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12:31PM

Civilization = bad connectivity principle, but dream = good

Trio of stories (2 FT and 1 NYT) on evolving ideologies of Russia (old leader), Egypt (new leader) and China (new leader).

Putin is floating a unique Russian civilization idea - likely as his legacy signature concept in governance.  The purpose is setting the long-term course of how Moscow handles the federation's many nationalities.  For now, a trial balloon, but already the blowback is sensed and it's building.  These nationalities naturally feel like they're being told to assimilate or find themselves a bit lost in Russia's future - as defined by Putin et al.

Morsi in Egypt is now revealing a similar bias on his effort with the constitution.  He wants to make it so Islamist that Egypt's many minorities are reacting badly, seeing no good space for themselves in Egypt's future on this basis.

My point in raising both issues:  when you argue civilization and, on that basis, identity (typically tied to religion), then you're saying, "This is how we're going to run this place and this is how we're going organize our connectivity with the outside world - by requiring this sort of homogeniety at home."

Problem is, the self-limiting nature.  If you want connectivity, you want to promote diversity.   That attracts the bodies and minds and the money.  This is an old concept, as in back to Amsterdam and the Dutch when they built up their global nets.  England picks up this vibe and does similarly.  The US gets the DNA via New Amsterdam-cum-New-York.

When you don't care about identity/religion on this level, you take on all comers, meaning you're open for business with everyone.  That's how you succeed.

Third cite:  Xi Jinping in China resurrecting "Chinese dream" notion as part of his reform/progressive agenda.

That "dream" apes the US version, which is centered on success and the pursuit of happiness.  

Why good?  It says your identity is more about success than comformity and homogeniety.  You'll work with anybody, because the dream trumps the exclusionary identity.

So, my point:  if you go the civilization/religious identity route, you scare off connectivity and globalization (or certainly retard it), but if you go the "dream" route, you choose pragmatism over such identity.  Your identity is simply your culture of success.

I think both Russia and Egypt will learn the limits of this approach, and it will be a painful process. But these are natural growth patterns.

China, I think, risks the other pathway:  the cult of success makes it harder to promote morality.

So it's the old choice:  preserve the identity and the attached morality, or risk both by opening up and prioritizing success.

Why I always advocate the latter:  It simply works better on raising income, and when you raise income, it's a virtuous cycle, as the people become even more tolerant and open, seeing the value in this path.

Meanwhile, if you choose identity over success, you makes less money and achieve less, and you tend to trigger a vicious cycle, as the outside world becomes more evil in your eyes ("Why won't they do business with us on our terms?")

But this is why China succeeds where Russia (and I fear Egypt) will not.

12:03AM

I join the advisory board of an Indian "sysadmin" commercial firm

The company:

Negara Infracon Private Limited is a company, incorporated under company's act 1956, with the main objects of carrying on business of Irrigation, Solar Power production, Infrastructure and Light Rail projects. The registered office is situated at Lucknow, Uttar Pradesh; the corporate office is situated at Bengaluru, Karnataka.

The website:  http://www.negara.in

The vision:

It is our vision and hope to be an infrastructure company of the country that provides environmentally friendly power on most cost effective basis along with providing the most effective infrastructure such are Mono Rail, Metro Rail, Four or Six lane expressways and bridges.

We forecast to grow in the field of Irrigation by taking up projects to provide water to the farmers in India which is the life of Indian economy.

The endless source of energy from the sun is a great task to achieve and requirement of solar power is huge. We visualise our growth at a steady pace. The company is ensuring growth with ethics and prosperity for its stakeholders through inheriting trust, establishing bonds and fostering relationships. We envision a bright further where we stand a globally acclaimed company, synonymous with commitment.

INFRASTRUCTURE

  • Provide effective and modernized Mono/ Metro Rail for major cities in India. This will reduce traffic congestion.
  • Build Express roadways with international standards, safety measures and cope up the need in India.
  • Retain leadership positions amongst organizations in Infrastructure, while working with innovation and dedication in every project undertaken.

IRRIGATION

  • Provide efficient and modernized systems in transporting water to fertile lands of India.
  • To constantly work and ensure cost effective productivity and improvement in transporting water, the most essential element for human race.
  • Retain leadership position amongst organizations in irrigation, while working with innovation and dedication in every project undertaken.

POWER PERFECTION

  • Ensure efficiency of the most common available source of power for sustaining and putting India's growth and development on top gear.
  • Provide clean and green power for the future of Indians. Retain leadership position amongst organizations in solar power generation, while working with innovation and dedication in every project undertaken.
  • To continually innovate ways to ensure cost-effectiveness, enhance productivity, improve financial health of the organization and continual fulfilment of stakeholders' aspirations.

GENERAL BUT SPECIAL

  • To be a transparent organization and technology-driven, that ensures dignity and respect for its team members.
  • To inculcate value system all across the organization for nurturing relationships between its constituents, associates and stakeholders those are based on mutual trust and respect.
  • To continuously upgrade and update both the knowledge as well as the skills of the human resource.
  • Be socially responsible through community development by leveraging our core competencies, resources and knowledge base.
  • To ensure excellence in every activity that is undertaken.

I am found on the Advisory Board page with others:

ADVISORY BOARD

Manish Uprety

MR. MANISH UPRETY (F.R.A.S.)

International

Mr. Manish Uprety F.R.A.S. is an alumnus of the Delhi School of Economics, University of Delhi, India and the University of London, United Kingdom. The field of Management has been his research area where he explored the co-evolution of strategy and environment. He joins Negara to add to the strategic perspective of the company.

A prolific speaker on international development issues, Mr. Manish Uprety has addressed various established platforms such as Banque de France, Paris; Mexican Parliament, Mexico City; TERI, New Delhi; EABA, Brussels; and ULPGC, Spain, among others. He was invested as a Fellow of the Royal Asiatic Society (F.R.A.S.) of Great Britain and Ireland in October 2010. Mr. Manish Uprety was also conferred with "2006 Global Human Rights Protection Award" by the Indian Institute of Human Rights at the 8th World Human Rights Congress held in New Delhi, India on the World Human Rights Day on the 10th of December 2006. Mr. Uprety looked after the Technological and Institutional Development of CISRI-ISP / IIMSAM which is an inter governmental observer to the Economic and Social Council of the United Nations . He is also associated with Kohima Komets Football Club (KKFC) which is a premiership club in the Nagaland Premier League (NPL), Nagaland, India.

 

Manish Uprety

DR. THOMAS P.M. BARNETT

International

Dr. Thomas P.M. Barnett earned a B.A. from the University of Wisconsin in 1984 (Russian Literature & American Foreign Policy), and then an A.M. from Harvard University's Russian Research Center. After earning a Ph.D. in Political Science from Harvard, Barnett spent a decade and a half working in U.S. national security, first for a defense think tank (Center for Naval Analyses) and then as a Professor at the U.S. Naval War College. Following a two-year stint in the Office of the Secretary of Defense, Barnett entered the private sector as Senior Managing Director of a software firm (Enterra Solutions) focused on global supply-chain management. Dr. Barnett currently serves as Chief Analyst for the massively multiplayer online consultancy Wikistrat. A New York Times-bestselling author of five books, Dr. Barnett gives speeches all over the world to various private and public-sector organizations, and his own consultancy (Barnett Consulting) has advised global corporations and governments since 1998. He blogs on international affairs at his own site (www.thomaspmbarnett.com) and is a Contributing Editor at Esquire magazine.

 

MR. PRAGYANESHWER SHUKLA

Finance

Mr. P. Shukla is a well known figure in the Indian Financal sector who has a Post Graduate degree in Science from the Lucknow University which he secured in the year 1974.  After securing his degree, Mr. Shukla ventured into the Indian Banking sector where he held important managerial positions in a nationalized bank for twenty seven years. Mr. Shukla's vast experience in the field of finance, accounting and foreign trade is his wealth of knowledge from which he contributes as a member of Negara's Advisory Board.

He is also a renowned freelance consultant for financial services like – financial investigations, investigative audit, project reports and more. Mr. Shukla also has an immense interest in learning foreign languages and holds diplomas in French and German.

Obviously, my role in the company is to help source infrastructure deals.

2:16PM

Turning point on US obesity epidemic?

From NYT:

After decades of rising childhood obesity rates, several American cities are reporting their first declines.

The trend has emerged in big cities like New York and Los Angeles, as well as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.

“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011.

The drops are small, just 5 percent here in Philadelphia and 3 percent in Los Angeles. But experts say they are significant because they offer the first indication that the obesity epidemic, one of the nation’s most intractable health problems, may actually be reversing course.

Crucial to get kids less fat, because fat kids are almost totally doomed to be fat adults, burdened by all manner of lifetime medical ailments.  Our obesity epidemic began with kids and it will end with kids.

Especially tough since so many kids eat majority of their weekday food at school (breakfasts + lunch + snacks). Health advocates have to fight food and beverages industry on this.  Good example:  big push to get sodas out of schools and Coca-Cola and others fire back with "energy drinks" that are just as sugary.  Sugary drinks are believed to account for half of the obesity epidemic.  

Then there are those cheap-skate Republicans in Congress who insist on labeling pizza a "vegetable," while insisting on more tests and thus less phys ed.  I can tell you that Indiana is nuts on that score (testing):  my kids are forced to prep and take these mindless (and useless) tests ALL YEAR LONG.  What a way to prep kids for the 21st century!

But I digress ...

Researchers are trying to figure out what's working.  All they know is this: "declines occurred in cities that have had obesity reduction policies in place for a number of years."

Looking ahead:

Though obesity is now part of the national conversation, with aggressive advertising campaigns in major cities and a push by Michelle Obama, many scientists doubt that anti-obesity programs actually work.

Exercising is required, but it never does it alone (and never will).  Key is reducing all those empty calories and portion sizes ("Want some fries with your pizza and Gatorade?").

What we eat in America is what is most profitable for US food companies and ag corps to sell - plain and simple. We subsidize grains big time and do virtually nothing for fruits and vegetables.

We've got a nanny state alright, and she's telling us that fat is good.

I admire Michelle Obama for working this issue.  Exactly the right focus for her right now.  Because when we solve the tripling of obesity that's unfolded over the past three decades (stunning, really), we solve a good deal of our healthcare crisis.

1:23PM

WSJ: "Terror Fight Shifts to Africa" (I told you so . . . in 2005)

Front-page story on the 7th of December, with subtitle "U.S. Considers Seeking Permission for Military Operations Against Extremists."

This is what I wrote in the early part of 2005, published in October of that year in Blueprint for Action: A Future Worth Creating:

CENTCOM’s AOR encompasses the Persian Gulf area extending from Israel all the way to Pakistan, the Central Asian republics formerly associated with the Soviet Union, and the horn of Africa (from Egypt down to Somalia). This is clearly the center of the universe as far as the global war on terrorism is concerned, and yet viewing that war solely in the context of that region alone is a big mistake, one that could easily foul up America’s larger grand strategic goals of defeating terrorism worldwide and making globalization truly global. Here’s why: CENTCOM’s area of responsibility features three key seams, or boundaries, between that collection of regions and the world outside. Each seam speaks to both opportunities and dangers that lie ahead, as well as to how crucial it is that Central Command’s version of the war on terrorism stays in sync with the rest of the U.S. foreign policy establishment.

The first seam lies to the south, or sub-Saharan Africa. This is the tactical seam, meaning that in day-to-day terms, there’s an awful lot of connectivity between that region and CENTCOM’s AOR. That connectivity comes in the form of transnational terrorist networks that extend from the Middle East increasingly into sub-Saharan Africa, making that region sort of the strategic retreat of al Qaeda and its subsidiaries. As Central Command progressively squeezes those networks within its area of responsibility, the Middle East’s terrorists increasingly establish interior lines of communication between themselves and other cells in Africa, as Africa becomes the place where supplies, funds (especially in terms of gold), and people are stashed for future use. Africa risks becoming Cambodia to the Middle East’s Vietnam, a place where the enemy finds respite when it gets too hot inside the main theater of combat. Central Asia presents the same basic possibility, but that’s something that CENTCOM can access more readily because it lies within its area of responsibility, while sub-Saharan Africa does not. Instead, distant European Command owns that territory in our Unified Command Plan, a system constructed in another era for another enemy. Those vertical, north-south slices of geographic commands were lines to be held in an East-West struggle, but today our enemies tend to roam horizontally across the global map, turning the original logic of that command plan on its head.

Central Command’s challenge, then, is to figure out how to connect these two regions in such a way as to avoid having Africa become the off-grid hideout for al Qaeda and others committed to destabilizing the Middle East. By definition, such a goal is beyond CENTCOM’s pay grade, or rank, because it’s a high-level political decision to engage sub-Saharan Africa on this issue—in effect, widening the war. And yet solving this boundary condition is essential to winning the struggle in the Middle East. What the Core-Gap model provides Central Command is a way of describing the problem by noting that transnational terrorism’s resistance to globalization’s creeping embrace of the Middle East won’t simply end with our successful transformation of the region. No, that struggle will inevitably retreat deeper inside the Gap, or to sub-Saharan Africa.

Why is this observation important? It’s important because it alerts the military to the reality that success in this war won’t be defined by less terrorism but by a shifting of its operational center of gravity southward, from the Middle East to Africa. That’s the key measure of effectiveness. Achieving this geographic shift will mark our success in the Middle East, but it will also buy us the follow-on effort in Africa. You want America to care more about security in Africa? Then push for a stronger counterterrorism strategy in the Middle East, because that’s the shortest route between those two points.

Ultimately, you’re faced with the larger, inescapable requirement of having to connect Africa to the Core to run this problem to ground, otherwise today’s problem for CENTCOM simply becomes tomorrow’s distant problem for EUCOM. When you make that leap of logic, the next decision gets a whole lot easier: America needs to stand up an African Command. Now, I know that sounds like a huge expansion of our strategic “requirements,” but when you consider the boundary conditions in this way, the discussion shifts from if to when.

The WSJ says the Obama Administration is thinking about asking Congress for expanded hunting authority to likely include Mali, Nigeria, Libia and others.  The focus is naturally al-Qaeda of the Islamic Maghreb's (AQIM) expanded geographic reach.

AFRICOM was authorized a little over a year after my book came out. I'm not drawing a line of causality- just pointing out I got it right.

What I got wrong about Africa back then was the speed: I saw this fight shifting over a much longer time and I saw globalization's successful embrace of Africa taking much longer.  In short, my combined optimism/pessimism was simply too slow.

12:02AM

Xi summoning his inner T.R.?

Xi will be walking the tightrope for a solid decade.  He needs to reform - but he's a princeling.  He needs to keep the country growing - but he needs to tame its many excesses (especially industry's rampant abuse of the environment).  And all the while he needs to assert China as a true global power - without taking on any unnecessary or risky fights.

If Xi Jinping isn't China's Teddy Roosevelt, that nation is going to end up wishing he was.

[And if you think I mischaracterize TR in any way, you need to read up on your Edmund Morris, for TR started no wars and actually was the first sitting POTUS to win a Nobel Peace Prize.]

Good sign (first cite below) is his early edict that Chinese officials need to cut down on all the pagentry and red carpets and flower arrangements and "empty talk" and spend more time touring the less fortunate parts of their mini-kingdoms.  You know, see how the other half lives now and then.

Very TR.

Bad sign (second cite) is China cutting exploration cable of Vietnam's national oil company as it tries to explore what it considers to be its chunk of the South China Sea bed.

A bit bully, to coin a phrase, but also a bit TR, who was famous for not taking crap off the powers-that-have-been.

We will want to see only the good stuff, and will cringe at the assertiveness, but the two must go hand in hand. Only Nixon could go to China, as they say.  You want Xi to fix things at home?  Well, then he'll need to prove things abroad.  There is a yin-yang balance to national shame and national pride.  Both work to drive a population and its leaders toward "positive" change.

China won't go meekly into its necessary future - nobody does.

The man has his work cut out for him - as towering as task as TR regrading the economic landscape of this country and centering our politics on the middle class.  Third cite notes that "China's murky shadow banking system could amount to nearly 50 percent of GDP and debate is raging about the effectiveness of how it is regulated."

Let's hope Xi is a suitable "traitor to his class."

After all, we lucked out and got two Roo-se-velts [thank you Netherlands!].

And became the greatest power the world has ever known.

The more China replicates that journey, the better off this world is.

And that's the God's honest truth.

Speaking this morning at Walt Disney World at a political post-election gathering of sorts.  I am preaching the progressive gospel to all who will listen.  Hallelujah brother!  Give me a high-four Mickey!

12:01AM

WSJ front-pager on "global gas push" mirrors Wikistrat sim scenario

Per the recent Wikistrat simulation, "North America's Energy Export Boom," we had a scenario called "Fit of Peaks" in which the US "got it right" (fracking revolution) but much of the rest of the world had a hard time cashing in similarly.

The WSJ front-pager, entitled "Global Gas Push Stalls: Firms Hit Hurdles Trying to Replicate U.S. Success Abroad" fits that model nicely.

Key finding:

Among the reasons for the glacial pace are government ownership of mineral rights, environmental concerns and a lack of infrastructure to drill and transport gas and oil. In addition, much less is known about the geology in most foreign countries than in the U.S., where drilling activity has been going on for more than a century.

The upshot:  the U.S. and Canada could remain the main countries to reap the economic advantages of shale development for some time.

The serious advantage: the gas and ethane glut lures petrochem and fertilizer companies to NorthAm to take advantage of the cost differential - "a huge change after years of shifting production abroad."

Bottom line:  about a decade head-start for NorthAm.

I speak this morning in Houston at a board meeting of a national offshore industries association member company.  This emerging strategic reality is coming to dominate my career right now.

12:23PM

Just starting Wikistrat simulation: Iraq 2023

From the preview page:

Introduction

The International Energy Agency predicts that by 2020, Iraq will roughly double its current oil production of 3 million barrels a day. Already, Baghdad exhibits the air of a raucously corrupt boom town, so it’s fair to say that the economic forces driving Iraq today will grow magnificently more profound over the next decade, as the country migrates from an Iran-sized oil industry to one eventually approaching that of Saudi Arabia.
 
With the current Persian Gulf security situation fixated on the Arab Spring, Iran’s reach for the Bomb and Turkey’s neo-Ottoman ambitions, it’s all too easy to ignore Iraq’s rapid rise as a world oil power (e.g., today’s Iraq accounts for more of the world’s rise in oil production than any other state), which begs the question: What kind of Iraq is possible 20 years post-Saddam?

Should be an interesting scenario drill.  As always, if you want to join Wikistrat's global community of strategic thinkers, the door is open.  Simply contact me and I will put you into the process of application.

12:27PM

Nice post (full of data) about India in Africa

Find it here.

Posted by old friend (or is it demon?) Tyler Durden at Zero Hedge.

Best bit:

Parallels are often drawn between India and China’s African “safaris.” Indeed, their trade with Africa has grown at similar rates; India’s at a compounded annual growth rate of 24.8% and China’s at 26.3%. More importantly, access to natural resources and especially oil is the main driver of both Asian giants’ engagement of the continent.

There are important differences though.  For one, India’s footprint in Africa is small compared with that of China. Take their role in Africa’s trade for instance. In 2011, India accounted for 5.2% of Africa’s global trade compared with China’s 16.9%. Besides, unlike China’s investment in Africa, which is led by state-owned companies, Indian investment is mainly driven by the private sector. In another contrast with Chinese companies, India hires local laborers while many Chinese companies bring Chinese laborers to their projects in Africa.

Indian officials admit that China’s aid-for-oil strategy, which involves extension of soft loans for massive infrastructure projects in return for African oil, used to impress them as it helped Beijing secure deals in its favor, according to the MEA official. This prompted India to follow the Chinese strategy in some countries where it was seeking oil deals.  However, India was unable to match the aid the Chinese offered. It underscored the need for an approach that built on India’s strengths, which ultimately resulted in India focusing on capacity building in Africa.

Worth reading.  

Obtained from Craig Nordin.  He got it from Sudha Ramachandran at The Diplomat.

12:30PM

Big GM investment in China

 

GM reached out to China's auto firm SAIC in the late 1990s, and the fruits of that JV continue to pile up, according to the WSJ last Thursday:

General Motors C. and Chinese joint-venture partners agreed to build a third commercial vehicle factory in southwest China to meet growing demand and protect GM's status as the largest auto maker by volume in the country.

$1b plant looking to crank 400k vehicles by 2015, giving GM and its partners a total capacity of 2m vehicles. China's light vehicles market will top 20m next year, while the US remains around 15m.  600 or so new dealerships planned across China, bringing the volume to 3500 total.

Nothing marks you more fully as globalization's demand center than to have the car market.  That was America in the 20th century, and it's China in the 21st.

 

 

12:01AM

Getting Arctic hydrocarbons will be a lot harder than anticipated

FT special report on Canadian energy that highlights the difficulties of accessing Arctic oil and gas and bringing it economically to market.

First is the sheer remoteness.  Then there's the extremely hostile environment.  Even with the ice-clearing in the summer, the genuine window for exploitation is still measured in weeks.  Everything you use must be special built, platforms with extreme reliability.

And the fields in question need to be big - really big - to cover the high costs.  

In short, only the majors and supermajors should apply, because only they will have the "financial firepower."

This is all before governments issue ever stringent safety requirements to protect the environment, a bar that rises with each Deepwater Horizon.

Finally, there's how you get it to market, with the big choice being between fixed pipelines and ice-class shuttle tankers.  Neither is cheap.

Just a bit of cold water thrown on the anticipated "bonanza."

I note it with interest as I write the final report (while traveling most of the week) for Wikistrat's recent "How the Arctic Was Won" simulation.

12:01AM

Fracking confronts the reality of limited water resources

WSJ piece noting that all this hydralic fracturing (fracking) is coming up against local water limits.  Already, US fracking uses water on par with the city of Chicago or Houston.

So the industry jumps into figuring out how to reuse the water multiple times by cleaning it up (not enough for drinking but enough to reuse).  Already in PA the percentage use of recycled water is up to 17% this year, jumping from 13% last year.

This is a huge issue, because we're looking at 1 million more fracking wells globally by 2035, according to Schlumberger (oilfield services co.).  The issue is expressed both in unwanted externalities (enviro risks/damage) and cost within the industry (acquiring and disposing).

Something to keep an eye on, as the industry competes with Mother Nature (climate change), agriculture and urbanization globally.

9:54AM

The micro-corollary of sovereign land sales: wooing foreigners to unsold properties

Again just back to a pet notion of mine:  all this debt + demographic aging in the West is going to lead to some countries selling off or making available for sale things that otherwise would not be considered to outsiders they would also not otherwise tolerate.

Point came up in recent Wikistrat sim on the Arctic:  Can you imagine China buying its way onto the Arctic Council by so bankrolling/purchasing/whatever a member state (bankrupt Iceland, independence-minded Greenland, etc.) that it effectively captures its seat.  I know, it sounds impossible, but then you remember how America got its seat (Alaska).  But then you say, those were different times when bankrupt states or overstretched regimes would sell off that which they could no longer manage/exploit/defend (like Russia on Alaska).

But then I wonder:  why can't we collectively head back into that territory with all this debt and demographic aging in the West.  Is this not the elderly couple downsizing their house - just writ large?

So you look at Spain right now, and the NYT headline reads, "Spain woos foreigners to thin its investory of unsold homes."

Now, Spain has always been sort of interesting on immigration - as in, innovative.  They wooed foreign workers in the good times, and then subsidized their return home in the bad times.  So now they're being aggressively innovative in the bankrupt times.

But it gets you thinking, huh?

11:07AM

Great summarizing FT article on "global food security" risk

Notice the equatorially-centric band? Remind you of another map?

Starts by calling farmers "the canaries in the mine when it comes to climate change."  Brilliant.

What affects farmers affects the global food supply and causes the price rises that hit middle class wallets and increases the risk of hunger for the world's poor.

CC isn't the "only culprit" when it comes to good security.

The primary drivers, the article notes, are population growth and the stunning growth of the global middle class, which, as we know, likes to eat and eat well.

Next is the loss of land to food crops due to urbanization and the diversion of crops to fuels (dumbest idea in human history).

But here's the quote that caught my eye:

If these were the only pressures on the global food supply, feeding the world sustainably could still be achievable, says Jerry Nelson, a senior research fellow at the International Food Policy Research Institute (IFPRI).  "If you didn't have climate change, you could tell a story about how it will be challenging and how we need to invest more in productivity, reduce waste and manage international trade," he says.  "But this would be something we could accomplish.

"When you throw climate change into the mix, that makes everything a lot more difficult."

Or better said - with regard to risk - more uncertain.

Great little piece in "FT Special Report: Managing Climate Change."

10:53AM

The Chinese Communist Party comes up with new "test" for industrial projects

Thanks to growing grass-roots protests by Chinese citizens over big industrial projects, the NYT reports that the government there now says all such plans must pass a "social risk assessment" prior to final approval.  

Interesting choice of terms, yes?  The environmental impact is what the people worry about, but it's the "social risk" that gets the government interested.  Apparently this has been done in some local governments for a while now (the experiment, per the Chinese way) and now it's being adopted on national scale.

China already has environmental impact studies, and now the government says (as of 1 Sept) that they must be posted on the internet (also interesting).

Environmental minister says, "By doing so, I hope we can reduce the number of mass incidents in the future."

The tipping point?

Enviro protests used to attract only the old and retired.  Then the young started showing up in numbers, and that's when the Party got scared.

China is, as I argue, on the verge of a huge and prolonged progressive era.  All sorts of things to clean up. Each time such steps are taken, just a bit more power to the people - always defensively offered by the government.

3:52PM

Lesson in eBook marketing

When I published the five-volumes of The Emily Updates about a year ago, I made them $2.99 each.  Not smart.

They sold at a slow clip and, at one point, they all got in the middle of the top 100 for Caregiving within Physician and Patient within Medicine within NonFiction.  They never scored in the 100 within Medical within Professionals & Academics within Biographies and Memoirs within NonFiction.

So my brother Andrew, he the librarian and self-publisher of several eBooks (but also an upcoming version of General George Barnett's memoirs for the Naval Institute Press), finally advises me to cut the price down to 99 cents for vols 2-5 and make vol. 1 free (to do this on Amazon you need to sell it for free somewhere else so they price match and I did this on SmashWords).

Suddenly we're seeing a lot move movement and our first review!

Which I have to say, is the perfect review for the endeavor.

The proof:

 

  • Vol I is now the #1 free book in Caregiving (out of only 2, so let's say the competition is limited), but III is now #2 on the paying list, II is #3, V is #9 and IV is #10.
  • Going up a level to Physician and Patient (all first time hits), vol. I is #10 (of 11 on Free), but III is #14 on paying, II is #15, V is #44 and IV is #46.
  • Going up to Medicine (nose bleed territory for us), vol. I is 44th on the Free Top 100.

 

Alternately, the volumes appear for the first time in the Biographies and Memoirs track:

 

  • Vol I is #2 in Medical Top 100 Free, III is #44 on the paying list, II is #45, V is #82 and IV is #85.
  • Going up to Professionals and Academics, vol. I  is #10 on the Free Top 100.
  • Going up to Biographies & Memoirs, vol. I is #73 on the Free Top 100.

 

Admittedly, a "hill of beans," but fun stuff to the three of us: my spouse Vonne, daughter Em (now studying in Japan), and me.

9:53AM

Big surprise: Asia wants a regional trade bloc that includes China

The Obama Administration's big idea was a Trans Pacific Partnership that magically excluded China.  It is the lynchpin, along with the "strategic pivot" of US military forces into East Asia, of his dreamt-of 21st century containment of China's rise.

The "pivot" idea is merely stupid, but the TPP was magnificently dumb.

We encouraged China's rise (after encouraging the tigers and before that South Korea and Japan) by playing regional military Leviathan and enabling their export driven growth by keeping our markets open.  The implicit deal:  take that trade surplus (now consolidated by assembler-of-last-resort China) and plow it back into US debt markets, keeping our dollar cheap and enabling more of the same (we import goods, we export security, everybody peacefully rises, and the world is a better place).

That transaction strategy, as I have called it, worked wonderfully for years and years.  But it came to its logical endpoint in the crash of 2008.  We simply can't sustain such a grand strategy any more and, frankly, we don't need to.  Asia is risen, it remains peaceful, and its logical regional integration now proceeds.

Can we still play Leviathan in this process?  At great cost, yes, but a Leviathan is not what is needed now. It is now longer a possible achievement, given China's rise, and attempting to maintain that status now only gets you unnecessary tensions and arms racing.  

Instead, the economic integration needs to be matched by suitable regional security arrangements.  Those arrangements tend to come via crises or hotspots like the South China Sea issue.  You either fix them or they fix you.

The new grouping is seen as a rival to a trade initiative of the Obama administration, the 11-nation Trans-Pacific Partnership, which includes many of the same countries but excludes China.

The announcement came as China was facing pressure to back down from its hard-line stance in its disputes with four Southeast Asian countries over ownership of islands in the South China Sea.

What ASEAN's proposed Regional Comprehensive Economic Partnership says is that, no matter the lingering tension on the islets issue, Asia's economic and trade and investment integration will proceed.  And no, it won't be held hostage to Obama's containment fantasies.

Some analysts in Asia describe the Obama administration’s trade initiative as one element in a policy to contain China, the world’s largest producer and exporter of manufactured goods.

“China’s exclusion is strange, given its huge economic presence in the Asia-Pacific” region, Amitendu Palit, a visiting senior research fellow at the Institute of South Asian Studies at the National University of Singapore, wrote in a recent edition of East Asia Forum. “This has given rise to views that the United States is driving the Trans-Pacific Partnership with the strategic objective of marginalizing China.”

There are plenty of Chinese behaviors that we need to work, but we're no longer in charge of how things unfold in Asia, and no amount of military hardware parked there is going to change that.

8:45AM

Africa: investments and insurgents

Pair of WSJ stories:  first one on Carlyle Group joining the list of private equity firms rushing in with yet another Sub-Saharan Fund; and second on EU debating whether to fund a cohort of West African states looking to combat the radical Islamic militias that have taken over northern Mali with the intention of setting up their own separate state.

The combination is - to me - telling of that dynamic of rapid frontier integration that I'm always going on about.

Africa is, of course, not really a frontier in a settling sense, but it is one in a globalization-investment-trade sense.  And when you're a frontier in that sense, it's not surprising to see both dynamics in play, as the "rush" of connectivity creates its own blowback (the central theme of my books).

From the first piece:

The investments, and Carlyle's nascent Sub-Saharan Fund, targeted at $500 million, show how private-equity firms are trying to position themselves to tap into the continent's new consumers as well as companies that are expanding on the back of demand for food and energy from the rest of the world.  Competition among global rivals is heating up in Africa, as investment returns diminish in more developed parts of the world.

From the second piece:

West Africa countries are trying to set up the force to help Mali to regain control of its northern half, which is under the sway of the al Qaeda affiliate, known as al Qaeda in the Islamic Maghreb, or AQIM.  The nations say northern Malie is becoming a haven for violent groups that live off kidnapping and trafficking as well as a training ground for terrorists who could destabilize the whole region.

I mean, seriously, I bet I could find you similar stories in U.S. East Coast newspapers from 1870-something that describe new funds and new military efforts being launched for the American West.

The speed of both dynamics is, in terms relative to even our recent past, rather stunning.  The worst thing I wrote in The Pentagon's New Map concerned my pessimism over Africa's future.  I just had the whole thing taking far longer than it is.

And that's a real lesson for me.

12:55PM

You know that recurring dream about going back to high school?

Spending school day lecturing to three AP Government classes at Son #1's H.S.

Pretty fun, actually.

Ate lunch with the teachers in their lounge.

Great school. Made my senior son happy.

 

 

10:32AM

Obesity epidemic: one variant of the punitive approach

WSJ headline says Denmark scraps it's "much-maligned 'fat tax' after a year."

Danish lawmakers have killed a controversial "fat tax" one year after its implementation, after finding its negative effect on the economy and the strain it has put on small businesses far outweigh the health benefits.

Nations including Switzerland, the U.K, and Germany have held up the tax, which applies to any food containing more than 2.3% saturated fat, as a potential model for addressing obesity and other health concerns. But in Denmark, it has been a source of pain for consumers, food producers and retailers as the nation's economy struggles.

"The fat tax is one of the most maligned we [have] had in a long time," Mette Gjerskov, the minister for food, agriculture and fisheries, said during a news conference Saturday announcing the decision to dump the tax. "Now we have to try improving the public health by other means."

The failure of Denmark's fat tax is a demonstration of how difficult it can be to modify behavior by slapping additional duties on products seen by many as essential staples, especially during tough economic times. Products such as butter, oil, sausage, cheese and cream were subject to increases of as much as 9% immediately after the new tax was enacted.

"What made consumers upset was probably that an extra tax was put on a natural ingredient," said Sinne Smed, a professor at the Institute of Food and Resource Economics.

The fat tax comes to an end after netting an estimated €170 million ($216 million) in 2012 in new revenue. Danish lawmakers will slightly raise income taxes and reduce personal tax deductions to offset the lost revenue. The lawmakers also decided on Saturday to reverse an earlier decision to create a sugar tax.

"This is not what is needed in the current economic situation," said Holger Nielsen, Denmark's minister for taxation.

Human bodies are designed to crave fat, especially when we're stressed.  The body is telling us to store up because things seem dangerous.  This is evolution talking:  if things are going south, better to stockpile fat now for the bad days ahead.

Problem is, modern life creates all sorts of stresses and modern food companies love moving this sort of product, because it nets them the highest profits.

End result:  an obesity epidemic.  The food companies know how to trigger our interest, and life provides all manner of stimuli that triggers our desire.  The cost is pushed downstream.  

Governments want cheap food but then regret the healthcare bill that follows.  Governments then try to go punitive - actually on the consumer - by issuing a fat tax that the sellers pass on directly.  Consumers get mad, tax gets scrapped.

Conservatives yell, "nanny state."  But in truth, Western governments already lavish the ag and food industries with subsidies that encourage all this, meaning the nanny state is already here, she's just encouraging us to eat the worst sorts of food (or the most profitable to sellers).  In relative terms, veggies and fruits aren't subsidized, grains are.  So we're being fatted up by our nanny state for the healthcare providers.

Governments can't disincentivize bad eating by taxing people.  They need to rejigger the already bad incentive system for ag and food companies.

Still, the fact that states are trying is an indicator of the progressive agenda that eventually must come.

But Big Food wins another round ("See, the evil government is trying to deny you your bad diet!"  Cha-ching!)

7:20PM

Funniest SNL video ever (for me, at least)

Painfully true, like I wrote this!