A Poker Game We Can’t Afford To Lose

Five dudes are seated at a high stakes virtual poker table.  Four of them desperately need to win. One of them cannot afford to lose. But they’re not all playing against each other. Four are playing together, because none of them can win alone. But none of them trust each other.

In 2015, I posted a blog entitled Cyber War’s Pearl Harbor.  It was a hypothetical exercise about the possibility of a cyber-attack launched simultaneously by Russia, China and Iran. But let’s add North Korea to the table. 

This year, I read a novel entitled 2034, written by retired Admiral James Stavridis and Elliot Ackerman, which posed a similar scenario that went beyond mere cyberwar.  I don’t want to dwell too much on the plot and crimp their sales, but it gave credence to my 2015 post, at least in terms of anticipating that a cyber-attack might be the prelude for something much bigger; something that could easily get out of hand. It also echoed the plot of an alliance of China, Russia and Iran, in which China was the dominant cyber player.

We are now at a point that I could not have imagined in 2015, and circumstances make the potential that I hypothesized that much more possible.  Recent events also should give us a taste of what a cyber war might inflict on us on a grander scale. But first, some background to the hypothesis.

The US is obviously one of the players, and unquestionably the one with the most to lose.  Hence, it cannot afford to lose.  The four other players are each in a tight spot, thanks in part to their own internal mismanagement, made yet worse by sanctions that the US has imposed on them as the economic arm of its war on whatever.  The sanctions have not yet brought them to their knees, but they have crimped their style. In addition, their internal dilemmas motivate need for solutions to be found beyond their borders.

Iran is a quasi-client of Russia, but a bit of a wild card.  North Korea is a client of China, but also a wild card. China and Russia have been dating lately, enjoying military games together.  Although, if I were the Russian bear, I’d be a bit wary of the Chinese dragon.  China has plenty of population in need of work, and not enough resource.  Russia has plenty of resource to exploit, and not enough workers.  Siberia is calling.  But I digress. That’s for the future. We’re in the here-and-now.

The foursome are in tight economic boxes with populations that may not be willing to bear much more hardship, though all are well practiced in that skill.  Still, patience has its limits.  Other countries have revolted for less justification.  So, something needs to happen to change the equation.  The question is when, and how.

All four countries are known to have substantial cyber warfare chops, and to have used them steadily and progressively. 

The U.S. has some pretty significant tools also.  We know this because some of them have been laid bare by our adversaries.  Apparently, our offensive capabilities are more impressive than our defensive capabilities.  The security breaches by Edward Snowden and Chelsey Manning are further evidence of a laxity of organizational security discipline that invites actors to test the limits.  What is not known, by us and possibly by our adversaries, is what other tools the US may have that have not yet been displayed, or compromised.

So, here we are, back at the virtual poker table, with the world around it steadily dissembling with internal and international fissures, creating opportunities for the bold and the desperate.  While the Four Amigos may not completely trust each other, they have a common bond in the need to change the power equation for their respective purposes. And a shared capacity to do so. 

*   *   *

One of the aspects of the novel 2034 that intrigued me was the subplot of the Chinese developing the capability to neutralize our internet, telecommunication and defense networks, particularly those integrating our military assets. This is all too credible, not only in my view, but in recent events. 

  • The Colonial Pipeline attack was an example of how hitting one strategic utility or infrastructure system can leverage chaos across a region.
  • Attacks on hospitals is a cyber-terrorism attack that can kill, but also spread more generalized sense of vulnerability.
  • Attacks on Yahoo and Facebook demonstrate the capacity to leverage one point of entity vulnerability into strategic widespread disruption.
  • The Kaseya VSA ransomware attack similarly shows the power of leveraging a specific vulnerability for widespread disruption across multiple high-level client organizations.  While this was a ransomware attack for fun and profit, imagine it instead as a cruise missile, the damage from which cannot be reversed quickly with a ransom payment.
  • Taiwan has recently expressed concern regarding China’s near-term capability to electronically neutralize its defenses as an element of an invasion, echoing the plot of the novel 2034, but with a much shorter time horizon in mind.

Now, imagine the above bullet points, not as isolated incidents, but as elements of a coordinated, sustained effort by the Four Amigos to change the geo-political equation to their advantage.  What would they have to gain, and what might they risk losing?  But first, a brief meditation on our national psyche.

*   *   *

We in the U.S. are infatuated with technology more than informed about it. We can see its potentials, but are not particularly motivated to consider the risks.  This is not unique to technology.  It is found in broader elements of our national character.  We tend toward optimism.  We believe there is no challenge we can’t conquer, including self-inflicted wounds.  Technology will bail us out of everything. Everything is disposable and replaceable.  When something new and shiny comes along, discard the old, even if it has continued useful purpose.  Don’t refurbish our old cities; build new ones.  And so it goes.  Our attitude about technology is very much grounded in this national mentality.

We built information technology with basically the same mentality.  Get to market first.  First mover. Gain market share, particularly in software, selling vaporware, if necessary.  Work out the bugs later.  The Y2K Dilemma, as I have previously written, was known back in 1975 (at least to my knowledge, and likely sooner) but not addressed until it was on the eve of the crisis.  The logic then was that all the old stuff would be replaced by new stuff (like microcomputer technology and new operating systems) except it wasn’t, and the new stuff was built with the same myopia to a known risk.

The internet, as we know, was funded by DARPA and created to provide a communication network among distributed academics, contractors and government officials in the military-industrial complex.  It was also intended to be a resilient network in the event of war, being decentralized and capable of sustaining attack on any of its component nodes without bringing down the system. Academia saw its broader potential and expanded its use in a positive way.  Contractors saw its potential and expanded it in a commercial way.

The commercialization of the web has obviously provided many benefits to humankind around the world, but it now also poses some significant risks, not least to national security.  While it was intended to expand connectivity and the transmission of knowledge, it has become a powerful tool for disinformation and cyber-tribalization.

Of particular concern, a network that was designed to be highly decentralized and resilient has become highly concentrated and a cyber-highway to massive attack and failure.  It is this last aspect, as illustrated by recent trial runs of cyber disruption, which should put our leadership on high alert. They have been alert since 2010 with the creation of the Cyber Command, but not obviously effective in preventing or thwarting escalating attacks.

Nor can government do this alone.  Government and the greater society depend on the private sector to do its share in protecting an economy that is increasingly dependent on and vulnerable to this technology.  The private sector, obsessed with the bottom line, too often would rather gamble on avoiding the risks and costs of cyber-attack than investing in prevention through adequate security investment, training and staffing.

 *   *   *

What we have been exposed to over the past twenty years are concerted acts of espionage by state actors gathering critical intelligence from government and commercial targets, and a series of more visible pillage by cyber-privateers, believed to be in the employ of state sponsors, but not officially linked. The cyber-privateers play an important role in strategy development. Targeting critical, but non-strategic entities, they give state sponsors a laboratory for observing how defender states respond to attacks in different scenarios.  

State sponsored activity appears to be low visibility/ low impact, stealing vital information but not overtly using it as a destructive tool.  Cyber-privateers elevate the visibility through their high visibility cyber-muggings which also serve as an element of cyber terrorism, making the public aware of its vulnerability, and thus more compliant to their demands in absence of any apparent institutional defense from government or private sectors. 

But what would a full blown cyberattack look like?  Imagine for a moment that our Four Amigos got together for a group bit-bang. 

First, the players individually may have already laid the foundation for such an endeavor over recent years.  The same backdoors that allowed them to gain entry and extract data may have also allowed them to plant little cyber-bots of program code; sleeper cells, if you will, waiting for their command to wake and unleash their mayhem.  Sleepy security teams, lax in their defensive protocols, may have failed to detect these little intruders among the morass of code and jerry-rigged programming infrastructure that populates many complex corporate and government systems. 

No doubt, the players will periodically test their backdoors to determine that they’re still available and haven’t been closed by the latest software patch. But, if that happens, they’re not too worried.  Being more patient and diligent than we tend to be, they’ve built options and alternatives so that one failure doesn’t bring down the show.  And besides, time’s on their side. 

The important thing is that in a massive cyber-attack, they don’t have to bring down everything. They just have to poke enough holes in the right systems to cripple the society. We have previously witnessed dress rehearsals in eastern Europe. COVID19 response and the resultant supply chain disruption could serve as a proxy, but it could be much worse in a true cyber-attack. 

The above scenario assumes that the Four Amigos have already laid some significant foundation in their individual activities, but it is unlikely that any of them would act alone except in extreme desperation.  So what might prompt them to join forces? 

I would suggest that serious desperation, coupled with a perception of a vulnerable, weakened U.S. might be a trigger for a unified effort.  Imagine an attack during a particularly brutal winter, following an acrimonious election.  A broad-based attack, launched with sufficient stealth to shield its source, would delay an immediate response, which would already be too late.  The U.S., preoccupied, if not crippled with response to multiple domestic crises for which it is unprepared, would hesitate to launch a massive military response that it could not support logistically. It would be effectively contained on its continental island, and the Four Amigos could go about their respective business plans in their respective neighborhoods, mostly without firing a shot.  Russia could send its demands to Europe; China likewise to Taiwan, Japan, and the rest of Southeast Asia, and throw South Korea as a tip to North Korea for its assistance.  Iran can proceed to brutalize its neighbors into submission in the name of Allah at its considered pace.

Sound crazy?  Well, so did the lightning collapse of Afghanistan, until it wasn’t.  But this game has  much higher stakes.

So, what might prevent this from happening?  Two possibilities:

  1. As I noted in the beginning, the Four Amigos don’t really trust each other, and for good reason. So how does any one of them know that when it comes to pulling the trigger, they’re all in, and nobody’s holding back to let the other guy be the fall-guy?  The novel 2034, illustrates this dilemma toward the end. 
  2. A strategic cyber-attack only makes sense if it correctly assumes that a strategic nuclear attack won’t be the response.  That assumes a rational assessment of risk and benefit by the U.S. 

Anyone want to take bets on that?

The suspicion that we may be half-crazy isn’t a preferred or sure-fire defense, but at present it may be all that saves us.

Onward.

20211011

© Copyright 2021 All rights reserved.

Has China ‘Jumped the Shark’?

A three-part meditation

Part 1 The China Syndrome

Call me crazy, but it feels like 1983.  I’m thinking specifically with reference to the Soviet Union, as we knew it in process of its death spiral.   I see an analogy today in China’s incomprehensible rapid moves to confrontation across every possible front of engagement with the rest of the world, which prompts me to ask: has China ‘jumped the shark’?

But first the baseline of comparison.  In my capacity as an armchair international strategist (in the same manner and with the same qualifications that we are all armchair economists, psychologists, sports experts and military strategists) I sensed around 1982 or ‘83 that something momentous was likely to happen soon on the world stage.  My sense was that if a third world war was going to happen, it would likely happen soon, because the Soviet Union seemed to be becoming increasingly desperate, and its aging, brittle leadership seemed to be losing its capacity to govern.  Instead, it collapsed, and Gorbachev arose to facilitate a transition of sorts.  I hasten to add that at that time I knew nothing more than what I read in the media.  As historical facts became better known, it turns out that I may not have known much less than our vaunted Kremlinologists of the time.  (Which is better? A good guess or clueless certainty? Which is worse?)

Some attribute the collapse of the Soviet Union to Reagan’s confrontation and his high stakes poker gambit posed by the Star Wars defense, a.k.a. the Strategic Defense Initiative, a fanciful strategy in its time that has taken long to approach, if not achieve its strategic promise.  I continue to question that Star Wars or Reagan were decisive.  I think if Gerald Ford or Jimmy Carter had remained in office, the result would have been pretty much the same. The Soviet Union collapsed from within from its own brittleness, very much like we are now.  We didn’t need to invest in Star Wars, or a 600-ship navy that even the Navy didn’t want.  That’s an opinion; not a fact.  But it is worth considering as we contemplate our potential for folly in addressing China’s new aggressiveness. 

Let us now consider China.  A corollary to Murphy’s Law of unknown attribution states that ‘friends come and go; enemies accumulate’.  China’s confrontational stance of the past three years seems unprecedented in its post-Mao evolution, and largely unnecessary.  Yes, Trump made a total ass of himself in the relationship, but it’s Trump. But China wasn’t just responding to Trump in kind.  It chose to take on everyone.  And if they didn’t first provoke China, China would do its best to pick up their end of the load. China challenges America’s position of power on the one hand, arguing that the world order should be multi-centric; on the other hand, its egocentrism demands obeisance of the rest of the world to its requirements as a presumed right. So far, it doesn’t seem to be a winning strategy.  But so far, China doesn’t seem to be reconsidering.  So, what explains the behavior?

One might assume that China is making a premature move to assert what it presumes to be its rightful and inevitable role as a world power.  But what if Xi is acting, not out of a misplaced sense of power, but a well-founded sense of fear? What if his striving to redefine the world stage and expand his power externally is out of fear that China will collapse internally from pressures that it cannot otherwise manage without the exercise of greater global influence to bend the world to his needs? George Friedman has made a more compelling case for this argument in a recent issue of Geopolitical Futures: Facing Reality: China’s Strategy  .

China has fascinated me from a distance, not as a geopolitical subject, but as a case study in management, China, Inc., if you will.  Its growth over the past 40 years has been impressive by any measure; progress that could only come by autocratic means; the kind of means that corporate executives must lust for, and some strive for.  But the question about the Chinese juggernaut is how long it can last until it crashes, and what might that look like. Democracies can wither and decay, as we are now experiencing in the U.S. regrettably but not yet fatally. Autocracies usually end much more violently because they can only be undone by forces more brutal than those which held them together.

I have certain ‘idea buckets’ into which I categorize observations.  In China’s case, the operative bucket is ‘the math doesn’t work’.  On the one hand, the popular narrative is that China is destined to overtake the U.S. within 10 to 15 years economically and achieve parity militarily. I would contend that it will overtake the US economically in quantitative terms, but not qualitative; and quantitative terms are largely irrelevant to its sustainability, when compared to the liability side of its national ‘balance sheet’.  Militarily, as retired Admiral James Stavridis’ and Elliot Ackerman’s novel 2034 illustrated, China might achieve a stunning tactical victory in a military confrontation, but it is no more likely than we are to achieve a strategic victory by military means. Will the resulting stand-off be worth the price to either party, or the world at large?

I suspect the truth is we don’t know the truth about China, any more than we did about the Soviet Union in 1983 or Russia in 2021, or Afghanistan after 20 years of bloody and costly engagement. Our margin for error is, as we say in accounting,  ‘material’.

So, what might be keeping Xi up at night?  First and foremost, his people.  China’s greatest asset is its people, and its greatest liability.  The demographics are not looking good, the distribution of national wealth is as problematic as in our own paradise, and the national mood is becoming surlier as ordinary people are faced with the environmental, economic, and social consequences of the massive changes wrought on the country over the past 40 years of its juggernaut.  The CCP leadership has bought a lot of time and patience in offering the populace hope for a better future in the aftermath of Mao’s ‘cultural revolution’.  But that patience appears to be approaching its expiration date. And now Xi seems intent on commencing Great Leap Forward v.2.  Those who cannot remember the past are condemned to repeat it.

If China is people-rich, it is otherwise resource poor.  Xi’s ‘Belt and Road’ wet dream does not guarantee secure access to resources, merely an extended and vulnerable logistical supply chain exposure. Securing the South China Sea doesn’t begin to solve the problem.  He might consult his military establishment, which has little experience with supporting a logistical supply chain outside its borders, how that might work.

Climate change will inflict more damage on China than the US military is ever likely to. So far, rhetoric aside, China shows no inclination or capacity to manage its climate threat and economic imperatives in tandem in any rational and effective way.  In fairness, neither do we.

Finally, China’s progress over the past 40 years has been its good fortune to operate in a geo-political vacuum in which it has largely dictated rules of engagement to a largely passive and compliant western world.  But its recent and growing belligerence has caused a perhaps unexpected awakening and a growing unity of opposition in the West.  This is about 20 years overdue, but better late than never. The consequences of continued complacency don’t get any better from here.

The math doesn’t work’ because none of these issues individually has an easy solution. The interaction of all of them is yet more complex.  It is difficult to imagine how a society that has grown as rapidly, and in what appears to an outside observer to be a grand experiment in creative chaos, can achieve stability and sustainability in an orderly fashion short of brutal autocracy.  An yet the very exercise of that brutality is the most likely catalyst of its undoing.  China, Inc. is not a management success; it is a management dilemma that has yet to play out, and the odds are against it.

Part 2 The American Syndrome

For 80 years we have built an economy on war.  We have built a culture on war.  We have made war living room entertainment. Does anyone see where this narrative has taken us? Is that what we truly wish to be by choice, a warrior nation?  We have evolved to the caste structured, colonial power that we revolted against 245 years ago.

Fresh from my prior autopsy on our withdrawal from Afghanistan, I am mildly disturbed by reports that the US military is considering possible collaboration with the Taliban in opposing ISIS. Such thinking suggests that we have also lost the war on drugs at the highest levels of national and military management.  In this case, the drug of war. A military version of FOMO.  Pentagon, don’t even think of helping the Taliban.  Leave that to Russia and China.  It’s their backyard, their security risk more than ours. Let them spend their resources.  ‘Ignorance is curable; stupid is forever’.  Don’t be stupid. We had our chance. We blew it. Don’t double down on stupid.

None of this has made us safer, or wealthier in intrinsic terms as a nation.  In fact, it has made us poorer.  And our propensity to play with our military toys in foreign neighborhoods has made us less secure.   ‘Friends come and go, but enemies accumulate.’

So, where does this leave us in confronting a China that may be more paranoid than purposefully belligerent, and using us as a set prop for its domestic soap opera of ‘threats from the West’, material courtesy of the U.S.?  We must ‘pivot to Asia’. Obama was correct in the perception and in seeing trade alliances as a critical strategic component. But he was weak in the execution. Hillary was clueless. Trump grasped the obvious, but in his typically ignorant manner, made a difficult situation nearly incendiary.

Speaking of ignorance, Bloomberg reports recently that the CIA is thinking about creating a ‘Mission Center for China to gain greater insight into America’s top strategic rival’.  So where has the CIA been for the past 10 years since the commencement of the pivot?  And where was the CIA for the prior 20 years as China was obviously growing into more than a ‘blip on the radar screen’?  Meanwhile, with our lead ‘intelligence’ agency just now deciding to give China its proportionate due, our vaunted military is doing its own budgetary pivot to China.  You can imagine the ‘intelligence’ going into that exercise.  But we can count on the ‘(__)-industrial complex’ to help the military fill in the blanks.

As a relevant aside to the above in the aftermath of the collapse of the Afghanistan government and the fruitless involvement by the U.S., reporting confirms what has long been obvious: the U.S. never clearly understood Afghan society and politics and never really had a coherent concept of its ‘strategic national interests’, or a strategy to pursue them. Can we extrapolate to China, both in terms of our ignorance and its consequences?

We have obvious strategic national interests in Taiwan, South Korea, and Japan that I doubt we have fully defined in concrete terms that would inform an appropriate strategy.  They are a part of our vital supply chain, more so than China; and we have seen quite dramatically what happens when interruptions occur in the China supply chain or any other.  How much would we allow those elements to be threatened without response? What kind of response is appropriate, and likely to be effective?  What are the consequences if we do not act effectively?  Another ‘red line’, like Syria? I have no reason to believe that America Inc. has effectively addressed these questions, much less approached credible answers.  Indeed, corporate priorities and greed for profit from the mirage of the ‘vast Chinese market’ have dominated US national policy for decades with the government taking a back seat, as the corpocracy has preferred.

Our greatest advantage is not in our bloated, unsustainable military machine, rendered weak despite its size by years of excess use, deficient maintenance, and squandered investments (the F-35, equivalent of the Swiss Army knife that does everything, but nothing well; littoral combat ships, still in search of their mission; Zumwalt class destroyers with guns that still can’t destroy).  Our greatest advantage is our economy, which is also the basis of our military strength.  Our second greatest advantage is that we still retain some influence with other nations to mount a concerted diplomatic and economic alliance to confront China’s belligerence with consequences that will mean far more to its domestic security than the South China Sea or Taiwan will ever provide. 

China’s ‘Belt and Road’ strategy will mean nothing without cooperating markets at the other end.  That is the power of the West, but it should use it intelligently, and with respect for China as an equal player; but China must never become the dominant player as long as it remains the brutal autocracy it has proven to be, Xi’s sweet talk notwithstanding.

It bears saying that the US should also step back from its role of global dominance in its own enlightened self-interest, enabling other allies to assume their share of the burden and responsibility for sustaining and guiding workable global systems to the benefit of all. This is not about ‘playing nicer with the other kids’. It’s about accepting that alliances are stronger when everyone feels they have a stake in the outcome and a say in the risks that they are expected to bear. As with Afghanistan, there are risks; much larger risks.

 We have yet to come to terms with the fact that our dominant position since WWII is more a circumstance (last man standing) than an achievement; and not an anointment for perpetual supremacy, much as we would like it.  We have not demonstrated the institutional wisdom or competence to earn such right.  Nor should we aspire to the burden.  We should strive to remain the strongest nation in capabilities, but modest in our ambitions, and respectful of other nations’ just interests and needs in a world of limited resources.

I am not a big fan of revolutions.  They rarely achieve progress.  The American Revolution did for a time, but after 245 years we have become the very thing we revolted against: a quasi-colonial power devolving to a brittle caste system. As General Petraeus asked of the Iraq war, ‘how does this end’?

Part 3 We’re all fakin’ it.  And none of us are makin’ it.

Let’s be honest with ourselves.  The U.S., China, Russia, Iran, North Korea.  We’re all fakin’ it.  (Europe has fewer pretenses; it’s just dithering in its own stew.)

China, Russia, Iran, and North Korea are ‘punching up’ to leverage global influence from their modest bases of power and influence.  The U.S., by contrast, is sliding down the slope from its position of bright, shining prominence on the hill.  We’re all meeting in about the same place…if we’re honest with ourselves. I suspect Xi knows that, and that is his fear. 

There is evidence, courtesy of George Friedman’s Geopolitical Futures newsletter, that Russia knows that. As Mr. Friedman notes, the head of Russia’s defense establishment is as worried about Russia’s collapse from within as we have been shaken by the rise of the Trump Taliban and division within our own country. It’s been fun for Mad Vlad’s kleptocrats, but the bill is coming due.  Russia is powerful enough to create trouble in its neighborhood, but not powerful enough to take and hold anything beyond its borders and limited near-in sphere of influence. It is a nuisance in the cyber-sphere largely due to the complacency and restraint of the U.S.  That could change quickly.  Russia could invade Europe, but holding it would likely make its Afghanistan adventure look like a holiday outing.  (Neither Russia nor the U.S. ever seem to learn much.)

The mullahs also must wonder when the time’s up for their show in Iran. Again, on a smaller scale than China, Iran faces demographic, climate and economic challenges that are relatively no less daunting in proportion, if more modest in scale. They’ve had great fun disrupting their neighborhood in the name of god and at the expense of their people, but they’ve proven themselves no better or kinder than the devil they deposed, and far more disruptive.  Depending more on the muscle of the Quds than on Allah, how much longer will the regime last before the current administration meets the Shah in hell?

And when the Dear Leader of North Korea begins to speak candidly with his people about his country’s economic situation, one must wonder if the end is near.  Nukes don’t put food on the table, or heat the hut.

Short form:  We’re all fakin’ it.  None of us can afford our military fantasies and adventures. We’re all arriving at essentially the same destination, and it isn’t pretty.  The math doesn’t work.  The elements of the algorithm don’t integrate.  The theory is not reconciling with the reality.  And the masses of population for whom it all must work at some existential level are arriving at the same conclusion at about the same time.  It isn’t a liberal thing or a conservative thing.  It’s about a basic sense of well-being at the most primal level of human needs.

War is deplorable in a moral context, but morality always takes back seat to other priorities: power and profit.  War is unsustainable in an economic context. Will we recognize that before it bankrupts us of everything else in addition to our moral sense? If the world’s leaders, such as they are, continue in the illusions that they can re-litigate history, and write the future to their liking, it seems inevitable that we will discover the real-world consequences of the aphorism: ‘the math doesn’t work’.  

So here we are.  Five dudes at a poker table, metaphorically speaking.  Four of them are desperate to win, and one of them can’t afford to lose. Except they’re not all playing against each other. Four of them are playing together. Who is the odd man out?

Stay tuned for our next exciting episode.

Onward

20210906

Copyright 2021 All rights reserved.

Stop Blaming Afghanistan for Our Systemic Failures

Monitoring Afghanistan isn’t my day job, but after 20 years of casual ‘person-on-the-street’ observation from a discrete distance, and having much less information than the experts, but apparently no less insight based on recent events, I feel confident to cast a few random thoughts into the public discourse din from a management perspective.

 *  *  *

Crisis Management

When you’re in a crisis, the first cardinal rule is to admit to yourself that you’re in a crisis.

When you’re in a crisis, the second cardinal rule is to admit to your stakeholders (allies, voters, other interested parties who may suffer the consequences of such) that you, and possibly they, are in a crisis. It’s not the ‘funest’ part of the management job but it has a few benefits.  1) It sets a new standard by which to judge actions to follow. 2) It prepares stakeholders (you know, the people you professed to value at the beginning of the endeavor) to consider their exposure and take appropriate measures of self-protection.  That may not always be to your liking, but, hey, it’s a crisis.  You’ve already lost some measure of control, and to the limited extent that ethical considerations may still be present in your value set, you have a moral and ethical obligation to inform your partners / stakeholders of what may lay ahead.  It helps to sustain relations at some level when the crisis is resolved, or resolves itself.  We seem not to have done a very good job at this.

Third, don’t assume that your audience is stupid.  They may be in some significant measure, but they aren’t likely to appreciate the inference, and are often smart enough to perceive it.  When you say that Afghanistan is not like Vietnam, and a listener with 60 years of memory and at least a high school education can see for themselves that it looks very much like Vietnam, they are likely to regard you as one of two possibilities:  clueless or a shameless liar.  Neither perception fosters better future communication and trust.

Objectives and Strategy

The Original Objective in Afghanistan was to ‘get Bin Laden’.  Not easy, but straight-forward.  Unfortunately, our ADD afflicted president, Bush the Lesser, was influenced by the Bush Whisperer to take his eyes off the prize and go for the oil, and a billion worth of gold or more for Halliburton.  (Note to Liz Cheney:  Stay focused on January 6.  Get off your high horse about Biden’s alleged failures in the exit from the failures perpetrated by your dad and his merry band of Klingon Warriors.)

Obama finished what Bush the Lesser was too distracted to finish. Objective achieved.  Mission accomplished.  Other than that, we have had no discernable strategy to justify remaining that was ever credible in context of Afghanistan’s circumstances.  At that time, we should have begun planning an orderly exit, and might have avoided the crisis we have now created.

Biden and Obama were right to want to get out ASAP, and to doubt the military’s credibility in arguments for staying. The cloak of ‘national security’ is now threadbare.  It has been for a while.  Obama failed to be assertive enough soon enough.  Biden was boxed in strategically by the machinations of the Trump-Pompeo strategy, but nonetheless failed to manage the consequences of that undesirable circumstance as effectively as he might have.  Yes, he was preoccupied with COVID and the budget, and rightly so, but the bureaucracy that was managing Afghanistan was not similarly engaged in COVID, and effective delegation is a critical factor in successful management.  We should have moved much faster to coordinate the way out and protect the people we profess to care about.

And not nearly enough appears in public discourse about the vital contributions of Trum-peo Taliban to this disaster.  They deserve considerable credit.  To the press, which is eager for a scalp, give Biden credit that he extended the deadline of withdrawal to August 31. If he had stuck to Trump’s deadline of May 1, this would have been yet uglier, because we would have been four months less prepared for an event we should have begun preparing for 10 years earlier. 

Strategy and Context

Strategy cannot succeed without understanding context. Whatever strategy we may have had for Afghanistan, perhaps one of the best kept secrets we’ve had, seems not to understand the nature of the place and its people.  If we ever learned anything during our work with the insurgency of the eighties, it seems that it was purged from our operating memory as we defended against the insurgency of the ‘00s.  ‘Those who fail to learn the lessons of history….’

By the way, one of the aftermaths of 9-11, as I remember it, was the consolidation of the intelligence community to break down silos, improve the exchange of information, and provide a better, more timely product.  How well did that work in this case? How has it been working generally?  Did we create greater intelligence, or just a greater bureaucracy? Are we any better able to anticipate trouble, or only better at connecting the dots after the fact? Was the problem the acquisition, the analysis, the communication of the intelligence by the intelligence community, or the failure of its clients to grasp and face reality with the information provided, or all the above?

The foundation of a successful strategy is competent intelligence.  Need I say more?  Let’s keep it simple.  A nation of 38 million people basically fell before a force of 70,000 core troops and 200,000 irregulars.    That was not merely a failure of the government, corrupt as it was; or the army, of whatever disposition it was.  It was a failure of the people to calculate their interests consistent with our expectations. Or was it a failure.  Was it that they arrived at a different calculation that we never understood, because we never bothered to?  It didn’t fit with our ‘strategy’.  Was it the will of the people, or lack thereof, or the will of the regional war lords who had their own calculation of interest, different from the people and different from the kleptocrats in Kabul?  Or was it the potent marriage of our ignorance and our arrogance?

Strategy and Tactics

The best strategy cannot succeed without effective tactics.

The best tactics cannot accomplish anything sustainable without a coherent strategy. 

Our military has great tactics for certain things.  Massive destruction. Sometimes surgical destruction, killing in large groups (surely, there was a bad guy in there somewhere). Taking ground.

Holding ground?  Not so much. Gotta move on. Places to go. People to see.  And besides, it’s not our responsibility to ‘hold the ground’.  It’s the responsibility of the people we supposedly came to help.  Because we can’t be there forever.  And we shouldn’t be. (Although in all fairness, we’ve held South Korean ground and European ground for a decent period.  It was in our interest, and we had allies who cared more about the goal than we did, and should have.)

And a few random thoughts, none of which are particularly original, but they fill out the narrative:

  • Given that the Taliban were doing such an effective job at holding the most powerful military in the known universe at bay with IEDs and HDEs (Human Directed Explosives, a.k.a. suicide bombers) did we really think that we could create an Afghan army in anything resembling our effectiveness, much less be more effective where we have failed?  And what did we expect would happen when we pulled the plug on our support at departure?  Were we ever really trying to build ‘internal security’, or just peddling weaponry at our taxpayers’ expense?
  • How credible is the notion that we can control Al Qaida and ISIS with an ‘over-the-horizon’ strategy when we couldn’t control the Taliban under our nose with boots on the ground?
  • Finally, and I’m not a military guy, I can’t imagine any scenario in which a defeated army can extract from a hostile active war environment in a graceful, dignified way, and without cover from a nearby base in a friendly country, neither of which existed in this case. That is not Biden’s failure.  It is predicated by all the failures that preceded it over the sordid history of this misguided adventure. 

The news is not all bad.  China, Russia, Iran, and Pakistan are having a moment to gloat in our latest day of infamy.  But now, they own the problem that they have nurtured, and we are leaving behind.  And they face a far greater internal security threat than we do.  That’s not good news for anyone, but it’s worse news for them than for us.

So, what’s the point of this lengthy narrative?  Two points, actually.

  • We obviously did not learn from our mistakes in Vietnam and Iraq and Iran and Somalia and Lebanon and Libya and other lesser venues.  We had better learn from Afghanistan, and fast, because China is the next stop. We had better not screw that up, and we will if we approach it with the same mentality. ‘Those who fail to learn the lessons of history….’
  • Afghanistan is not merely a military fiasco; it is a management fiasco, not confined to the military. I have used a management framework for addressing what I see as its failings. It is the same framework that can be applied to the failings of many corporations, and the impacts of other corporations’ misbegotten successes at cost to a failing American society, not unlike the failed Afghanistan society in fundamentals.  We must not see Afghanistan as a distant failure of Afghans, but as an extension of the failure of America’s elites to see our society and its impact on itself and the greater world in its true dimensions and consequences.

A great people can fail when they cannot comprehend their own weaknesses in time to correct them. We are a great people not because of who we are, and what we have achieved, which at best is a mixed bag; but because of who we aspire to be, and the promise that holds for ourselves and the greater world. We are a long way from perfecting ourselves, much less the world.  Nor should we strive for perfection in either case.  But we can do better. And time is running out on our great experiment for a course correction.

I close this meditation on this chapter of our national incompetence with an expression of sorrow and respect for the men and women, past and present, who answered our country’s call to duty, and served and sacrificed with honor.  I also express sorrow and regret for the many innocents who have died or may suffer because we sacrificed their well-being in pursuit of our own.

Next stop, China.

Onward

20210901

Copyright 2021

Don’t Celebrate the Pay Raise; Anticipate ‘the Next Shoe’!

We are now in the 4th act of the COVID 19 drama.  We think the end is in sight, and we’re acting as if it’s ‘after-Times’.  But it’s just the 4th act, and the Delta variant is offering plenty of potential for further plot twists within an explosive political environment that is its own drama.

As business scrambles to re-assemble the fragments of its ‘before-Times’ business plans, it is coping with a major dislocation of its labor paradigm for a variety of reasons that COVID did not create, but merely amplified and thrust to the surface.  One of the ‘quick fixes’ is to pay higher wages to the ‘little people’* it has pissed on for so long to coax them back to the same work they performed before but now under more demanding circumstances. 

By the way, the class of ‘little people’ includes a range from nursing home health aides and restaurant wait staff to junior bankers in prestige counting houses.  Sorry, Harvard and Stanford grads, you too are in that class, no matter what you’ve been programmed to believe; higher pay grade, but equally disposable. There are more where you came from.  And some day, there will be algorithms to replace some of you as they did aspiring attorneys before you.

Ironically, but not surprisingly, opinionators, pundits and the press have picked up on this eruption of the norm and rushed to the judgment that it is the ‘new normal’; that the ‘little people’ have at last gained bargaining power in the labor market.  Silly pundits.  Only for the moment.

One must ask where does this lead.  The answer to the future is, once again, in the past.  Over the past forty years management has persistently arbitraged labor when it could through offshoring and outsourcing, and substituted automation wherever possible, because bots don’t take vacations, sick time or have child care issues. (They just get hacked!)  This trend was further accelerating before COVID-19, aided by cloud information technology, artificial intelligence, and organizational consolidation.  COVID-19 will accelerate this process. Emergence of the Delta variant to Covid-19.v1 levels of lock-down response will kick the process into warp drive.

One of the consequences of COVID-19 is the drive to digitize everything that can be digitized, and automate the workflow that connects it all.  It is critical to the concept of remote work in any economically sustainable manner.  The expectations of certain financial titans notwithstanding, remote work is likely to remain a major and growing part of the business environment.  I suspect that executive Neanderthals in their more cloistered thoughts are planning for that as well, even as they demand obeisance to their requirement for return to the office and restaurants.

So, what is the next shoe to drop?  Quite likely a continued downsizing of organizational staffs as further automation kicks in.  It is likely to be subtle and gradual over the next five years; difficult to detect in the overall churning of the labor pool, but accelerating and cumulatively significant. The result will be more of what we have observed and become apparently numb to:  downward migration of the economic casualties to lower paying, lower skilled jobs, gig work, struggling self-employment and small business creation, unemployment, homelessness, depending on one’s skill sets and aptitudes. 

This transition trauma is not without its offsets.  COVID-19 also demonstrated the vulnerability of our supply chain in many crucial areas.  A consequence of this realization will be an ‘unbundling’ of that which was previously consolidated in vulnerable environments, and a shortening of supply chains to reduce the number of points of vulnerability that can be disrupted by COVID-23, climate change, China, or those unidentified aerial phenomena that may decide to stop teasing us and get down to business.  We are undergoing a major disruption of our operating assumptions and operating environment without a holistic understanding of the process or a master plan to deal with it.  It will undoubtedly create unanticipated opportunities that will absorb many of the displaced, but the process will not be pretty or painless, and there will be much ‘breakage’ along the way.

The downside narrative is not inevitable, but it is probable in absence of a yet-to-be detected engagement on the part of the business community to deal with the consequences of labor displacement that it creates in pursuit of its disparate goals, and shared objective of profit at any cost, but theirs. The business community that creates the unemployment cannot continue to disparage the unemployed and the government that is left to pick up the tattered threads of the social fabric that business shreds.  There are consequences for persistent irresponsibility, as we are now witnessing.  It is in the interest of the business community to collaborate with government in dealing with labor displacement and transition because a displaced worker on the one hand is a displaced consumer / debtor on the other.  In the end, nobody gains, but this logic appears to have escaped the business elite in their relatively sheltered cells.

So, ‘little people’, enjoy your raises in the moment, but understand the implicit cost that comes with the benefit, and pack your own parachute.  Good luck.

  • ’little people’ – for those readers of  more recent vintage – a phrase made infamous by the late Leona Helmsley, a.k.a. the Queen of Mean, the female mirror persona of Donald Trump who opined that taxes were for the ‘little people’.

And for the record, ‘Ich bin ein ‘little person’.’  [with attribute to John F. Kennedy]

Onward

20210718

© Copyright 2021

On Climate Change I Was Right, But for the Wrong Reason

On November 19, 2004, a land use planning committee that I chaired in the town of Guilford, Connecticut conducted a day long workshop for shoreline municipal officials on the subject of possible climate change impacts on the Connecticut shoreline.  Walking into that event, I was neutral on the subject.  But as a resident of fifteen years in this shoreline community, and an alumnus of the Economic Development Commission and Planning and Zoning Commission, I was fully informed of the divisions that can occur in our community over issues of land use and the environment.

The primary objective of our community was to explore the potential for transit-oriented development around our train station on the southern area of our town center bordering Long Island Sound.  Being a shoreline area, it was both high value and environmentally sensitive.  The motivations for development and protection were equally present, and potentially disruptive to any plan.  Knowing that climate change was an evolving issue of increasing visibility, I decided as a matter of due diligence that the committee should inform itself of the issue and avoid ‘unforced errors.’  Put simply, the challenge was to determine where we could safely and beneficially pour concrete, and where we shouldn’t.

As I said, I entered the event neutral on the subject, but wanting to learn enough to make reasonable judgments.  I left stunned.  The presenters, a collection of scientists, environmental managers from the FEMA and NOAA, a world-renowned economist on the subject, a nationally recognized land use attorney and an investment advisor gave us their assessments of what could lie ahead, with appropriate caveats, but credible grounding in science and economics. 

Before choosing the accounting profession, I had considered a career in science, and have retained a layperson’s level of engagement with the field.  I understand that the nature of science is the inherent disruption of what we believe we know for the furtherance of knowledge.  The dueling of theories among advocates in the field can be as political and unsettling to the observer as anything in politics.  To some degree, it is a part of the ‘trial by combat’ through which hypotheses are refined into fact.  But sometimes it ends in suppression by brute force of peer pressure.  Science is conducted by humans.  It has no immunity from the human afflictions that affect all our other endeavors, although it does strive for some safeguards. But the information gained from this workshop has served as the baseline against which I have monitored subsequent events, and it has stood the test of time.

The presentations avoided the sensational and stuck to facts. It presented ranges of possibilities in impacts and probable trends. As I had requested, it focused on probable impacts which would be local, and not on means of prevention in which we must participate, but which our town cannot achieve alone.

I left the workshop with two conclusions:

  • If what these folks presented comes to pass, Guilford, the state, the country and the world will be in deep-severe.  (I pride myself on having a firm grasp of the obvious)
  • If what these folks presented comes to pass, there is no freaking way that government at any level is remotely prepared to deal with it, which will make a bad situation far worse.

Note that I said ‘government’ and not ‘society’.  I exhibited a biased assumption that if government would comprehend the situation, it would be able to lead the public to the proper actions to avoid disaster.  I was wrong.  Not about climate change being an existential threat. And not about government being unprepared to deal with it. But about the ability of our citizenry to understand and accept and act upon what is in its own best interest.  Our response to COVID-19 proved to me that I misunderstood the depth of our social dysfunction, which has been descending steadily for the past 40 years.

A word about government.  In the United States, and I presume most places practicing some level of democratic governance, government is not designed to be proactive.  Liberals expect it to be infinitely proactive. Conservatives oppose anything beyond a minimal need; however they choose to define ‘minimal’ at any point in time. Some are apparently still rutted in 1776. Climate change demands a proactive, but reasoned, response.

‘Government’, as we broadly think of it, is composed of two layers: the administrative layer which serves as a foundation for ongoing day-to-day activity, and the political layer which rests upon it, and provides enablement and direction to the administrative layer (or not).

The political ‘layer’ in turn is comprised of two factions.  One that represents voter constituencies, and one that represents economic constituencies. Those factions reside side-by-side in the schizophrenic mind of the average politician, the voting constituency dominates to some degree for three months every biennial election cycle; the economic constituency that finances campaigns (and whatever else) dominates the other twenty-one months.

Then there’s the voting constituency.  The People are far more numerous than the corpocracy, but seriously uninformed, disunited to any particular purpose, and poorly organized.  The corpocracy is fewer in votes, but far superior in resources and organization to project their will to effect.  In any given contest, who would you put your money on?  Who do our political leadership listen to most closely?

None of this is news.  It just encapsulates the dilemma of climate change and so much else.

But the news is COVID-19 and what it tells us about our society, and our willingness to act within our ability in our individual and collective self-interest.  A society that can take simple measures to protect itself in the face of an immediate and manifestly deadly threat, and refuses to do so, has no credible capacity to deal effectively with a threat like climate change that is gradual, but accelerating, long term, multi-faceted, integrated and diverse in its consequences, and not immediately responsive to our most aggressive potential remedies.

Since the day of that workshop, I have been engaged with the subject on various levels.  I have focused on impacts rather than prevention and remediation.  I have chosen that path in the belief that, unless we clearly understand what we are at risk of losing, we are unlikely to be motivated to do what we must to prevent it. (Short form: in this case, the stick might work faster than the carrot.)  I was wrong.  Neither are working.

Thus, the administrative layer of government cannot lead us to where we need to be if it is not directed and enabled by the political layer that oversees it.  The political layer keeps its ear to the ground, its eye to the sky, and mumbles platitudes while it hopes no one will hold it to account during its present and presumptive future.  The corpocracy plays good-cop/bad-cop on the subject where it can, only making substantive responses when the existential interests of some of its members are put in play.  And the ill-informed, generally unmotivated, and too often antipathetic voters return the same leaders to power who willfully stick their heads in the sand at their constituents’ ultimate expense.  (As Exhibit A, I submit Senator Snowball from Oklahoma.)

I was wrong.  It is not government’s failure that dooms us to respond effectively to climate change.  It is ours. Enough of us do not care enough to make a difference.  Thus, we are approaching escape velocity from the gravitational pull of responsibility, but not from the impact of consequences. 

Happy Independence Day.

Onward

20210704

© Copyright 2021

When will we reach ‘herd outrage’ at gun violence?

We long ago reached herd immunity to gun violence, especially in Congress. But when will we reach herd outrage at gun violence?

Have we not sufficient evidence to conclude that ‘good guys with guns’ will not save themselves or the rest of us from the nuts who compulsively run to the nearest gun store for more ammo and one more gun than they already have at the drop of a dog whistle from the NRA, a despicable organization that has so shamed itself that no further public rebuke should be necessary?

This week, as events were unfolding elsewhere in the country, we experienced in Connecticut, the home of Sandy Hook, another mass shooting by another troubled soul who fortunately did not take other lives before he took his own. But he did his best to try, and fortunately was not successful.

And yesterday, Indianapolis. Where does it end? When does it end? How stupid are we? How craven are the members of Congress who bow down to a mindless obsession with so-called Second Amendment rights at the expense of our collective right to the freedom of fear from mindless violence, or, in the vernacular to which they profess such reverence: ‘the right to life, liberty and the pursuit of happiness’?

When will we as a nation discover our collective intelligence and soul, and forsake our childish fears and fantasies, attached to a delusional definition of independence and freedom in the medium of a weapon of personal destruction?

For all the trappings of our ‘advancement’, we remain fundamentally tribal and primitive. If we cannot lead ourselves out of our orgy of self-destruction, we have no business in presuming that we have any authority to lead the world to anything but mass destruction.

But there is a broader and deeper question that must be addressed. What is it in our national psyche that leads so many of our fellow citizens to self destruction through civil destruction. Why do we, the self-styled beacon of freedom, lead all other nations in our orgy of civic self-destruction? We must face this question, and answer it.

We are becoming Afghanistan. We must ask ourselves if that is that fate we choose, because it is clearly our choice, not our destiny. But if we default to guns, de fault is our own.

Onward

20210416

Groundhog Day Meets Déjà Vu All Over Again

This period we are experiencing reminds me of 1964 – 68, when American cities were churnin’ and burnin’, and the beginning of the AIDS crisis.

We have learned NOTHING!

Or, we have forgotten what little we may have learned.  We are a society of studied tunnel vision and willful amnesia.

The black community has every right to be enraged, but rage alone will not solve its dilemma; only intensify it, playing into the very forces of racism and bigotry that have defined its existence for too long.

The white community can no longer stand by in various hues of dispassion, disdain, fear, anger, and mindless racist hatred, and say ‘it’s not my problem.’  It’s our problem. If we did not create it, we have allowed it to persist with efforts that were inadequate in time, resource, or understanding to solve it.  We tried throwing money at it.  That didn’t work.  And when that didn’t work, we said ‘enough’, when we should have been saying ‘why’.  But if we ask ‘why’, that requires a conversation.  And a conversation may lead to answers that neither blacks nor whites want to hear.  So instead, we talk at each other, if we talk at all.  And the anger and distrust ferments, until it erupts.

At some time in the mid-seventies, as the US was going through its nervous breakdown, exhausted by Watergate, Vietnam and a deteriorating economy, I had an epiphany regarding the death of Martin Luther King.  It occurred to me that the timing of his death had particular significance in the context of the political evolution of the country.

At the time of King’s death, he was no longer just leading a movement for civil rights for people of color.  He had transcended that limited vision.  He had crossed the Red Sea and arrived at ‘The Promised Land’, so to speak.  More aptly, he arrived as an invading moral force, speaking no longer only to black people about their own plight, but to all people, black and white, about their shared plight.  Poverty knows no color line.  And coffins imported from Vietnam were being delivered with increasing frequency to black and white neighborhoods.

King spoke of economic issues, and of the moral issues of Vietnam in terms that were color blind.   And white people were beginning to listen as intently as black.  And not just white liberals.  And that was very clearly dangerous to the power structure.  And that’s when he died.  Coincidence?  Perhaps.  I have no facts.  But events are consistent with the revolving plots and rhythms of history. You might say, there was ‘probable cause’.

There is an important theme in this observation.  King became most influential when he saw the plight of black people in broader terms, and spoke to the broader audience who shared that plight in terms they could understand, and identify with…and embrace.   Obama understood the same, which is how he became president.  And undoubtedly mindful of King’s fate, which may be how he managed to survive his two terms.

And so to the Black Lives Matter contingent, I would offer this observation:  It should dawn on you by now, but apparently has not, that until all lives matter, black lives don’t matter, and will not.  ALL LIVES MATTER! Until all lives matter, No lives matter. Black, gay, women, the poor, the elderly, children, the infirm, immigrants, Muslims, Chinese…,white people.  No   lives   matter.  It’s that simple, and that frightening.

***

How about AIDS.  As we live the COVID-19 experience, it reminds me of a combination of the Vietnam Syndrome and the beginning of the AIDS Syndrome.  I’m referring in both cases to their social dynamic rather than the military or medical.  Our society remained significantly indifferent to both as they were devolving.  And when escalating news accounts began to impose on our consciousness, we evolved from indifference to denial.  But as the number of coffins mounted and began to arrive closer to home, if not in the home, we could no longer deny what we should have paid attention to much sooner.

Our approach to COVID-19 seems too similar.  The shock of March and April is wearing off much too quickly.  We were denied the luxury of indifference this time by the speed of the onslaught, but we are quickly embracing denial:  ‘It’s just the old folks.  It’s just the infirm; an ‘inevitable’ culling of the herd, a natural biological process.’  ‘My village isn’t New York City’. ‘We’re not Italy’.  Facile rationalizations to shed caution and discipline, and go back to what we want.  A return to the programmed American mind:  ‘I know my rights.’ ‘You can have it all.’  ‘Sometimes, you’ve gotta break the rules.’

We’re well versed in our rights.  Not so much in our responsibilities: for ourselves, to each other, as a society.  Responsibility is the flip-side of Rights on the coin of freedom. If we choose to indulge our frustrations and exercise our rights without regard to the responsibilities for managing this evolving dynamic that will transcend our normal micro attention span, we will revisit the horrors of the AIDS endemic magnified.  It will batter our defenses of denial, one by one.   Or, I could be wrong.  To quote one of Ronald Reagan’s cherished heroes: ‘Are ya feelin’ lucky?  Well, are ya, Punk?’

***

I’m the son of a cop.  As you might imagine, I’m observing recent events with great discomfort.  Cops are a tribe; one of many ‘professional’ tribes like lawyers, doctors, academics, except they have guns.  Always have been a tribe.  Always will be. Their profession exists on the edge of society, separating the ‘civilized’ society from the jungle with the ‘rule of law’.  Except it’s never that simple.

My father had an interesting take on his profession, delivered to me from time to time in one-line asides to various conversations that gave me insight into ‘life on the street’.  Once he observed: ‘You go to court for law, not for justice’.  This followed a trial to which he was called to testify on an arrest.  The arrest was a pro-forma affair that was necessary by law although the circumstances were, shall we say, contentious.  From my father’s perspective, the defendant’s case was essentially compromised (thrown, in the vernacular of the tribe) by his own attorney, with the result that law was rendered, but not justice.

On another occasion he talked about an incident in which he was called to  a house in a poor neighborhood on a case of risk to a minor.  The child was very young.  The mother was clearly a risk. The mother was arrested; the child placed in foster care.  My father observed that, although he was doing what was both required by law and in the best interests of the child, he knew the child would grow up hating cops for taking away what the child regarded as his ‘security’, bad as it was.  No winners here.

I once asked him if his gun was sufficient protection for the risks he faced in certain situations.  He said that it was not the gun that protected him but the badge. He quipped ‘The badge says that I belong to the biggest gang in town, and if you mess with me, you mess with the gang’.   But he added in a more solemn tone that resonates today: ‘the badge only protects me as long as the society respects it.  When that stops, the gun won’t be enough.’  Today’s smoldering ruins of Minneapolis’ 3rd precinct station attest to the truth of that statement.

So with those words in mind, and with the benefit of knowing from countless stories that what we see in the news is rarely the whole context, I am nonetheless greatly disturbed…no, horrified…by what I am witnessing evolving on our streets, and the demeanor that has become all too common among all too many police forces.

But it’s not just the cops.  When I asked him one day to describe his job, he quipped “Our job is to fix whatever society can’t handle by other means.” On another occasion he responded to a similar question by saying “My job is 10% law enforcement and 90% social work.”  Put those two together and you have the driver of today’s problem.  When society becomes dysfunctional at its most basic level, the cops get called…to deal with the vagrancy, the disorderly conduct, the outbursts from mental illness, the family strife, the thefts of shear desperation in a society where the bridges to safe alternatives are steadily collapsing.  Call the cops.  And eventually, it affects and infects the police force as well.  The good cops leave, the standards for their replacements decline. The supervision tolerates behaviors that may have been unacceptable before if there were higher standards.  Cops are no different than any other organization under economic and leadership (political) stress.  Except they have guns.

So we are at a moment when the thin blue line is yet again a boundary between chaos and order.  The unanswered question of the moment is: are they the defending edge of order or the leading edge of the chaos to come?  Initial reports are not encouraging.  But the important point to understand is that the police are not the problem; merely the tip of the iceberg.

Onward!

To what, I don’t know.  But going back is not an option. Standing still can be fatal. Moving forward is the only credible option.

20200601

Copyright © 2020, All rights reserved.

Capitalism and ‘Herd Immunity’ – A Different Warp

In the age of COVID-19, business executives, who  are generally conservatives, embrace a strategy of opening the economy, regardless of the uncertainties that COVID-19 poses, and ‘let it all hang out’, with the magical thinking that ‘herd immunity, a yet unproven concept in this case, will ‘resolve’ the situation to a new ‘stability’. This is more typical of a radical mindset than conservatism, but, whatever.

An article in Bloomberg triggered a series of random thoughts.  Let’s start with the notion of herd immunity as it relates to capitalism itself.  Recent articles have noted what has bothered me for some time: the seeming detachment of the stock market in general from Main Street economic realities.  Do stock market valuations not understand or care what is happening on Main Street. Do they fail to understand Main Street’s ultimate impact on Wall Street’s  ability to ever realize its discounted expectations of future Main Street growth?  In theory, it is  Main Street that will  vindicate or vanquish Wall Street’s sanguine expectations.  Or is it?

Or does Wall Street have a more perverse, counter-intuitive take on Main Street misery – a vulture capitalist strategy that translates  Main Street pain into capitalist predatory gain.  This can work on a micro basis; but on a macro basis each player is betting on eating someone else’s lunch. There’s only so much lunch to go around, and so many vultures. But, hey, that’s competition!  Part of Capitalist virtue.

The point is that capitalism in aggregate appears to be operating with a mentality of herd immunity in the markets. That makes its perspective on COVID-19 pandemic hardly surprising.  In fact, it’s disturbingly consistent, because in neither case is The Herd correct.

Speaking of the Bloomberg article in the context of bailouts and the crisis of confidence in capitalism, the pandemic may have slammed us into a new reality, but the destination was already programmed in.  We’ve merely reached it at warp speed.

Let’s go back to stock prices.  Since 2008 the Fed has become The Market’s primary drug dealer, given The Market’s spastic reactions to Fed musings on interest rates.  ‘Accommodation’ is a synonym for ‘enabling’, as with a drug addict.  When  market prices are more responsive to Fed interest rates than Main Street realities, one has to wonder who’s paying attention to what.  But interest rate accommodation has seemed to be the ‘drug of choice’ for Wall Street, as Main Street continues to deteriorate. And the Fed is the Pusher.

Nor is the Fed the only drug dealer. As the economy was coming back on schedule from the Great Repression of 2008, the Demander in Chief delivered an unneeded tax cut  injection with payment deferred to the future and deflected to Main Street.  That was before COVID.  Then Wall Street proceeded to incur more debt, inflate more valuations, buy back more stock, and consolidate further in the comfort of herd immunity to failure based on ‘president’.

It is worth noting that this could not have been done by the Demander-in-Chief without the aiding and abetting of a Republican controlled Congress that poses a greater risk to national prosperity than the Demander himself…and that is a pretty high bar to clear, but they did it.  It is not surprising, because Congress has become a subsidiary of the Wall Street interests whose habits it is sustaining in various ways.  And it too has enjoyed a certain sense of herd immunity.

Dorthy, contrary to the surrealism of the moment, we are still in Kansas, not Oz.  You just have to remove the VR headset and see what was there before COVID.

Homelessness, un(der)employment, lack of adequate health care, labor displacement by automation, distorted income distribution in a ‘competitive’ economy where corporations exert asymmetric advantage and power and unions have atrophied through incompetence and myopia, and the middle class is in a free-fall to the bottom.

Let’s take them one by one.

Homelessness.  We see the headlines from LA and Frisco, and New York.  We know that homelessness isn’t just a consequence of the unemployed, but of the under-employed and fully employed as well in an economy that has ground down middle class stability through business consolidation, outsourcing, down-sizing, the ‘gig’ economy over 30 years.

Un(der)employment.  The growth of the ‘gig’ economy with the shedding of stable employment options has coincided with the growth of the tech darlings like Uber, Lyft, WeWork and Amazon and many others who succeed with business models and practices that can most politely be described as predatory, with the result of enriching the enterprise’s shareholders at the expense of the greater society that must bear the multitude of consequences.

Lack of Adequate Health Care.  If ever there was a need, it is now, but the problem has been long evolving, and it is one in which we all share some blame.  Everyone wants a free lunch.  But it is the broader public which has the greatest interest and the least influence in the tug-of-war of competing interests. And here we are. Meanwhile, the financial intermediaries demand protection of their market from government competition after 40 years of failure to advance anyone’s well-being but their own.

Labor Displacement by Automation.  Nobody wants to touch this one.  Least of all, the people with the greatest control over the paradigm.  Business would like to believe that it is someone else’s problem.  But, to paraphrase Walter Reuther’s retort to Henry Ford when the latter bragged about the productivity of his automation, robots don’t buy cars, or entertainment centers, or vacations, or food, or clothes, or…..Where’s the tipping point beyond which you crash the upward curve of the stock markets into dystopic reality?

Oh, yes.  Wall Street is aware.  The Business Roundtable trots out Jamie Dimon to emulate a Concerned Executive.  But there’s little evidence of a concerted effort by business to address the multitude of ills that beset the economy long before COVID-19 arrived in town.  And now, Wall Street, like Main Street and Pleasant Street and every other street, is in a fight for survival that it did not expect, but should have anticipated, because everything on which it has built its success has laid the foundation for its decline.

Nine years ago, three years into the Great Repression, I posted a blog on the future of capitalism from the view of my humble foxhole. It posited that capitalism cannot continue to survive in its current form. Still, it survived its own excesses, having apparently learned nothing, and scaled new heights, while society has plumbed new depths.

Yes, we need a ‘culling of the herd’.  Not of the old and infirm, but of the greedy and arrogant.

***

Word for the day: dystopic

“An imaginary place or state in which the condition of life is extremely bad, as from deprivation, oppression, or terror.”

Remove the word ‘imaginary’.  We have arrived.

Thought of the day:

Capitalism without conscience is no better than communisim without a soul.,

And a shout-out to Professor Scott Galloway,

whose style is exceeded only by his substance.

Onward

20200515

Copyright ©  2020, All rights reserved.

 

COVID-19: The Way Forward

I am not an epidemiologist.  But at some point, we all have to absorb the firestorm of information that is thrust upon us and sort out our options and way forward.  Not an easy task, but not elective.

So let’s sort out what what we know, what we know we don’t know, and what we don’t know we don’t know, and figure out what our options are.

Known Knowns [KK]:

  1.  The virus is the independent variable at this time. Until we know enough about it to predict it and control it, it sets the agenda, irrespective of our policy preferences.
  2.  The virus is fast moving, more so that most of similar repute, making quick identification and containment critical, and difficult.
  3.  The virus operates in stealth mode. It does not display symptoms quickly. Thus, it can spread quickly before revealing itself, making containment more difficult and expanding the potential for infection.
  4.  The most reliable means of containment is a reliable vaccine, and it is the least certain of quick response.
  5.  The most reliable known and available means of containment at present is social distancing.
  6.  The capacity of the health care system to handle the contagion is a critical constraint on policy options and a determinant on the outcomes.
  7. The level of testing nationwide is currently insufficient in extent and reliability of process to provide sufficient information for data-driven decisions on forward strategy.

The consequence of this is  that governors and health experts are operating on ‘informed guesses’ in absence of sufficient data; an unfortunate necessity with inherent risk.

Known Unknowns [KU]:

1. The scientists are working hard ‘under the hood’ to understand how the virus is built and how its internal mechanics work. They have made tremendous progress in short time.  But this is only half the challenge. The other half is knowing how the virus acts ‘in the wild’ under various environmental contexts, both communal and in terms of individual health profile contexts.

2. We do not know the full range of effects of the virus and which are caused by the virus, and which may be collateral to the virus.  This may affect assessment of risk exposure, and of treatment and prevention strategies.

3.We do not yet have a national protocol for testing and uniformity of procedures among states that give us a reliable base of information on the true progression of the disease and its rate of infection, symptomology and mortality.

4. We do not know when  testing in the states will reach a level that enables effective monitoring of the disease’s status, either in the current round or in the ones to come.

5. Because of deficiencies KU2, 3 and 4, we do not have an adequate database on which to make projections of infection rate, and to sufficiently understand the characteristics of the disease we are fighting (algorithm/model deficiency).

Understanding the structure and character of the disease (KU #1 and 2) is part of the challenge.  Another critical part is seeing how it propagates in the wild, and how it operates in patients of varying health and genetic profiles. Building case history and trends of infection and treatment are equally critical.

5.  We do not yet know if herd immunity can be built with exposure, and how long that immunity will last (temporary, permanent or not at all), and therefore cannot assume that this mechanism will gradually reduce population risk as we wait for deployment of the vaccine to critical mass. If herd immunity does not work with this novel virus, we’re back to relying on a vaccine.

6. We do not know if the virus responds to seasonal fluctuations.

7. We do not know how long it will take to perfect a vaccine, how long it will take to manufacture the vaccine to level of need, and how long it will take to deploy the vaccine to a sufficient level of community protection.

Most statements to date have cited 12 to 18 months as the time to develop the vaccine, but are mute on the time to manufacture and deploy it.  Deployment is the ultimate measure of the planning horizon for dealing with this round of contagion. It is likely the basis on which measures of social distancing and collateral impacts on the economy must be based.  It is conceivable that a time horizon of 3 years from today to reach a status of sufficient immunization is reasonable, assuming that we can develop an effective vaccine in 12 to 18 months.

Unknown Unknowns [UU]:

1.  Will this be like HIV-AIDS, constantly morphing and keeping one step ahead of the scientists?

 2. What’s up next? And how soon?  Over the past 20 years we have seen a progression of serious diseases that are totally disrespectful of borders.

Scientists have warned, for those who listen, that a pandemic was inevitable in the near future. The future is here. They also warn that it won’t be a one-and-done.  Do we choose to listen?

The Options:

So, what do we do with this information in assessing risk and planning our personal and business strategies?

Our options consist of two extremes and infinite variation on those themes between.  Let’s look at Best Case, Worst Case, Most Prudent Case.

Option 1: Optimistic Case.

This is actually a misnomer. Perhaps most simplistic case would be more appropriate.  Endorsed by people who would generally describe themselves as conservative, it calls for removing the lock-down that has existed for the past 2 months, reopen the economy and trust that herd immunity will emerge from the progression of infection to achieve an acceptable state of stability until a vaccine and treatments can assert true proactive control of the disease. It accepts a ‘tolerable loss of life’ without projecting what that might be, or what might be the net result on the economy it so cherishes.

It is ironic that conservative supporters embrace a strategy that  insists the economy must be saved above all else.   It is in fact  a radical strategy.  Reckless might be more appropriate. It has two major weaknesses.  It assumes that herd immunity works with this virus, which at present is unknown since it fails to conform with other contagions in so many ways.  The strategy also gives no account for how much damage might be done to the economy whether or not herd immunity works and contagion spreads beyond expectations, doing severe harm to the health care system and other service groups that may become significantly impacted before the damage is understood and Plan B is implemented.  Oh, and there is no Plan B.  It is a faith-based, data-free, science-agnostic response.

Option 2: Pessimistic Case

Those of a liberal persuasion, who value life above economy and generally assume that the economy will be there to deliver whatever is demanded of it, will advocate for continuing the lock-down in some significant measure until a vaccine and reliable treatments are developed.   This would be considered the ‘safe’ option, but it has two main flaws.  First, there is no guarantee that cures or preventive vaccines will arrive in the near term, much as we may hope.  Second, even this most exceptional of countries doesn’t have the economic resources to shut down the economy indefinitely and sustain its population at some minimal level of subsistence until the unknown date of arrival of a vaccine. In failing to accept the probability of future hardships, it is as irresponsible in its commitment to human life at all cost as is Option 1 in its commitment to the economy without regard to the cost of human life.

Option 3: Prudent Option.

First, we must recognize that we are only 3  months into this crisis, and there is still too much that we don’t know and need to know in order to manage it.  In a jerry-rigged manner to date, the most populous states with the most at risk have chosen to protect human life over the economy and supported lock-down with safety net.  The federal government has been essentially shamed into supporting a limited safety net for the first phase of this contagion.  But a second phase is expected, and could be worse.  Can we afford a second lock-down if needed?

Here’s the rub, imho.  We still have the same conundrum of the other 2 cases of not knowing when successful treatments and vaccines will be available in scale.  The professionals hope to develop a vaccine in 12 to 18 months.  But no one is saying how long it may take to manufacture and distribute to scale.  Let’s assume another 12 to 18 months, if we’re lucky.  So we’re out 3 years.  And that’s just to get us to a point where we are able to resume activities in a manner approaching 2019.

At this point, our safest option is to protect people through the strategy of social distancing and sustain the economy by all appropriate means through this next cycle of contagion which will bring us to the point of the hoped-for delivery of a vaccine by the beginning of 2022.  This would involve a more target series of lock-downs guided by better data, and would hopefully minimize the economic damage.  It would also require an equivalent federal response and debt level approaching the response to the Great Depression and World War II.  It would be a tremendous sacrifice, but it would hopefully keep our human capital in tact.  And that is the foundation of our country.  It is doable, if we choose.  It is not the choice we want, but it is a choice that we can sustain.

If by 2022 the vaccine has not arrived, then we will hopefully have learned enough about the virus to better calculate our risks and our defensive strategies, and to modify our business plans and methods to new realities.  We must assume that even modified or rolling lock-downs will not be sustainable beyond 2021, and we will have to adapt to that harsh reality if presented.  But we will have bought time, and hopefully wisdom.

Where We Are

As of May 2020 we in the United States have embarked on a hybrid response; an experiment with human lab rats.  In the face of a federal leadership, unyieldingly committed to concerted incompetence, we now have Options 1 and 3 operating in parallel.  It will take two months to determine which strategy is the more prudent.

If it took us 10 years to recover from the Great Repression of 2008, it is safe to assume that it will take us at least as long to recover economically from this pandemic. That will take us to 2030. That will take us to the threshold of the more severe consequences of climate change, which is not waiting on COVID-19’s resolution; it’s just ramping up more gradually in the background of our current disaster and laying the foundation for the next; and will present its own challenging trade-offs in which human life is in the balance.

* * *

Word for the day:   dystopic

“Relating to or denoting an imagined state or society where there is great suffering or injustice; dystopian.”

Remove the word ‘imagined’.  We have arrived.

Onward

20200510

The Economy or People?

The debate continues to rage.

Do we save the economy or do we save people from COVID-19?

Do we save the economy or do we save people from COVID-19?

Do we save the economy or do we save people from COVID-19?

As if it was a binary choice.

The titans of the economy and their political echo chamber most forcefully pose the rhetorical question with the refrain:

The cure must not be worse than the illness.

The cure must not be worse than the illness!

The cure must not be worse than the illness!

The answer is brutally simple.  The People ARE the Economy, Stupid!*

* (with appropriate acknowledgement of original core content to James Carville)

The economy is the net sum of the actions and aspirations of people.  Obviously, it does not treat all people the same, but all people are a part of the great accounting equation. People produce the goods and services which other people buy.  Debilitate people in their capacity to participate in the economy, and you debilitate the economy.  Simple as that. You don’t need an algorithm or big data to noodle that out.

The Economy, in this instance, does not get to choose who lives and who dies, or how many live or die, or how debilitated the survivors will be physically or financially.  For now, the virus has all the cards and is dealing them as it chooses. So the cry of the economic elite to return the economy to operation is an act of profound ignorance of the situation, indifference to consequences, callous calculation of the cost to others, and likely all of the above.  But in the long run, it is unlikely to be a benefit to the few if this situation gets out of hand.

In fact, the ability of the great mass of people to participate in the economy has been steadily debilitated for 40 years before COVID-19.  It has been documented in the growing disparity and concentration of wealth, and the steady erosion of government and civic capacity to the benefit of the wealthy.  And then, along comes COVID-19 to administer ‘a stress test’.

The aircraft carrier Theodore Roosevelt might serve as an interesting analog to the conundrum of ‘Economy vs. people’.  Consider the good ship The Economy.  It provides protective service for a hefty fee.  Fifteen percent of the crew are now identified with the virus.  1 dead, 6 hospitalized, one in ICU at this time.  Should the ship sail with risk of further spread of the virus in its crew, or stay in port until the situation stabilizes?

Consider that the ship is unlikely to have any senior citizens, whom the lieutenant governor of Texas regards as expendable, and relatively few with compromising chronic medical conditions that would make them unfit for service. They are among the most able of our population, physically.  They are also a diverse group of specialties; and, while many are cross-trained for redundancy, none of them are truly expendable without impairing the capability of The Economy.  Three specialties in particular come to mind:  nuclear reactor specialists, cooks and pilots.  Nuclear reactor specialists are relatively few and not easily replaced.  Cooks work in tight quarters, are relatively few with unique talents and serve a ship of 4400 human energy plants that can’t fight well on an empty stomach.  Pilots cost a couple of million dollars to train and years to train to capability. No unit of that inventory can be replaced quickly or cheaply.  So conserving these and other critical resources becomes critical to the success of The Economy.  The Brass can order the ship to sea, but the virus will not necessarily salute and debark. You can’t defeat your enemy until you understand who or what your enemy is.  We do not yet sufficiently understand how our enemy operates to be able to defeat it.

This example is likely to offend the sensibilities of the economic elite, well insulated in their illusion of wealth, but harboring deep, subliminal fears that the basis of their wealth is threatened by the unwillingness of people to put themselves at risk to support it.  The notion  that people are obliged to support The Economy is symptomatic of addiction to wealth that obscures the mind of the wealthy to the true foundation of what they take for granted.

Time for another exercise.  Mr. or Ms. Executive, remember the days of your youth when you stood on a beach as the tide came in, barefoot, before the tasseled loafers.  Remember how each receding wave would extract a few grains of sand beneath your feet, until you lost your balance.  Today, you stand on the veranda of your Hamptons estate gazing out at the ocean, contemplating the economic tsunami you fear is coming.  You know how destructive a tsunami can be.  You’ve experienced a number of storm surges, but never a tsunami.  You know the tsunami will knock you down unless you move farther inland and to higher ground.

The truth is that before COVID-19, you’ve been losing ground for years, largely because of the short-term, short-sighted mentality of yourself and your cohort. The grains of sand that you stood on were people.  Ever so gradually, the tides of change have been dragging them out to sea.  The sea wall that protects your estate from erosion, call it the government at all levels, sits on those same grains of sand, and is collapsing for lack of maintenance against steady erosion.  But all along, you’ve been pocketing ‘the savings’ at their expense.  And now, the tsunami is coming for you.

The capitalist economy of the United States has become progressively dysfunctional  over 40 years, and we are now about to witness the cumulative impact of its obsession with the pursuit of profit above all else.  It has manipulated the political processes to steadily dismantle capacity for resilience. It has eroded institutional safety nets and shock absorbers to leave the greater public exposed.   It cowers in its luxury towers, wringing its hands over where to deploy its accumulating cash reserves among the market turmoil that its short-sightedness and manic self-interest have created.  We have a system that can’t produce decent affordable housing; affordable health care; efficient and sustainable transportation; that wantonly places the safety of our food supply and environment at risk; and yet has the audacity to declare itself the giver of all things!

The economic elite, with relatively few exceptions, know only one god. Their prophet is profit.  They worship at the alter of the holy trinity: The Dow Jones, The S&P and The NASDAQ; three pillars of notional wealth that have departed reality.  An economy built too much on paper and pixels, but agnostic of fundamental human needs which should be its intrinsic justification.

There will be a ‘culling of the herd’ as a result of this disaster.  Many businesses will fail, and many should.  All of the zombie corporations that should have laid down and died a long time ago, except for the possibilities that they could still be milked just a little longer, may finally come to rest.  Grocery stores’ bare shelves are great indices of what ordinary people regard as important when they see life through an existential lens.  Will this lead to a re-calibration of value and priorities in the future.  One might hope.  And others might fear a just but unfavorable verdict.

Corporations will fail. Their bones will be picked by the vultures and repurposed.  But people must survive, because their physical and economic capacity and stability will be the basis on which the economy  will resume. The economic elite can not pick and choose who is expendible and who must be saved.  The virus holds those cards, as it has shown.  But the executive elite can put us at unnecessary risks if its self-serving priorities are allowed to prevail.

COVID-19 has provided the United States with a critical test which it has substantially failed at this point. The adequacy of remediation is the only remaining question. If this was war, we would spare no expense or effort or imagination to prevail. This is war, only this time, the objective must be to preserve life, not to take it.

But there is a greater question which COVID-19 prompts, but cannot answer.  Are we a nation of people, served by corporations?  Or are we a nation of corporations, served by people?

That question must be answered soon by the people, while they retain the means to do so.

Onward.

20200418

Copyright 2020 All rights reserved.