day in the first free election in the Communist empire, the people of Poland spoke as one—over 95 percent voted to oust the Communist regime. As we traveled through the region that day, we saw hordes of citizens lined up at the polls with stunned looks on their faces, still unable to comprehend the magnitude of the event, like sleepwalkers in the middle of a historical moment they never expected to experience.

It was inevitable that the poetry of that annus mirabilis should eventually give way to prose over the next few years; and that ecstatic acts of liberation and the poignancy of first elections should be followed by something more workaday and methodical. Yet the chronicle of democracy compiled since then has a quiet grandeur of its own. Throughout the 1990s, I worked on a U.S. House of Representatives task force coordinating with the parliaments of ten former Soviet bloc states to embed the promise of democracy in their countries’ social and political institutions. We worked to build libraries and judiciaries, police departments and political parties. Some of these countries, like Poland, which had the benefit of a democratic movement that had functioned almost as a shadow state to the increasingly illegitimate Communist government, made the transition with relative ease. Others, like Ukraine and Belarus, had greater difficulty in exorcising their Soviet ghosts. Yet the democratic revolutionaries continue to grapple with the promise of 1989 in their efforts to establish the rule of law and inviolability of personal liberty. The road to democracy was filled with potholes and occasional rest areas, but the brave people in these countries understood that however fast it moved, or was occasionally diverted, the traffic was headed one way.

There have been daunting lessons to learn since the historic election in Poland. Even the best intentioned and most committed members of new democracies are not always able to resist those who exploit fragile institutions for personal gain or political malice, or those who use freedom as a cover to create corruption and chaos. Yet the work of twenty years ago continues today—often quietly and hidden from view but with vigor and success. In 2004, for instance, the U.S. House of Representatives Democratic Assistance Program was created to help countries ranging from Kenya to Indonesia whose 1989s have been partial, not yet yielding their full promise. Discussing parliamentary committee systems in Jakarta or budget oversight in Nairobi—work which may not pay off for years or decades, or perhaps ever—I sometimes think back to where it all began in the jungles of Central America and the factories and universities of Eastern Europe and think too of the winding path 1989 has created for our generation. It reminds me of the story of an old man whose sole occupation was to sit in a chair waiting for the Messiah. When a passerby asked him how he could spend his life this way, the old man replied that what he did might not appear to be exciting but it was steady work. That is what the events of 1989 have provided for so many democracy activists in so many countries around the world: steady work.

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