Sublime Oblivion » news 2010 http://www.sublimeoblivion.com Anatoly Karlin on Eurasia, geopolitics, and peak oil Mon, 06 Feb 2012 12:15:06 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Sublime News #8 – #9 http://www.sublimeoblivion.com/2010/04/19/news-8-9/ http://www.sublimeoblivion.com/2010/04/19/news-8-9/#comments Mon, 19 Apr 2010 08:11:26 +0000 AK http://www.sublimeoblivion.com/?p=4106 Continue reading →]]> 1. The revolution in Kyrgyzstan to be covered in Sublime News #10 – this issue is packed enough as it is. For now, read Kyrgyzstan and the Russian Resurgence (free Stratfor) for a summary.

2. Putin made a conciliatory speech on the 70th anniversary of the Katyn massacre, much more so than the one a year ago. It was balanced and considered, condemning the crimes of totalitarianism, while avoiding any acknowledgement of modern Russia’s responsibility.

In a bitter irony for the Poles, three days later the firebrand Polish President Lech Kaczynski’s plane tumbled out of the sky while flying (uninvited) to attend a separate commemoration. Among the dead were assorted members of the Polish military, clergy, politicians, and Katyn victims’ families (see list).

First, putting all your eggs in one basket is pretty stupid. High-ranking politicians and generals are important national assets. They shouldn’t all be packed into one plane just to save a little money. In banana republics – which fortunately for Poland it is not – such accidents can cause state breakdown and revolution.

Second, the insistence on continuing to land in Smolensk against the advice of ground control is key to understanding the tragedy. Lech Kaczynski has a history of interference with pilots’ decisions. During the South Ossetian War, he threatened to fire the pilot for countermanding his orders to land in a war zone and instead continuing on to Azerbaijan. Though the threat wasn’t carried out, the pilot is known to have suffered from depression afterwards. The same pilot was flying the aircraft in this case. It will not be surprising if some similar, irresponsible stubbornness typical of Kaczynski was at play here. Or perhaps the pilot just really, really didn’t want to “fail” Kaczynski again.

Few people explicitly blamed Putin, the FSB, or even NKVD trees planters from the 1940′s for the crash. The exceptions were ultra-nationalist Artur Gorski (he who also tried to make Jesus Christ proclaimed King of Poland) and the ever reliable Russian liberast Novodvorskaya. There is absolutely nothing indicating a conspiracy, which in any case is highly unlikely given that this would have produced great risks for very limited payoffs.

Russia has been using the crash as an opportunity to mount a charm offensive towards Poland: Putin hugging Polish PM Donald Tusk; shows of solidarity towards Poland from Russia’s leaders and citizens; the prime-time airing of the Polish movie “Katyn”. I am almost certain that most of it is simulated, at least amongst the Russian leadership. Would America’s elites shed any real tears if Chavez, or Putin for that matter, fell out of the sky while flying to the United States? No, I don’t think so. But it seems to be working.

The fortuitous (for Russia) death of Kaczynski kills two birds with one stones. One of the most prominent and respected Polish proponents of the anti-Russian agenda is elimated, while relations with Poland can be improved so as to ease its concerns over Russia’s westwards-creeping sphere of influence.

3. In recent months, there has been talk of Poland’s reserves of shale gas, which – or so some commentators have suggested – will wean off east-central Europe from its dependency on Russian gas. US giants announced exploratory drilling will begin in Poland within the next few weeks. One oil and gas research group estimates there could be as much as 1.4tn cubic meters of unconventional gas in tight rock formations across northern and central Poland, which have recently become accessible thanks to American developments in hydraulic fracturing technology. These reserves would boost the EU proven reserves of natural gas, now at 2.8tn cubic meters, by 50%. Furthermore, Poland itself – whose own gas consumption is pretty low at 14bn cubic meters of gas (72% imported) – will become self-sufficient for decades. Poland is clearly very enthused about this, offering foreign companies excellent tax incentives for developing the shale gas.

Will this actually produce the desired results? First, the high costs mean that only 28% of gas-producing wells have generated decent profits, making investment risky. Second, they have amazingly huge decline rates – e.g., around 60% per year for the Barnett shale fields in Texas (and up to 80-90% in the Haynesville wells). This makes ramping up production quickly difficult since you have to run so hard just to keep still. Third, the projections indicate European gas production (now c. 200bn cubic meters) will decline while demand (now c. 520bn cubic meters) will increase. Poland’s 1.4tn cubic meters of shale gas reserves are insignificant relative to Russia’s 43tn cubic meters of conventional gas reserves, for which the infrastructure is already built. Finally, it is not even at all clear that Poland switching from coal to shale gas will even be that environmentally-friendly.

Now if there is the political will in Poland, it will probably be able to build up a shale gas infrastructure and ensure itself – and even its Visegrad and Baltic neighbors – energy independence for a few decades, starting from around 2020. (That period may also coincide with Nabucco coming onstream by 2015, if it gets the go ahead this year). The geopolitical configuration of Europe will change. Poland will become a far more significant pole in the European power balance than it is today, while Germany – and Britain further downstream – will become even more dependent on Russian gas, delivered by the Nord Stream pipeline bypassing Poland and the Baltics.

4. The Eyjafjallajökull volcano in Iceland erupts, covering northern Europe with a haze of ash and disrupting transatlantic flights.

There are three things to be said about this. First, people in Britain have been reporting that the sky was unusually clear, with nary a cloud in sight, and that there was a spike in temperatures, with people even sunbathing. This was to be expected following the grounding of air fleets in the affected regions, since aircraft contrails, or vapor trails, are a major source of global dimming. This effect limits the amount of solar radiation hitting the surface of the Earth, and has caused the real extent of global warming to have been underestimated. (Or put another way, if all the world’s air fleets were to vanish today, temperatures would immediately spike by about 1C).

Second, the Eyjafjallajökull volcano could trigger off the much bigger Katla volcano. Katla has seen a significantly increased incidence of tremors in the past day. In the worst scenario, albeit a pretty unlikely one, the skies over Europe could remain ashen for up to two or three years – wrecking havoc on transatlantic transport and nudging already-strained airlines into bankruptcy. However, there shouldn’t be any major cooling effect, since even the larger Katla eruptions have historically been an order of magnitude less intense than that of Mount Pinatubo in 1991. (Unless the really big one blows off, that is Laki, whose eruption in 1783 caused dearth throughout Europe). That said, the global warming-induced melting of the Icelandic glaciers could make its volcano eruptions both bigger and more frequent in the decades to come.

Finally, see this Oil Drum post about The Possible Impact of the Icelandic Volcanoes on Energy Production. In short, major Icelandic eruptions could cause energy problems due to 1) a decrease in biofuel crop yields and 2) wind turbines having to be shut down so that their turbines don’t get damaged by air particles from the eruption.

5. With the British elections on May 6th 2010 fast approaching, the key debates center around the economy. During the recession, Britain experienced a peak-to-trough fall in GDP of 6.2% and its budget deficit this year will account for 12-13% of GDP. Foreigners are beginning to look at Britain as the new “sick man of Europe”. Below are three articles which, roughly speaking, offer an “optimistic”, a “realistic”, and a “pessimistic”, respectively, view on the British economy.

A) The pain to come: A terrible recession will be followed by a lacklustre recovery, but Britain is no basket-case (Economist). ”The economy may have been lopsided before the recession, but on nothing like the scale of southern Europe. In 2007 Spain’s current-account deficit ran at 10% of GDP; Greece ran one of 14.4%. By comparison, Britain’s 2.7% was a mere bagatelle. The fall in the pound has allowed the economy to regain competitiveness in a way not open to the weaker members of the euro area. As for the resemblances with the 1970s, history is not repeating itself. Inflation has recently flared up, but at 3% in February it is tame; the post-war high, reached in 1975, was 27%… But [Britain's debt figure] is inflated by London’s role as a global financial hub where foreign banks cluster to do international business. Adjusting for this, McKinsey reckoned that debt amounted to 380% of GDP in 2008. Although this was the second-highest after Japan (459%), four other countries – Spain, South Korea, Switzerland and France – had debt above 300%… Britain’s economy was overhyped before the recession, but the gloom has been overdone since the great fall.”

B) A Prayer from the Death Bed: Great Britain Stars in Its Own Greek Tragedy (Spiegel). “The country that was once referred to as “Cool Britannia” is in a serious crisis, with a hole in its budget even bigger than Greece’s budget deficit, now at 12.2 percent. And nobody knows how to fix the problem. Indeed, the problem has become so worrisome, that the European Commission told London on Wednesday to do more to tighten its budget, … “The fiscal strategy outlined in the United Kingdom’s convergence program does not foresee the correction of the excessive deficit by the fiscal year 2014/2015, as recommended by the Council,” the European Commission said in a statement… The accountants at PricewaterhouseCoopers have calculated that starting next year, Britain would have to make across-the-board budget cuts of 5 percent a year to come close to cutting the deficit in half by 2014. But because the Brown government has already declared the budgets for health, law enforcement and schools to be off-limits, cuts of up to 10 percent – per year – are to be expected in most areas… And things could even turn out to be much worse if there is no strong economic upturn during this period. … There will also be massive cuts in low-income housing construction and transportation, translating into even more dilapidated housing, more potholes on Britain’s already miserable roads, and new cutbacks in high-speed train service. Universities have already lost close to £1 billion in funding, and various think thanks predict that the defense budget could shrink by about 15 percent between now and 2015.”

C) Election 2010: Debt – A conspiracy of silence (The Independent). ”In 1975 the UK had government interest-bearing debt of about 45 per cent of the total economy (GDP) and the debt was rising at about 8 per cent per year. We then had to crawl to the IMF in 1976.Today, that interest-bearing debt is about 65 per cent of GDP, rising nearly 13 per cent a year. A degree in economics will not be necessary to spot that things are a lot worse than in 1975… The mid-1970s IMF crisis was triggered largely by the fact that foreign buyers of government debt were so nervous of the UK’s ability to repay debt that interest rates roared into the teens. Inflation was a much bigger issue then than now, and foreigners and Brits alike also feared we intended to “repay” our debt with relatively worthless scraps of paper. So there was a buyers’ strike on government debt and we had to be bailed out. Rationally, the currency collapsed in value, and as the cost of importing oil and the like rose, so did inflation. … So how can we get out of this financial hole before our creditors get to us? There are three ways to reduce our national debt: let inflation rip to destroy the debt; increased tax revenues from higher taxes and economic growth; cut government spending. … The political debate talks of a few hundred million here and there – it needs to be about tens and scores of billions. Neither party has plans to deploy actions for the economy remotely commensurate with the size of the problem.”

I lean towards the “realistic” / “pessimistic” sides of the debate. The Government’s rosy projections of 2.5%+ growth are unlikely to materialize. Consumption is going to be kept down by consumer indebtedness, the upcoming hikes in interest rates, and increases in tax rates. There’s little room for export growth, considering the deindustrialization of the British economy. Finally, there itsenergy problems. The North Sea oil and gas fields are fast depleting and Britain’s reliance on gas supplies is increasing. Having failed to make any long-term arrangements with suppliers like Gazprom on the cheap, it will be forced to bid at spot prices on the LNG market to a greater extent than the European nations. Finally, the emerging trends towards the unraveling of liberal globalization cannot bode well for a nation that derived so much of its prosperity from open markets and international financial, legal, and consulting services.

Now what about the elections? Below is a graph of party approval ratings. Of late, the Conservatives, New Labor, and the Liberal Democrats have been running neck and neck.

[Opinion polls on British election: Conservatives, New Labor, Liberal Democrats].

My suspicions are that if the Tories win, there will be attempts at a strong fiscal rentrenchment. The shrinking of the public sector will hurt living standards, but lay the foundations for eventual stabilization. On the other hand, New Labor or the Liberal Democrats will be unwilling, or unable, to follow through will this, and the eventual result would be one default or another accompanied by a sharp drop in living standards. Another possibility is a “hung parliament”, should the three parties all win roughly equal shares of the vote (as seems to be a strong likelihood today). Such a paralysis would delay any actions to address Britain’s imbalances.

6. Demography watch.

7. Energy & climate blast – lots of important reads these last two weeks.

8. Eurasia watch.

  • The Failure of the Anti-Russian “Freedom Agenda” (Daniel Larison).
  • Yanukovych removes Ukraine’s application to join NATO, a move that is supported by the majority of the Ukrainian population.
  • Russia’s industrial production in Q1 2010 continues a slow recovery. More encouragingly, after the sudden collapse in late 2008-early 2009, Russian consumer expectations are rapidly approaching their old boomtime highs. Merrill Lynch is particularly optimistic – Russian Economy May Get ‘Biggest Bounce’ in World, making the highest yet prediction of 7% growth  for 2010 (most analysts suggest 4-6%).
  • Randy McDonald writes about Soviet computers.
  • A detailed study from Russia’s VTsIOM polling agency on the Internet in Russia. Summary: 81% of Russians have cell phones; 46% have computers; 38% are Internet users (23% use it daily).
  • Russia Weekly Sitrep (Patrick Armstrong).
  • The Sirens of Russia. Post by A Good Treaty about Russia’smigalka culture of impunity – and how it is perhaps slowly beginning to retreat under public pressure and the influence of social media.
  • Russian attitudes towards Katyn (Levada). Some 50% of Russians view Poland positively, 26% negatively (AK: these figures are likely the reverse in Poland). Only 43% of Russians have heard about Katyn. Asked who was responsible for it, 19% said the USSR, 28% Nazi Germany, and 53% didn’t know. Around 15% think it was “genocide”, 38% a “crime”, 14% consider it justified under wartime conditions, and 33% didn’t answer. Only 18% think Putin should apologize for Katyn in Russia’s name, while 46% disagree. Of the latter, 47% think he shouldn’t apologize because Nazi Germany was responsible; 34% – because today’s Russia shouldn’t answer for the USSR; and 8%, because it would weaken Russia’s position in relation to Poland.
  • Russia: Other Points of View analyzes Stratfor’s coverage of Russia and The Dangers of Meddling in Russia’s North Caucasus.
  • The new Journal of Eurasian Studies (h/t Sean) from South Korea. I checked out the first article in its first issue: Eurasian polities as hybrid regimes: The case of Putin’s Russia, which is basically accurate: “It is argued that Russian political development under Putin is best understood not as “authoritarianization” but as a process in which Russia transitioned from a system of “competing pyramids” of machine power to a “single-pyramid” system, a system dominated by one large political machine. It turns out that in single-pyramid systems that preserve contested elections, as does Russia, public opinion matters more than in typical authoritarian regimes.”

9. Mexico and the Failed State Revisited (free Stratfor) has the counter-intuitive take that far from challenging the state, the drug cartels are actually benefiting the Mexican economy because the immense profits reaped from selling drugs to the affluent US can be reinvested into Mexico.

…It is not clear to STRATFOR that Mexico is becoming a failed state. Instead, it appears the Mexican state has accommodated itself to the situation. Rather than failing, it has developed strategies designed both to ride out the storm and to maximize the benefits of that storm for Mexico. First, while the Mexican government has lost control over matters having to do with drugs and with the borderlands of the United States, Mexico City’s control over other regions — and over areas other than drug enforcement — has not collapsed (though its lack of control over drugs could well extend to other areas eventually). Second, while drugs reshape Mexican institutions dramatically, they also, paradoxically, stabilize Mexico. …

On the whole, Mexico is a tremendous beneficiary of the drug trade. Even if some of the profits are invested overseas, the pool of remaining money flowing into Mexico creates tremendous liquidity in the Mexican economy at a time of global recession. It is difficult to trace where the drug money is going, which follows from its illegality. Certainly, drug dealers would want their money in a jurisdiction where it could not be easily seized even if tracked. U.S. asset seizure laws for drug trafficking make the United States an unlikely haven. Though money clearly flows out of Mexico, the ability of the smugglers to influence the behavior of the Mexican government by investing some of it makes Mexico a likely destination for a substantial portion of such funds.

Of course, there’s also the problem that Mexico’s oil production is plummeting as the supergiant Canterell depletes. (the state oil company is blamed for managerial fecklessness, but geological reasons are more important). An interesting scenario: if Mexico becomes a net oil importer and the US relaxes its drug policies, could it experience a liquidity crisis?

10. Ahmed Karzai and the US have fallen into a blame game of necessity. Karzai criticizes the West for electoral fraud and legitimizing the insurgency. Since NATO troops are, one way or another, going to leave Afghanistan in a few years, Karzai needs to build a base of support amongst his own people and his neighbors (Iran, China) if he wants to survive. The US in turn blames Karzai’s corruption for the sabotage of the war effort, because the alternative would be an indictment of the entire American war strategy. As of now, Karzai may be rightly feeling like Ngo Dinh Diem in South Vietnam, – the US no longer regards him as a reliable asset and he is at risk of being overthrown in favor of someone more manageable.

11. From Stratfor. There is relative optimism in Iraq and the US about the security situation as American troops continue a steady withdrawal. However, there remain questions about the governing capability of the new government and the ability of the security forces to maintain stability. Iran retains the potential to inflame ethno-sectarian strife, albeit thus far it prefers to (successfully) exercise its influence through “softer” means. The main problem is that by invading Iraq, the US has destroyed the old Iran-Iraq balance of power – and the forthcoming withdrawal of US forces will actually give Iran much better opportunities for extending their sphere of influence over Mesopotamia.

According to another source, Iraq will take 5-10 years to (re)build a military capable of defending the country against Iran or Syria. “The Iraqi plan is to stock up on superior American weapons, and train Iraqis to use that stuff with effectiveness approaching that of the Americans. That takes money, and time. Iraq is buying second-hand F-16s, but it will take three or four years to get the pilots and ground crews up to an acceptable level of performance. Along with this, the Iraqis want to buy modern anti-aircraft missile systems, and get them into service.” Also recall that it will take about a decade to ramp up Iraqi oil production, if the effort is successful.

Conclusion? The US is withdrawing from Iraq, bogged down Afghanistan, and in uncertain fiscal straits. Iraq has the potential to stand on its own feet, but will need a few years of stability. Thus, Iran will now enjoy a “window of opportunity” of around 5 years to make a play for hegemony in the Persian Gulf.

12. Palestinians Try a Less Violent Path to Resistance.

RAMALLAH, West Bank — Senior Palestinian leaders — men who once commanded militias — are joining unarmed protest marches against Israeli policies and are being arrested. Goods produced in Israeli settlements have been burned in public demonstrations. The Palestinian prime minister has entered West Bank areas officially off limits to his authority, to plant trees and declare the land part of a future state.

Something is stirring in the West Bank. With both diplomacy and armed struggle out of favor for having failed to end the Israeli occupation, the Fatah-dominated Palestinian Authority, joined by the business community, is trying to forge a third way: to rouse popular passions while avoiding violence. The idea, as Fatah struggles to revitalize its leadership, is to build a virtual state and body politic through acts of popular resistance. …

Nonviolence has never caught on here, and Israel’s military says the new approach is hardly nonviolent. But the current set of campaigns is trying to incorporate peaceful pressure in limited ways. Rajmohan Gandhi, grandson of the Indian independence leader Mahatma Gandhi, just visited Bilin, a Palestinian village with a weekly protest march. Next week, Martin Luther King III is scheduled to speak here at a conference on nonviolence.

Reminds me a bit of this scene from A Sum of All Fears.

13. Peter Lavelle interviews Middle East journalist Robert Fisk back in September 2009. If you want a ten minute video summary of why the West fails in Dar al-Islam – this is it.

14. United States watch.

  • Obama Limits When U.S. Would Use Nuclear Arms to states that have nuclear weapons or haven’t renounced or violence the Non-Proliferation Treaty. It is rational and profitable for US interests.
  • US gunships attack Iraqi civilians in Wikileaks scandal (see video). This is a non-story – mistakes do occasionally happen (if you really want to get all moral and uptight about this, the relevant question is why the US is in Iraq in the first place). Some might complain the soldiers were cold-hearted by laughing and making morbid jokes, but humor is a typical defense mechanism to scenes of carnage.
  • Obama administration ‘looks backwards’ to punish heroes. As I’ve said before, most of the Obama administration’s “change” is more cosmetic than real. It is a continuation of Bush post-2006.
  • The march to American Caesarism continues. When did it become legal to assassinate Americans? “Anwar al-Awlaqi, the New Mexico-born cleric living in Yemen, has been placed on a target list that makes him fair game for assassination by the U.S. military or CIA”. The problem isn’t so much the authorization of assassination, which is a useful anti-terrorist tool, but the fact that this further widens the gap between US liberal/rule-of-law pretensions and reality, and hence undermines its international legitimacy. After all, Israel or Russia, states that are not averse to assassinations on foreign soil, don’t portray themseves as guarantors of liberal internationalism. America does.

15. The consevative reaction in Europe spreads to Hungary, with the election of the Fidesz Party to power. By itself this is a normal development unworthy of much comment, except for the fact that the democratic left (the Socialists) have now been marginalized, and now enjoy about the same level of support as the far-right Jobbik and his Movement for a Better Hungary. This party is truly extremist – it has a “Magyar Garda” militia, its symbology draws on the banned Nazi-era Arrow Cross Party, and its rhetoric attacks the Jews above and the Roma below.

Hungary is going to face lean economic times in the years ahead and Viktor Orban of Fidesz can be expected to come under attack by a Jobbik energized by supporters dissilusioned of conventional politics. As Walter Mayr of Spiegel writes in “The Monster at Our Door”: Hungary Prepares for Shift in Power, the end result could be that Orban deserts austerity politics for the seemingly greener pastures of identity politics – for instance, it is known he is in favor of double citizenship for ethnic Hungarians outside Hungary, which could lead to clashes with Romania and Slovakia. (Though it should be stressed this is hardly unusual for Eastern Europe – for instance, Russia’s conferral of dual citizenship was one of the factors provoking conflict with Georgia over S. Ossetia and Abkhazia, and the Romanians themselves are at odds with Russia and Ukraine thanks to their issue of Romanian citizenship to Moldovans).

16. The Caucasus Emirate (Scott Stewart & Ben West), free Stratfor article about what is now the foremost jihadi group operating against Russia in the North Caucasus.

Umarov’s founding statement for the Caucasus Emirate, in which he called for the region to recognize the emirate as the rightful regional power and adopt Shariah, marked a shift from the motives of many previous militant leaders and groups, which were more nationalistic than jihadist. This trend of regional militants becoming more jihadist in their outlook increases the likelihood that they will forge substantial links with transnational jihadists such as al Qaeda — indeed, our Russian sources report that there are connections between the group and high-profile jihadists like Ilyas Kashmiri.

However, this alignment with transnational jihadists comes with a price. It could serve to distance the Caucasus Emirate from the general population, which practices a more moderate form of Islam (Sufi). This could help Moscow isolate and neutralize members of the Caucasus Emirate. Indeed, key individuals in the group such as Umarov and Kosolapov are operating in a very hostile environment and can name many of their predecessors who met their ends fighting the Russians. Both of these men have survived so far, but having prodded Moscow so provocatively, they are likely living on borrowed time.

17. Maoists kill 75 police in central India attack. Not much comment, except to note that many countries, including ostensibly succesful and democratic ones, have violent, festering insurgencies. Russia/Chechnya is hardly unique.

18. Turkey Overtaking Germany No Wishful Thinking on Paradigm Shift (h/t Randy McDonald). “Turkey’s $620-billion economy could move ahead of Germany’s to become the third-biggest in Europe by 2050, behind Russia and the UK”. Such long-term projections are pretty useless, but it’s true that in the medium-term Turkey has bright prospects, in part thanks to its demographic vigor and favorable geographical position.

19. @ any Asian readers or people familiar with the region – how accurate is this “Spenglerian” article on “Asia’s Permanent Advantage” by Chan Akya?

For the frequent traveler, there is a stark dichotomy across the world. Almost without exception, traveling with an Asian carrier to any Asian airport is a pleasure. In contrast, using any airline domiciled in Europe or North America with passage through airports in that part of the world is stunningly inconvenient. …

When you leave the airport in Shanghai and can get to the main city 30 kilometers away within eight minutes on the superfast magnetic levitation train, you cannot help but notice that the actual technology for this wonder comes from Germany. Yet, there are no such trains in operation anywhere in Europe, let alone Germany. …

Surely this is because, here in Asia, we are in the biggest cities you say. … Well, drive from Shanghai in virtually any direction and the first time you see roads that are any worse than those around the city you are a good 200 kilometers away. And even there, the roads are better than many American motorways.

Yeah alright, so the Chinese truck driver barreling towards you looks like he hasn’t slept in three days (very likely), and there is the occasional car wrapped into the milestone on the side of the road; but none of that detracts from the sheer robustness of the infrastructure. …

And then the last observation sinks in. Every single Asian city is heaving at the edges, with millions of people. Yet, crime rates are negligible and social tensions appear well under control. A far cry from the banlieu of Paris or the Turkish quarter of Berlin, for example, not to mention the public housing nightmares of Chicago or Detroit.

It is not the gargantuan dams of China or the super-efficient underground in Singapore that impresses you, but rather the fact that even the most economically backward parts of Asia have taken growth to be their mantra. What’s more, they have the financial muscle to push it through.

With that, your despondency turns to depression. How, you ask, can the “developed” world ever regain its luster?

For a start, all American and European cities will have to reinvest hundreds of billions into their cities to rejuvenate the existing infrastructure. Then the states/smaller countries will have to connect the cities to the rest of the region, install new technology infrastructure, focus on customer service and improve productivity to new heights to compete with the Asians.

Ah, but a minor detail intervenes. Who has got the money to do all that? Well, let us raise taxes you say. Problem is, no one in your country is making much money in the first place so raising taxes will simply drive consumption down and drive the deficit wider. Well, let us borrow the lot you say. Trouble is, no one has the money to lend to you at your abysmally low rates. Except the Asians – who you then recall can play tough once in a while.

And that’s about when you reconcile to the inevitable future – Asia with its apparently permanent advantage on infrastructure and operating efficiency leaving Europe and North America ever further behind. Nothing appears to have the ability to reverse this trend.

See also It’s China’s World. We’re Just Living in It (Rana Foroohar & Melinda Liu) - “The middle kingdom is rewriting the rules on trade, technology, currency, climate—you name it.” Another related post on the same theme is Coal and Treasuries by Gregor McDonald.

20. Military blast.

21. Things are getting more interesting in North Korea. There is danger of famine. The people are increasingly disillusioned, but unlikely to revolt. A coup by pro-Chinese military officers is a possibility. “Rumors of a North Korean submarine being responsible for the March 26th sinking of a South Korean corvette are growing more popular in the media… Survivors of the explosion agree that the blast came from outside the ship.” Watch this space.

22. Russophobe & liberast watch.

  • Link to The Soviet Story propaganda flick. I haven’t yet seen it, or plan to, despite having had the chance. (The screening coincided with my gym-going time).
  • David Satter, respected Russia-watched: “The present Russian leadership not only does not care about America’s security concerns, it is indifferent to Russia’s own.” Need more be said?
  • The bear is back: Poland’s tragedy, Russia’s gain (Arthur Herman) – “the most insane column in the entire history of mankind”, according to Mark Adomanis.
  • Putin wins again: Rebuilding imperial Russia (Ralph Peters), whom Mark Adomanis says is “very likely the single most repulsive figure in American  journalism”. More on Ralph Peters.
  • Paul Goble the Propagandist flip-flops from “Muslims will take over Russia!” in 2006 to “Muslims are no longer a demographic reserve” in 2010. Either way, however, Russia is doomed according to according to Goble’s cherry-picked sources. There is something resembling a “discussion” of this article on SWP’s blog.

23. Remember what I wrote about Russians’ attitudes to Stalinism in Sublime News #7? An “interesting” discussion about it developed on a far-right forum.

24. Flotsam and jetsam.

]]> http://www.sublimeoblivion.com/2010/04/19/news-8-9/feed/ 9 Sublime News #6 http://www.sublimeoblivion.com/2010/03/28/news-6/ http://www.sublimeoblivion.com/2010/03/28/news-6/#comments Sun, 28 Mar 2010 08:17:22 +0000 AK http://www.sublimeoblivion.com/?p=4050 Continue reading →]]> 1. My e-friend Eugene Ivanov participated on Peter Lavelle’s Crosstalk program at Russia Today, Lobbying: Who really rules America? Check it out!

2. Is Obama transforming America into Amerika? Let me explain. Take a look at the details of the healthcare bill, which was passed despite my pessimism (to be fair I think I had a good excuse). Essentially, it will eventually require everyone to buy a health insurance, but there will be subsidies for the poor / employers and continuing competition amongst insurance providers. Overall, could it even be said that the current administration is essentially transforming the American welfare state from one based on liberalism (in which markets are the primary guarantors of welfare with government only stepping in to restrict un-competitive practices, streamline market distortions, and assume only minimal relief obligations from private charitable and religious groups) to corporatism (in which the provision of welfare is tied to the imperative of maintaining social stability)?

Second, the US is developing a proper industrial policy in a bit to reverse deindustrialization. For instance, there are the plans to double exports by 2015, expand into foreign markets, and react strongly against currency manipulation by China. In other words, the US may be beginning to abandon its status as the world’s consumer of last resort – an important foundation of the current international system. These is also a higher focus on equality of opportunity, energy efficiency and greentech, closer ties between the state and the “commanding heights” (see Goldman Sachs, General Motors, Google, etc).

This is a suggestion, not a conclusion, and certainly not a moral judgment. Quite possibly, a “convergence to Europe” is inevitable as the US population ages and comes under increasing limits-to-growth pressures (e.g. peak oil). Incidentally, Matt Taibbi has a different take - his best line, ”The whole picture is strange: Democrats running as Republicans, Republicans running as Turner-Diaries conspiracy theorists.”

3. Climate change & energy blast.

4. Geoengineering watch

  • 6 Ways We’re Already Geoengineering Earth (Brandon Keim) – draining the rivers; painting the Earth black; the infinite farm; wiping out reefs; the plastic revolution (note: will probably be mankind’s longest-lasting legacy); altering the atmosphere. (h/t Lou Grinzo)
  • A Survival Guide to Geoengineering (James Cascio) – “despite its potential to trigger conflict, geoengineering will likely be part of the global response to climate change. Be prepared.”
  • On terraforming the solar system, with pictures & What do you think of geoengineering (Randy McDonald) – in my huge post on the topic, I’ve described it as a “final gambit”. We will soon be so far beyond climatic tipping points that sacrificing prodigal resources into geoengineering, in the hope that it will provide a big payoff (e.g. avert the collapse of industrial civilization), will become both rational and inevitable.

5. Global Wellbeing Surveys Find Nations Worlds Apart – Gallup measured life satisfaction for 155 nations by “asking respondents to place the status of their lives on a “ladder” scale with steps numbered from 0 to 10, where 0 indicates the worst possible life and 10 the best possible life”.

The results? Dernmark 82%, Canada, Australia & Israel 62%, Brazil 58%, USA 57%, Britain 54%, Germany 43%, France 35%, Poland 28%, Russia & Ukraine 21%, Japan 19%, India & Egypt 10%, China 9%, Togo 1%. For some reason, only the the Americas, northern Europeans, and Anglo-Saxons consider themselves to be thriving, while most of Eurasia and Africa are heavily depressed.

6. In other news from Gallup, 49% of Americans believe that the healthcare bill is a “good thing”, whereas just 40% believe it is a “bad thing”. Some have critisized this as an outlier, however. Time will tell as passions die down and Americans get access to more affordable healthcare (and assuming the fiscal situation remains more or less under control – no certainty given the range of possible discontinuities).

7. Russia watch. Mark Adomanis does a good summary of the week’s main issues: START, pipelines, and economic growth. Now for my thoughts.

I agree with Mark that the agreement over START will not overspill into better overall Russia-America relations. What they have is a fundamental geopolitical clash of interests that simply cannot be resolved while both nation-states retain imperial mentalities. The deal to cut nukes is 1) a rational cost-cutting measure – though not an imperative one, ignore the talk that Russia can’t afford maintaining a massive nuclear arsenal, it can but would rather not, and 2) in any case the age of the ICBM is slowly drawing to a close with the proliferation of effective ABM systems covered on this blog.

PS. Nikolas Gvosdev on START.

So what do we have? Based on preliminary reports, the Russians will get language that recognizes that there are important linkages between offensive and defensive systems–acknowledging their concerns over how U.S. missile defense systems could impact the strategic balance–but that language is nonbinding, and does not prevent Washington from moving ahead, if it so chooses, with plans to deploy limited BMD systems in the Black Sea region. Both sides will have an upper limit of 1,675 warheads and may shoot for an even lower number of delivery vehicles than originally outlined in last year’s MOU–from 1100 to an upper limit of 800. Some of the Russian reductions are likely to occur from attrition and the retirement of aged systems. This will test the willingness of the Senate to accept a compromise, because it has been argued that Russia would have “no choice” but to bring down the size of its nuclear arsenal, to a size it can more effectively maintained–but now Russia will get binding limits on the size of the U.S. arsenal as well.

Russia’s potential buyout of the Ukrainian gas pipeline network in return for selling Ukraine gas at lower prices is potentially a huge deal that will further tighten its control over European energy supplies – agreed with Mark. (It would also in large part remove the need for South Stream). Note that Ukraine is now very strapped for cash and its implicit social obligations to provide subsidized gas to the populace are placing it between a rock and a hard place (popular unrest, fiscal collapse, and increased Russian influence).

World Bank predicts Russia will grow at 5.0-5.5% in 2010 (not news: most investment banks predict 4-6%, Citibank predicts 6.2%), but will slow to 3.5% in 2011 “as tight credit and unemployment constrain consumption”. Nonetheless, this means that by 2012, Russia will have regained its peak GDP level of 2008 (which in turn was roughly equal to its peak Soviet-era GDP in 1989 – excellent, a whopping 23 wasted years!). But anyhow, still better than common expectations during the crisis…

8. Military & hi-tech blast (no, I’m not a Sinophobe, I admire good spies). ;)

  • Cyber-attack on U.S. firms, Google traced to Chinese (Bill Gertz) – describes how 2000+ Chinese hackers infiltrate US companies to steal industrial R&D. Makes perfect sense for a country looking to leapfrog development, of course.
  • Jihadism and the Importance of Place – free Stratfor article on the geopolitics of jihad. The jahidi movement is transitioning from being based on large organizations to clandestine cells and individuals, as country after country is “drained” of its ability to sustain Islamist militants.
  • The people have been liberated. China no longer has a People’s Liberation Army, now it’s just the Chinese Army. I think they should go all-out and rename it to Ever Victorious Army!
  • Has you Gmail been hacked by the Chicoms? Find out!
  • Stratfor has a long, detailed history of Chinese espionage efforts (“mosaic intelligence”). Behind subscriber wall.
  • Is Russia Google’s next weak spot? – the Kremlin to launch “national search engine” and give government e-mail accounts to every Russian to rationalize social services. (PS. Paranoiacs hold your breath, totalitarian Turkey already has a system. PSS. Apprecite deadpan humor).

9. This whole nonsense about the “Day of Wrath” and how the foundations of the Putin regime are crumbling in the recent wave of “protests” that are hardly large enough to even deserve the name! According to Barret Brown anyway, who believes that “it is worth noting that a poll conducted this month indicated that almost 30 percent of Russians are inclined to engage in protests of this sort, and that this percentage is higher than it was just a month ago”, hence spelling the apocalypse for the Kremlin. Erm, this is basically the same figure as in early 2005 (coinciding with protests over welfare reform), and LESS than two occasions in the 1990’s. Give me a call when it breaks 50%, then we might have something to talk about.

[Blue line = "yes I think protests are possible"; light blue line = "yes I will probably participate in protests. Opinion polls from Levada].

The fact of the matter is that most Russians if not happy, at least satisfied, with the political system, and 70% believe they are “free” today (this figure was much lower under Yeltsin and the early Putin years).

10. The Israel-US spat over settlements. Nothing will come of it as usual. The two countries are bound together by mutual geopolitical interests – the US needs its Middle East bridgehead, Israel needs its insurance policy.

11. What’s really wrong with Russia? by Ben Aris – (h/t poemless). An excellent article that I recommend very much. It points out Russia’s real economic weaknesses, without succumbing to Russophobia or hyperbole – a rare achievement in the mainstream Russia-watching community, regretfully. A few quick comments:

The big omission here on the Kremlin’s part is that while they are spending on power and trains, they have ignored badly needed investment into social infrastructure.

I agree, but it’s not quite accurate to say that social infrastructure has been ignored – at least, not after 2007-2008. E.g., there is a lot of investment in newly-equipped hospitals and clinics since 2007, and positive results are already showing.

Oil is heavily taxed, with the state taking 90 cents on every dollar when prices for oil are over $27. The extra revenue has been used to subsidise income and profit taxes (13% and 24% respectively) in an effort to boost economic diversification. Even this largesse can’t soak up all the petrodollars, so the excess cash is siphoned off into the “lockbox” of the Stabilisation Fund and kept out of the reach of free-spending MPs by Finance Minister Alexei Kudrin.

Good points, but note that some extreme free marketeers would decry the heavy taxation on oil (they’re incorrect of course, having never heard or serious studied lock-in or dependency theory).

The Kremlin’s solution is to lift struggling sectors up by the bootstraps by pouring enough money into them so that even if they can’t compete on price, they can compete on quality. The trouble is that state-led rescues of industry look intrinsically wrong-headed to almost everyone.

Katinka Barysch… spoke for many recently in a recent paper when she wrote: “A genuine modernisation alliance would have to be bottom-up and driven by the private sector. The Russian leadership is pursuing a model of modernisation that is state-centric and top-down. It throws money at new institutes to foster research, it nationalises big industries, it tells state-owned banks which sectors to lend to. It does not do the things that would be required for genuine economic diversification. … Barysch assumes there is a foundation of business that will flourish if the shackles of government are removed, but the Kremlin is facing an economy where rafts of products and services are simply missing and can’t get started.

State spending is inherently wasteful, but as Russia has the money thanks to oil, the issue at hand is not the efficiency of state spending, but rather its effectiveness: can the spending create sectors that don’t exist now or upgrade those that can’t compete now? “As there is no vibrant [small and medium-sized enterprise] sector, the only option left is heavy state spending. The Kremlin is doing this not because they want bigger versions of the existing state-owned behemoths, but because how else are they going to change the nature of the Russia economy?” says Plamen Monovski…

Head. Nail. Railing about how a large degree of state involvement is necessary for Russia to develop has been one of S/O’s common themes.

More worryingly, these nascent attempts to remake the system have already led to an increase in political risk. Up until now Russia has grown by first putting bums in empty seats, and then building new factories when the Soviet-era capacity was fully used. To go to the next stage, the system itself has to be liberalised, as it is efficiency not volume that counts now. This means cutting into the vested interests and they are already fighting back. In March, Medvedev told ministers that they had to obey orders “or take a hike” – a rare visible sign of the growing tension.

Conventional wisdom has it that Putin is a virtual dictator, but bne’s sources in diplomatic, business and government circles say that Putin is visibly under an increasing amount of strain, frustrated by the government machinery’s failure to implement his plans. On top of this, bringing in Medvedev has considerably weakened his position. “Two camps have formed around Medvedev and Putin. The first wants to see Medvedev go further with the liberalisation of the economy and politics, whereas the people close to Putin want to keep things as they were prior to the crisis – where they were making money,” says an economist who has been advising the government at a top level. “Putin is visibly stressed, as some people are starting to ignore him and others are openly calling for him to leave.”

1) Demonstrates how the anti-Putinistas have no appreciation for nuance or the institutional intricacies of the system Russia’s leaders have to operate in.

2) The more portentous conclusion one could possibly draw from this is that at times when plans for reform ran into heavy vested opposition, what followed was either a) a period of conservative retreat and stagnation or b) the opposite – an upping of the tempo and increase in coercion, centralization, mobilization. It will be interesting to see what will happen this time round.

PS. One major thing Aris leaves out is Russia’s awfully low level of energy efficiency. Not that it matters for now, given that it is so well-endowed with resources, but nonetheless all good things come to an end. Furthermore, improvements in energy efficiency can translate into higher foreign export earnings or domestic saving (in the form of resources-left-in-the-ground).

13. Germany: Mitteleuropa Redux (Peter Zeihan) from Stratfor (free article) – an interesting take on the rise of German power in Europe in the wake of the financial crisis – and the possible responses of its neighbors.

All this and more has happened. We saw the 2008-2009 financial crisis in Central Europe as particularly instructive. Despite their shared EU membership, the Western European members were quite reluctant to bail out their eastern partners. We became even more convinced that such inconsistencies would eventually doom the currency union, and that the euro’s eventual dissolution would take the European Union with it. Now, we’re not so sure. …

Back-of-the-envelope math indicates that in the past decade, Germany has gained roughly a 25 percent cost advantage over Club Med. … The implications of this are difficult to overstate. If the euro is essentially gutting the European — and again to a greater extent the Club Med — economic base, then Germany is achieving by stealth what it failed to achieve in the past thousand years of intra-European struggles. In essence, European states are borrowing money (mostly from Germany) in order to purchase imported goods (mostly from Germany) because their own workers cannot compete on price (mostly because of Germany). This is not limited to states actually within the eurozone, but also includes any state affiliated with the zone; the relative labor costs for most of the Central European states that have not even joined the euro yet have risen by even more during this same period.

It is not so much that STRATFOR now sees the euro as workable in the long run — we still don’t — it’s more that our assessment of the euro is shifting from the belief that it was a straightjacket for Germany to the belief that it is Germany’s springboard. In the first assessment, the euro would have broken as Germany was denied the right to chart its own destiny. Now, it might well break because Germany is becoming a bit too successful at charting its own destiny. And as it dawns on one European country after another that there was more to the euro than cheap credit, the ties that bind are almost certainly going to weaken.

14. Liberast & Russophobe watch.

15. Odds and Ends.

16. Happy Earth Hour Day! (Personally, I think it’s a ridiculous and meaningless gesture that does absolutely nothing except assuage the guilt feelings of green-washy liberals for fucking up the planet). ;)

]]> http://www.sublimeoblivion.com/2010/03/28/news-6/feed/ 6 Sublime News #5 http://www.sublimeoblivion.com/2010/03/22/news-5/ http://www.sublimeoblivion.com/2010/03/22/news-5/#comments Tue, 23 Mar 2010 01:45:18 +0000 AK http://www.sublimeoblivion.com/?p=3983 Continue reading →]]> 1. Sorry for being three days late with what is supposed to be the weekly news. I tend to get lazier during holidays, even though I get far more free time! Alternatively I could just be getting bored. We’ll see. I think I might have to cut down the length of these News posts down to 10 or fewer items, otherwise it may become an unwelcome chore rather than something I do out of interest.

2. Report: US shipping arms ahead of strike on Iran. “Scottish newspaper says US transferred ammunition containers with ‘bunker-buster’ bombs to Diego Garcia in Indian Ocean”. Fact or fear-mongering? The US still needs more time to develop bunker-busters capable of penetrating the deepest Iranian nuclear installations (they are slated for end-2010), so I doubt there’ll be a Gulf Inferno this year. Somewhat related: Hezbollah: Craving war, not wanting it (Nicholas Noe) – as I predicted, an Israel-Hezbollah war is a real possibility in 2010.

3. Russia attacks Georgia! Or so many Georgians believed following the airing of a “scenario” / fake news on a pro-government TV channel, in which President Saakashvili was killed and Russian tanks rolled into Georgia from recycled footage of the 2008 war.

The news station, Imedi TV, had once taken an anti-government line after its oligarch owner, Badri Patarkatsishvili, fell out with Saakashvili. Its offices were stormed during the November 2007 anti-government protests and soon after “democratized” to Saakashvili’s side. Patarkatsishvili, who was living in exile in London, died of a heart attack hours after meeting Berezovsky. (The circumstances remain very hazy. On the one hand, Patarkatsishvili had alleged that Saakashvili had sent hitmen to off him; on the other hand, he was obese and lived an unhealthy lifestyle, so a natural heart attack was entirely possible). But in any case, following Patarkatsishvili’s death, control of Imedi moved to shadowy ownership (“And the truth is we do not know who owns it, because the story we were told, that it was in the hands of a subsidiary of the state investment fund of the gulf emirate of Ras Al-Khaimah, has now been denied, in blunt terms, by that country’s rulers.” – Salome Zourabichvili). Anti-Saakashvili journalists and staff were replaced, and by the time it resumed broadcasting in early 2008 the TV station was firmly under pro-Saakashvili editorial control. (The affair was reminiscent of how Gazprom, an arm of the Russian state, took over NTV in 2001).

So what happened in this saga? Simple. After a brief warning that what would follow is just a possible scenario if Georgia “does not consolidate against the Russian plan”, there was a 30-minute program recycling archive footage of the 2008 war – bombings, Russian tanks, the weeping bereaved, etc. The government is evacuated and shortly afterwards Saakashvili is killed in murky circumstances, to be replaced by Nino Burjanadze, the opposition leader who had been reaching out to Vladimir Putin in an effort to resolve Georgia-Russia differences. This was a way of smearing the opposition as Russian stooges.

There was widespread panic and an abnormally high number of deaths from heart attacks. A day later, Saakashvili defended the hoax news as a robust way of defending Georgia against the Russia jackboot: “No matter the scenarios they have planned out for us, the scenario shown yesterday [on Imedi] was, unfortunately, realistic, and despite the nervous reaction [of Georgians to it], yesterday’s report will will become an obstacle to [Russia's] fulfillment of its plans [against Georgia]“.

This fits the general pattern of Georgia’s behavior under Saakashvili – a zealous, almost chiliastic, drive to unify the nation and “anchor” itself onto Western security institutions (primarily NATO), so as to escape from Russia’s growing sphere of influence. These actions have been symbolic, with little or nothing of substance… even most Western politicians now regard him as an unbalanced maniac, and are hesitant about dealing with him seriously. Well, there’s always PR companies to spruce up the tree, but you can only do it so many times before the sheen wears off permanently. Right?

4. The London Times comes out with its 2009 list of best world universities. I will take the opportunity to quickly say how stupid and ridiculous these lists are in general.

Let’s look at the Times list. UC Berkeley or the Ecole Polytechnique, known throughout the world, are both superseded by the University of Bristol in Britain, which is a respectable institution but not world-class. It gets stupider as one goes down. Lomonosov Moscow State University, full of world-famous scientists and Russia’s best students, is apparently comparable with British universities like Newcastle or Aberdeen, or Hong Kong Polytechnic University, which famously offers a major in Intimate Apparel. Part of the explanation is that far too much emphasis is placed on the staff/student ratio (UC Berkeley totally flunks this) and the International Student Score (whatever the hell that is), whereas the citation/staff score is not the best measure given the academic tendency to form their own mafia-like cliques (i.e. incessantly cite each other’s work).

The Chinese ARWU estimates are somewhat more accurate, but still lacking.

It would be great if some organization could conduct a real study, which instead of relying so much on subjective weighting of statistics, would test the skills and knowledge of graduates from each university on their subject. (After all, to applicants, that is the thing that matters most). I would suspect that a lot of universities that coast only on their reputations, or on their country’s reputation, will slip a lot. (One really annoying thing is that so many Third Worlders in a position of cultural dependency on the West have an irrational respect for a Western education, no matter how poor it is in practice – how much money they throw away into the wind sending off their students to British polytechs-renamed-as-universities!). I remember reading about a limited study which tested the math knowledge of math graduates from some of the world’s best institutions, the top three were all Japanese universities, fourth was Moscow State University, fifth was either MIT or Caltech.

5. The reader T. Greer sent me the article Regional Nuclear War Could Devastate World Population, Report Warns. Basically, the model indicates that the consequences of a regional nuclear war between India and Pakistan, involving 100 Hiroshima-sized nuclear bombs, will cause a multi-year temperature plunge and could lead to the starvation of 1bn people.

I disagree with most of it (see my Thinking about Nuclear War). It is just the recycling of the discredited “nuclear winter” theory (see the section on “nuclear winter”). There will be a small temperature drop, but it will only last for a few weeks or months at most. Only in a global nuclear war between Russia and the US can widespread famine be expected due to the cessation of international trade / food shipments and the much bigger mega-tonnages involved (leading to far bigger temperature drops). In the regional war described in the report, only sub-continental Asia will be significantly affected – India will be substantially damaged, losing a few of its cities, but would recover within a few years; Pakistan, however, would probably collapse, and will lose any meaningful independent existence.

6. Serious Problems Emerge For The F-UK-De Group Of Countries by Ed Hugh argues that fiscal union is the only realistic way forward for the EU by this point due to the Mediterranean crisis.

Now, taking us back a bit nearer to that harsh and horrid reality, Daniel does in fact, in his ill-named Working Paper “Adjustment Difficulties in the GIPSY Club“, actually get to the heart of some very important matters… The core of Daniel’s argument is … that the kind of fiscal adjustment currently being proposed for some of the peripheral countries is going to have one, and only one immediate consequence: these countries are going to be sent off to the outer darkness of very, very (see his numbers) sharp GDP contractions, and these contractions run the risk of preciptating pre-Argentina 2000 type situations in one after another of the countries involved, since the contractions in nominal GDP are so large that they effectively take away with the one hand what was given (in the form of sacrfice) with the other, and will lead to a seemingly endless spiral of increases in the debt-to-GDP ratios, which will in turn lead to ever deeper short-term fiscal cuts, and ever stronger contractions, etc, etc. As Daniel argues, the only way to restore competitiveness, and avoid the dreaded Argentine spiral is to carry out some form of internal devaluation. …

… Another reason the F-UK-De group are in trouble if the GIPSYs [Greece, Ireland, Portugal, Spain, Italy] wander off to the outer darkness, is that they will have issues to resolve in their banking systems, as the chart below reveals. German banks may have little exposure to Greek debt, but their exposure to Spain and Ireland is enormous. … Another reason the F-UK-De [France, UK, Germany] group are in trouble if the GIPSYs wander off to the outer darkness, is that they will have issues to resolve in their banking systems, as the chart below reveals. German banks may have little exposure to Greek debt, but their exposure to Spain and Ireland is enormous. …

On the other hand, A Germany (or a Japan) which is not able to maintain a substantial external surplus (which is the only way a country with their kind of demographic profile can attain headline GDP growth, since internal demand is long gone as a “driver”) since without a surplus and without GDP growth the implicit liabilities of ageing populations (via health and pension commitments) will become unpayable, leading to default (or a huge slashing of public welfare commitments) in these countries too.

However, there are no signs that fiscal union is around the corner. Germany does not want to foot the bill, simple as, and instead it looks like Greece to going to turn to the IMF.

7. How Much Of The World Is In a Liquidity Trap? (Krugman) “Almost all advanced countries. The US, obviously; Japan, even more obviously; the eurozone, because the ECB probably couldn’t engage in Fed-style quantitative easing even if it wanted to, given the lack of a single backing government; Britain. Not Australia, I guess. But still: essentially the whole advanced world, accounting for 70 percent of world GDP at market prices, is in a liquidity trap.”

8. China To Connect Its High Speed Rail All The Way To Europe in an excellent demonstration of what the coming age of “scarcity industrialism” will be like.

China hopes to complete this massive infrastructure project within 10 years, which will include three major rail lines running at speeds of 320 km/hour. The first will go from King’s Cross Station in London all the way to Beijing (8,100 km as the crow flies) and will take approximately two days. This line will also then extend down to Singapore. A second HSR line will connect into Vietnam, Thailand, Burma and Malaysia. The last line to be built will connect Germany to Russia, cross Siberia and then back into China. …

Financing and planning for this monstrous project is actually being provided by China, who is already in serious negotiations with 17 countries to develop the project. China states that other countries, like India, came to them first to get the project rolling, because of their experience in designing and building their own HSR network. Financing for the infrastructure will be provided by China and in return the partnering nation will provide natural resources to China. For instance, Burma, which is about to build its link, will exchange lithium (used in batteries), in order for China to build the line.

China benefits because it will be able to transport materials cheaply into manufacturing centers inside its borders and the Eastern Hemisphere benefits by getting a fast, efficient, low carbon transportation system. Considering China has already become the global leader in HSR, their leadership in this new venture could reasonably shift the balance of power in their direction. Also, get ready for a huge influx of HSR station designs in the coming years.

The themes: 1) the rise of China, 2) China’s quid pro qua approach to international economic relations – as opposed to Washington’s which is based more on values, 3) a strategic project to ensure secure supplies of resources in both the medium-term / next decade (during which the US will keep its naval supremacy – hence China’s need for land-based routes as a backup) and in the long-term / next several decades (during which China’s domestic energy and REM resources will begin to peak and run down).

9. Putting the anti-Toyota witch-hunt and the lambasting of China’s currency manipulation into context – Obama is to create Export Promotion Cabinet in a bid to double US exports by 2015. Strategic trade is back in vogue.

Stratfor has an interesting take on this. Mercantile competition was one of the main triggers for pre-Pax Americana wars (i.e. struggles for raw materials and captive markets). The US-Japan war was a good example. The post-WW2 alliance structure linking the US to Japan, Germany, Western Europe, and the Asian tigers, was partly built on granting them access to the American market and thus enriching them, while they in return recognized and supported US hegemony. This pattern may fade away and present us with a host of unintended consequences as the US abandons this system.

10. Reaction of the Rest watch.

11. Climate & energy blast.

12. Military & security blast.

  • Navy Wants Lots of Lasers – from this great blog I found, Defense Tech. As I noted in my On Future War article, effective lasers *are* the holy grail of missile and air defense. The US Navy’s current research projects – 100kW+ Solid-State Fiber Laser that could fit into aircraft pods; shipboard point defense Free Electron Lase; High-Power Microwave Directed Energy Weapons to knock out enemy C&C; The Revolutionary Approach to Time-Critical Long Range Strike (RATTLRS) Program (Mach 3+ cruise missile); Next Generation Integrated Power Systems to power the all-electric warship; the Electromagnetic Railgun.
  • Related – Boeing Completes Design of Shipboard Superlaser. I think it is safe to say that the US Navy will feature all-electric ships armed with superlasers, railguns, and hypersonic cruise missiles by the 2030′s.
  • Not Enough Food For Too Many People in North Korea; Avoiding Another Pearl Harbor (from N. Korea) is not a problem thanks to US missile defense systems like THAAD and Aegis/SM-3.
  • That Elephant’s Going To Do What? Where? – JSF costs spiraling out of control (not exactly news). In fact there are compelling arguments to abandon the project altogether and focus on the development of next-generation UAV’s.
  • Anti-Missile Effort Edges Forward – more on the game-changing developments in BMD. Europe to be defended against IRBM’s, and to an extent against ICBM’s, by 2020. As I’ve been saying the days of ballistic missile preeminence are coming to an end.
  • Cyber War = Space War – “Its becoming increasingly evident that any future war between modern militaries would be both a space war and a cyber war, in fact, they would be one and the same”.
  • Mistrals from France, drones from Israel… and armored vehicles from Italy? This seems rather strange, since although Russia’s UAV and amphibious / sea-based C&C capabilities are weak, it has some of the best armored vehicles in the world. And indeed the Russian Defense Ministry dismissed this report.

13. Tech blast.

14. Texas Conservatives Win Curriculum Change, marks regress in reason and progress.

AUSTIN, Texas — A far-right faction of the Texas State Board of Education succeeded Friday in injecting conservative ideals into social studies, history and economics lessons that will be taught to millions of students for the next decade. Teachers in Texas will be required to cover the Judeo-Christian influences of the nation’s Founding Fathers, but not highlight the philosophical rationale for the separation of church and state. Curriculum standards also will describe the U.S. government as a “constitutional republic,” rather than “democratic,” and students will be required to study the decline in value of the U.S. dollar, including the abandonment of the gold standard. … By late Thursday night, three other Democrats seemed to sense their futility and left, leaving Republicans to easily push through amendments heralding “American exceptionalism” and the U.S. free enterprise system, suggesting it thrives best absent excessive government intervention.

Also from Texas Freedom Network

… the board stripped Thomas Jefferson from a world history standard about the influence of Enlightenment thinkers on political revolutions from the 1700s to today. In Jefferson’s place, the board’s religious conservatives succeeded in inserting Thomas Aquinas and John Calvin. They also removed the reference to ‘Enlightenment ideas’ in the standard, requiring that students should simply learn about the influence of the ‘writings’ of various thinkers (including Calvin and Aquinas).

Though, perhaps better than closing half your schools altogether, as in Kansas City. ;) Apart from that, I would venture to guess that these Texan history-politicisers would also probably be the first and loudest to condemn Russia’s “rationalization” of Stalinism in a few of its textbooks.

15. Liberast & Russophobe watch – quite a productive week!

16. A documentary on North Korea – a ”fascinating” country indeed, a totalitarian ice cavern.

17. Ever wanted to see how a typical Russian face looks like? The researchers Darya Laane and Sergei Petukhov compiled a composite image five years ago and wrote up an article on it.

[Typical representatives of the Vologda-Vyatka zone].

PS. Here is a composite pic of the average Japanese, Chinese, and Korean woman’s face.

18. In Crimea, ethnic Russians burned Ukrainian history textbooks. In Lviv, Ukrainians collected Russian history textbooks for pulping / recycling. Just goes to show 1) how riven the country is, and 2) that the Westerners are more “with the times”, so to speak, in their hatred, while the Crimean Russians are so 1930′s. (h/t @Ukroblogger)

19. Inspirational quotes of the week. Citizenship in a Republic, Teddy Roosevelt.

It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.

Thought-provoking quotes from Yukio Mishima (see link for more).

We are ignoring the fact that bringing death to the level of consciousness ic an important element of mental health…Hagakure insists that to ponder death daily is to concentrate daily on life. When we do our work thinking that we may die today, we cannot help feeling that our job suddenly becomes radiant with life and meaning.

20. Humor and interesting flotsam and jetsam:

]]> http://www.sublimeoblivion.com/2010/03/22/news-5/feed/ 5 Sublime News #4 http://www.sublimeoblivion.com/2010/03/13/news-4/ http://www.sublimeoblivion.com/2010/03/13/news-4/#comments Sat, 13 Mar 2010 19:00:15 +0000 AK http://www.sublimeoblivion.com/?p=3751 Continue reading →]]> 1. As you may have noticed, I’ve radically simplified the website. I regret having to remove the Twitter integration and coolest navigation features. Nonetheless, it was unavoidable. The website loaded far too slowly most of the time, and when I got linked to from A Fistful of Euros, the resulting upsurge in visitor numbers repeatedly crashed the site. I thus decided on a minimalist revolution from above so that you, readers, will hopefully always be able to quickly and easily access S/O content. PS. I also expanded the Best Music page – check it out!

2. When I meet people, I sometimes mention the S/O blog as one of the things I do if I think they might be interested in its material. My problem – somewhat paradoxically, as its author – is that I also have difficulties in summarizing what it is about. Erm… Russia. Peak oil. EROEI. What’s that? Futurism. So what do you think will happen? I look at trends, and possible discontinuities, for example… Anyhow, I don’t feel like I’m doing it right. I’d appreciate it if you could help me out, e.g. by writing down three or four sentences that distill the essence of S/O.

3. A lot of Not So Good news on the climate change front. The subsea permafrost of the East Siberian Arctic Shelf is destabilizing, possibly threatening to uncork massive amounts of methane into the atmosphere over just a few decades (i.e. instantaneous on the geological timescale). This is bad because methane is much more potent than CO2 over timescales of decades. There is a danger that the process will pass a threshold beyond which it acquires runaway characteristics, raising global temperatures by as much as 8-10C. Needless to say, such an extreme hothouse state would spell the end of industrial civilization, maybe even homo sapiens. Therefore, should global warming runaway, geoengineering will almost certainly be attempted as a “last gamble”.

Methane release from the not-so-perma-frost is the most dangerous amplifying feedback in the entire carbon cycle.  Research published in Friday’s journal Science finds a key “lid” on “the large sub-sea permafrost carbon reservoir” near Eastern Siberia “is clearly perforated, and sedimentary CH4 [methane] is escaping to the atmosphere.”

Scientists learned last year that the permafrost permamelt contains a staggering “1.5 trillion tons of frozen carbon, about twice as much carbon as contained in the atmosphere,” much of which would be released as methane.  Methane is  is 25 times as potent a heat-trapping gas as CO2 over a 100 year time horizon, but 72 times as potent over 20 years!

The carbon is locked in a freezer in the part of the planet warming up the fastest (see “Tundra 4: Permafrost loss linked to Arctic sea ice loss“).  Half the land-based permafrost would vanish by mid-century on our current emissions path (see “Tundra, Part 2: The point of no return” and below).  No climate model currently incorporates the amplifying feedback from methane released by a defrosting tundra. [AK: See MIT study using upgraded model that takes this into account].

The new Science study, led by University of Alaska’s International Arctic Research Centre and the Russian Academy of Sciences, is “Extensive Methane Venting to the Atmosphere from Sediments of the East Siberian Arctic Shelf” (subs. req’d).  The must-read National Science Foundation press release (click here), warns “Release of even a fraction of the methane stored in the shelf could trigger abrupt climate warming.”  The NSF is normally a very staid organization.  If they are worried, everybody should be.

It is increasingly clear that if the world strays significantly above 450 ppm atmospheric concentrations of carbon dioxide for any length of time, we will find it unimaginably difficult to stop short of 800 to 1000 ppm.

There are so many positive feedbacks to global warming in the Arctic – it is both the canary and the gas in the coal mine. Do yourself a favor and read the whole article.

James Cascio (one of the leading thinkers about geoengineering) writes about using methanotrophic bacteria, genetically-engineered to survive the cold Arctic seas, to oxidize the excess methane in that region. He also stresses that if the methane gun goes off, we may have no choice to attempting large-scale geoengineering.

If the frozen methane in the Siberian ocean is melting faster, our options are extremely limited. We’d no longer be in a position to stop the melting, even by ceasing all greenhouse gas production today; the temperature increases we’re seeing now are the results of greenhouse gases put into the atmosphere decades ago. And when methane melts, it appears to do so quickly — there are signs that past methane clathrate events took less than a human lifetime. This is why I think that methane melt would inevitably mean geoengineering.

Probably a more realistic, and certainly cheaper, proposal than a 100,000 square mile sun shade.

4. A good, albeit depressing, article by George Monbiot on the intellectuals’ fallacy that reason persuades. Unfortunately for the world, it’s the opposite.

5. Iraq Opens Up to Foreign Oil Majors – Mission Accomplished!

The contracts awarded in two auctions, which pay a per-barrel fee for development work rather than granting a share in the production itself, will cost the companies a total of about $100 billion to develop deposits, Oil Minister Hussain al-Shahristani said in December. Iraq, with the world’s third-largest oil reserves, will earn about $200 billion a year. …

A group led by BP, which vies with Shell as Europe’s largest oil company, will receive $2 billion per year in fees to develop the Rumaila field. A Shell-led group will get $913 million and a group led by Exxon, the largest U.S. oil company, will receive $1.6 billion per year. Each calculation is based on the agreed-to per-barrel fee times the maximum production level.

“We see this as the beginning of a long-term relationship with Iraq and will continue to look for further opportunities,” Andy Inglis, BP’s chief executive for exploration and production, said on a conference call March 2.

This is not looting, as hardcore critics of US foreign policy / imperialism assert. The contracts were signed on favorable terms to Iraq (i.e. not the production-sharing agreements, or PSA’s, typically arranged with corrupt Third World states). The main hope is that under the current plans, a rapid surge in Iraqi production will postpone global peak oil (World Oil Capacity to Peak in 2010 Says Petrobras CEO) by up to a decade. This is important because cheap oil flows are one of the key foundations of Pax Americana and of the global (neo)liberal internationalist order.

[History of Iraqi oil production].

Will this actually work? I am skeptical. The optimistic scenario assumes the confluence of all the best outcomes in the following:

  1. Iraq’s reserves are not massively overstated for political reasons like in the rest of OPEC.
  2. The security situation in Iraq remains stable, unlikely given the fragility of the post-2008 agreements between ethnic / religious clans, and the influence Iran weilds over key political factions.
  3. No geopolitical disruptions, such as Iran blocking the Strait of Hormuz or raiding Iraqi oil installations, e.g. in response to a US-Israeli strike on its nuclear facilities.
  4. Iraq manages to attract the technical talent to make this work. Developing oil fields is a highly complex organizational endevour, and most of its managerial talent emigrated in 2003-2008.

Finally, history itself suggests that the odds are against the Al-Shahristani plan / optimistic scenario from being realized. Note that at three distinct prior points in the last three decades, it appeared that Iraq might become a dominant oil exporter. The buildup in the 1970′s was interrupted by the Iran-Iraq War. The late 1980′s recovery was utterly reversed by the Gulf War. The 1990′s recovery was stunted by UN sanctions, and output again dipped during the 2003 invasion of Iraq and remained depressed throughout the anarchic 2003-2008 period.

The common pattern? All Iraq’s historic rises in oil production, or recoveries, were interrupted by geopolitical flux in decadal cycles. Considering the current, irreconcilable tensions between Iran, Israel and the US, is it really outlandish to suggest that some renewed geopolitical shock in the early to mid-2010′s once again disillusions the Iraq oil bulls?

6. Collapse of Pax Americana watch. Complexity and Collapse: Empires on the Edge of Chaos by Niall Ferguson, court historian of the American empire. I highly recommend registering with FP and reading the article free.

What matters most is that in such systems a relatively minor shock can cause a disproportionate — and sometimes fatal — disruption. As Taleb has argued, by 2007, the global economy had grown to resemble an over-optimized electrical grid. Defaults on subprime mortgages produced a relatively small surge in the United States that tipped the entire world economy into a financial blackout, which, for a moment, threatened to bring about a complete collapse of international trade.

Though the more fundamental source of system strain was the first peak oil shock, this analysis is still valid and correct.

Regardless of whether it is a dictatorship or a democracy, any large-scale political unit is a complex system. Most great empires have a nominal central authority — either a hereditary emperor or an elected president — but in practice the power of any individual ruler is a function of the network of economic, social, and political relations over which he or she presides. As such, empires exhibit many of the characteristics of other complex adaptive systems — including the tendency to move from stability to instability quite suddenly. But this fact is rarely recognized because of the collective addiction to cyclical theories of history. …

But what if fourth-century Rome was simply functioning normally as a complex adaptive system, with political strife, barbarian migration, and imperial rivalry all just integral features of late antiquity? Through this lens, Rome’s fall was sudden and dramatic — just as one would expect when such a system goes critical. … the final breakdown in the Western Roman Empire began in 406, when Germanic invaders poured across the Rhine into Gaul and then Italy. Rome itself was sacked by the Goths in 410. … Byzantium lived on, but the Western Roman Empire was dead. By 476, Rome was the fiefdom of Odoacer, king of the Goths.

What is most striking about this history is the speed of the Roman Empire’s collapse. In just five decades, the population of Rome itself fell by three-quarters. Archaeological evidence from the late fifth century — inferior housing, more primitive pottery, fewer coins, smaller cattle — shows that the benign influence of Rome diminished rapidly in the rest of western Europe. What Ward-Perkins calls “the end of civilization” came within the span of a single generation.

I am an adherent of the fast collapse school. Most historical examples conformed to this pattern.

The most recent and familiar example of precipitous decline is, of course, the collapse of the Soviet Union. With the benefit of hindsight, historians have traced all kinds of rot within the Soviet system back to the Brezhnev era and beyond. Perhaps, as the historian and political scientist Stephen Kotkin has argued, it was only the high oil prices of the 1970s that “averted Armageddon.” But this did not seem to be the case at the time. In March 1985, when Mikhail Gorbachev became general secretary of the Soviet Communist Party, the CIA estimated the Soviet economy to be approximately 60 percent the size of the U.S. economy. This estimate is now known to have been wrong, but the Soviet nuclear arsenal was genuinely larger than the U.S. stockpile. And governments in what was then called the Third World, from Vietnam to Nicaragua, had been tilting in the Soviets’ favor for most of the previous 20 years. Yet less than five years after Gorbachev took power, the Soviet imperium in central and Eastern Europe had fallen apart, followed by the Soviet Union itself in 1991. If ever an empire fell off a cliff — rather than gently declining — it was the one founded by Lenin.

True that it collapsed suddenly, but as I wrote previously, this was because the dictator (Gorbachev) lost the will to enforce coercion – i.e. the thing that made central planning work. Otherwise, the Soviet system was entirely sustainable (which is not to say that it was “optimal”, “good”, “dynamic”, etc). See Harrison 2001.

If empires are complex systems that sooner or later succumb to sudden and catastrophic malfunctions, rather than cycling sedately from Arcadia to Apogee to Armageddon, what are the implications for the United States today? First, debating the stages of decline may be a waste of time — it is a precipitous and unexpected fall that should most concern policymakers and citizens. Second, most imperial falls are associated with fiscal crises. All the above cases were marked by sharp imbalances between revenues and expenditures, as well as difficulties with financing public debt. Alarm bells should therefore be ringing very loudly, indeed, as the United States contemplates a deficit for 2009 of more than $1.4 trillion — about 11.2 percent of GDP, the biggest deficit in 60 years — and another for 2010 that will not be much smaller. Public debt, meanwhile, is set to more than double in the coming decade, from $5.8 trillion in 2008 to $14.3 trillion in 2019. Within the same timeframe, interest payments on that debt are forecast to leap from eight percent of federal revenues to 17 percent.

These numbers are bad, but in the realm of political entities, the role of perception is just as crucial, if not more so. In imperial crises, it is not the material underpinnings of power that really matter but expectations about future power. The fiscal numbers cited above cannot erode U.S. strength on their own, but they can work to weaken a long-assumed faith in the United States’ ability to weather any crisis. For now, the world still expects the United States to muddle through, eventually confronting its problems when, as Churchill famously said, all the alternatives have been exhausted. Through this lens, past alarms about the deficit seem overblown, and 2080 — when the U.S. debt may reach staggering proportions — seems a long way off, leaving plenty of time to plug the fiscal hole. But one day, a seemingly random piece of bad news — perhaps a negative report by a rating agency — will make the headlines during an otherwise quiet news cycle. Suddenly, it will be not just a few policy wonks who worry about the sustainability of U.S. fiscal policy but also the public at large, not to mention investors abroad. It is this shift that is crucial: a complex adaptive system is in big trouble when its component parts lose faith in its viability.

… The next phase of the current crisis may begin when the public begins to reassess the credibility of the monetary and fiscal measures that the Obama administration has taken in response [AK: this has been a constant S/O theme for a year now]. Neither interest rates at zero nor fiscal stimulus can achieve a sustainable recovery if people in the United States and abroad collectively decide, overnight, that such measures will lead to much higher inflation rates or outright default. As Thomas Sargent, an economist who pioneered the idea of rational expectations, demonstrated more than 20 years ago, such decisions are self-fulfilling: it is not the base supply of money that determines inflation but the velocity of its circulation, which in turn is a function of expectations. In the same way, it is not the debt-to-GDP ratio that determines government solvency but the interest rate that investors demand. Bond yields can shoot up if expectations change about future government solvency, intensifying an already bad fiscal crisis by driving up the cost of interest payments on new debt [another major S/O theme - compound debt trap or inflation]. Just ask Greece — it happened there at the end of last year, plunging the country into fiscal and political crisis.

Finally, a shift in expectations about monetary and fiscal policy could force a reassessment of future U.S. foreign policy. There is a zero-sum game at the heart of the budgetary process: if interest payments consume a rising proportion of tax revenue, military expenditure is the item most likely to be cut because, unlike mandatory entitlements, it is discretionary. [AK: see my argument that the US military-industrial complex will be hit particularly hard by the coming debt & fiscal crises] … And what about the United States’ other strategic challenges? For the United States’ enemies in Iran and Iraq, it must be consoling to know that U.S. fiscal policy today is preprogrammed to reduce the resources available for all overseas military operations in the years ahead. [AK: This is the geopolitical component of collapse]

Defeat in the mountains of the Hindu Kush or on the plains of Mesopotamia has long been a harbinger of imperial fall. It is no coincidence that the Soviet Union withdrew from Afghanistan in the annus mirabilis of 1989. What happened 20 years ago, like the events of the distant fifth century, is a reminder that empires do not in fact appear, rise, reign, decline, and fall according to some recurrent and predictable life cycle. It is historians who retrospectively portray the process of imperial dissolution as slow-acting, with multiple overdetermining causes. Rather, empires behave like all complex adaptive systems. They function in apparent equilibrium for some unknowable period. And then, quite abruptly, they collapse. To return to the terminology of Thomas Cole, the painter of The Course of Empire, the shift from consummation to destruction and then to desolation is not cyclical. It is sudden.

That said, the suddenness shouldn’t be overstated. In reality, when a complex system collapses, its constituent parts tend to reassemble into a simpler structure after some period of flux; but since this simpler structure requires fewer investments to maintain itself, the resulting entity can, in principle, be even more vigorous and expansionist than the hypertrophied empire that preceded it. For instance, the late USSR was decrepit, at home and abroad; today’s Russia is brashly expansionist, for its radical post-Soviet “simplification” has freed up resources away from the maintenance of complexity. Likewise, following the collapse of Pax Americana, the American Republic will remain; it will be like a crustacean that has shed its shell, and it will, if anything, be enthusiastic about reclaiming its old spheres of influence in a far blunter, more aggresive manner than it maintains Pax Americana today.

[Desolation by Thomas Cole (last stage of empire)].

(Overall I like Ferguson’s work, especially the earlier ones before he became famous and adopted an air of aloof arrogance - The Pity of War is a masterpiece of historical revisionism. BTW. I met him once when he was giving a talk about his new book The War of the World: Twentieth-Century Conflict and the Descent of the West (certainly not his best book, IMO). He made the surprising claim that Iran today is as big a threat to US hegemony as Imperial Germany was to the UK in 1914. I took issue with this, citing Iran’s vastly weaker economy, military, etc relative to Germany a century ago, which by 1914 had twice the UK’s steel production, Europe’s most powerful armed forces, and leadership in the new chemical and electrical engineering industries. His answer to my criticism was unsubstantive and unimpressive. Nowadays, I realize that in a way he was correct, however. Though Iran cannot stand head-to-head against the US, 1) today’s US Empire is a much more fragile system than the British Empire and 2) in particular, Iran can hit it the US at a criticial position – its reliance on cheap oil. British power in 1914 relied on its financial strength, Royal Navy, and coal. Germany was powerless to do anything about the latter two, though over four years of total war it did indirectly undermine the former, since Britain’s military expenditures shifted the balance of financial power to the US. In contrast, Iran can hit directly at the heart of US power – the global oil system.)

7. Who owns US debt? One interesting thing I observe in those figures is that in the last half-year, America’s strategic competitors (China, Russia) have slightly reduced US Treasury holdings, whereas its allies (Britain, Canada, Japan, France, Australia, Poland) tended to increase them. Plus, there are suspicions / conspiracy theories? that the US, it’s own best ally, is buying its own debt.

8. Economic apocalypse watch. Europe’s banks brace for UK debt crisis - UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece.

Fitch warns Britain and questions Greek rescue as sovereign risks grow:

A string of European states are stepping up the pace of retrenchment, aiming to cut deficits to 3pc of GDP within three years. The risk is that Britain will soon stick out like a sore thumb, left behind with a shockingly large deficit long after such loose fiscal policy can be justified as a crisis measure. The UK deficit this year is 12.6pc of GDP, the highest among G10 states.

The Government is clearly counting on a “Korean” recovery, modelled on Korea’s fast return to trend growth following the Asian crisis in 1998. It relies on rising output and tax revenues to plug much of the deficit. “This is an optimistic assumption,” said Fitch.

The Coming Greek Debt Bubble by Peter Boone and Simon Johnson.

By the end of 2011 Greece’s debt will around 150% of GDP (the numbers here are based on the 2009 IMF Article IV assessment; we make some adjustments for the worsening economy and the restating of numbers since that time – for example, the fiscal deficit in 2009 will likely turn out to be about 8 percent, which is double what the IMF expected until recently).  About 80 percent of this debt is foreign owned, and a large part of this is thought held by residents of France and Germany.  Every 1 percentage point rise in interest rates means Greece needs to send an additional 1.2 percent of GDP abroad to those bondholders.

What if Greek interest rates rise to, say, 10% – a modest premium for a country which has the highest external public debt/GDP ratio in the world, which continues (under the so-called “austerity” program) to refinance even the interest on that debt without actually paying a centime out of its own pocket, and which is struggling to establish any sustained backing from the rest of Europe?  Greece would need to send at total of 12% of GDP abroad per year, once they rollover the existing stock of debt to these new rates (nearly half of Greek debt will roll over within 3 years).

This is simply impossible and unheard of for any long period of history.  German reparation payments were 2.4 percent of GNP during 1925-32, and in the years immediately after 1982, the net transfer of resources from Latin America was 3.5 percent of GDP (a fifth of its export earnings).  Neither of these were good experiences. …

The French and Germans are apparently actually encouraging banks, pension funds, and individuals to buy these bonds – despite the fact senior politicians must surely know this is a Ponzi scheme, i.e., people can get out of Greek bonds only to the extent that new investors come in.  At best, this does nothing more than postpone the crisis – in the business, it is known as “kicking the can down the road.”  At worst, it encourages less informed people (including perhaps pension funds) to buy bonds as smarter people (and big banks, surely) take the opportunity to exit.

While the French and German leadership makes a great spectacle of wanting to end speculation, in fact they are instead encouraging it.  The hypocrisy is horrifying – Mr. Sarkozy and Ms. Merkel are helping realistic speculators make money on the backs of those who take seriously misleading statements by European politicians.  This is irresponsible.

Eurozone could risk ‘sovereign debt explosion’ - Europe’s governments are at increasing risk of an interest rate shock this year as the lingering effects of the Great Recession drive debt issuance to record levels and saturate bond markets, according to Standard & Poor’s.

9. John Michael Greer makes a post excellent even by his high standards, Barbarism and Good Brandy. Emergy, energy concentrations, and economic triage for dummies.

10. A stunning 80% of Internet users around the world see Internet access as a fundamental human right. (This is an illustration of the amazing centrality the Internet has assumed in our lives over the past decade. The son of ARPANET is easily the most significant invention of late industrialism – so significant, that as far as I know uniquely, it created an entirely new social, economic, and military environment – that of cyberspace).

The BBC has a map of the spread of Internet penetration around the world from 1998-2008. Just ten years ago, the only “wired societies” were those of the advanced world. Today, even nations like Brazil, Iran, and Belarus have widespread Internet penetration. With 29% penetration as of end-2009, China has decisively overtaken the US as the nation with the most netizens.

Within the next 2-3 years, the Internet is projected to 1) become much, much faster, by orders of magnitude, and 2) penetration will become near-universal in all but the poorest nations.

11. One example of how the Internet is changing the world – people put their shit up and it is coming back to bite them in the ass. Back from 2005 - Bloggers Need Not Apply.

That’s when the committee took a look at their online activity. In some cases, a Google search of the candidate’s name turned up his or her blog. Other candidates told us about their Web site, even making sure we had the URL so we wouldn’t fail to find it. In one case, a candidate had mentioned it in the cover letter. We felt compelled to follow up in each of those instances, and it turned out to be every bit as eye-opening as a train wreck. [AK: I don't mention my blog on these occasions unless what I've written there is directly relevant to it. That said, I make absolutely no effort to hide my online work - nor would I ever consider doing it]

We’ve all done it — expressed that way-out-there opinion in a lecture we’re giving, in cocktail party conversation, or in an e-mail message to a friend. There is a slight risk that the opinion might find its way to the wrong person’s attention and embarrass us. Words said and e-mail messages sent cannot be retracted, but usually have a limited range. When placed on prominent display in a blog, however, all bets are off. …

It would never occur to the committee to ask what a candidate thinks about certain people’s choice of fashion or body adornment, which countries we should invade, what should be done to drivers who refuse to get out of the passing lane, what constitutes a real man, or how the recovery process from one’s childhood traumas is going. But since the applicant elaborated on many topics like those, we were all ears. And we were a little concerned. It’s not our place to make the recommendation, but we agreed a little therapy (of the offline variety) might be in order. …

You may think your blog is a harmless outlet. You may use the faulty logic of the blogger, “Oh, no one will see it anyway.” Don’t count on it. Even if you take your blog offline while job applications are active, Google and other search engines store cached data of their prior contents. So that cranky rant might still turn up. [AK: This is really stating the obvious]

The content of the blog may be less worrisome than the fact of the blog itself. Several committee members expressed concern that a blogger who joined our staff might air departmental dirty laundry (real or imagined) on the cyber clothesline for the world to see. Past good behavior is no guarantee against future lapses of professional decorum. … [AK: I would suggest Tribble's department go the whole nine yards and ban the Internet in their workplace. I mean past good behavior is no guarantee that someone wouldn't go over to blogger.com and start up a blog within 5 minutes. Even better, we wouldn't have to read his parochial diatribes]

We’ve seen the hapless job seekers who destroy the good thing they’ve got going on paper by being so irritating in person that we can’t wait to put them back on a plane. Our blogger applicants came off reasonably well at the initial interview, but once we hung up the phone and called up their blogs, we got to know “the real them” — better than we wanted, enough to conclude we didn’t want to know more. [AK: Likewise, this is enough for me to conclude that I don't want to work with or study under Tribble and his ilk either. So we do each other a favor ;) ]

Ivan Tribble is the pseudonym of a humanities professor at a small liberal-arts college in the Midwest.

The anonymous beigeocrat who wrote this article is both 100% correct and an excellent reason to blog under one’s own name.

It’s true that associating your real-life “True Name” with the writings, rantings, and ravings of an online avatar may potentially result in real-life consequences. Unsuccessful job applications, denunciations, and other Kafkaesque nightmares are distinct possibilities. (We live in a society that likes to pretend it’s free, even makes a religion of it, whereas in reality it is just a multitude of centrally planned corporate dictatorships and professional guilds). Surely it’s best to conform, get yourself a nice cushioned job, and pursue the American Dream of ever bigger living boxes and higher-horsepower wheeled boxes with Stakhanovite fervor?

That is what most people do – the premeds with no life except studying, the grad students desperately seeking tenure, the office robots who don’t make it to the top of the corporate pecking order, all in thrall to the Tribbles of the world. But is this really a free, or even satisfying, existence?

I too was under the System’s spell until about a year and a half ago (I assume the timeline based on when I dropped my anonymity). I now realize – true, still more in theory than in practice – that expending great efforts on spinning the careerist hamster wheel is pointless, even idiotic (far better to own the wheels and hamsters yourself). I also realize that the world now has so many hamsters and so many wheels that sustaining them far into the future is probably unrealistic. I am also thankful that I’ve come to these conclusions in my early 20′s, rather than in my 40′s, a time when the same realizations tend to cause midlife crises… Real freedom only begins with freedom from fear.

Incidentally, that is why I respect people who are unafraid to tell it like it is under their true names (e.g. Leos Tomicek), even when I don’t agree them on most things (e.g. Craig Pirrong).

[Zaporozh'e Cossacks writing a letter to the Sultan by Ilya Repin].

I guess I’m rambling now, displaying a lack of focus to the search committee picking over this entry. Back on topic. Leaving aside questions of principle, I don’t even think that Tribble is correct in his practical conclusions that blogging is almost always bad for job applications, etc. If you annoy someone with your Russophile or doomer views*, big deal – you don’t get the position (one out of at least hundreds of others), and you are the better off for it – i.e. you won’t have to deal with a judgmental, opinionated boss. However, every so often your views will find a surprisingly warm reception, allowing you to establish a strong, friendly rapport based on common values with your prospective employers and colleagues.

Finally, the source of Tribble’s critique of public blogging comes from his infatuation with the traditional academic establishment, which is very conservative and mafia-like in its cliquishness. The democratic Internet, which eliminates the need for the current, broken system of peer review, and gives voice to organic intellectuals as never before, is viewed with deep suspicion. No wonder. I’ve blogged for two years as a hobby, and I already managed to get cited on Google Scholar with absolutely zero effort on my part. Such possibilities must be immensely frustrating to the old school who have to jump through the traditional hoops. But they are losing the war. As the Internet becomes ever more ubiquitous in our lives, and as limits to growth constrain the traditional, bureaucratized academic system, it will be bloggers and amateur enthusiasts, eccentrics and organic intellectuals, who will take over as the driving force behind social and cultural progress (though probably not technical R&D).

* That said, I probably wouldn’t recommend going public with extreme and unpopular views, such as neo-Nazism, “race realism”, or political Islamism (fundamentalist Christianity is totally cool though). Perhaps I’ll yet regret writing about Green Communism and ecotechnic dictatorship. ;) Then again, one can always take up sustenance permaculture or sail off in a boat.

12. Turkey watch. Zavtra.com.ua: Turkey might activate its relations with Russia in retaliation to US (recognition of Armenian genocide). Turkey’s interests are diverging from those of the US on a range of issues, causing it to edge a bit closer to Russia.

That said, there’s absolutely no point in speaking about a solid alliance. This Eurasianist fantasy is just that, a fantasy. Russia and Turkey simply have too many potential clashes of interests (the Balkans, the Caucasus, the Black Sea, and Central Asia), which will eventually emerge into prominence because they are both rising Powers.

What is more likely are temporary marriages of interest, such as what we have now. Turkey might be interested in this to free up resources for increasing its influence over Iraq, Syria, the Balkans, and former-Soviet Central Asia; Russia will be interested in freeing up resources for its own geopolitical projects, i.e. reasserting hegemony over the Caucasus. Once the new Russian and neo-Ottoman Empires are both consolidated, their relations will deteriorate.

13. China watch. Beijing seeks a shift in geopolitics

More importantly, the Chinese Communist Party (CCP) leadership is gunning for a paradigm shift in geopolitics, namely, new rules of the game whereby the fast-rising quasi-superpower will be playing a more forceful role. In particular, Beijing has served notice that it won’t be shy about playing hardball to safeguard what it claims to be “core national interests”. …

Likewise, Central Party School strategist Gong Li said Beijing should “not yield a single inch” as far as matters such as Taiwan and Tibet are concerned. Professor Gong said while China is not yet a superpower that can throw its weight around on a global scale, Beijing should “brandish the sword” in areas affecting the country’s “core values and major interests”.

According to Yang Yi, a well-known scholar at the Beijing-based National Defense University, China has been thrust to the forefront of the global stage by force of circumstances. “Under such circumstances, it’s better that we take the initiative and be proactive and creative,” said General Yang. When faced with challenges and provocations, China should “show the flag and hit hard [at opponents]“, he added. “While we may suffer temporary damage, it is imperative that our opponent be dealt a blow that it cannot sustain.”

14. Robert Amsterdam writes about The Rise of the Franco-Russo Axis. I don’t agree with this characterization – as with Turkey and even Germany, it is more a temporary marriage of interests. France gets snubbed by the US, e.g. the most recent - France vows retaliation against US in air tanker dispute. Though volatile Sarkozy shows his displeasure by acquiescing to major commercial and military deals with Russia, the longer-term analysis suggests that France and Russia will be natural strategic competitors.

This comment by georgesdelatour (arguing that Britain and Russia are natural partners) got me thinking of European geopolitics in the 18th century. A rising Russia, surrounded by non-friendly Poland, Sweden, and Turkey. Friends with Habsburg Austria, and sometimes Prussia and England. Almost always aligned against France, which in turn allies with nations like Turkey and Poland to check Habsburg designs. Italy is disunited and Spain is weak. In essence, Russia’s relations tended to follow a chequerboard pattern – enemies with its neighbors (Turkey, Sweden, Poland), friends with its neighbors’ neighbors (the German states, Austria), enemies with its neighbors to the 3rd degree (France), and friends with its neighbors to the 4th degree (Britain).

As I noted in Europe, The Black Continent, a broadly similar geopolitical structure may appear within the next two decades, albeit with some differences – e.g. modern day Germany is more powerful than Prussia, whereas Habsburg Austria has no modern equivalent; Italy is an independent player; Turkey’s power is rising, rather than declining as with the Ottomans; and the US, though its global empire will probably collapse, will nonetheless remain a very powerful and significant player.

Based on the 18th century precedent, there is ground to believe that Russia and Britain will pursue good relations – especially since Britain will want for gas supplies since it will be suffering an energy crunch by the mid-2010’s. On the other hand, Britain is closely aligned with the US, whose primary goal is to preempt the emergence of a Eurasian hegemon. Since the Russian Empire is reconsolidating itself, this might limit the scope of any Anglo-Russian friendship.

15. Rise of Russian Empire watch. Azarov, close Yanukovych supporter/ POR member, becomes Ukraine’s PM. The new cabinet is dominated by the pro-Russian Party of Regions, with a few independents and smaller party members in the less important posts. The BYT bloc is in the opposition and seems to have reverted to its strident anti-Russian stance; the pro-Russian coalition now in power (POR / Litvin bloc / Communists / some defectors) is currently strong, though potentially unstable.

PS. The new cabinet is also all-male, which is surprising even by the generally low levels of political participation of women in E. European politics. Did Yanukovych get an allergy to all female politicians after his struggle with Yulia? ;)

16. Even more on new Eurasian Empire. Stratfor has a series summarizing Russia’s designs on and activities towards reconsolidating its Eurasian Empire. The analysis is steretypically Stratforish, logical and hard-knuckled realist (perhaps to a fault?). But I essentially agree with it.

See also Vladimir Putin forging ahead with vision of Eurasian empire.

17. Commentator Randy McDonald sent me this link which argues that nothing substantial may come out of the recent Eurasian-integration trends, just as nothing substantial came out of the Union state of Russia and Belarus after 1997. I could potentially sympathize with this view.

However, one major difference between today and the past two decades is that now 1) the West is in rapid decline, whereas 2) Russia’s relative rise is accelerating. Indeed, as suggested by Ferguson above (and numerous times on S/O), the entire global system may now be approaching a discontinuity that kills off today’s (neo)liberal cosmopolitan internationalism and massively reduces American influence. The old rules of the game will be thrown overboard.

Just like in human societies aspiring people flock around the alpha male of the tribe, so all nations like to bandwagon with what they believe is the stronger – or will soon become the stronger – nation. Or as Osama bin Laden put it, “when people see a strong horse and a weak horse, by nature, they will like the strong horse”. From the perspective of nations bordering a resurging Russia in the 2010′s, the new Eurasian Empire will appear to be the strongest horse in their vicinity.

18. Anti-neoliberal rant about Latvia’s economic collapse. You think Greece has problems? Try Latvia.

19. War watch. Indian Su-30 Fleet Expands Still More. A Russian Tragedy – conscript hazing (dedovschina) still influential. China roundup. North Korea Builds An Operating System (cyberwar). A Different World – interesting article about China’s encouragement of out-of-the-box military thinking. The South African Scam – it’s Navy is regionally dominant (no surprise there), but ill-trained. Picture Perfect – India’s military-industrial complex is inefficient.

20. Limits to Growth watch – water shortages. One of the less discussed issues, but one that is easily as significant as peak oil.

PS. I hope to write a review of Pearce’s book When the Rivers Run Dry within the next few weeks.

21. America’s watch / Rise of the Rest / Waning of Pax Americana. Nikolas Gvosdev, a realist, on the BRIC Wall about the waning of Washington’s influence amongst the BRIC democracies.

Secretary of State Hillary Clinton returned empty-handed from Brazil. Neither Foreign Minister Celso Amorim or President Luiz Inacio Lula da Silva were responsive to her arguments for supporting stronger sanctions against Iran.

This shouldn’t have been a surprise. Brazil has long made clear its stance on the Iranian question: it wants proof that Iran is working not on mastering nuclear technologies, but on actually constructing a weapon. … Brasilia is not eager to condemn what it sees as activities that any rising power should have the right to engage in.

But the ramifications go far beyond getting Brazil’s support in the Security Council. Efforts to get a new stronger sanctions resolution are running against not only the expected resistance from China, but reluctance on the part of Turkey to endorse this approach. Meanwhile, India’s private sector shows no real enthusiasm for cutting off commercial relations with Tehran. Instead of showcasing the determination of the “international community,” the Obama administration is facing the reality of a divided world. Even if successful French diplomacy with Russia ameliorates Moscow’s opposition, the current drive for sanctions looks largely like a “Euro-Atlantic” initiative—and if so, it loses a good deal of its punch if half the world chooses to ignore them.

Two years ago, Washington was abuzz once again with the prospects for a “League of Democracies” that would support U.S. global leadership. But in the aftermath of Cyclone Nargis, which devastated Burma/Myanmar, a very clear rift opened up between the democracies of the advanced north and west, which advocated an intervention on humanitarian grounds, and the democracies of the south and east, which proved to be far more receptive to China’s call for defending state sovereignty. In the Doha round of trade talks and in the ongoing climate change negotiations, the leading democracies of the south and east—Brazil, Mexico, South Africa, India and Indonesia among them—have tended to line up with Beijing instead of joining Washington’s banner. …

The rebuff of Clinton in Brasilia this past week did not have to be a foregone conclusion. But it is a dramatic reminder that even the inspirational presidency of Barack Obama is not sufficient to pull the “southern democracies” into a closer partnership with the United States.

See also As NAFTA Growth Slows, Mexico Should Look South.

22. International Women’s Day.

24. Other stuff.

24. Liberasm watch. Valeria Novodvorskaya: Normal Collaborationist. (Leos)

]]> http://www.sublimeoblivion.com/2010/03/13/news-4/feed/ 18 Sublime News #3 http://www.sublimeoblivion.com/2010/03/06/news-3/ http://www.sublimeoblivion.com/2010/03/06/news-3/#comments Sat, 06 Mar 2010 20:00:47 +0000 AK http://www.sublimeoblivion.com/?p=3718 Continue reading →]]> 1. Over the long-term, it is the less-noticed things that generally come to be regarded as the most important. The rise of China, not the war on terror. Peak oil and the declining EROEI of our energy sources, not stock market bumps and falls. And so on. In this spirit, the recent NATO exercises in the Arctic may be a portent of greater things to come. Nine thousand NATO troops from 14 countries are taking part in the Cold Response 2010 exercises off northern Norway, with the participation of Swedish soldiers. They are not new, but they are being expanded in scale in recent years.

The audience to these exercises is obvious – Russia. The melting of the Arctic sea ice is opening up new hydrocarbon deposits and making polar trade routes increasingly viable. This is already unleashing a scramble for the Arctic on the part of nations like Russia, Canada, the US, China, Denmark, and Norway. Part of this new competition will overspill into the military sphere. These exercises are a good example of the geopolitical feedback loops that will constrain hydrocarbon extraction volumes below the level dictated by geology in the absence of political factors.

The bigger picture is that as the world’s hydrocarbon and mineral resources begin to run scarce, there will be more and more resource wars – of which Iraq 2003 was only the first and most prominent. In particular we can expect intensified China – West competition over Africa and the Middle East, and Russia – West competition over the Arctic and Caucasus.

2. Washington is locking down its influence over Romania, with an agreement to station GBI missiles in the country (the previous candidate, Poland, was abandoned, and given Patriot batteries and F-16′s instead). This follows on 1) Moldova’s tilt away from Moscow after the defeat of Voronin’s Communist Party in September 2009, in favor of Romania, and 2) Ukraine’s partial return into the Russian imperial fold. There are also American plans to position warships with Aegis/SM-3 in the Black Sea, ostensibly to protect Europe from Iranian IRBM’s.

Needless to say, Russia is none too happy about this. An expanded American presence in the Balkans may complicate any future intervention in the Caucasus, e.g. a renewed conflict with Georgia or helping Armenia should it be attacked by Azerbaijan. On the larger strategic level, just as Russia is reasserting its influence over core former-Soviet territories, a cordon sanitaire is being constructed around its reemerging empire (albeit this time much further to the east than the old Iron Curtain). Just this last week, the US Navy conducted exercises with the Georgian Navy and announced plans for flight training exercises in the Baltics later in the month.

Equally needless to say, at present Russia does not have any way of arresting Washington’s slow march back to containment. On the other hand, it does have the capability to undermine an increasingly fragile Pax Americana elsewhere. It can render meaningless any US sanctions on Iran’s gasoline imports, and it could even sell the Islamic regime the S-300 anti-aircraft system and information networking equipment, anti-ship cruise missiles, and sea mines that will enhance its chances of closing down the Strait of Hormuz to oil shipping in the case of war with the US.

This is not to imply that we are already plummeting into a new Cold War. But the foundations and trends for it are certainly there, and growing stronger.

3. Quick note on Ukraine. Yanukovych is now firmly entrenched as President of Ukraine, after Tymoshenko’s (loser of the recent elections) coalition government collapsed. Though he has made symbolic overtures to the West, such as visiting Brussels before Moscow, his actions indicate that Ukraine will be drawing a lot closer to Russia.

4. NATO is, of course, no longer near the monolithic anti-Soviet bloc it once was – not surprisingly, given the relative decline of its lynchpin. In particular, there are (very faint) allusions to the Franco-Russian alliance of 1892 in Medvedev’s Monday visit to Paris to talk with Sarkozy about 1) buying four Mistral C&C helicopter carriers, 2) the usual commercial deals, 3) more French participation in Russia’s gas industry, and 4) Russia’s proposed pan-European security treaty that would displace the old Cold War arrangements towards something closer to the even older Concert of Powers.

As usual, we must not overstate the short-term significance. France remains firmly entrenched within its alliances with Germany and the US, while Germany remains Russia’s primary European partners. Over the longer-term, things can change. Germany may soon start returning to sphere-of-influence-politics, while a post-collapse USA is likely to become dominated by isolationist tendencies. In this situation, stronger ties between France and Russia will be in both nations’ geopolitical interest.

5. Collapse of Pax Americana watch. See this Russia Today “Crosstalk” hosted by Peter Lavelle, in which the speakers compare the USSR in the late 1980′s and the US today.

As I have argued before, the similarites are many.

6. USA watch. Wall Street’s Bailout Hustle by Matt Taibbi details the scams being played by the investment banks on the taxpayers. Personally, I’d reserve more of the blame for the government. Bankers are supposed and expected to be greedy, politicians are the ones *supposed* to look out for their constituents. Barack O’Bush signs extension to the Patriot Act.

The crisis of the regions (Ambrose Evans-Pritchard) - just as Europe has its Latvias, Greeces, Spains, and Irelands, so the US has its Floridas, Arizonas, Michigans, New Jerseys, Pennsylvanias, and Californias.

The Economic Policy Institute says states face a shortfall of $156bn in fiscal 2010. Most are banned by law from running deficits, so they must retrench. Washington has provided $68bn in federal aid, but that depletes the Obama stimulus package.

7. In my last Sublime News #2, I explained my initial lack of mention of the Dubai assassination of a Hamas operative by Mossad was due to its lack of significance. This is not the case for the exposure of Israeli spy rings in Lebanon.

WITH a lot less exposure in the world’s press than it got for its recent Dubai operation, Israel has quietly suffered a string of setbacks in Lebanon, a front-line state with which it has often been at war. Lebanon’s security service says that since November 2008 it has broken up no fewer than 25 Israeli spy rings. The reported arrest this month of a colonel in Lebanese army intelligence, identified solely by the initials GS, brings the number of those charged to 70-plus; 40 of them are in Lebanese police custody. …

Aside from the alleged spies, the Lebanese say they netted fancy surveillance and communications gear disguised, among other innocuous things, as Thermos flasks, canisters of motor oil and battery chargers. The gadgetry may be what gave the game away. Security sources hint that France or perhaps Russia helped the Lebanese by supplying sophisticated systems to monitor and analyse the telecoms data. The Lebanese then homed in on suspicious signals.

Another clue may have pointed to the importance of the signals trail. Last summer, as the spies were being rounded up, a senior man in Unit 8200, the section of Israeli military intelligence tasked with eavesdropping on Israel’s enemies, shot himself in his office. Colleagues blamed “unrequited love”.

I noted back at the beginning of the year that there is a significant chance of a new Israeli-Hezbollah war in 2010. Since the same basic conditions are still in place (standoff with Iran, no prospect of successful sanctions), this severe blow to Israel’s intelligence assets in Lebanon will give Israel an added incentive to launch a demonstrative strike against Iran’s proxy in Lebanon.

8. More on Russia’s demography – the site Demoscope summarizes the demographic results of 2009 (in Russian).

9. The demographic armageddon that no neocon dare name (or: Poland is doomed!) by Mark Adomanis @ True Slant. He correctly points out the illogicality of harping on about how Russia’s demography will lead to its doom, while ignoring Poland‘s even direr straits. Nonetheless, I disagreed with him that Poland is the demographic sick man of Europe. Below is my first reply, which generated an ongoing conversation.

I don’t agree with you that Poland (or Russia) is necessarily worse off than Western Europe, or more precisely, the Teutonia (Germany / Austria) and the Med (Italy / Iberia / Greece) parts of Western Europe. (Obviously France, UK and Scandinavia are better off).

Both Poland’s and Russia’s fertility collapses occurred in the early 1990’s, and since the mid-2000’s both have seen an appreciable and accelerating rise in fertility (especially Russia). That is because women postponed having children during the unstable transition years, but are now beginning to have them in a race before it becomes physiologically impossible.

(Incidentally, I agree with you that Russia is better off than Poland. Not only is Russia’s real TFR now higher, but its desired TFR is higher (2.5 vs 2.1 for Poland), which makes me think that Russia will approach Scandinavian levels of TFR by 2015 (around 1.7-1.8) whereas Poland will remain stuck at 1.4-1.5.)

In comparison, in Teutonia in the early 1970’s and in the Med in the 1980’s, the TFR fell to below 1.5 and has remained stuck there ever since. This means that a generation has already passed, their current child-bearing generation is substantially smaller than the last one and as such they already have no hope of averting big natural population decrease.

So basically, the likes of Russia and Poland still have a “window” of 10 years to raise their TFR back up to sustainable levels. This window has already closed for Germany and Italy.

10. My work on Russia’s demography was publicized by Douglas Muir at A Fistful of Euros, who also described S/O as “an interesting, provocative labor of love” and a “macro-look at Russia with a side order of challenging speculation”. Well put and thanks!

11. I also got a pleasant surprise on discovering one of my posts is cited on Google Scholar, in the paper Chinese among Others: Emigration in Modern Times by Philip A. Kuhn from November 2009.

12. Ed Hugh summarizes the world economy in The “Three Speed” Global Manufacturing Recovery Continues in February.

I’ll note that 1) the Asian region, as well as Brazil and South Africa, show fast manufacturing recovery and continue to decouple from the industrialized nations’ unwinding, and 2) as of now Russia looks its stuck in an L-shaped rut, so perhaps the 6.2% growth predicted by Citigroup for 2010 is too optimistic.

13. Energy blast. Faster than expected well inflation over Ghawa’s new developments. Perhaps we’ll nuke oil shale fields instead. ;)

14. Climate blast. Lou Grinzo of the excellent Cost of Energy blog compiles the latest in AGW denier extremism. (This is an example of delayed reactions to overshoot, and of the neglected political factor in Limits to Growth whose importance should not be understated).

I’ve become convinced that we’re on a collision course, not just with devastating human impacts from climate change and peak oil, but also with acts of violence committed by the most militant and deluded of the climate change deniers. The bullying has reached astonishing levels, and as much as I would hate to see anyone on any side of this issue be physically harmed or “merely” intimidated, it’s undeniably true that intimidation is already happening and violence can’t be far off.

See also The Rise of Anti-Science Bullying.

Meanwhile, nature couldn’t care less about our affairs, least of all those of reality-deniers. Arctic seabed methane stores destabilizing, venting – this methane trigger is a potential feedback / tipping point that could catapult the climate system into the land of no return.

15. Tech blast. Progress in materials science thanks to development in quantum mechanics. Chickenosaurus: Canadian scientist says he can create dinosaurs from chickens – since we are so hell-bent on recreating Jurassic climatic conditions, might as well accompany it with the period-authentic megafauna. Skinput Turns Any Bodily Surface Into a Touch Interface.

16. War blast. Littoral warriors too pusillanimous to kick pirate ass. Under current plans India to acquire dominant armored force in Eurasia by 2020; not as useful as it sounds due to decreasing utility of tanks in 4GW. North Korea’s catabolic collapse continues. First S-400 battalion is deployed around Moscow.

Tomgram: William Astore, The U.S. Military’s German Fetish. I disagree with most of it.

17. Turkey watch. What’s Really Behind Turkey’s Coup Arrests? (Soner Cagaptay). Apparently, Islamist elements in Turkish politics are asserting supremacy over the secular military. I would appreciate if any Turks or Turkey-watchers could comment.

A mountain has moved in Turkish politics. All shots against the military are now fair game, including those below the belt. The force behind this dramatic change is the Fethullah Gülen Movement (FGH), an ultraconservative political faction that backs the ruling Justice and Development Party (AKP). The FGH was founded in the 1970s by Fethullah Gülen, a charismatic preacher who now lives in the United States but remains popular in Turkey. It is a conservative movement aiming to reshape secular Turkey in its own image, by securing the supremacy of Gülen’s version of religion over politics, government, education, media, business, and public and personal life.

To some, it might appear that the newfound freedom to criticize the military proves that Turkey is becoming a more liberal democracy. But the truth is that Turkey has replaced one “untouchable” organization for another, more dangerous, one. Criticizing the Gülen movement, which controls the national police and its powerful domestic intelligence branch, and which exerts increasing influence in the judiciary, has become as taboo as assailing the military once was. Today, it is those who criticize the Gülen movement who get burned. …

Illegal wiretaps and arbitrary arrests serve to intimidate the public, not prosecute criminals. Because of Ergenekon, Turks who oppose the AKP and the Gülen movement fear to speak their minds freely. If you have doubts, call a friend in Turkey and ask for an opinion of the case. Your friend will respond with details of the weather.

The military, which opposes the AKP and the Gülenists because it sees itself as the virtual guardian of Turkey’s secular polity à la Ataturk’s vision, serving as a bulwark against religion’s domination over politics and government, has become the primary target of this round of politically motivated arrests. …

With the Gülen movement in control of large portions of the government apparatus and running a political witch hunt against its opponents through the Ergenekon case, Turkey is taking a dangerously authoritarian turn. A personal friend and politician from the former Soviet Union once said, “A police state emerges not when the police listen to all the citizens, but when all the citizens fear that they are being listened to.” Welcome to the new Turkey: If you listen carefully, you can hear the political ground shifting below your feet.

PS. I did ask a Turk over Facebook. He said “Ergenekon case is totally a lie and prisoners of this case are innocent” and “Turkish government and preacher named Fethullah Gülen are liar”.

18. China watch. See Question and Answer Session With Foreign Minister Yang Jiechi At Munich Security Conference (h/t Nikolas Gvosdev) for a summary of China’s views on the injustice of US arms sales to Taiwan, the Google affair, and Iran sanctions.

In other news, growth in Chinese military spending falls to 7.5% in 2010, or around 80bn $. As I frequently pointed out is the case for Russia and the US, real military spending is almost always substantially larger than the official figures, sometimes several times over. Taking into account the GDP deflater would provide a real military spending figure of twice that, i.e. 150-200bn $ (a valid adjustment since the bulk of Chinese military product is domestic), and adding in the normal black budgets, structural militarization, etc, will probably yield something in the region of 300-400bn $.

19. Brazil watch. A few months ago the Economist (world’s sleaziest magazine) had a long feature on Brazil takes off.

Now that scepticism looks misplaced. China may be leading the world economy out of recession but Brazil is also on a roll. It did not avoid the downturn, but was among the last in and the first out. Its economy is growing again at an annualised rate of 5%. It should pick up more speed over the next few years as big new deep-sea oilfields come on stream, and as Asian countries still hunger for food and minerals from Brazil’s vast and bountiful land.

Good so far. It’s newly-discovered offshore oil resources will be a boon in the post-peak oil world, as will its other natural riches.

And, in some ways, Brazil outclasses the other BRICs. Unlike China, it is a democracy. Unlike India, it has no insurgents, no ethnic and religious conflicts nor hostile neighbours. Unlike Russia, it exports more than oil and arms, and treats foreign investors with respect.

And the ideologizing begins by the third paragraph.

Just as it would be a mistake to underestimate the new Brazil, so it would be to gloss over its weaknesses. Some of these are depressingly familiar. Government spending is growing faster than the economy as a whole, but both private and public sectors still invest too little, planting a question-mark over those rosy growth forecasts. Too much public money is going on the wrong things. The federal government’s payroll has increased by 13% since September 2008. Social-security and pension spending rose by 7% over the same period although the population is relatively young. Despite recent improvements, education and infrastructure still lag behind China’s or South Korea’s (as a big power cut this week reminded Brazilians). In some parts of Brazil, violent crime is still rampant.

I’ve hi-lighted the fundamental reason why Brazil is very unlikely to become a developed nation within the foreseeable future, unlike east-central Europe, Russia or even China – …”in the 2006 PISA science assessment, only 15.2% of Brazilians possessed skills beyond those needed for purely linear problem-solving, compared with 47.6% of Russian and 51.3% of American students. A country needs to have sizeable cadres of skilled workers to move into added-value manufacturing or complex services. Brainier nations will also assimilate technology more easily and thus their economic “rate of convergence” to developed-world status will be that much faster.” Historically, education is the elixir of growth and the only nations to have truly “caught up” with the developed world in the past fifty years – Japan, Korea, Taiwan, Singapore, … – all had superior education systems.

Nevertheless, the country’s course seems to be set. Its take-off is all the more admirable because it has been achieved through reform and democratic consensus-building. If only China could say the same.

More irrelevant ideologizing. As I remember noting in one of my Tweets, the Economist is far more useful as a portal into the thinking processes of the Western neoliberal elites than as a source of objective analysis.

(Furthermore, Brazil isn’t even all that cuddly liberal).

20. This has been a productive week for observers of reality-disconnected Russophobes and their liberast lackeys.

First off the bat (and I do mean bat), Yulia Latynina, the one who thinks poor people shouldn’t vote. Her latest nuggets of wisdom / Ру. (h/t poemless):

I don’t like human rights, environmental activists or the Olympic Games. You might call me crazy for this belief. After all, these three things are beneficial to mankind, and most of their participants don’t make a lot of money.

Maybe I have been shaped by the fact that I was born in the Soviet Union, a country that was determined to bring peace and happiness to the whole world, and I’m a bit distrustful of these “do-gooders.” I prefer the guys who work for a profit, provided that the country is built in such a way that they contribute to the common good. …

And consider the environment issue. Millions of people are dying from environmental poisons, acids and heavy metals. Who could argue against the fight against pollution? But the Kyoto Protocol does not limit pollutants. It limits completely harmless CO2. The concentration of CO2 in the Jurassic or Devonian periods was from seven to 12 times greater than today. And this is precisely because CO2 is an integral part of the biosphere. It can also be the source of a lucrative trade in carbon quotas. …

The global bureaucracy wants to succeed where the Soviet Union has failed. It is anxious to help the poor and save the planet — not by discovering and making a profit, but by regulating and distributing.

Second, Masha Karp, gold medal winner for Russophobe cliche, with her KGB TV (sic) opus about Russia Today.

Despite the channel’s original name, things that are really happening in Russia today, such as the suppression of free speech and peaceful demonstrations, or the economic inefficiency and corrupt judiciary, are either ignored or their significance played down. Instead, the “Explore Russia” slot offers pretty pictures glorifying the country’s cuisine, arts and crafts and colourful history. …

… It is this complex image of Russia — claiming to share the West’s “ideology” but not subscribing to its values — that is tirelessly promoted by Russia Today, and also by Western PR agencies hired for this purpose, by selected foreign journalists invited to the Valdai Club, where they are wined, dined and fed the Russian perspective on the world, by foundations to promote Russian language and culture and by various less visible activities such as organising abusive postings on foreign newspaper websites. Of course, instead of spending a fortune on all this, the Kremlin could try and change the image of Russia just by changing its own ways. But that doesn’t seem very likely.

Reality check. Every serious nation spends resources on improving its international image – if anything, Russia was came fecklessly late to this game. No self-respecting nation karps on about its failings, real or imagined, much as their detractors might wish to the contrary.

Third, Russian Anti-Americanism: A Priority Target for U.S. Public Diplomacy by Ariel Cohen. Love the juxtaposition of the quasi-academic (quackademic?) layout and the litany of contradictions, unsupported assumptions, and meaningless beigeocratic blather in the content. One of Cohen’s suggestions:

Use public diplomacy strategically to counter the flood of anti-American propaganda from the highest levels of the Russian government. U.S. public diplomacy should focus on reaching ordinary Russians. These efforts should include international broadcasting, Internet campaigns, the launch of a new Russian satellite channel, Web 2.0 social networking, print media, and revamped academic, student, andbusiness exchange programs.

“Web 2.0 social networking”? Really? Why not full-immersion virtual reality interaction while you’re at it?

Cohen assumes that Russian disillusionment with the West came about because of the (mythical) Kremlin clampdown on information and propaganda. In reality, this is very unlikely to be the case since opinion polls show that it is the young, best-educated, and most Internet-savvy Russians – i.e., those who know the West best in Russia – who are also the most dismissive of the West’s superiority complex.

Fourth, as noted by A Good Treaty, neocon sports commentary is amazingly stupid. From the hallowed pages of the Wall Street Journal:

This thought runs against centuries of Russian tradition, but why not try to measure Russia’s greatness by its ability to build a free and prosperous country, a good global citizen at peace with its neighbors? This kind of Russia might also fare better at the Olympics. The four leading medals winners in Vancouver are free-market democracies.

Obviously East Germany was the most democratic nation in history. I mean, it even had the word “democratic” in its name!

21. More inanity from the WSJ. Free market fundamentalism saved Chile from earthquake apocalypse, as per intolerable hack Bret Stephens. Maybe not.

22. Mark Adomanis at True Slant is churning out a stunning, even prodigal, amount of quality output on Russia. Right now, he is on a Da Russophile-sque “myth-busting” roll, exposing the most incompetent Russia analysts / Russophobes (Stephen Blank, Leon Aron), attacking self-hating limp-wristed liberasts like Nemtsov, and defending the “Putin economic model” (at least for being better than the free-for-all 1990′s). A Good Treaty is another Russia blog off to an excellent start, with short and engaging posts on Stalin’s legacy, Latynina’s insanity, and meeting with Kozlovsky.

I wonder how long they’ll last. The frequent pattern I see with good new “Russophile” blogs goes something like the following: Week 1 = loads of well-written, passionate posts; Month 1 = enthuasism remains, output drops to normal; Year 1 = by now many of them get tired of commenting on the same topics, refuting the same myths, and making ridiculing the same cliches, and die of ennui. Examples: Fedia Kriukov, Konstantin, Kirill Pankratov, Moscow Tory, Parallax Brief. Even Da Russophile after a fashion – my blog is now Sublime Oblivion, and Russia is no longer it’s defining focus.

23. @ Russophones / Google Translate users, demography of late Soviet / RF Jewry in latest issue of Demoscope journal.

24. This should be S/O’s theme song. ;)

25. Heroic Latvian hacker calling himself “Neo” steals tax records and exposes corruption in the super-Depressed Baltic state.

26. More humor:

27. Religion watch. Catholic Church rehabilitates Marx, so please no more talk of godless commies. ;) (h/t poemless)

]]> http://www.sublimeoblivion.com/2010/03/06/news-3/feed/ 18 Sublime News #1 http://www.sublimeoblivion.com/2010/02/22/news-1/ http://www.sublimeoblivion.com/2010/02/22/news-1/#comments Tue, 23 Feb 2010 06:41:31 +0000 AK http://www.sublimeoblivion.com/?p=3708 Continue reading →]]> I am beginning a new post category, Sublime News, in which I collate and comment on news bits and pieces that I find interesting over the past week. Whatever I write over the week will be automatically published every Saturday, 12pm (California time). This first post will be exceptional in that it will cover a longer prior timespan.

1. Rising tensions over the Falkland Islands between Argentina and the UK, following the discovery of oil in the region and Britain’s decision to start exploration drilling. Contrary to media hype, war is not imminent; even though Britain, like the US, suffers from “imperial overstretch” and a military-industrial “death spiral”, it is still far, far more powerful than Argentina. The Royal Navy has the world’s second best “power projection” capabilities (amphibious, logistics, aeronaval). Argentina’s military power, never impressive to begin with, has only stagnated since 1982.

On the other hand, this episode does represent two important things. First, the geopolitical factors that constitute negative feedback loops to the resource extraction sector that supports the global industrial system. For instance, as oil production peaks, we can expect an accelerating scramble for the remaining reserves. This may yield short-term benefits for the stronger Powers that will emerge victorious in the neo-colonial gunboat wars of the future, but will accelerate the decline at the global level. Second, we find that most Latin American countries expressed their support for Argentina, even including regional rivals like Brazil and Chile. This illustrates the rising prominence of the “World Without the West” / “Clash of Civilizations” paradigms that will replace neoliberal internationalism in the coming age of scarcity industrialism.

However, I must emphasize that these are incipient trends, not current realities. For now, the overwhelming fact on the ground is that 1) Argentina is weak and 2) it can only count on rhetorical support from its neighbors, not military (Brazil has no particular interest in allowing Argentina to become a potential challenger to its regional hegemony). However, many things can change within a decade. As I wrote earlier, Britain faces a panoply of problems – fiscal, debt, energy, separatism, etc – that will critically undermine its international power, including the ability to sustain the current scope of its armed forces. (In this respect, it is essentially a microcosm of the United States). Meanwhile, though it has plenty of its own problems, Argentina has shown signs that it has outgrown out of its traditional fiscal problems. Following six years of very fast growth, it was little affected by the 2008 economic crisis, its public finances are not unduly bad by global standards, and looking further ahead, its agricultural and natural resource wealth stand it in good stead for the coming age of scarcity industrialism.

If Argentina pursues a rational military procurement and modernization program (amphibious ships, cruise missiles, modern diesel subs, UAV’s, etc) - and assuming it is not once again derailed by the mismanagement and corruption that made it into a unique specimen of a country that went from “developed” to “developing” status after 1950 – then the military balance may swing sufficiently wide in its favor as to enable it to contemplate a successful military solution to the Las Malvinas issue by 2020.

2. Shortly after penning an anti-guvmint screed, Joe Stack crashed his plane into the IRS building in Austin, Texas, in a symbolic copycatting of 9/11. Though legally an unequivocal terrorist (as defined by the PATRIOT Act), he is fast becoming a folk hero amongst the Tea Partiers.

Though I don’t care to comment much on the ethical and moral issues, this does shed light on pertinent current trends. Foremost, the growing disillusionment with the System, the increasing perception by the citizenry that the United States is becoming a “hypertrophied state” hijacked by connected elites, who use it to cushion themselves with corporate socialism while pushing capitalism on the rest. In terms of the Belief Matrix, the country is beginning to lose belief in itself (“rejection of tradition”) and move away from rational-liberalism towards the illiberal populism and patrimonialism that is the common refuge of many post-collapse societies. Also recalls this line from Tainter’s Collapse of Complex Societies:

According to RM Adams, “By the fifth century, men were ready to abandon civilization itself in order to escape the fearful load of taxes”.

Would this action have any real effect? Rehashing the arguments of proponents of the “propaganda of the deed”, Baudrillard would argue that it would have a profound symbolic impact.

The terrorist hypothesis is that the system itself suicides in response to the multiple challenges of death and suicide. Neither the system, nor power, themselves escape symbolic obligation -and in this trap resides the only chance of their demise (catastrophe). In this vertiginous cycle of the impossible exchange of death, the terrorist death is an infinitesimal point that provokes a gigantic aspiration, void and convection. Around this minute point, the whole system of the real and power gains in density, freezes, compresses, and sinks in its own super-efficacy. The tactics of terrorism are to provoke an excess of reality and to make the system collapse under the weight of this excess. The very derision of the situation, as well as all the piled up violence of power, flips against it, for terrorist actions are both the magnifying mirror of the system’s violence, and the model of a symbolic violence that it cannot access, the only violence it cannot exert: that of its own death. This is why all this visible power cannot react against the minute, but symbolic death of a few individuals.

But in this case Trotsky’s analysis is the more persuasive.

But the disarray introduced into the ranks of the working masses themselves by a terrorist attempt is much deeper. If it is enough to arm oneself with a pistol in order to achieve one’s goal, why the efforts of the class struggle? If a thimbleful of gunpowder and a little chunk of lead is enough to shoot the enemy through the neck, what need is there for a class organisation? If it makes sense to terrify highly placed personages with the roar of explosions, where is the need for the party? Why meetings, mass agitation and elections if one can so easily take aim at the ministerial bench from the gallery of parliament?

In our eyes, individual terror is inadmissible precisely because it belittles the role of the masses in their own consciousness, reconciles them to their powerlessness, and turns their eyes and hopes towards a great avenger and liberator who some day will come and accomplish his mission. The anarchist prophets of the ‘propaganda of the deed’ can argue all they want about the elevating and stimulating influence of terrorist acts on the masses. Theoretical considerations and political experience prove otherwise. The more ‘effective’ the terrorist acts, the greater their impact, the more they reduce the interest of the masses in self-organisation and self-education. But the smoke from the confusion clears away, the panic disappears, the successor of the murdered minister makes his appearance, life again settles into the old rut, the wheel of capitalist exploitation turns as before; only the police repression grows more savage and brazen. And as a result, in place of the kindled hopes and artificially aroused excitement comes disillusionment and apathy.

3. Yushenko goes out with a provocative bang, making Galician nationalist / Nazi collaborator Stepan Bandera into a “Hero of Ukraine”. With Tymoshenko’s challenge to the election results dismissed, the new Ukrainian President is now Yanukovych, who represents the Russophone, pro-Russian eastern and southern regions and Donbass oligarchs. This should come as no surprise to S/O readers, given that I predicted Yanukovych would win the second round from the beginning. (Pic h/t @ Ukrainiana).

According to the election results, the final tally was Yanukovych 49%, Tymoshenko 45%. This was stunningly similar to the result I predicted from analyzing which other candidates’ supporters would vote for Mr. Blue or the Gas Princess.

Adding up these figures, Yanukovych gets 50% of the votes, whereas Tymoshenko gets 46%.

The only question now remaining is how fast Yanukovych will now move Ukraine back into Russia’s orbit, perhaps starting with entry into the Russia-Belarus-Kazakhstan customs union.

4. The Airborne Laser (ABL), mounted on a modified Boeing 747, finally succeeded in “killing” a low-tech Scud missile in testing. Yes, not very impressive so far. The range was short and the second test failed anyway. But the regular mechanical breakdowns of the first WW1 tanks, far from invalidating the concepts of armored warfare, were instead portents of the future. What we are seeing is nothing less than the dawning of the age of automated laser weaponry.

5. Its official. Russia’s population grew by 23,300 souls in 2009, for the first time since 1995. Though the rate of natural increase remained slightly negative for Russia as a whole (the Siberian and Urals Federal Regions actually saw positive natural population growth for the first time in 19 years), this was more than compensated for by immigration.

This improvement was in large part thanks to an impressive increase in the life expectancy, which rose to 69 years in 2009 – almost as high as in 1963-68 (before the alcoholism epidemic) and 1986-91 (Gorbachev’s anti-alcohol campaign. Birth rates also increased by 3%, hysterical Russophobe predictions of a crisis-induced “abortion apocalypse” to the contrary.

This of course should come as no great surprise to S/O readers, since back in mid-2008 my projections indicated that:

  1. Russia will see positive population growth starting from 2010 at the latest.
  2. Natural population increase will occur starting from 2013 at the latest.
  3. Russia’s total life expectancy will exceed 68 years by 2010 and reach 75 years by 2020.

Now according to my models, in the case of a total fertility rate of 1.5 (i.e., the same as in 2008, when it was 1.49, so that is actually discounting any further increases) and assuming a very modest life expectancy rise (74 years by 2025 – it is already close at 69), and 300k annual migration (currently around 200-250k), “the population size will remain basically stagnant, going from 142mn to 143mn by 2023 before slowly slipping down to 138mn by 2050″. Of course it is also entirely possible that Russia’s LE will converge to developed-country levels quicker and that the TFR will stabilize at 1.7-1.8, in which case its population may grow back to around 150mn by 2025.

Thus far, the reality of Russia’s demographic turn-around is actually exceeding both Rosstat‘s and my own most optimistic forecasts (not to even mention “pessimists” like Eberstadt, Steyn, etc). No wonder that pundits are beginning to read and propagandize the gist of my articles, e.g. from Mark Adomanis at True Slant (h/t poemless).

1) Its population is in steep decline and chronically afflicted by alcoholism.

These are actually two very separate issues, but what the hell, why not, we’ll combine them. As I’ve argued before Russia’s population decline has actually abated rather dramatically. What is Russia’s demographic future? No one really knows (predictions are hard, especially about the future!), but it stands to reason that it’s not nearly as bad as Black, Eberstadt, Steyn, Feshbach, and all the other nameless neocon apparatchiks,  most of whom have made crude linear projections decades into the future, think. And alcoholism in Russia is not some eternal unchanging constant: the country’s current high rates of alcoholism are the result of a trend that started in the 1960’s, not in prehistory. Alcoholism in Russia was and is largely a reaction to bleak socioeconomic conditions and the easy availability and cheapness of alcohol,not the result of some quasi-mythical Russian predilection for booze and penchant for self destruction. Will this trend be reversed? Perhaps! Perhaps not! The truth is no one really knows, but to pretend that Russians are utterly passive in the face of some all-powerful and immutable force known as “alcoholism” is as condescending as it is stupid.

Now the next question – should I now rest on my laurels, or should I continue trying to refute the demographic doomers who continue to insist that Russia’s population will fall to 128mn within two decades?

6. Goldman Sachs helped Greece conceal its deficit spending shenanigans by providing it with loans disguised as currency trades. Can this get any dodgier? This also introduces an interesting philosophical exercise – who’s more responsible, the bank(st)ers or the politicos? (The drug pushers or the drug abusers?). And of course Greece is far from alone. The real elephant in the room is the United States.

7. Russian Twitter hero and unabashed patriot, Dmitri Rogozin, proves that Western diplomats are girly men.

8. Two stories that represent the two most important trends of our world systems – shortage of Rare Earth Metals could thwart innovation (limits to growth) and 10 profound innovations ahead (technological progress). If we could find some way to figure out which trend is the stronger and more stable one, you could make a good guess as to the meaning of the 21st century.

9. What blogging is all about… (h/t Lou). ;)

10. Yulia Latynina, Russian liberal par excellence (that is, in the anti-democratic 19th century sense of “liberal”), on why Letting Poor People Vote is Dangerous. At least she is brave enough (or stupid enough?) to say what many liberasts think, but don’t have the guts to do so outright. H/t Sean.

Viktor Yanukovych’s victory in Sunday’s presidential election — not unlike the victories of former Chilean President Salvador Allende, Iranian President Mahmoud Ahmadinejad or Adolf Hitler — once again raises doubt about the basic premise of democracy: that the people are capable of choosing their own leader. Unfortunately, only wealthy people are truly capable of electing their leaders in a responsible manner. Poor people elect politicians like Yanukovych or Venezuelan President Hugo Chavez.

When the Orange Revolution hit Ukraine five years ago, the people arose in a united wave and did not allow themselves to be deceived by the corrupt elite. That elite had reached an agreement with the criminals and oligarchs of Donetsk to make a minor criminal, who could not string two sentences together, the successor to former Ukrainian President Leonid Kuchma.

And by far my favorite bit:

Can you imagine U.S. voters putting a leader in the White House who is a puppet of the ruling elite and criminal clans?

Socialist democrat Allende = genocidal maniac Hitler? The same US whose regulatory bodies are captured by Wall Street, which confirmed itself as an oligarchy with the recent removal of campaign funding limits for corporations? (I can just about see a few post-peak oil decades down the line Exxon oligarchs sending American conscripts to fight national liberation movements in Saudi Arabia or Nigeria).

Really, why the fuck does anyone act surprised that Russia’s limousine liberals – part disconnected elitist, part neo-Bolshevik, part plain insane – only have the support of 3% of the Russian population?

PS. More inane rantings from Latynina. It appears her disdain for facts extends well beyond Russian politics.

“The global warming is an invention of the global bureaucracy,” says one of Russia’s leading journalists and authors, Yulia Latynina, who in most of her publications exposes controversial activities by the Intergovernmental Panel on Climate Change (IPCC).

“The IPCC are unable to explain to me why the 10th century and the 16th century in Europe were far warmer than it is today. They are unable even to tell what the weather tomorrow is going to be like, that is doing something that can be verified,” Latynina says in a weekly magazine. “One simple question – why do they think that warmth is bad? Did the human race drown or perish in the 10-13th centuries?”

The global warming threat, she believes “is one of the brightest illustrations of the Global Bureaucracy’s ideology, a phenomenon that is still largely embryonic. But if the current trend continues, it may spell the end of the Western civilization, freedom and progress in science and engineering.”

11. Back in the real world, the news from the climate front, as usual, gets worse by the month if not the week.

Organizers of the recent climate conference in Copenhagen sought, unsuccessfully, to forge agreements to limit global warming to 2 degrees C by the end of the century. But even an increase that small would cause deadly harm. And far greater damage is likely if we do nothing.The numbers — and there are many to choose from — paint a grim picture. According to recent estimates from the Integrated Global Systems Model at the Massachusetts Institute of Technology, the median forecast is for a climb of 5 degrees C by century’s end, in the absence of effective countermeasures. That forecast, however, may underestimate the increase. According to the same M.I.T. model, there is a 10 percent chance that the average global temperature will rise more than 7 degrees C by 2100, and a 3 percent chance it will climb more than 8 degrees C. Warming on that scale would be truly catastrophic. Scientists say that even the 2-degree increase would spell widespread loss of life, so it’s hardly alarmist to view the risk of inaction as frightening… (The M.I.T. model estimates a zero probability of the temperature rising by less than 3.6 degrees by 2100.)

You bet. A rise of more than 5 degrees C will result in a global collapse of food production and the almost certain demise of industrial civilization. At above 7 degrees C, we may well be looking at human extinction as “zones of uninhabitability” begin to overspread much of the world.

An adaptability limit for large warmings–are we accounting for it?

Steven Sherwood(1), M Huber(2)
(1) Yale University, Department of Geology and Geophysics, New Haven, CT, USA
(2) Purdue University, West Lafayette, IN, USA

The consequences of large warmings (>4C), which on current trends look increasingly likely in the 21stcentury if not the 20th, have received little attention. It seems to be widely assumed that humans can adapt to any amount of warming, on the basis that humans live in such a wide variety of climates now. We show that when examined in terms of the peak value of the wet-bulb temperature (Tw), which ultimately governs the possibility of transfer of metabolic heat to the environment, the world’s present-day climates are far less variable than one might think based on mean temperature. A warming of only a few degrees will cause large parts of the globe to experience peak Tw values that never occur today; 7C would begin to create zones of uninhabitability due to unsurvivable peak heat stresses (periods when the shedding of metabolic heat isthermodynamically impossible); and 10C would expand such zones far enough to encompass a majority of today’s population. It is unknown how much of our present 7-10C cushion we can live without before experiencing significant problems, making it difficult to draw conclusions about more modest climatechanges, but the limits themselves rest squarely on basic thermodynamics. These inferences stand in contradiction to damage functions currently used in economic cost-benefit calculations. In these, climate damages increase with global mean temperature according to a polynomial form, and remain moderate (typically <30% of GDP) even for 10C or more despite the implication that most of the surface wouldbecome uninhabitable by humans and most livestock during the warm season…

12. Meanwhile, AGW deniers continue spreading their malicious lies and propaganda over the Internet like a horde of virtual locusts. See IPCC errors: facts and spin at Real Climate for a thorough debunking of their mendacious drivel.

13. Something a bit more encouraging. Old dude beats up pathetic wannabe gangsta on a public bus.

14. An intriguing attempt to rank national naval strengths from Strategy Page – Naval Forces of the World. Unsurprisingly, the US completely dominates with more than half the global naval power. The only other navies of real strength are considered to be the UK, Russia, Japan, China, and France. I more or less agree with this analysis, excpet to note that 1) the importance of specifics – whereas the UK has much better “power projection”, Russia’s strategic naval forces are far ahead and second only to the US, and 2) China’s naval power is growing rapidly, it will soon overtake Japan if it hasn’t already, and by 2020 may even be ahead of the US.

15. China sells $34.2bn of US treasury bonds, indicating its loss of confidence in the credibility of any US promises to ever rein back on its fiscal overstretch. The only nations still buying up US Treasuries are geopolitically-aligned ones (e.g. Japan) and private investors, but the endgame for Pax Americana has begun and the next global credit or geopolitical shock may finish it. Meanwhile, Tokyo welcomes Chinese destroyer. Perhaps this doesn’t mean anything important, or perhaps it is just the beginning of Japan’s road towards bandwagoning with China.

16. Andrey Ternovskiy, a Russian, is behind the site ChatRoulette which anonymously pairs you up with random Internet strangers via webcam. Sounds like the perfect hangout for weirdos… and it is. Wouldn’t recommend it unless you’re interested in live gay porn.

17. Turkish Foreign Minister Calls for Eurasian Union (Leos Tomicek). Turkey is a rising power with energy, cultural, and political interests in Central Asia and the Middle East, and it will be freer to expand once NATO / the West starts becoming irrelevant.

18. Economic catastrophe in Latvia, previously hailed as a “Baltic tiger”. Latvia’s Economy Contracts Almost 18 Percent in Q4 2009 (Ed Hughes). From his Facebook updates:

“Latvia’s GDP fell by 17.7% year on year in the last quarter of 2009,meaning the economy has now shrunk by more than 25 percent in twoyears. The IMF projects another 4 percent drop this year and predictsthat the total loss of output from peak to bottom will reach 30percent. This would make Latvia’s loss more than that of the U.S. Great Depression downturn of 1929-1933.”

“The consequence of this strong recession in Latvia – more and moreLatvians are leaving in search of work elsewhere, while fewer andfewer young people feel confident enough to have children, making thelong term future of the country even more uncertain.”

There follows a graph of Latvia’s birth rates plummeting by around 8% in 2009 y/y, with the rate of decline accelerating to 12% by December 2009.

Perhaps a timely reminder of the dangers of too much economic openness, the (prior?) dogma of our times? In comparison, Russia’s GDP fell by 7.9% and Belarus’ GDP actually grew 0.2% in 2009, and both saw continuing demographic improvements.

19. On my reading list:

The Lucifer Principle – Nietzschean book by Howard Bloom. (h/t Lou).

The Sea of Fertility – Yukio Mishima, my new hero, whose ritual suicide consitutes the epitome of artistic holism.

The Rediscovery of the Mind – Cognitive science is ”the ongoing research program of showing Searle’s Chinese Room Argument to be false”, and it’s not hard to see why.

Towards a New Socialism – Haven’t started reading this year, but looking forwards to it since it’s connected with many of my own ideas about how advances in cybernetics and computer science is making central planning feasible, even for highly complex and advanced economic systems.

Getting ready to post reviews of The Peak Oil Books, When the Rivers Run Dry (Pearce), and The Singularity is Near (Kurzweil).

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