Streetwise Professor

February 19, 2019

Whoops, They Did It Again

Filed under: Economics,Politics,Russia — cpirrong @ 7:27 pm

An American investor, Michael Calvey of Baring Vostok, has been arrested for fraud in Russia. It has been some time since something like this has happened, a fact that has been attributed to Putin’s direction that business disputes should not result in the imprisonment of any of the disputants. But when it comes to westerners, it just may be the case that there aren’t many of them around to be arrested.

The FT article reports a stunning statistic that speaks to this point. Foreign direct investment, which totaled $79 billion before Putin’s glorious triumph in Crimea, had fallen to $27 billion by 2017 . . . and a pathetic $1.9 billion in 2018. Less FDI, fewer foreign direct investors–and hence fewer to arrest.

Between sanctions, and the stultified (and risky–financially and personally) economic environment in Russia, foreigners have finally wised up. Once upon a time, the returns looked very appealing, and many were willing to take the plunge. Well, the returns were high for a reason–they were compensation for risk of expropriation, sometimes facilitated by, er “legal” means. And evidently, most have decided that the rewards don’t justify the risk.

I have some sympathy for Calvey, but not a great deal. He assumed a known risk, presumably thinking he would be able to manage it–or perhaps foolisly assuming that Putin really cared about trying to create a more hospitable investment environment. Further, no doubt that anyone who swam in those waters for as long as he did had more than a little shark in him.

The FT article is titled “Calvey’s arrest sends chills through Russia’s foreign investors.” To which I say: what foreign investors? The article includes this quote:

A person close to the Vostochny dispute said: “This is transformative. This kills FDI stone dead forever . . . This sends the message, can you use the security services against your business rivals over a few million dollars? Yes, you can.”

But (see above) FDI is already as dead as Monty Python’s parrot, and there was virtually no prospect for resurrection. As for sending a message: uhm, if you hadn’t gotten this message by now, you are a little slow on the uptake. A decade plus slow.

And that’s likely why Putin has said and done nothing about this. Kudrin may think this is “an emergency for the economy,” but Putin almost certainly recognizes that Kudrin is living in the past, and that the parrot is indeed dead.

Moreover, the last thing he would do now is take any action that would give the impression that he is kowtowing to the West. His political persona is now heavily invested in the image of a strong Russian leader standing up against a West–and an America in particular–that desires to subjugate Russia. He’s particularly unlikely to abase himself (in his eyes) before the US/West when he realizes that the payoff for doing so is negligible.

Michael Calvey was a fool who rushed in where angels fear to tread, and his arrest is more of an echo of the past, than a harbinger of the future. Certainly as long as Putin is around Russia will be largely isolated from the West, and will stagnate accordingly.

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February 16, 2019

The Idiotic Freak Out Over Putin’s Middle East Diplomacy

Filed under: China,History,Military,Politics,Russia — cpirrong @ 8:59 pm

There has been a steady chorus of wailing about how the US “retreat” from the Middle East (which is at present limited to an announced intention to draw down in Syria) is empowering Russia, and that Putin is exploiting the “vacuum” left by Trump.* This WSJ oped is representative of the genre. Which is to say it is incoherent to the point of idiocy.

For one thing, this piece, and the entire genre, mirrors one of Putin’s most glaring intellectual failings: zero sum thinking. If Russia gains, the US must lose, right?

Wrong. The US has global interests, and does not have unlimited means to pursue them. Strategic prioritization–most notably, focusing on China–and redeploying resources to focus on the new priorities is vital and beneficial and advances US interests. Perhaps Russia gains in some ways from this, but those gains do not come anywhere near erasing the benefits accruing to the US of downplaying peripheral theaters and focusing on more important ones. Further, any local gains Russia may achieve in, say, Syria are almost certainly to be more than offset by the disadvantages of competing with a United States that has its strategic priorities straight. Putin–and other American adversaries/enemies, notably Iran–have exploited US misadventures in the Middle East. Focusing efforts and husbanding resources makes the US stronger, not weaker, both absolutely and relative to would be competitors–including Russia.

I have yet to see anyone make a remotely plausible case of why an enduring US role in Syria makes any strategic sense. As I’ve said from the very day that Putin put troops there–if he wants the shithole, let him have it. It has no strategic importance to the US, especially in its utterly wrecked current condition. We have far more important issues to deal with, China foremost among them.

The WSJ piece also provides room for considerable doubt about Putin’s prospects. Specifically, it inadvertently demonstrates the inherent contradictions in Putin’s policy. The author, Angela Stent, spends much of the piece fretting about the warming relationship between Russia and Israel. She also frets about the cooperation between Iran and Russia. Well, those policies are utterly incompatible, given that Israel and Iran view each other as existential enemies. The rapprochement between Russia and Saudi Arabia is similarly incompatible with a strong cooperative relationship between Russia and Iran. Something has to give.

I also fail to see why having Russia and Israel on good terms is a bad thing, especially in light of the fact that the Soviet Union was Israel’s arch-enemy (except for a brief, historically miraculous moment in which Stalin thought supporting Israel–and arming it–advanced Soviet interests), and armed its enemies (including Syria) throughout the Cold War. This was a major reason why the US had to take substantial risks to defend Israel in the Cold War–and why some said this risk wasn’t worth it, and that the US should jettison its support for Israel. Indeed, Soviet support for Arab states waging war on Israel brought the USSR and the US to the nuclear brink in 1973. A Russia that values its relationship with Israel is more likely to put a brake on Israel’s enemies with whom it has influence (notably Iran and Syria). That reduces the likelihood of conflict in the Middle East, and reduces a source of friction between the US and Russia.

Tell me why this is a bad thing.

And don’t forget–it takes two to canoodle. Here Putin is canoodling with Benjamin Netanyahu, who is (a) extremely hawkish, and (b) recognizes that Israel’s security depends crucially on the US. If Netanyahu believes there are gains to trade to be realized from dealing with with Putin, it is likely that the US is a gainer too.

Having Russia on friendly terms with Israel enhances the Jewish state’s security, and thereby advances American interests. And if in the end Russia chooses Iran and Syria over Israel, the pearl clutching about a budding Russian friendship with Israel will look rather foolish, no?

The friendliness between Russia and KSA can be analyzed similarly. The contrast with the Cold War again deserves comment. The inflection point in US involvement in the Middle East generally, and KSA in particular–the Carter Doctrine–was a response to the perceived Soviet threat to seize the Arabian Peninsula. Although the military threat ebbed with the collapse of the USSR, a KSA with fewer enemies and threats requires less US protection.

Here it should be added that the main reason for KSA and Russia to cooperate now is oil. But this in many respects is a confession of weakness, not strength. The resurgence of US as a major oil producer has undercut the market power of the Saudis and Russia, and their cooperation is largely defensive, rather than offensive.

Those who are paying attention, moreover, realize that there is considerable disagreement within Russia about the desirability of cooperating with OPEC (which, in effect, means with KSA) on oil output. In particular, my old buddy Igor Sechin is lobbying hard against continued cooperation, claiming it is a strategic threat to Russia:

“The participants of the OPEC+ agreement have actually created a preferential advantage for the USA – that sees raising its own market share and the seizure of target markets as its primary task – which has become a strategic threat to Russia’s oil industry development,” the letter [from Sechin to Putin] seen by Reuters says.

“The key strategic challenge which the domestic oil industry is faced with today is the further decline in Russia’s market share, despite the availability of quality recoverable oil reserves, necessary infrastructure and personnel,” it said.

Here Sechin is actually expressing some economic reality. Given its market share, Russia’s–and Rosneft’s–demand elasticity is substantially greater than one, and restricting its output reduces its revenues/income. Russia/Rosneft would likely be better off with a lower price and higher output–which is precisely why for years it abstained from cooperating with OPEC.

This internal discontent among extremely powerful players–and Sechin is arguably the most powerful player in Russia after Putin–sharply limits the potential for enduring cooperation between Russia and the KSA. Again, the fears are vastly overblown.

In sum, freaking out over greater Russian diplomatic efforts in the Middle East is totally unjustified. Russia’s gains are not America’s losses–the world is not zero sum. There are inherent contradictions in Russian efforts that will inevitably force them to make choices that limit their influence. And some Russian initiatives could actually serve to reduce the likelihood of major conflicts that would harm US interests.

I can’t write about this subject without mentioning today’s remarks by the most annoying leader in the world today. And no, I don’t mean Putin–I mean Angela Merkel. At the annual security conference in Munich, Frau Merkel chastised the United States for its plans to draw down in Syria and Afghanistan:

German Chancellor Angela Merkel has warned that a hasty U.S. pullout from Syria runs the risk of strengthening the roles of Russia and Iran in the Middle East.
Speaking at the Munich Security Conference on February 16, Merkel questioned whether the planned U.S. withdrawal was “a good idea.”
“Will it once more strengthen the capacity of Iran and Russia to exert their influence?” she asked.
She also cautioned against a premature U.S. withdrawal of forces from Afghanistan, saying that NATO’s Resolute Support mission in that country was dependent on the U.S. military’s commitment.

Well, for starters, lady, if you are so convinced of the need for military engagement in Syria and Afghanistan, why don’t you order your pathetic military to pick up its broomsticks and take the lead in the fights there? Oh. I forgot. You are the leader of the biggest free rider in Nato, who constantly lectures everybody else about global responsibilities, but who never puts her money–or the lives of German soldiers (assuming they still have any) where her fat mouth is. Until you do, you can kindly STFU.

The outrageousness of Merkel’s bloviation is even more remarkable given that in the very same speech called Russia a “partner” and “made a robust defense of Germany’s foreign trade relations and ties with Russia during her speech.”

Why, some might call that collusion!

So which is it? Russian influence is something to be contested, or embraced?

Merkel has also been a robust defender of the nuclear deal with Iran, and critical of the Trump administration’s withdrawal from it. German has led efforts to circumvent US sanctions on Iran–which are intended precisely to limit Iranian influence. But then she tells us we have to garrison Syria to fight Iranian influence.

Square that circle for me.

Angela cannot go away soon enough. But alas, no doubt she will be replaced by someone equally annoying. Germany is not America’s friend. But it is probably too much to expect that those who are demented by Trump hatred will understand that, just as it is too much to expect that said demented people will recognize that some modest Russian diplomatic achievements in the Middle East do little harm to the US, and indeed, may actually redound to our benefit.

*The whole idea of a US “retreat” in the Middle East is so completely unmoored from reality that anyone who uses this term, or similar expressions, should be ignored and mocked. The US is still in Iraq. It has actually increased its involvement in the Persian Gulf, most notably in its confrontation in Iran. It supports the Saudi’s fiasco in Yemen. It periodically bombs Libya. Support for Israel is at unprecedented levels. Egypt’s military government is getting military and political assistance from the US. If this is retreat, I’d hate to see an advance. Reducing involvement in what is arguably the least important country in the region–Syria–when its whole reason for being there (the presence of ISIS as a territorial entity) is strategic rationality, not a retreat.

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February 13, 2019

Brave Green World

Filed under: Climate Change,Economics,Politics,Regulation — cpirrong @ 11:21 am

I was considering not commenting on the Green New Deal, given the largely negative–and often incredulous and scathing–response that its release evoked. Including from mainstream Democratic politicians, notably Nancy Pelosi. But most of the cast of thousands currently seeking the Democratic presidential nomination have embraced it to some degree or another, and the criticism has spurred a counterattack from many media precincts. The plan will therefore not be consigned immediately to oblivion, so I will weigh in.

In a nutshell (emphasis on the “nut”), the proposal aims at making the US “carbon neutral” in a mere decade by eliminating the internal combustion engine, retrofitting every existing building in the US, largely eliminating air travel and replacing it with high speed rail, and reducing, er, flatulence from cows by sharply reducing our consumption of meat. No biggie, right?

I find it somewhat ironic that hard on the heels of the announcement of the basics of the GND, the hard left governor of California, Gavin Newsome, said it was necessary to “get real” and recognize that the state’s high speed rail project was a disaster, and to eliminate most of the route.

But “getting real” is not on the GND agenda.

If implemented, the GND would effectively destroy a vast amount of the existing US capital stock, or require its replacement with less productive capital. This will make Americans poorer, in terms of consumption of goods and services.

The proponents of the GND commit the fundamental economic fallacy of arguing that this destruction of productive resources will bolster the economy because of all the jobs that will be created to build a fossil-fuel free power system, electric autos, massive rail systems, etc. The reality (sorry, but I can’t help dealing in reality) is that jobs are a cost, as is the decline in consumption required to make massive investments in new capital to replace existing capital.

The point of producing–including through the use of labor which entails the cost of foregone leisure–is to consume. The GND will unambiguously reduce consumption of goods and services, and make us poorer. GND is crypto-Keynesianism at its worst.

Then there is the detail of paying for this. Here advocates of GND invoke MMT–Magical Monetary Theory. Sorry, MMT actually stands for “Modern Monetary Theory” but my description is far more accurate. MMT is free lunch economics writ large, mistakes accounting identities for economic substance, and commits errors that would be embarrassing for someone in their first session of Econ 101 at one of your more backward community colleges.

The Magical Monetary Theorists argue that an endeavor as massive as the GND can be paid for by printing money.

Really. Don’t believe me? Consider this (rather conclusory) tweet by a major MMT advocate, Stephanie Kelton:

Q: Can we afford a #
? A: Yes. The federal government can afford to buy whatever is for sale in its own currency.

What follows (as is usually the case with MMT arguments) is a verbal discussion of a game of financial Three Card Monte.

Read that again: ” The federal government can afford to buy whatever is for sale in its own currency.” But at what price, dear? At what price? Venezuela has been operating on this principle, and is on pace to achieve record inflation of more than a million percent per year.

All of which obscures the economic essence. Investment today requires people to reduce consumption of goods and services. They only do so in anticipation of consuming more in the future–the “more” is the interest/return on capital from the investment. In private capital markets, the interest rate/return on capital adjusts so that the additional consumption people demand to fund investment is just paid for by the additional production flowing from the assets invested in.

In GND, as noted above, the massive investment will not result in a greater flow of goods and services in the future that will make people willingly reduce their consumption today. Indeed, future consumption in goods and services will decline. The private rate of return will be negative.

And indeed, GND implicitly acknowledges this. Its entire rationale is to reduce carbon emissions, under the theory that these are a “bad.” That is, the payoff from the massive investment (the sacrifice of private consumption) is a lower level of bad carbon emissions.

But to the extent that the reduction of this particular bad is a good, it is a public good. Everyone benefits from a decline in this putative pollutant, regardless of their contribution in paying for the reduction. Meaning that it cannot be financed voluntarily via private capital market transactions, but must be compelled, and paid for through massive taxation.

Printing money only changes the form and/or the timing of the taxation. Inflation is a tax. Moreover, if you borrow/print to pay for investment today, the investment cost not covered by the inflation tax must be paid for by higher taxes in the future. Like the old oil filter commercial: you can pay me now, or you can pay me later. But you must pay.

This is not hard. But reality is not magical.

Furthermore, given that it will be the most massive government program in history, it will entail all of the rent seeking and waste inherent in such programs.

I should also note that it will entail massive redistribution, most notably from rural, exurban, and suburban areas to urban ones as it will dramatically raise the costs of transportation and mobility which are borne disproportionately by those living outside cities. If a few Euro cents/liter fuel tax in France sparked massive protest in non-metropolitan France, just think of what would be in store in the far more sprawling US in response to taxes orders of magnitude larger than those imposed by Manny Macron.

These costs could be justified if the cost of carbon is sufficiently high, in which case the social rate of return could be substantially higher than the private rate of return, and the cost of capital. But even if one believes the most alarmist estimates of the cost of carbon, the adoption of GND by the US would have a modest–and arguably trivial–impact on emissions and temperatures, given the level and growth of emissions elsewhere, especially in China and India. Thus, the social rate of return is almost certainly far below the cost of capital.

The advocates of GND argue that the US needs a grandiose mission. The analogies that they draw are to NASA’s moon landings, or–get this–World War II and the defeat of the Nazis.

But neither Apollo nor even WWII envisioned the radical transformation of society–which is an explicit goal of GND. Apollo was a focused, and by comparison with GND, a relatively moderate expenditure financed in the ordinary course of government business and intended primarily as a campaign in the Cold War, undertaken at a time when the Johnson administration waged another Cold War campaign–Vietnam–with the specific objective of minimizing disruption to US society and the economy. World War II definitely altered every aspect of American life, but these disruptions were also viewed as temporary sacrifices necessary to win the war, to be reversed at its conclusion. Which happened in the event: the US demobilized rapidly, and most wartime expedients (e.g., rationing, the massive employment of women in manufacturing) were scrapped precipitously at its conclusion. As happened in WWI as well: Harding’s 1920 campaign slogan was “return to normalcy” after the extraordinary measures adopted during the war. But GND proposes to be the new normalcy, deliberately destroying the old normalcy.

The original New Deal as implemented was also not intended to be as transformative as its latter day green version (though the more Bolshi elements of the Roosevelt administration did harbor such ambitions).

What are the politics here? This is being pushed by the urban progressive left, epitomized by Alexandria Ocasio-Cortez, D-Brooklyn. (Sorry, Tatyana!) The ubiquitous AOC is the face and voice of the movement, though frankly I doubt it would get the same attention if her face looked like, say, Debbie Wasserman-Schultz, and I wonder whether her Munchkin voice will eventually grate on even her fellow travelers, not to mention the rest of us.

But the main political effect here is to cause deep fissures in the Democratic party. Mainstream elements are in a state of near panic, which they are attempting to conceal, with little success.

And this will redound to the benefit of Donald Trump. Opposition insanity is the greatest gift an incumbent can receive. And methinks this is a gift that will keep on giving, through November 2020.

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January 22, 2019

Regulating Carbon Emissions: Efficiency vs. Redistribution

Filed under: Climate Change,Economics,Energy,Politics,Regulation — cpirrong @ 8:01 pm

Bloomberg reports that New York state’s plan to eliminate its few remaining coal power plants has caused power prices for delivery in 2020, 2021, and 2022 to increase. Eyeballing the chart, the impact of the proposed regulation is on the order of $7/MWh, or about 25 percent of the 2019 price.

Coal represents a dwindling fraction of New York’s generation. The EIA reports 0 electricity from coal in October, 2018. As of 2014, the last full year for which I could find data on the EIA website, coal accounted for 4.6 million MWh, out of a total of 137 MWh of generation.

The efficiency impact of this depends on (a) the estimated social cost of carbon, (b) the kind of generation that will replace the shuttered coal plants, and (c) the non-energy costs that this replacement generation creates.

If you believe that the cost of carbon is $40/ton, if coal is replaced by zero emissions generation, the move is efficiency enhancing. A coal plant with a heat rate of a little more than 10 implies a carbon cost per MWh of $40. This is well above the price increase of around $7.

If coal is replaced by natural gas, with a carbon cost of about $20/MWh, the call is closer, but still comfortably in favor of eliminating coal.

Lower social costs of carbon of course affect the math. The other thing to keep in mind, though, is that the price is for energy only. Changing the generation mix also affects the need for ancillary services to maintain grid stability. In particular, substituting diffuse and intermittent renewables for coal increases the non-energy costs of supplying electricity. These costs can be appreciable, though again it’s difficult to see them being so large as to overcome the approximate $160 million in carbon cost savings from eliminating coal, based on a $40/MWh CO2 cost, ~4 MWh of coal fired generation, and replacement of coal by zero carbon emissions generation sources.

What’s truly startling about the numbers, though, is the redistributive impact. Price is driven by marginal cost, and the price impact suggests that the cost of the marginal megawatt hour from coal replacement generation is about $7/MWh above that of the eliminated coal units. Note: that $7/MWh price increase benefits every single MWh generated by inframarginal units (e.g., combined cycle NG). Coal represents (as noted before) ~3 pct of NY generation, but the remaining 97 percent will see a big increase in margins.

This is a crude calculation, but roughly speaking the regulation will result in a transfer of about $1 billion/year from consumers to owners of generation (~140 million MWh x $7/MWh). The vast bulk of this $1 billion will be a quasi rent for inframarginal generating assets. (About $28 million–4 mm MWh/year x $7/MWh–will cover the cost of the more expensive generation that replaces coal plants.)

As is often the case with regulation, the wealth transfers swamp the efficiency effects (which total at most $130 million=~4 MM MWh x $33/MWh in social cost savings). (Since coal generation has probably dropped from the 4 million in 2014, and the price impact reflects the elimination of the remaining coal generation, the total efficiency effects now are probably substantially smaller than $130 million.)

Thus, although this regulation is sold as one benefitting the environment, I strongly suspect that the political coalition that has given it birth is strongly supported by incumbent generation operators selling into the New York market. That is, it smacks of the typical special interest regulation that benefits a small concentrated group at the expense of a large diffuse one (i.e., the consumers in New York), all dressed up in pretty green (environmental green camouflaging Benjamins green, as it were).

Yes, in this instance perhaps–depending on one’s assumptions about the cost of carbon and the incremental uplift costs created by the regulation–this bargain has produced an efficient outcome. But the redistributive nature of this regulation, and those like it, creates a great risk that such regulations will be introduced even when they are inefficient.

Those harmed include ordinary New Yorkers lighting their homes, and commercial and especially manufacturing firms (and their employees) who pay higher power costs. (Employees will pay in lost employment and lower wages, due to a decline in derived demand for labor driven by higher costs of other inputs.) In France, a seemingly small imposition on a similar group sparked widespread social unrest. It hasn’t happened in the US yet (or in places like Germany, where consumers and employers are paying steeply higher electricity costs due to anti-carbon regulations), but US states should be aware that such policies could trigger resistance here as well–especially if and when the hoi polloi realize that the biggest winner from these policies is not the environment, but companies that are pretty unpopular to begin with.

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January 21, 2019

Two falsehood fly, and the truth comes limping after it

Filed under: Politics — cpirrong @ 9:56 pm

Two events over the weekend illustrate the utter depravity of modern media (especially social media) and political culture. (These really cannot be separated.) The first is the BuzzFeed story that Mueller had evidence that Trump had instructed Cohen to lie to Congress. The second is the confrontation between a group of Catholic high school students and some activists in front of the Lincoln Memorial in DC.

It is hard to say which is the most egregious. The Trump-Cohen story’s claim for precedence is its obvious political importance, given that if true it would provide a justification for impeachment, with all the potential for political chaos and strife that entails. The Covington High story is appalling because it set off a frenzy of hatred, doxing, physical threats, and threats to the future prospects of a group of high school kids, that went on for hours–and still continues to some degree. Orwell blushes that he only conceived of a Two Minute Hate.

Both stories share a common thread: virulent hatred, mainly on the left, but not exclusively so, that makes the haters believe any anti-Trump, or anti-conservative story (especially if the conservatives are white males), without reservation, and to repeat it, without reservation. Despite the fact that so many previous stories have proven completely false. These are stories that are not only too good to check, but which must be repeated relentlessly in reckless disregard of the truth, and callous indifference to the effects that defamatory lies have on the targets, or on the country, or on the fabric of civil society.

The Covington High story was fueled by (a) a highly biased account from a clearly partisan and interested man, Indian activist Nathan Phillips, and (b) an video that presented a snippet of the interaction between Phillips and the Covington students, edited to reinforce Phillips’ claim that he, a lone and beleaguered protestor, had been set upon by a group of racist high schoolers bedecked in MAGA hats.

The deference to Phillips is truly nauseating. We are supposed to accord some moral standing to “activists”–especially minority ones. Especially those with drums! So authentic! This to a large extent reflects white liberal guilt, which operators like Phillips are past masters at exploiting.

I, on the other hand, hear the word “activist” and immediately suspect a manipulator, and a con. I suspect a guy who has figured out that whites fall for the Magical Indian shtick, and who plays it for all it is worth.

Once the field of vision was extended beyond Phillips and the video edited to substantiate his story, the narrative fell apart. The Covington boys had been harassed by a small group of “Black Israelites”, who hurled racist and homophobic slurs at them. The N-word was lobbed liberally at black Covington students. Phillips saw an opportunity, and waded in, banging his idiotic drum in the faces of the students. They didn’t get in their grills: he got in theirs.

Phillips made claims (e.g., the students shouted “build the wall”) that are not supported by the full video. He also neglects to say that his followers told the students to “go back to Europe.”

Insofar as the Black Israelites are concerned, to call them fringe lunatics would be to understate matters. I can only say that if a group of white fringe lunatics were to harangue people at the Lincoln Memorial, you’d be hearing about them 24/7. The Black Israelites, however, are merely bit players in the mainstream narrative about this event.

But the falsehood had already flown, and continues to fly. And the hatred–truly virulent hatred–has taken wing with it.

I’m so old, I remember when “rush to judgment” was a bad thing. Now its de rigeur, indeed mandatory, if the judges are left and the judged are right.

This illustrates another axiom of mine. There is no better tool for manipulation and distortion than a cleverly edited or shot video, in which the filmmaker or editor evokes verisimilitude by presenting actual visuals–the camera doesn’t lie, right? In reality, however, by controlling the range of vision or the events portrayed (and those not portrayed), the filmmaker/editor can lie outrageously by presenting a grotesquely incomplete and hence misleading portrayal of events.

There is always the Rashomon problem: even honest observers will disagree on what happened during a particular event. But when there is a political agenda at play, things are far worse. A dishonest filmmaker or editor can lie outrageously while only presenting things that actually happened–but only some of the things. In the wrong hands, the camera is the biggest liar of them all.

In court you have to swear to tell the whole truth. Because the most vicious lies can be partial truths. And much of the art of filmmaking is to tell partial truths.

I therefore suggest: the more viral and provocative a video appears, the more skeptical you should be.

Visuals–photos, but especially video–are the most effective form of agitprop. If you see visuals that advance a prevailing social/political/media narrative, you should immediately suspect agitprop. The more powerful the visuals are, and the more that they conform with the narrative, the deeper your suspicion should be.

One thing truly atrocious about the Lincoln Memorial fiasco was the haste with which ostensibly conservative figures joined the condemnation of the Covington students–they foolishly and seemingly eagerly ignored my advice of caution. Methinks this reflects a form of Stockholm Syndrome, combined with a craven desire for acceptance by a mainstream media and political culture that hates their guts. These alleged conservatives apparently feel compelled to bend over backwards to to prove they are not hypocritical, and that they will call out their own. Better to kill the innocent with friendly fire, than–heaven forfend–be seen as reluctant to castigate the guilty. They have their minds right, boss!

I can guarantee that the left has no such scruples. This is an asymmetry that repeatedly cripples the right, and advantages the left.

The Diocese of Covington in particular deserves scorn. It bought the BS shoveled out by the media hook, line, and sinker, and offered condemnation and an abject apology.

Note to the Catholic Church: those attacking the students hate your church with a particular virulence. The Diocese were craven fools empowering their sworn enemies.

Another suggestion: never believe the narrative pushed by the media. If you do, you are a sucker, and worse–a useful idiot. All of those conservatives who did so in this instance should be deeply ashamed.

Insofar as the BuzzFeed story is concerned, the “publication” claimed to have seen (or not seen, depending on which of the two bylined reporters you ask!) documents showing that Trump had suborned Cohen’s perjury. CNN and MSNBC repeated this over 200 times, breathlessly intoning that this foretold Trump’s doom.

Then Mueller’s office denied it. Stated that the story was inaccurate. When a desperate media claimed that the denial was equivocal, the special counsel’s office made an adamant denial.

You know this story was shopped (most likely by someone within Mueller’s office) to every other major publication–which didn’t touch it. But after BuzzFeed (which should be renamed BottomFeed) ran it, the rest felt liberated to repeat it. (By the way, what do you call those who live off the excrement of bottom feeders? The MSM, I guess.)

Again, the story was too good to check, or to question. It advanced a narrative detrimental to the media’s main enemy. So go with it!

I don’t like to be pessimistic, but I think the point of no return has been reached. The utter lack of prudence, discretion, and basic fairness appears to be too deeply entrenched to be displaced. Worst, respect for truth has become obsolete, replaced by the basest political relativism: whatever advances my cause is right, the truth be damned. It is far more important to crush one’s political and social enemies, than to attempt to learn the truth, or to be cautious about reaching erroneous conclusions no matter how damaging those errors may be to ordinary people or political or civil society.

I don’t think it is an exaggeration to say are pre-revolutionary conditions. When honest disagreement is impossible, and a desire to seek truth is sacrificed to political expediency and political or social advantage, force is all that remains to arbitrate difference. We are rapidly reaching that point, if we have not already done so.

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January 16, 2019

Don’t Bother Me With the Facts! I Have a Narrative I Need to Flog!

Filed under: History,Military,Politics,Russia — cpirrong @ 7:20 pm

US ambassador to Germany Richard Grenell recently tweeted that the Trump administration had been tougher on Russia than any of its predecessors. The reflexive anti-Trumpers wouldn’t stand for this. Not for a second.

NYT columnist Bret Stephens leaped into the lists to tilt at Ambassador Grenell:

And let’s play no word games about the difference between USSR and “Russia.” Putin’s Russia is the USSR reborn under the exact same management.

That’s what’s called “projection”, Bret, for you are playing word games by transmogrifying Putin’s Russia into the USSR.

Today’s Russia “is the USSR reborn” only in Putin’s wildest dreams. By any objective measure, Russia today pales in comparison to the USSR as a threat to the US (or the West generally). From 1945 through 1991, the Soviets had millions of men and thousands of tanks poised on the borders of western Europe. Today the men do not exist and the tanks are rusting away in storage–and all are hundreds of miles to the east of the Elbe. The Soviet Union had a very credible navy: Russia’s navy is back from the utter decrepitude of the 1990s and early 2000s, but is still a pale shadow of what it was under Admiral Gorshkov. Whereas the Soviet Union posed an extreme conventional threat to the US and the west, Russia poses no threat at all.

Oh, by the way Bret–where is Putin’s Warsaw Pact? Oh, that’s right–they are all Nato members.

The USSR was also a formidable ideological adversary, and its ideology was aggressive and expansionist. Especially prior to the 1980s, the Soviet ideology had substantial international appeal, especially in the Third World. The Cold War was as much intellectual and ideological, as it was military and economic.

Putin tries on new ideologies like a teenage girl tries on new clothes. But his ideological fashion choices are primarily for domestic political effect, and have no appeal outside Russia’s borders. Zero. Zip. This is in large part because most of Putin’s ideologies are nationalist and insular. His embrace of Russian Orthodoxy is a particularly telling in this regard. It only has very limited appeal even within Russia, and none whatsoever outside it.

Russia is not an ideological nation. It is a kleptocratic regime.

Yes, Putin laments the demise of the USSR. But his efforts to rebuild it are pathetic in the extreme. In his nearly 20 years in power, his efforts to reconstitute the USSR have succeeded in reclaiming–wait for it–Abkhazia and South Ossetia, and some rather decrepit bits of Ukraine. These are the offal of the USSR. He is now putting the squeeze on Belarus–but Lukashenko has no desire to go back to the Soviet Union.

And even these “accomplishments” have succeeded primarily in isolating Russia, with one of the consequences being economic stagnation that leaves Russia even further behind the US in the wellsprings of military power. After a brief splurge in defense spending, the realities of Russia’s parlous economic condition have forced Putin to cut back again, and announce new weapons with great fanfare–but not to produce them in meaningful numbers. Potemkin revisited.

In sum, Putin’s Russia is at best a pitiful simulacrum of the USSR. To equate the two, as Stephens does, is beyond farcical.

So after dispensing with Stephens’ sleight-of-hand turning 2019 Russia into 1979 USSR, let’s evaluate Ambassador Grenell’s statement on the merits, administration by administration post-USSR.

The Clinton administration was all in propping up Yeltsin. When Yeltsin shelled the Duma in 1993, Clinton said: “I guess we’ve just got to pull up our socks and back Ol’ Boris again.” When Yeltsin was in grave peril of losing the 1996 election, Clinton said: “I know that means we’ve got to stop short of giving a nominating speech for the guy. But we’ve got to go all the way in helping in every other respect.” (Can anyone say “interfering in an election”? I knew you could.) The Clinton administration also supported Russian policy in Chechnya.

Bush II famously gazed into Putin’s eyes, and his administration got on rather well with Russia. Even the 2008 invasion of Georgia did not trigger a vigorous response.

And Obama. Where to begin? Of course there’s the Reset, complete with Hillary grinning like a buffoon standing next to Lavrov, holding an idiotic button (mislabeled in Russian, no less). Then there was Obama paling around with Medvedev–they were burger buddies, remember? Oh–can’t forget the hot mike statement that Medvedev should tell Vladimir to be patient, as Obama would have more flexibility after the 2012 election. In the 2012 campaign, Obama mocked Romney saying that Russia was a threat.

Given this, it’s not surprising that Putin smelled weakness, and that his peak aggressive phase occurred during the Obama administration.

Obama’s response was 90 percent petulance and condescension about Putin not following the arc of historical progress, and 10 percent rather ineffectual measures.

It is against this standard–not that of Cold Warriors facing an existential threat–that the Trump administration should be measured. And as Grenell said, by this standard Trump has indeed been far more robust. He has provided Ukraine with weapons (which Obama steadfastly refused to do). He has embarked on rebuilding the US military. He has implemented more vigorous sanctions than the Obama administration. And the US military smoked 200+ Russians who tried to throw their weight around against US forces in Syria.

Further, look at other news involving Grenell. The Germans are in apoplexy over Grenell’s threat to sanction any company that cooperated with the Nordstream II pipeline that will bring Russian gas to Europe. Merkel’s party spokeswoman huffed: “The American ambassador operates in a, shall I say, somewhat unusual diplomatic manner. He’s shown that not only through this letter [on Nord Stream 2 sanctions] but also from when he took office.”

And this is not a new thing. Trump has been bashing Nordstream since he took office–and the Germans have been reacting with outrage every time.

Trump’s notorious criticism of Nato is also hardly pro-Russian. His main criticism is that Nato countries–especially Germany–don’t do enough to counter Russia, but expect the US to do it for them.

This is not a hard call. The Trump administration has objectively been far harder on Russia than its predecessors–including most notably its immediate predecessor, whom people like Bret Stephens now lavish praise on. It isn’t even close. To claim that US policy towards the USSR is the appropriate yardstick by with to measure US policy towards the decrepit, dissolute successor state of Russia requires breathtaking intellectual dishonesty. But Bret Stephens is obviously up to the task

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January 7, 2019

Lost in Space? Some Musings on the Economics of an Independent Space Force

Filed under: Economics,History,Military,Politics — cpirrong @ 8:30 pm

One of the Trump administration’s (and really, Trump is the one pushing it) more interesting ideas is the creation of an independent military “space force” as a separate service branch, co-equal with the Army, Air Force, Marines, and Navy. Given that this proposal gores many, many political oxen inside the military and without, it’s hard to get an objective viewpoint. Everyone’s opinion is colored by their vested interest.

I have no answer as to whether it’s a good idea or not. But I do have some thoughts on the appropriate framework that could contribute to a more objective evaluation. Specifically, transactions cost economics and property rights economics (and organizational economics, which has some overlap with these) address issues of how formal organizational structure, and the ownership and control of assets, can affect the allocation of resources, for better or worse. And that is the issue here: can a reorganization involving the creation of a new entity that has control rights over assets heretofore controlled by other entities improve the allocation of defense resources?

I mused on this topic long ago, but have never really pursued it in a serious way. But I’ll muse some more given the newfound topicality.

It’s useful to divide the analysis into two parts. First, how does organizational structure, and in particular the assignment of rights of control over existing assets (e.g., artillery pieces, aircraft), affect military effectiveness and combat power? Second, how does organizational structure affect the choices regarding which assets to invest in?

With respect to the first issue, over the centuries militaries have devoted considerable effort and thought to organizational charts, and the allocation of control rights over military hardware and military units. Some simple examples: should each division have its own artillery, with all guns being under division control, or should some guns be assigned to battalions subject to control at a higher level (e.g., corps, army)?; should all tanks be concentrated in armored divisions, or should infantry divisions also have organic tank units?; should submarines be employed in support of fleets, or operate independently?

As with all resource allocation decisions, there are trade-offs, and militaries have struggled with these. There has been experimentation. There has been success and failure. Changes in technology have necessitated changes in organization, because the nature of specific weapons systems may affect the trade-offs. These are arguments that never end, as the incessant reorganizations of militaries (e.g., the U.S. Army’s recent shift to a brigade-based structure) demonstrate.

A couple of transactions cost economics insights. First, most decisions regarding the use of military assets are made subject to severe temporal specificity. If I am under attack, I need fire support NOW. Moreover, it may be the case that even in a large military only a few resources are available to provide that support. Temporal specificity creates transactions costs that can impede the allocation of resources to their highest value use.

Second, trade is unlikely to be a viable option, especially given temporal specificity. “Hey. I need some artillery support on my position right now. Can you give me an offer on what that will cost me?” Yeah–that works. The prospects for spot exchange are almost non-existent, and intertemporal exchange is unlikely because (a) timelines are short (for a variety of reasons), making end game problems acute, and (b) potential parties to an exchange are unlikely to be interacting repeatedly over time with reciprocal needs.

Since voluntary exchange is out (except in very unusual circumstances) resources need to be allocated by authority. Which makes issues of organization and the allocation of authority (control rights) paramount.

With respect to space assets, the case for a space force relates to the fact that many space assets (a) offer value to air, naval, and ground forces, and (b) there are economies of scale and scope. Having each service invest in its own space assets likely sacrifices scale and scope economies, but eliminates the need for inter-service bargaining over access to these assets, and reallocation of these assets in response to shifting military needs.

Allocating space assets to one existing branch (e.g., the Air Force) would facilitate exploitation of scale and scope economies, but would require inter-service bargaining to permit the non-controlling service to get access. A specialized space force permits exploitation of scale and scope economies, but also necessitates inter-service bargaining. The key question here is whether a specialized force would have better incentives than an operational force. For example, the Air Force might favor itself over other services when deciding how to utilize space assets, whereas a separate space force would not be as parochial.

With respect to the second issue–which assets are procured–the impact of organization on the Congressional procurement process is paramount.

The services are highly politicized organizations, and certain specializations within a service may exercise disproportionate influence. For example, the “fighter mafia” in the Air Force is legendary. As another example, in the pre-WWII U.S. Navy, battleship admirals held sway. These factions within a service may warp and stifle the development of new technologies, new doctrines, or investment decisions: the stultifying effect of the dominant infantry branch within the pre-WWII U.S. Army on the development of armored forces (both hardware and doctrine) is an example.

Creation of a separate force that invests in assets provided by the other branches would tend to undermine the power that any faction in a particular branch could exercise. The branches would have to form coalitions to influence Congressional funding decisions. But the creation of a new entity with its own vested service interest and its own ability to influence Congress could prove problematic as well.

For example, in the immediate aftermath of the formation of the Air Force, beliefs that nuclear weapons made most conventional forces–including conventional air arms–obsolete, led the Air Force to try to persuade Congress to slash spending on conventional forces in order to focus on strategic forces, especially bombers. This led to the “Revolt of the Admirals.” It also led the Navy and even the Army to invest in nuclear capabilities in order to claim strategic relevance and maintain their share of the budget. These investments were almost certainly wasteful, and would not have been made but for the independent Air Force’s influence.

Perhaps the most important historical example that could shed some light on the desirability of an independent space force is the creation of a separate Air Force in 1947, and the Johnson-McConnell agreement of 1966, in which the Army ceded to the Air Force control over all fixed wing aircraft.

The effects of this reorganization were probably beneficial overall, but there certainly were problematic effects. In particular, it almost certainly attenuated the Air Force’s incentives to provide ground support, and resulted in the Army investing excessively in rotary wing aircraft (i.e., attack helicopters) to provide it.

Perhaps a better idea would have been to create a separate strategic air wing (first including strategic bombers, then strategic bombers and ICBMs, as well as air superiority fighters), and permit the Army to operate tactical aircraft for ground support. This was essentially what was done in in the immediate aftermath of WWII, with the creation within the Army Air Force of a Strategic Air Command, a Tactical Air Command, and an Air Defense Command.

The Marine Corps, and to some degree the Navy, provide a model. Each operate their own fixed wing air services, specialized to provide the kinds of air power each needs. Marine air is relentlessly focused on providing close air support. The Marine operational commander has control over these assets, and does not have to haggle with another service to get them. Moreover, the Marines’ acquisition decisions (notably the division between fixed and rotary wing aircraft) are oriented towards getting the optimal mix for the specific mission.

I have only touched upon some of the relevant considerations–there are no doubt others I have missed. Moreover, I have given only superficial attention even to the issues I raise. But this should be sufficient to show just how complicated this issue is. Organizational decisions, such as the creation of a separate space force, will have profound implications for how military resources are allocated, and what resources will be invested in in the first place. Crucially, the assets in question cannot be allocated by markets or the price system, so it is not a question of organization v. market, but the form of the organization(s). Further, military assets are complex, long-lived (and becoming more so–note that B-52s may be operational for more than a century), and can be extraordinarily specialized and hence specific (in the TCE meaning of that term). Technology is incredibly dynamic, and needs shift dramatically over time as new threats emerge. This all means that organization and the allocation of control rights matter. A lot.

And perhaps most importantly, organizational choices will be made in a politicized environment, and will affect political bargaining in the future. This will inevitably distort current choices (e.g., whether a space force will be created in the first place, what assets it will control) and future choices as well. It also makes it very difficult to sort through the debate on the topic, because everybody involved is a political player with its own political interests.

That makes it all the more important to establish a relatively objective and rigorous intellectual framework in which to analyze these questions. I think that transactions costs economics and property rights economics hold out great promise as the basis for such a framework.

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January 5, 2019

Vox Populi v. Vox Domini Super Eos Electos

Filed under: Economics,History,Politics — cpirrong @ 7:27 pm

For weeks France has been wracked by the “gilets jaunes” protests directed at President Emmanuel Macron. The protests had slackened recently, but today they flared up again, perhaps due to the arrest of a gilets janues leader. (Was this just stupidity, or does Macron want to stoke the protest? Dunno.)

The French protests represent yet another battle in the global war between the hoi polloi and the elite. The catalyst for the French protests was a quintessentially elitist policy initiative: a tax on motor fuel, with the stated purpose of combating climate change.

Even on its own terms the tax is stupid. Even assuming a very high temperature sensitivity to CO2, the reduction in emissions resulting from the tax would have a vanishingly small effect on global temperature. Furthermore, like most of Europe, French gas taxes are extremely high, and almost certainly far above the level that would efficiently address externalities arising from motor fuel consumption.

The protestors may understand that the tax does not make sense as a way of addressing climate change. But their interests are far more down-to-earth. This is another tax imposed on the most heavily taxed country in the OECD. Further, it falls most heavily on the rural population, and the working population, and has little impact on the metropolitan elites. It is, in a sense, the straw that broke the camel’s back.

With consummate tone-deafness, Macron galvanized the protestors with remarks that would make the fictional Marie Antoinette (“let them eat cake”) blush. Hey, if driving costs too much, just carpool! Or take the bus! Yeah. He actually said that (unlike Marie and the bit about the cake).

After the initial shock, Macron caved, and shelved the tax. But the protests continued, with varying degrees of violence around the country (e.g., torching toll booths). This is because the tax’s significance was more symbolic, relating to the excessive taxation in France, and the sneering indifference of the elite to the fate of non-elite France, which Macron has personified all too well. So, as is often the case in coordination games, once people became aware of each others’ dissatisfaction, the protests took on a life of their own even after the initial catalyst was removed.

Today the protestors gathered in front of the Paris Bourse, demanding Macron’s resignation. Surely, he won’t, but his evident unpopularity will hamstring his ability to govern for the remainder of his term.

The government response has been somewhat amusing. One tack was that police resources were inadequate to deal with both the protests and terrorism. “France Doesn’t Have Enough Cops.” That is, the government of the most heavily taxed advanced economy in the world cannot perform the primary duty of the state: to secure the safety and property of its citizens. So don’t protest, because that make it impossible to combat terrorists.

But of course they should be given more money and power.

In the United States, there is also an outcry against the president, but it is the inversion of the one in France. Whereas in France it is the ordinary people taking to the streets in opposition to the governing elite, in the US the governing elite is taking to the media and the bowels of the state to oppose Trump.

There are no widespread protests on the streets of the US (Antifa freaking out in Portland doesn’t count), and especially lacking are protests by ordinary citizens against Trump. And why should there be? For most Americans, the last two years have been pretty good insofar as bread-and-butter issues are concerned (as epitomized by yesterday’s job report, both on the number of jobs and wage growth). No, the frenzy in the US has focused on issues that ordinary Americans don’t give a rat’s ass about, but which drive the governing class into paroxysms of fury–e.g., alleged (but completely unproven) allegations of “collusion” between Trump and Putin/the Russians.

These allegations are merely useful cudgels with which to beat Trump. The fury of the governing class really stems from his running roughshod over their presumptions and privileges. He’s just not one of them. He insults them. He tramples their amour-propre. He does not worship their idols. Indeed, he trashes them. Icky people like him.

So whereas the ordinary French have taken to the streets, the governing class has taken to pulling the levers of its power–the FBI (even before the election), the American star chamber (aka the Mueller Investigation), incessant and hopelessly biased media coverage, and now, threats of impeaching “the motherfucker.” (To which I say–be my guest. Look at how well that worked out in 1998-99.) There are even those who have advocated a coup.

I daresay that the governing class in the US sees what is going on in Paris and other places in France, and shudders. It shows how deeply loathed the governing class is, and how a seemingly small spark can ignite a political firestorm against them. They have certainly questioned the protests’ legitimacy, at times in their desperation succumbing to the last refuge of the idiot–blaming it on the Russians. Case in point, the pathetically hilarious Max Boot (hey, Max, can you do a pushup?) who at one time pined for an American Macron, only to be subjected to ruthless–but completely warranted–ridicule when the French protests erupted. In a nauseating attempt to rationalize the complete popular repudiation of his man crush on Macron, Max insinuated that although the Russkies may not have caused the protests, they fanned the flames through their diabolically clever exploitation of social media.

The condescension here is palpable, and reflects a pattern that I’ve pointed out going back to 2015. Rather than acknowledging that widespread popular dissatisfaction with the elites–as epitomized by Brexit, the Trump election, various European elections, and now the protests in France–were due to repeated elite failure unsullied by any success, they add insult to injury by accusing their opponents of being stupid, unwitting pawns of their current bête noire.

It is indeed amazing to see that an incessant barrage of attacks from the governing classes have not moved the needle on Trump in the slightest. If anything, they have bound him and his supporters more tightly, because the latter recognize that an attack on Trump is just as much an attack on them.

The most common divide in polities around the developed world right now is between the governing and the governed. The self-conceived and self-congratulatory elite vs. the ordinary. France is just the most recent battleground. It wasn’t the first, and it won’t be the last. The battle is becoming more intense because the objects of popular disdain refuse to acknowledge any responsibility for creating the conditions that have spurred popular discontent.

The same thing happened in France, 230 years ago. The nobility in the ancien regime stubbornly and righteously clung to their privileges, and their conviction in their own superiority. Worked out swell for them, right? But some people never learn.

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December 29, 2018

Is the Withdrawal From Syria a Bitter Pill for Jacksonians to Swallow? I Think Not

Filed under: History,Military,Politics — cpirrong @ 8:02 pm

I admire the work of Walter Russell Mead a great deal. I especially admire his identification of Jacksonians as a uniquely American political community, and his respectful and understanding treatment thereof, which is in stark contrast to the treatment given them by the sneering classes. I was therefore surprised by his recent column, which in my view completely misreads how Jacksonian America will respond to Trump’s decision to leave Syria and (perhaps–there are conflicting accounts) draw down forces in Afghanistan.

It’s fair to say that I was among the first (along with Mead) to identify Jacksonians as Trump’s core constituency, so I think I have some insight as to how they will react to his decision. And I think that Mead is off-base here:

That harmony may soon sour. Mr. Trump’s decisions on Syria and Afghanistan risk a rift between the president and his Jacksonian supporters and provide a way for some in the GOP to break with the president without losing their own populist credentials. The betrayal of the Kurds, the benefits to Iran of American withdrawal, the tilt toward an Islamist and anti-Israel Turkey, and the purrs of satisfaction emanating from the Kremlin are all bitter pills for Jacksonians to swallow.

Of the two wings of the GOP populist movement, the Jacksonians are the stronger and, from a political standpoint, the more essential. The GOP base is more hawkish than isolationist, and from jihadist terrorism to Russian and Chinese revisionism, today’s world is full of threats that alarm Jacksonian populists and lead them to support a strong military and a forward-leaning foreign policy.

Neoconservatives tried and failed to rally GOP foreign-policy hawks against Donald Trump. Should Jacksonians turn against him, they are likely to pose a much more formidable threat.

Where does Mead go wrong? Well, in part by forgetting some of the key attributes of Jacksonians that he identified about 25 years ago. One is the Jacksonian way of war. He noted that Jacksonians are reluctant to engage in foreign wars, but when they do they favor the massive application of brutal force to achieve rapid and total victory. Kill a lot of people, destroy a lot of stuff, and go home.

The wars in Syria and Afghanistan are the antithesis of this. Jacksonians were on board for the initial action in Afghanistan, oh so long ago. The US went in hard, employed all elements of its national power (except nuclear), and achieved what appeared to be a decisive and rapid victory. Then came 17 years of grinding, inconclusive combat. There is no prospect of a decisive outcome there. Similarly in Syria, the Jacksonian objective–destroying ISIS–has been largely achieved, and it is decidedly un-Jacksonian to get involved in a protracted Game of Thrones where there are no obvious good guys, and indeed, pretty much everybody is a bad guy by Jacksonian lights.

Insofar as allies are concerned, there is absolutely no cultural affinity between American allies in Syria or Afghanistan and Jacksonians, and as Mead noted, Jacksonianism is a peculiarly cultural, as opposed to intellectual, mindset. Further, as Mead also noted, Jacksonians despise corruption, and it is hard to imagine more corrupt societies and polities than Afghanistan and the Middle East. The tendency of our allies in both regions to turn their guns on American soldiers in “green on blue” attacks only confirms deep misgivings that our ostensible allies are not honorable people–and honor is a preeminent value among Jacksonians.

Jacksonians support wars that smite American enemies, and redeem American honor. Wars to build up nations with profoundly alien cultures that appear incapable of becoming stable polities, let alone ones that are grateful for American sacrifice on their behalf–not so much.

The Kurds may be something of an exception, but Jacksonian America has never shown much interest in them, despite the US’s long involvement with the Kurds in Iraq in particular. It is sad, but nonetheless true, that the US has sacrificed Kurdish interests on many occasions in the last 30 years. All without eliciting a peep from Jacksonian America. Why should now be any different?

Further, if they learn more about the Kurds, Jacksonians will realize that it is hardly a black-and-white picture. Yes, the Kurds have fought against ISIS, and fought well (as is their wont), but this is a matter of survival. But the long-running Kurdish fight with Turkey, led as it is by hard-core communists and socialists, and using as it does terrorist methods, will not garner sympathy from Jacksonians. They are not likely to be enamored with Erdogan’s Turkey either, but given the lack of a clear good guy that appeals to Jacksonian sympathies and sentiments, the likely response is to be to hell with them all, that’s not our fight.

Insofar as Iran is concerned, Trump has been sufficiently aggressive in going after the mullahs to counter any concern that he is soft on those who shout “death to America.” There are hardly purrs of satisfaction emanating from Tehran.

Similarly, Trump has been far more aggressive with respect to China, and even Russia, than his predecessors. Russian crowing about Syria stands in sharp contrast with their incessant bitching about everything else Trump has done, so despite the media’s and the Democrat’s and the anti-Trumpers’ insane claims that Trump is Putin’s pawn Jacksonians will not be fooled.

If anything, Jacksonians will conclude that Trump is focusing on the big adversaries where it matters, rather than frittering away American lives and treasure where it doesn’t. That is, they realize that Trump is hawkish where it counts, is not isolationist, and is working to rebuild the military. Against these big things, Syria is a trifling matter.

So, pace Dr. Mead, I don’t think that Trump need to have any concern that his most important constituency will find his recent decisions on Syria and (perhaps) Afghanistan a “bitter pill to swallow.” They are more likely to conclude that he has his priorities right. Furthermore, they are sure to notice that the people who are screaming the loudest about Trump’s decision are people they despise and who despise them in return. The louder that the Bill Kristols and Max Boots squeal, the more Jacksonians will conclude that Trump is doing the right thing.

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December 22, 2018

Given the Realm at Stake, Why Play This Game of Thrones?

Filed under: China,History,Military,Politics,Russia — cpirrong @ 2:57 pm

The most recent shrieking emanating from DC and its various satrapies is the result of Trump’s decision to exit Syria and draw down forces in Afghanistan, with the clear implication that the US will leave there too in due course. The conventional wisdom is almost universally against him, and as usual, the conventional wisdom is flat wrong.

In evaluating any policy or operation, the first question to answer is: what is the objective? In Syria, is it a limited one–the defeat of the rump of ISIS? Or is it a more grandiose, geopolitical one–to control the outcome of the Syrian civil war and determine who rules there?

Trump has made it clear that his objective is limited and tactical. He has apparently decided that although ISIS has not been extirpated in Syria, it has been so attrited that its remaining enemies can contain it, or finish it off. And there is a Machiavellian aspect to that: why not let American adversaries, Russia and Iran, spend their blood and treasure dealing with the dead enders that remain? You wanted Syria, Vlad–have at it!

The conventional wisdom embraces the more grandiose objective. Perhaps this is purely self-aggrandizement, and lets them resume their college dorm games of Risk for real. Issues of motive aside, it is beyond cavil that those who want the US to remain in Syria, and indeed, to become more heavily involved there want to commit the country to being a player in a Game of Thrones that puts the fictional version to shame.

And that is why the conventional wisdom is wrong. For what does the survivor who sits on the throne rule over? A country that was a largely irrelevant shithole even before seven years of internecine warfare that utterly wrecked and largely depopulated a nation that was already pitifully poor and weak before the war began.

Congratulations Bashar! Congratulations Vladimir! Congratulations Ali! Behold the spoils of your victory! And indeed, spoiled is the right word for it.

And again, from a Machiavellian perspective, tell me why it isn’t smart for the US to let Russia and Iran plow resources into rebuilding a devastated nation? If they do so, these are resources they can’t use against the US elsewhere. Furthermore, even if Russia gains a presence in the country over the longer term, it is an isolated and completely unsupportable outpost that (a) could not provide a base for power projection in the event of a real great power struggle, and (b) could be cut off and destroyed in a trice by the US. Let the Russians put their very limited resources into a strategic dead end.

As for the Iranians, yes, their presence in Syria poses a challenge to Israel. But (a) I am highly confident that the Israelis can handle it, and (b) it’s far cheaper for the US to support their efforts to do so with material support for the Israeli military. And just as is the case for Russia, for Iran Syria would be utterly unsupportable in the event of a real confrontation between Iran and Israel.

The principle of economy of force–something that the policy “elite” in DC appears never to have heard of–applies here. One implication of the principle is that you should concentrate your resources in decisive sectors, and not fritter them away in peripheral ones. For the US, Syria is on the periphery of the periphery. In any geopolitical contest with Russia and Iran, our resources are far better deployed elsewhere.

What’s more, despite the obsession of the foreign policy elite with Russia and Iran, they are secondary challengers to the US. China is far more important, and poses a far more serious challenge. Throwing military resources into Syria is to waste them in a peripheral theater of a secondary conflict.

When I first read of Trump’s decision, I turned to a friend and said: “I wonder what this means for Afghanistan.” And indeed, hard on the heels of the Syria announcement the administration stated that it would draw down forces in Afghanistan, with the clear implication that US involvement there would wind down fairly quickly.

All of the considerations that make Syria a strategic backwater for the US apply with greater force in Afghanistan. The country has spent over 17 years, the lives and bodies of thousands of soldiers, sailors, and Marines, and trillions of dollars on a country that is the poster child for shitholes. Yes, it was the refuge of a particular terrorist threat 17+ years ago. And yes, if we leave it will likely continue to be the cockpit of vicious civil war. Just like it has for the past two plus millennia. It was barely tractable for Alexander, and the British and Russia found it utterly intractable in their 19th and 20th century wars there. We’ve arguably done better, but not much. And again: what’s “winning,” and since the demise of the Silk Road, what in Afghanistan has been worth winning?

The war in Afghanistan has proved a sisyphean task. Sisyphus didn’t have a choice: the gods condemned him to roll the rock up the hill, only to watch it roll down again. The US has been engaged in that futile task by choice, and Trump has evidently decided that he doesn’t want to be Sisyphus anymore. (My skepticism about US involvement in Afghanistan also dates to years ago–as indicated by this post from almost exactly 9 years ago.)

One of the administration’s most important, and largely ignored, decisions has been to reorient US efforts away from conflicts against terrorism in isolated, poor, and peripheral places towards recapitalizing the military for peer conflict against China and Russia. This is the right choice, and long, long overdue. (I wrote a post in 2007 that expressed concerns about prioritizing anti-terror over conventional warfare capability.)

Alas, God will not restore the years the locusts have eaten in the Hindu Kush or on the Euphrates. But sunk costs are sunk. Looking to the future, the right strategic choice is to continue the pivot away from peripheral conflicts to focus on central ones.

And these costs are not purely monetary. Last night, due to a travel nightmare, I ended up returning to Houston on a flight that landed at 0230. On the plane were a half dozen young Marines heading home for the holidays. There were also two men, in their late-20s or early-30s, with prosthetic legs. They almost certainly lost them to IEDs in some godforsaken corner of the Middle East or Central Asia. With Trump’s decision in mind, I thought: what is the point of turning more young men like the fit and hearty 19 or 20 year old Marines into mutilated 30 year olds in places like Afghanistan and Syria? I certainly can’t see one.

I’m not a peacenick or a pacifist, by any means. But I understand the horrible cost of war, and fervently believe that it should only be spend on good causes that advance American interests. I cannot say with any conviction that this is the case in Syria, or in Afghanistan, 17 years after 911. Indeed, I can say the opposite with very strong conviction.

At the risk of stooping to ad hominem argument, I would make one more point. Look at the “elite” who is damning Trump’s decision in Syria. What great accomplishment–let alone accomplishments plural–can they take responsibility for? The last 27 years–at least–of American foreign policy has been an unbroken litany of bipartisan failure. The people who scream the loudest now were the architects of these failures. Not only have they not been held accountable, they do not even have the grace or maturity to admit their failures. Instead, they choose to damn someone who refuses to double down on them.

The biggest downside of Trump’s decision is that it apparently caused Secretary of Defense Mattis to resign. I hold General Mattis in the highest esteem, and believe that if he could no longer serve the president in good conscience, he did the right thing by resigning. But if he decided that Syria and Afghanistan were (metaphorically) the hills to die on, for the reasons outlined above I respectfully but strongly disagree.

My major regret at Mattis’ departure is again completely different than the conventional wisdom spouting elite’s. They lament the loss of an opposition voice within the administration. I cringe for reasons closely related to my reason for supporting a major pivot in US policy: I think that Mattis was the best person to oversee the reorientation of the Pentagon from counterinsurgency to main force conflict. We desperately need to improve the procurement process. We desperately need to focus on improving the quality and number of high end systems, and raising the availability of those systems we have: the operational availability of aircraft and combat units is shockingly low, and Mattis has prioritized increasing them. He has made progress, and I fear that a change at the Pentagon will put this progress, and the prospect for further progress, at risk.

Listening with dismay at the cacophony of criticism from the same old, failed, and tired “elite” reminds me of Einstein’s (alleged) definition of insanity: doing the same thing over and over, and expecting different results. The “elite” is invested in the same thing, and changing the same thing is a not so implicit rebuke for their failures. Until they can explain–which I know they cannot–why doing the same thing has led to such wonderful outcomes in the past quarter century, they should STFU and let somebody else try something different.


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