Sunday Cutdown VIII (1/21/24)
Clearing my inbox of stories I want to document
1) This “regional conflict” is entirely of Iran’s making
NYT: Why Iran Is the Common Link in Conflicts From Gaza to Pakistan
WAPO: Pakistan fires retaliatory strikes at Iran, raising fears of new conflict
NYT: In No Position to Fight a War, Pakistan Seeks an Off-Ramp With Iran
It gets to me that the media/expert coverage now feeds these three false narratives:
“Israel launched a war on Gaza”
“Israel’s Gaza War is escalating into a regional war”
“America’s foreign policy failures are behind all of this!”
Let me reject them as follows:
Iran is entirely behind Hamas’s initiation of war against Israel — a conflict that began on 7 October 2023. Without Iran’s help over the years, that invasion does not happen on anything approaching that scale. Doesn’t matter if Hamas kept Iran in the dark on timing and scope details. Iran knew what it was doing. This entire conflict is thus a series of events set in motion by Iran.
Israel did not launch the war on Gaza. Instead, it joined a war already launched against it by Hamas. This is not a war of choice but of sheer survival for the Israeli state and people. When somebody launches an invasion of your nation and engages in total war tactics (reveling in the atrocities), you fight back. You join that war — big time. At that point, proportionality is a joke. You want to end the threat — whatever it takes.
The so-called escalation unleashed by Israel’s decision to counter total war with total war (something America itself has a long history of doing) is complete BS. Instead, we are simply watching Iran’s off-the-bench subs racing onto the field and joining in the fun of taking on the vaunted Israel/US combo. These minions, like the Houthis, find fulfillment in this activity.
But again, this is totally Iran’s call from start to finish. Iran enabled Hamas, which acted with Tehran’s vigorous follow-on support. So, no, this is not a regional war; this is Iran coming directly after Israel, using all means at its disposal.
As for America’s guilt, that is the worst nonsense. Iran is responsible for what it does. So far, all America has done is stand by a long-term ally in a difficult situation, making sure nobody piles on from the sidelines, nor disrupts global trade unduly.
Casting the US or Israel as the problem or antagonists is backwards.
Iran is the instigator and troublemaker. Tehran sees a magical moment to flex its regional muscles, even to the point of launching strikes against hostile groups inside Pakistan, a move that got its own tit-for-tat response from Islamabad.
It’s important we keep viewing this conflict for what it is, versus what we want to make it seem for reasons of domestic political conflict.
2) India and China need no help from the US to have a vigorous rivalry
WAPO: Maldives asks India to withdraw its military in tilt toward Beijing
Get used to these stories, because they will multiple over the years, feeding all sorts of calls in our media for leveraging India against China.
This current bit:
India, the regional power, has for years stationed about 80 military personnel, vessels and aircraft in the Maldives for carrying out surveillance and rescue operations. Relations between India and the Maldives have been strained since Mohamed Muizzu became the Maldives president in November after a charged election campaign in which he promised to push “India Out” if he won.
So, a bit of election-driven nationalism within the Maldives triggers a similar fit of pique from India, where all sorts started calling for a tourism boycott of the island chain that depends on such revenue. That leads to the sacking of some mouthy Maldives ministers, leaving plenty of bad feeling on both sides.
As China seeks to lock down its trade and military dominance of East Asia in coming years, we will have the opportunity, much like India, to get into all sorts of minor competitions with Beijing over various island nations. These competitions typically end up being very transactional: I give you this if you refuse the Chinese/Indians/ Americans that.
Because it’ll all be so cynical, loyalties will switch back and forth regularly, as local governments seek to play the big powers off from one another. It will end up feeling like a tawdry replay of Cold War mechanics.
As will all such dynamics, I advocate that America take the higher ground. First, do nothing to inflame China-v-India. That relationship has plenty of flashpoints (real and imagined) to keep it testy, when, at its economic base, it needs to be stable and cooperative for the world’s ultimate benefit (in addition to their mutual benefit).
Second, when small nations seek belonging, they’re really seeking certainty in uncertain times. When you’re talking small island nations, that uncertainty crests with climate change — literally. As it increasingly dawns on them that they’re essentially screwed trying to navigate such futures on their own, their instinct for aligning with more powerful players will balloon in its intensity and urgency.
Outside powers can exploit that for meaningless competitions, or they can address that fear by offering forms of belonging. No small nation in Asia, in their right mind, wants to belong to China, and India is in no place to offer such belonging.
But the US? That is exactly what we should be offering.
3) Putin is burning through Russia’s savings
BUSINESS INSIDER: Russia has burned through almost half of the liquid reserves in its national wealth fund as it bleeds money amid the war in Ukraine
Vlad is putting up a good face on his Ukraine debacle, much like with his health. But as he continues to cannibalize the state’s treasures, it becomes more obvious that Russia will experience some sort of collapse once he passes and the true state of affairs is revealed (or simply can no longer be hidden).
This latest bit of evidence:
The stash of liquid assets in Russia's national wealth fund has fallen over 44% since Moscow invaded Ukraine, according to a Bloomberg report of Russian finance ministry data on Wednesday.
What is it using the money for?
The massive slump in the national wealth fund's liquid assets came as its holdings in Russian companies and in infrastructure bonds surged by 2 trillion rubles, per Bloomberg calculations. This suggests the state is using its liquid reserves to support the economy.
Putin is throwing everything into his dumpster fire.
Experts give the fund two years before it is gone — assuming oil prices don’t skyrocket, which is probably why Russia is so happy to see the Persian Gulf so tense and conflicted right now.
For now, global oil markets continue to “ignore” Israel-v-Gaza, much like the recent Davos gathering.
4) China’s “California effect” on global agriculture
REUTERS: China's embrace of GMO crops gains momentum with new import, planting approvals
The detail:
China on Thursday approved additional varieties of genetically modified soybeans and corn for import and production while expanding their planting areas nationwide, as part of a drive to improve food security and reduce imports.
China continues to exhibit zero reticence when it comes to adopting ag tech, and with good reason. Domestic demand for food soars just as climate change threatens domestic production and ratchets up import requirements — the opposite of food security that China’s leadership so desperately wants to achieve.
But here’s the interesting part:
As the world's largest importer of soybeans and corn, which GM varieties China approves can have huge implications on the planting size beyond its borders, Even Pay, agriculture analyst at Trivium China, said. "Farmers don't want to plant varieties if China can't buy them."
Just like California on so many regulatory issues (classically, those involving cars), when China speaks on a demand point, suppliers around the world are forced to adjust, because, who wants to deny themselves effective access to that huge market? It’s not like Detroit was ever going to make a CA car and a car for the rest of America, so it goes with regulatory-leader California on such things.
Increasingly, China has the same impact of global ag markets — its inherent and undeniable strength being its demand power.
5) China down, India up at Davos
CNBC: India goes big at Davos as world’s most populous country tries to woo investors
India goes all-out at Davos:
Along the Davos Promenade, attendees of the World Economic Forum stumble across the WeLead Lounge, a repurposed storefront showcasing India’s female leadership and talent. There’s also the India Engagement Center, a space promoting India’s growth story, digital infrastructure, and its burgeoning startup ecosystem.
Elsewhere at the forum, Indian technology and consulting giants Wipro, Infosys, Tata and HCLTech are out in full force to showcase the country’s prowess in key technologies like artificial intelligence, the subject that’s on everyone’s lips.
The hefty Davos promotions come after India surpassed China last year as the world’s biggest country by population.
The sale here is unsubtle: China has had it time and, now in decline, come take a look at rising India.
Impressive in its ambition and replication of China’s rise, individual Indian states mounted their own showcases at Davos, suggesting a competitive domestic landscape for attracting foreign direct investment (FDI).
The key, according to all, is (1) India showing that doing business there is easier than it has been in the past (godawful reputation for excessive government regulations and red tape bureaucratics); and (2) domestic consumption will continue grow sufficiently to justify the FDI commitment.
This is the story of all emerging markets, and, in many ways, it is the story of all lower-latitude countries (my Middle Earth extending 30 degrees north and south of the equator) as climate change unfolds. FDI seeks safety and certainty and profits. That is a tough enough sale for a rising superpower.
Imagine how much harder it is for small Middle Earth states.
6) Fear-mongering of the most elegant sort on DPRK
NYT: As if We Didn’t Have Enough to Frighten Us …
Nicholas Kristoff read a speculative report by two old North Korea hands and was scared enough to pen a column suggesting Kim is ready to launch an all-out strategic war on South Korea that would include striking Japan and US regional holdings (e.g., Guam).
Here’s what the experts said in their posted piece:
The situation on the Korean Peninsula is more dangerous than it has been at any time since early June 1950. That may sound overly dramatic, but we believe that, like his grandfather in 1950, Kim Jong Un has made a strategic decision to go to war. We do not know when or how Kim plans to pull the trigger, but the danger is already far beyond the routine warnings in Washington, Seoul and Tokyo about Pyongyang’s “provocations.” In other words, we do not see the war preparation themes in North Korean media appearing since the beginning of last year as typical bluster from the Democratic People’s Republic of Korea (DPRK or North Korea).
The logic here is self-sealing: Kim knows he can’t get what he wants from the US and doesn’t care to try anymore (no disagreement from me there), thus he’s decided on war (highly speculative judgment based on DPRK word choices) and so there’s … basically nothing we can do to dissuade him now (also agree).
And here’s where it gets Trumpian weird. Donald, of course, has consistently bragged that he prevented nuclear war with North Korea with his diplomacy, but these two experts see it completely opposite:
The second part of the answer as to why the current danger is being missed is the failure to fully understand how the failed February 2019 Hanoi summit affected Kim Jong Un’s views, and how over the next two years the North reexamined its policy options. The June 2018 Singapore summit with President Donald Trump was to Kim the realization of what his grandfather had envisioned, and his father had attempted but never attained—normalization of relations with the United States. Kim poured his prestige into the second summit in Hanoi. When that failed, it was a traumatic loss of face for Kim. His final letter to President Trump in August 2019 reflects how much Kim felt he had risked and lost. Overcoming that psychological barrier would never have been easy, and it goes a long way in explaining the huge subsequent swing in North Korean policy. This was not a tactical adjustment, not simply pouting on Kim’s part, but a fundamentally new approach—the first in over thirty years.
Basically, they’re arguing that Trump’s summitry created dreamy expectations of national fulfillment that were subsequently dashed, sending the regime down this Armaggedon-embracing path.
In other words, Trump’s clumsy and fruitless diplomacy is actually going to trigger nuclear war on the Korean peninsula.
How’s that for irony?
If anything, this warning should remind us exactly how dangerous it is to have someone as self-deluded as Trump go up against other world leaders of equal capacity for self-delusion (like Putin and Kim, to name two).
The result, as the experts imply, will not be in doubt. North Korea, if it launches nuclear strikes, will be completely eliminated by retaliatory US nuclear strikes. If it goes short of that, the US will come to South Korea’s aid in full, total war measure, likewise leading to the elimination of the regime.
So what are we supposed to do here? Neither the experts nor Kristof offer any ideas except that we and the world should recoil at such prospects. As the two experts warn ominously: “The wreckage, boundless and bare, will stretch as far as the eye can see.”
Personally, I found the report oddly imprecise and speculative for any two such respected (by Kristof) NorKo hands. It reads somewhat hyperbolic and thus unprofessional in tone. That may just be the subject or their personal tendencies, but it makes it hard to judge the analysis favorably.
Still, Kristof, like me, highlights the Trump diplomatic whatever (hard to call it success or failure, it was just so goofy in execution) as a turning point worth noting.
And I guess that’s what I take away from the piece: best to understand that Kim felt deeply burned by that whole process and now feels like global events may favor some bold move to — once again — push the DPRK threat back to the top of the global garbage pile (now topped by such piddling forces as Hamas and the Houthis).
7) Good news, but mostly bad
NYT: How Much Ice Is Greenland Losing? Researchers Found an Answer.
WAPO: Indonesia is clearing vast peatlands to grow food. Climate costs are dire.
PHYS.ORG: Climate change isn't producing expected increase in atmospheric moisture over dry regions: Study
NYT: U.S. Carbon Emissions Fell in 2023 as Coal Use Tumbled to New Lows
A quick round-up of new climate change evidence/reports/projections/measurments:
First, Greenland is losing ice much faster than models predict. Not good.
Second, Indonesia is doing to its vast peatlands what Brazil is allowing against the all-important Amazon forest: massive destruction in the name of food security:
Indonesia has been clearing tens of thousands of acres of densely vegetated peatland for farming, releasing massive amounts of carbon that had been sequestered below for centuries and destroying one of the Earth’s most effective means of storing greenhouse gases.
Also, very not good, because Indonesia possesses roughly half the world’s total peatland.
Third, scientists’ expectations of dry, hot lower-latitude deserts enjoying a bit more atmospheric moisture due to climate change … is turning out to be unjustified.
The findings are particularly puzzling because climatemodels have been predicting that the atmosphere will become more moist, even over dry regions. If the atmosphere is drier than anticipated, arid and semi-arid regions may be even more vulnerable to future wildfires and extreme heat than projected.
But, not all news is bad. Check out this chart on the progressive decarbonization of US electricity (in just 16 years!):
Obviously, this is something an advanced Northern economy can pull off at some speed.
Stuff your excuses in a sack!
8) The solution I’ve been hoping for
TIMES OF ISRAEL: Report: Arab nations to propose plan for ceasefire, hostage release, Saudi normalization
Citing the Times of Israel citing the pay-walled Financial Times:
Arab countries are planning to present within a few weeks a plan that would include a ceasefire in Gaza and the release of hostages, along with normalization with Saudi Arabia and other nations, the Financial Times reports.
At the same time, Israel would have to agree to “irreversible” steps toward a Palestinian state.
If true, then that would move things in the right direction. I still think Israel wants a completely disable Gaza and would need the Arab states to finance whatever is to become of the West Bank.
9) Remember who you bankers are
SAN: The US breached $34 trillion in national debt. Here’s who owns every dime.
Just a cool chart reminding us who’s who in holding US debt:
That’s a lot of the advanced world believing in our future — a trust worth preserving.
10) Changing of the globalization guard
VISUAL CAPITALIST: Visualizing 150 Years of Exports for Top Economic Superpowers
Another cool chart from the always good Visual Capitalist:
Shows how the US enabled the re-rise of both Germany and Japan after WWII, when it could have done something far different (victor, spoils, that old chestnut).
Then you spot how we enabled (and I mean truly enabled) the same with China.
What’s missing? The India timeline.
11) China’s demographic Rorschach
REUTERS: China's ageing population threatens switch to new economic growth model
Yet another cool chart — the fantastically convoluted Chinese age pyramid:
12) Build it and they will export
REUTERS: China widens South America trade highway with Silk Road mega port
The latest Belt and Road behemoth project to come to fruition:
In September, a group of Brazilian farmers and officials arrived in the Peruvian fishing town of Chancay. The draw: a new Chinese mega port rising on the Pacific coast, promising to turbo charge South America's trade ties with China.
The $3.5 billion deep water port, set to start operations late this year, will provide China with a direct gateway to the resource-rich region. Over the last ten years, Beijing has unseated the United States as the largest trade partner for South America, devouring its soy, corn and copper.
But it’s the larger numbers behind such infrastructure developments that speaks even louder:
A pretty amazing turn of events in just a decade’s time.