Rep. Ro Khanna: “We Made a Big Strategic Mistake”

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL ANCHOR: And to Washington now where the Biden administration says that it will continue to cooperate with the Justice Department’s investigation of the president’s handling of sensitive material. Around 20 classified documents from Biden’s time as vice president have been found at his former office and home. Walter Isaacson has been speaking to Democratic Congressman Ro Khanna about this and about how his recent foreign affairs article about how the U.S. can become a manufacturing superpower again.

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WALTER ISAACSON, HOST: Thank you, Christiane. And Congressman Ro Khanna, welcome to the show.

REP. RO KHANNA (D-CA): Thank you, Walter. I have read many of your books, so, I’m looking for to the conversation.

ISAACSON: You’re on the House Oversight Committee. And Republican Chairman Congressman James Comer is going to look into the Biden documents. He’s issued some very strong statements. What do you think about that investigation? Should there be one. What are you concerned about?

KHANNA: Well, the investigation should be broader to say, why are classified documents being misplaced? I’m in the House Arms Services Committee, Oversight Committee, when I go to look at classified documents, I go to the skiff (ph). I can never take those documents into my office. I can certainly never take them into my home. So, broadly, we need to have reforms for the executive branch so that these documents stay in the White House or the executive branch aren’t going to presidential, senators, people’s homes. But in term —

ISAACSON: But what do you think about the President Biden situation now?

KHANNA: In terms of the specifics, President Biden fully cooperated, from what we are told. The minute those documents were found, he returned them to the law enforcement agencies. He informed them. I do support Merrick Garland to have a special counsel to get all the facts. But I think what the facts will show is that President Biden cooperated, followed all the procedures, unlike the former president.

ISAACSON: And do you think that undermines then the case against the former president?

KHANNA: I don’t. I have never been one of the people going on television, excoriating the former president. What struck me though is wrong about what the former president did, is he didn’t just return the documents. I mean, when the National Archives said, look, these are sensitive documents. If he had returned them, that would have been the end of the issue. He did not. He’s willfully defied that. That, I do think, is a big issue. No person is above the law.

ISAACSON: You wrote a wonderful piece recently in “Foreign Affairs” magazine called, “The New Industrial Age”. And it was very much against the offshoring of jobs. Democrats in the past 20, 30 years have been all in favor of free trade. But you’re pushing that back a bit. Explain why you think the offshoring of jobs happened and what we can do to reverse it.

KHANNA: Walter, we made a big strategic mistake in this country. And what we said is let’s have the Nobel laureates, let’s have the PhDs. But production didn’t matter. Let’s — let that go offshore. That’s not something that we need to do here. We can become a knowledge economy, a service economy. In the process, 70,000 factories closed in America. Town after town has been decimated. It’s led to so many people losing the ability to have the American dream. It has led to social discord. And it is compromising our national security. This was evident in the pandemic where people said we don’t make masks in America. We don’t make enough baby formula in America. We don’t even make Tylenol — enough Tylenol in America. I said, we need an economic renewal of production. We need to be, clearly, the best producing nation in the world and we can be.

ISAACSON: Well, tell me how you do that. Is that with tariffs or is that with subsidies to manufacturing plants?

KHANNA: All of the above. I had said nothing new. I’ve looked at what Hamilton did. What FDR did. And I said, how does it apply to the 21st century? First, we’ve got a technological advantage, with digital technology, with sensor technology. This gives us a productivity advantage in the United States. We need to use manufacturing technology and innovation in manufacturing processes for all the new industries whether it’s steel, aluminum, textiles, masks. Second, we do need to have tariffs where you’re having imports coming in from places that have child labor or no labor standards, or places that have terrible environmental policy. Strategic tariffs and coordinated tariffs with our allies so that we are not acting alone. Third, we need financing. I mean, these are huge capital expenditures but financing and cooperation with a private sector. In China they are all state owned. In our case, we look at the CHIPS Act which I helped write. Intel or other companies have to get their private sector financing. But the government said, we’ll fund it if you build those factories in Ohio or in New York.

ISAACSON: To what extent was this problem because of China being allowed into the world trade organization?

KHANNA: That was a significant cause. If you look at David Autor’s work at MIT, he talks about 3.7 million or so jobs lost because of the China shock. The trade deficit, as you know Walter, ballooned from 1999 to about 2007, 2008 with China. I mean, we lost industry after industry to China. And that was a mistake. It was a mistake because they were artificially holding too many of our reserves and appreciating their currency. And they weren’t playing on a level playing field. They were massively subsidizing their industry, stealing intellectual property. While we, kind of, said — shrugged. We said, well, we were prospering, like does it matter? Well, it does a matter who is doing the production.

ISAACSON: Speaking of the House, Kevin McCarthy, a Republican, said that they’re going to form a select committee to look at China, trade relations with China, the deficit with China. Might you be on that special committee? And if you are, would it — it seems like a bipartisan thing. What do you want that committee to do?

KHANNA: I voted for that committee. I have respect for Mike Gallagher, the chair. We came into congress at the same time. He’s a marine, Ph.D. We don’t always agree but I think he will do a serious job. And I have expressed my interest in being on that committee and I have confidence that leader Jeffries will put a good diverse group on the committee. The committee, I think, needs to do two things. One, focus on the national security issues to make sure that while we affirm one China policy, that one China policy means that China cannot aggressively, militarily, try to take over Taiwan. And we need to make sure that with Japan, with the Philippines, with New Zealand, and with India that we have adequate deterrence for that. Until we needed an economic rebalancing, I’ve called for reducing our trade deficit with China every year. Both of those plights need to be done without engaging in xenophobia or China bashing or bashing Chinese immigrants.

ISAACSON: The loss of manufacturing jobs or hollowing out of places where there used to be factories. How has that affected wealthy and equality in America and democracy in America?

KHANNA: Walter, it has affected it profoundly. First, it has affected most people who don’t have a college degree. Many of those blue-collar workers, you know, they wanted a simple life. I’ve talked to many of them. I’ve been to Anderson, Indiana, Janesville, Wisconsin, and so many parts of the country. And they’ll say, look, we wanted to watch Friday night football, with high school football, or maybe watch football on Saturday or Sunday. We wanted a house. We wanted to have our kids have a better life. And all of that is gone. It’s gone for many of them. And they couldn’t just become software engineers. And then they look in my district and they say, Khanna’s districts got $10 trillion. And they say, his parents came here on the 1960s. I’m very proud of our immigration policy. But our parents, our grandparents have been here for hundreds of years. They fought in the wars. Who — what about us? And that is part of the tension in this country. The social discord because so many people see themselves forgotten is — in seeing the American dream. I call for a new economic patriotism which says, celebrate the immigrants. We are going to need the immigrants, by the way, in the intel factories, but make sure that they’re not just creating the wealth in Silicon Valley. Make sure that they’re the bringing new manufacturing jobs, the new factory jobs to places that were decimated.

ISAACSON: You talk about economic patriotism, that’s what you call it in the piece. How is that different from economic nationalism and the type of things that gave us Brexit.

KHANNA: Economic nationalism, I think, is fundamental rejection of trade. I’m not for the rejection of trade, I’m for the rebalancing of trade. Economic nationalism can vary into an anti-immigrant sentiment. As a son of immigrants, I’m not anti-immigrant. I think immigrants can help us rebuild our manufacturing capacity with new technology. Economic nationalism can reject our role in the world and veer towards isolationism. I’m not for that. I’m for America leading. Making sure we’re building relationships with countries around the world for our exports and so that America can still define the 21st century world order. But I am for patriotism. I am — I do believe this is — America is the greatest nation in the world. I believe we’re going to be the first multiracial, multi-ethnic democracy in the world. And I believe we owe every American the opportunity to make a dignified living and we haven’t done that for 40 years.

ISAACSON: A lot of the big corporate leaders and world, you know, bankers are gathering in Davos today as we speak. Davos has always been, sort of, a symbol of globalization into some extent, free trade. Is the World Economic Forum in Davos part of the problem or part of the solution?

KHANNA: More the problem, I think, than the solution if anything because it looks out of touch. I wish there could be a Davos in, you know, Cincinnati, Ohio. A lot — why don’t we have someone convene all our business leaders, all our education leaders, government leaders in a place like Ohio to say, how do we have the resurgence of American manufacturing. If America succeeds in renewing our productive capacity. If we create jobs in places left out, we will become a better stronger democracy, and we will be a better citizen of the world. But you can start by having a cosmopolitanism that is a cosmopolitanism for elites and forgets the concerns of citizens in those nations. A cosmopolitanism globalization has to be rooted. And I think what we had for 20, 30 years was a globalization that worked for some, who were flying to Berlin, London, and around the world. But forgot about a lot of people who were living in the communities in this country.

ISAACSON: Your economic patriotism sounds a lot like an economic populism, which is something that was a strong part of the democratic party for much of the 20th century. Now, the Republican Party or a wing of the Republican Party has become the economic populous. Do you think that the Democratic Party ought to try to regain that mantle as opposed to being seen as the party of the elites?

KHANNA: Walter, yes. And I actually think this is what gives us the opportunity to be a governing party and a majority. I mean, I’m so proud of my work with Senator Rubio where we’ve called for this creation of this economic development council that’ll help the private sector and government work to revitalize parts of this country that have seen jobs leave. If the Democratic Party says, look, we understand why the working class is angry. We understand that they have gotten shafted with certain trade policies with large corporations moving offshore. We understand we didn’t focus enough on places like Michigan, Indiana, and Ohio. But we have a real vision to do it. And that vision is going to mean not just tax cuts that CEOs in my districts will pocket and send their factories to Malaysia. That means actually government investment in places that are going to have new factories. And government investment in education that we can actually help win. I believe and compete (ph) in these states, in the Midwest that we’re currently losing, that Obama won. But more importantly, Walter, we can become the manufacturing superpower because what I’m saying is what Hamilton said. What FDR said. We’re the 21st century gloss. We just have to look at our history and learn from what we need to do for the future.

ISAACSON: You’ve been a strong and steady voice on the question of Ukraine. Saying that we should aim for more of a diplomatic solution as well as continuing military support. Do you think we should push more now that the winter has come just for a ceasefire or a way to try to take this off the table?

KHANNA: Well, Walter, I have a, as you, know supported every aid package to Ukraine. I have said very clearly that Putin’s war was unprovoked, unjustified. And I supported President Biden and clearly Secretary Blinken who had helped allied the NATO world to defend Ukraine in terms of our economic assistance. But I said, at some point, we need the war to end. The cost of the war not ending is more Ukrainian lives. The cost of the war not ending is more energy crisis and economic crisis. And that means that we need to have constant communication with the Russians and diplomatic efforts side by side. When I said, this you would have thought I uttered something that was totally crazy. But President Reagan talked with the Soviet Union at the height of the Cold War. And what I am for is a just peace. One that does not see Ukrainian sovereignty but understands that at some point Ukraine, itself, is going to have to sit down with Russia to find a ceasefire and to find a solution to this problem.

ISAACSON: You know Kevin McCarthy. He’s part of your California delegations, spent a lot of time with him. Tell me what you think is really going to be like with him as speaker.

KHANNA: Well, that depends which Kevin McCarthy. I mean, the Kevin McCarthy when I was a freshman who invited me to his office and talked about his son who worked in Silicon Valley, (INAUDIBLE). And I still remember what he said. He said, Ro, anything that goes up in Washington comes down. Be careful about taking shots at people. They can ricochet. That Kevin McCarthy, you know, there’s room to work with. If it’s going to be Kevin McCarthy who has made deals to the extreme wing, who’s always clasping to hold on to power. That would be very unfortunate. My hope for the sake of this country, for the sake of this presidency is that we can get something done. Because ultimately, as I write in that piece, our challenges remaining the worlds’ economic superpower and worlds leader. And that’s really what they’ve sent us to Congress to do.

ISAACSON: You’ve been a tribune of bipartisanship. You’ve worked on the CHIPS Act with Republicans. You’ve worked with Marco Rubio and others. Do you think, given what’s happened with Kevin McCarthy in the promises he had to make to be speaker, there is a chance of having a bipartisan center in the House of Representatives that can get things done.

KHANNA: I do think there’s a chance for bipartisanship, Walter, and it doesn’t have to be in the center. You know, I’m a progressive Democrat and I work with Conservative Republicans. It — we’ve worked on bringing manufacturing back. We worked on cybersecurity. We’ve worked on data privacy. I think, particularly, when it comes to rebuilding the industrial base of this country, it should be bipartisan. But I’ll tell you where I approach things, I grew up the sone of immigrants in Bucks County, Pennsylvania. I was born in Philadelphia. I was growing up at a time when the county was 95 percent white. I was probably only one of two or three Indian kids in a high school of 800 people. But people in Bucks County believed in me. They gave me a shot. They believed that anything is possible in America. And they were Republicans, and they were Democrats. And I still believe most people in this country are decent patriots. They care about this country. They want this country to succeed and they’re good people. And that faith gives me a sense that if someone is here in the United States Congress representing 700,000 people, I owe it to their constituency to listen to them. And not just label them as something not worth working with, but to listen to them as someone who’s representing the American people.

ISAACSON: So, how will you, as a member of the party that’s in the minority in the House of Representatives, the Democrats, how are the Democrats going to convince the Republicans to work together?

KHANNA: Walter, first in, their self-interest. If they look at recent history, when Republicans have overreached, when they have been obstructionists, they usually don’t stay in the majority. It’s in Speaker McCarthy’s interest to do things that are good for the American people. And we can when it comes to manufacturing in the United States. When it comes to some deal on immigration. When it comes to data privacy. When it comes to raining in the excesses of technology. These are all areas that we can work on. If it’s two years of investigations, well, this is not going to bode well for the country or for the Republicans re-election chances. If it’s getting things done, if it’s good for the country, and frankly, it’ll be good for them in 2024.

ISAACSON: Congressman Ro Khanna, thank you so much for joining us.

KHANNA: Thank you.