Xi Consolidates: China Stagnates

If self determination is the criteria for growth, China and other praetorian regimes throughout the world are going to have a tough time managing open political regimes with econometrics resembling autocracy.  The capital flows of globalization threatens these kind of regimes because closed political economies consume the very thing they cannot openly procure:  renewed social capital.  If the American’s can get tax, regulatory reform we’ll be favorably positioned to engage the contested commons again.  As for the Chinese, Saudi’s and other praetorian regimes, they’ll be exhausted in the management of a janus like embrace; the financial, monetary components of free moving capital and domestic constraints emboldened by unanchored credit.  By any measure, the west remains precariously ahead.

The formulaic style of slogans is purely totalitarian.  Its a social rubric used to identify miscreants and dissidents.  Orwellian phraseology in the west is strictly a cognitive shortcut, a fast pace arrangement of positions accommodating the commands of limited cognitive bandwidth.  The twittering of consciousness has consequences.  Eastern modes are fiercely concentric towards a commanding center; western aesthetics abandoned commanding centers with the arrival of digitization, ours remains eccentric in mood, tone and effect.  Even still, what matters is political culture.  Witness the odd role reversal Xi has struck.  Having his ideals enshrined into the communist constitution (a famously vacuous term) reveals just have far China has moved from the days of Deng Xiaoping.  Having survived Mao’s death grip, Deng emerged in the early 1980’s with “socialism with Chinese characteristics.”  Xi’s contribution is utopian, “a new era.”

The new historic juncture would entail acknowledging a new social, political relation between the Han masters and everyone else on the mainland.  It would mean acknowledging the superior ethical sources of western culture.  Instead, what Xi reveals is vacuous prescription without any corresponding interior relation to the governed masses.  The French utopians used the term social contract; mercantile British dependencies went farther in acknowledging an ethical, moral basis to sovereignty in compact.  The difference between Pericles and Lincoln cannot be bridged by mere force; how else would the autonomy of reason suffice in acknowledging a moral relation distinct in the created order!  Xi has acknowledged no such moral ground.

The founder of a new era is left commanding without ever acknowledging antecedent worth.  To do so, he’d need to repudiate a world that was defeated in its engagement with the west.

Commanding diktats absent a feedback loop is China’s new normal.

While the Chinese Communist party utterly dominates its domestic political economy, the reality is far messier than often acknowledged.  The party struggles to monitor, to reform state owned firms and their political relation to a commanding center.  Witness China’s defaults on peer-to-peer lenders; its massive, unsustainable.  Chinese geography locked the nation into an inward brace whose only relief was movement toward its southern littoral.  Without having active price signals originating from functioning markets, Beijing runs blind.  As of this writing, Chinese state owned enterprises are increasing in their peer-to-peer lending and default ratios.

That’s because China isn’t a market based political economy.

The trick isn’t just to wean Beijing toward a taxable consumption based model.  Its about getting Chinese Communists to acknowledge a social, political, moral relation that remains anathema to doctrinaire authoritarians.

The fight of the century remains between Keynes & Hayek.  Beijing is ahead of the Islamists by about two centuries.  Getting the boys in Beijing used to working within the confines of a relation that cannot be commanded is Xi’s challenge.

By any measure, he’s failing.

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Capricious Rule: ARAMCO’s IPO & the Static Ethics of Islamism

A reckoning is happening throughout the land of Ishmael; a summoning fit for a great statesman.  As of this writing, Crown Prince Muhammed bin Salman is vacillating, something great leaders don’t do in the service of great ideals.  The Arabs aren’t used to competing.  They aren’t familiar with the long arduous apprenticeship that is liberty, for the achievements that Christianity imposed upon the west, draped in modernist garb, are liberty, consciousness and interiority.  All three have their patristic patrimony in Aristotelian physics, only the last one, interiority has proved most difficult for Islam even though it remains hued from Plato, the first Greek idealist procured from the vast libraries of north Africa on Islam’s pincer movement toward Spain ending in Austria.

The centerpiece of Salman’s dilemma will not be resolved by technocrats servicing the financial exchanges in New York or London, but in Riyadh alone.  The act of faith itself remains the sine qua non; the crux of a harsh rubric for those raised upon the fare of prescription.  Islamic jurisprudence has a very long harsh history of prescribed means; nothing has prepared Prince Muhammed bin Salman to face the unconditioned.  This is a new rubric, a relation of openness in competing interests.  It threatens the archaic mien that has housed Islam since its inception.  The extended order isn’t managed, its participatory, with grave lasting consequences.  For the House of Saud to venture into an opening of transparency in the service of ending dependency means he must embrace an unusual encounter:  an open exchange that is the market.  If the fight of the century was between Keynes and Hayek, then the fight between the sons of Ismael and sons of liberty rejoins a conflict interrupted by the discovery of the new world under Columbus.

The Crown Prince wants the Saudi IPO listed at $2 trillion.  He isn’t getting it.  And while China’s premiere stipulates an opening bid of purchasing 5%, his offer cannot veil its true object, namely the slaughter of American preeminence under Bretton-Woods.  Prince bin Salman’s interests now lay in managing multiple state portfolios, it remains safe to say that his current interests lay in minimizing protracted conflicts with old friends in D.C.  Witnessing the near encirclement of Arabia by Persia means the long game is on, and Riyadh needs permanent allies in the west.

A move toward a partial opening of ARAMCO on the Saudi exchange would reveal a startling reversal of fortune halting the very progress Prince bin Salman needs.  Dressing up failure under the guise of fortifying domestic capital markets will not save the House of Saud.

Only an act of faith as a participant managing performance can. 

What the House of Saudi needs is a tutorial in interiority:  in acknowledging the self sustained intrinsic components of efficaciousness.  In propriety as a relation of procured spontaneity.  In a word:  the market.

What was it that Hayek implicitly knew, yet struggled for decades to grasp:  he knew that Keynes had no theoretical foundation or justification for social capital.  It was as if Keynes and his collective disdained the very moral identity that underwrote the achievement of the west.  Like all satanic revolutionaries, they deemed everything to be grasped and pushed around like chattel.  Enter the sons of Ishmael and long exhausted patrimony of prescribed means.

What the Kingdom needs is performance.  What Prince bin Salman must do is openly grasp, as an act of faith, the performative means of sustained engagement.  The impact of which is growth as market.

This performative means cannot be midwifed.  It must be efficacious.

The gift for you is plain for us in the west to see.  The sons of liberty beckon the sons of Ishmael.

Remember Arnold Toynbee after the Somme, when he pained to acknowledge what Pericles failed to see; that the performative means of growth itself remains self-determination.


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Dinosaurs Treading Water: IBM Inc.,

Let’s face it, in an age of economic repression, government is a competitor.  This remains the final explanation for why the U.S. economy is no longer dynamic.  The dismal rate of transformative companies and IPO’s match the reluctance contemporary c-suite leaders have for risk.  This is because our government uses the formative means of our market based economy to solicit and capture the very capital needed to sustain any great venture. The recent admonition of IBM is very revealing about the state of our political economy. If anyone still believes that taxes don’t matter, stop reading here, for the outperforming productivity gains American workers have enjoyed has come at the cost of growth itself.  We’re looking at the death of American dynamism, IF our neoliberal Keynesian political economy can’t muster the political leadership to thwart demise.

IBM’s recent dismal growth reflects just how difficult it remains for heavily capitalized industries to continue growing in an age of macro-prudential policy.  After having 21 quarters of failing year-over-year revenues, IBM has squeaked out 1% quarter growth.  This isn’t the crafty financialization of currency arbitrage that often underwrites the success of today’s tech giants.  This particular dinosaur is eking out a near death experience at the cost of profound loss of prestige.

When IBM began to reflect on its heritage, it discovered an inverse yield curve in value of its product line.  Computers and their appendages we’re becoming cheap commodities.  Its fixation on financial metrics wasn’t a sales pitch, it was a lifeline for a mature company experiencing a mid-life crisis.  Its clear that IBM’s leadership idolized revenue at the cost of clear identity (product) development.  Having arrived late to AI and cloud based computing, it harried along openly promoting marketing campaigns in the hope of a turn around that never arrived.  Witness its clear failure with capturing lucrative government contracts with CIA, and you see what happens when entire industrial fiefdoms idolize themselves in an age of digital revolution.  Selling off low end servers was only a small portion of IBM’s larger problem:  how to survive with an old core in decline.  New mainframe models isn’t what IBM needs.  What it needs is leadership that understands the social impact of digital mediums in an age of egalitarian revolution.

What IBM must do is refashion itself to incorporate a new paradigm of biologically lead advancements in digitalization.  IBM’s future is found in hybrid relations between physics and cellular life.

How does it get there?

It should do what Dell did and go private.  It should match the contours of miniaturization by going small.  Light, lethal and fast.  The vision thing is often oversold, but IBM needs to move in a direction that can sustain new ratios of growth seen in other industries.  Currently its business model is tied to idolizing previous achievements.  By any measure, IBM remains a dinosaur tethered to lethargic business practices.

To move on, IBM needs to shed the contours that produced its heritage.  To succeed, IBM must first confront a nasty reality that it continues to evade:  financialized revenue masquerading as an adult jobs program.

If Elephants can dance, dinosaurs can swim.

Just ask the Pentagon!


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China’s Slow Turn Toward Market Economy Status

When Xi consolidates his rule throughout the Party Congress this November 18, we should expect him to appoint a new Central Bank chair.  The success of Zhou Xiaochan, China’s current monetary authority will be a difficult act to follow.  Xiaochan was responsible for eliminating China’s dollar peg, modernized Beijing’s monetary policy tools, ended caps on deposit rates and engineered the yuan’s elevation as a reserve currency asset.  What could go wrong going forward?

To begin with, Asia only denominates about 2% of its transactions in yuan.  This has strong geopolitical implications evidenced throughout China’s posture in its southern littoral.  Until nations across Asia begin trusting China’s foreign policy posture, this will definitively halt Beijing’s progress toward possessing reserve currency status.

Recently, China’s central banking authorities have stepped up control over the yuan’s rise prodding Asian companies throughout Asia that have been hoarding dollars to convert them into yuan.  Any surge in yuan denominated deposits should be met with skepticism, until after the Party Congress.

China’s central bank has actively dialed back efforts to make the yuan an easier currency to possess by imposing strict domestic controls.  This official policy is charged with managing capital outflows.

Why is this happening?

China’s market fundamentals aren’t showing.  From Beijing’s mounting debt spiral and persistent industrial overcapacity to striking out-of-balance housing all suggest that Beijing needs to orchestrate a rising currency.  By any measure, China isn’t a market based economy.  In fact, China’s capacity led reform has sputtered out, disguising old flaws while creating new ones yet to be acknowledged and managed.  Chinese firms have simply carried on expanding, confident of state support.  This confidence is misplaced.

China remains a centralized based economy, with diktats actively managing supply-demand relations.  This lack of flexibility will generate volatile outcomes.  The source of China’s overcapacity is its politicized banking system that directs capital.  A nasty affliction of self imposed volatility may be unavoidable.

So what holds the minds of those in the Central Committee?

During the Party Congress, officials want to portray monetary stability to fend off any financial crisis while avoiding trade disputes abroad.  What must be immediately balanced is an appreciating yuan to China’s traditional inflationary based economic model which leans heavily on export based manufacturing.

Even still, currently, China is mired in tepid private investment and consumption.  By any measure, the boys in Beijing haven’t conjured or transformed China’s fundamentals out from an export based model.

APTOPIX China Politics

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Wayne Lotter’s Death, Illicit African Ivory & Despotic Kingdoms

When Wayne Lotter was murdered in route to his hotel in Dar es Saalam, he was fighting pitched battles against Africa’s weak institutions and perennially corrupt regimes.  Brave throughout his life, Lotter suffered for his conviction that illicit African ivory must be stopped.  After talking to investigators in South Africa, he began developing, fielding a reporting network of spies as an early warning system.  But Asia’s desire for ivory overwhelmed east Africa’s weak political economies.  He was murdered after being tracked and shadowed from agents favorable to east Asian regimes like China and North Korea.  In the end, Lotter’s death reveals how the west can assist east African reformers in strengthening the very institutions needed to thwart the Han masters in Beijing and their cohorts throughout Asia.

Strengthening the rule of law would coincide with meaningful economic and land based reform.  Since 1968, regulated hunting was introduced onto private property in both South Africa and Namibia.  Wildlife numbers have grown sixfold.

What is the alternative to regulated trophy hunting?  It isn’t manufacturing; given the speed of vertical integration that accompanies fractured world supply chains, Africa cannot wait to duplicate China’s rise.  The source of African renewal will come from within, from reforms that unleash service based industry.  Any initial view of Africa’s own illicit market behavior reveals a startling contrast to official Keynesian markets aligned with tax credits and other failed schemes.

Even tourism, once thought to be Africa’s panacea has hit a wall.  Across a continent of 538,000 square miles, twice the size of Texas, is used for official hunting.  Tourism cannot hope to compete with Africa’s illicit markets, for it remains capital intensive.  How can paved roads, restaurants, accommodations, multi-lingual staff, hospitals, airports and wi-fi reveal the immediate future.  Without transforming Africa’s illicit markets, African economies will remain stagnant, even possibly returning to overgrazed dusty cattle farms that remain unfit for even subsistence farming.

Lotter would often politely admonish westerners who pushed for conservation, openly opining how hard it is for poor African’s to muster the political will to conserve animals when they don’t have enough food, shelter or financial stability.  Even the possibility of converting large habitats to farmland isn’t viable given large expenditures required to move, sell or relocate natural habitats.

Here’s an old, hard truth that westerns cannot handle, yet remains true throughout Africa:  “Africa’s inconvenient truth is that wild spaces rarely ever occur without the presence of economic incentives.”  

This isn’t the green neocolonialism attributed to Rosie Cooney.  By linking wildlife advocacy to strong African nation states with strong legal cultures, its possible to begin seeding an emerging infrastructure that we see in Botswana. Hunting reserves, if linked to viable serviced based economies can inflect other economies throughout Africa.

Here’s one way to look at it:  when the animals are dead and their tracks paved over with malls and other failed centralized macro-schemes, the animals are never coming back.


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The Race to the Border, Iran’s Shia Land Bridge to the Mediterranean & An Israeli War Emerging

When the Israeli’s hit Iranian Shia militia’s on September 07, 2017 they hit a factory devoted to missile research, the town was Masyaf in western Syria and it was the first time the Israeli’s ever reached deep into Syrian territory.  The Hizbollah target was well over 300km from the Israeli border, even still, P.M. Netanyahu calculated that Russian anti-aircraft batteries would remain silent.  Why was he right?

The Iranian crescent proves U.S. war planners illusory gains that wars are won from the air.  Iranian subterfuge is growing, as is the reach and grasp of Israel.  With the breakdown of U.S. regional policy aims throughout the Mesopotamian region, we’re witnessing Iranian gains from the U.S. led defeat of the Islamic State.  The irony remains that U.S. war planners throughout defense knew not to permit media coverage to drive, frame the engagement, but they have and the Iranians are cleaning up moving west toward Israel.

Having commanded a battery in the Golan, Netanyahu commanded Putin in Sochi that the Israeli’s would permit al-Assad his writ in Syria, but not as a satrap of Iran.

The triangulation between Russia, Syria, Iran and Israel rests on wether Iran can muster the strategic acumen of building a land bridge from Baghdad through Syria to fortify its Lebanese proxies.  If Hezbollah can regain its composure, the Iranian will have encircled both Riyadh and Jerusalem.

The overland route begins in Baghdad, moving west to Syria it converges at Al-Bukamal, right at the Syrian-Iraqi border, from there its a short flight to the eastern Mediterranean.

We shouldn’t preclude that the American’s can’t deliver a diplomatic coup, yet gains on the ground in this part of the world have profound currency.  While the American’s seek to counter Iranian subterfuge in Golan with a ceasefire between Syria and rebel forces in its southern tier, we must remember that Turkey, the regional Sunni hegemon has left vacant its desire to topple Damascus, having turned inward to eliminate Kurdish domestic rivals.  No one can tell how this mixture will unfold between these rival dominant camps.

The future may be discerned by watching Riyadh and Amman.  Jordan has turned to normalize its relations with Syria while the House of Saudi remains locked in a stalemate in Yemen.  The only two actors with room to move and the American’s and the Iranians.

Iran is getting natural gas, mining, agricultural, commercial communication and oil rights in Syria.  While the Israeli’s believe a wedge can be driven between Moscow and Tehran, the game of action and maneuver resides with Iran.

The Israeli director general of Ministry of Intelligence, Chagai Tzuriel,  has openly stated that Russia needs Iranian ground troops to secure any regional hold in Syria.  What we’re looking at is a set match between Iran and Israel.

The Syrian civil war has exhausted Hizbollah.  It does not want a war on two fronts.  Although capable of mustering fighting columns of brigade scale battles, it remains deeply depleted of resources, hence the need for a land bridge linking Baghdad & Damascus.

Expect a game changer to emerge from team Trump around October 15, when he publicly derides the Obama deal struck with Iran.

This game of rubix-cube is deadly, and it isn’t fit for statesman.  What’s needed going forward is a open confrontation with Iran.  In a word:  offense.


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Ann Marlowe: The Oriana Fallaci of the Maghreb & Levant Returns

Ann Marlowe’s outstanding contribution to foreign affairs is easy to discern because she reports from regions that aren’t easily covered.  Having dominated the Levant, she’s moved on to cover Libya, Tunisia and the original fault line that began it all, Algeria. These aren’t easy subjects to engage from the wide disparate range of informing social, political trajectories that embody a previous unity called the Maghreb or Barbary coast.

Throughout North Africa and the Sahel, time has frozen since France disengaged from west Africa beginning under de Gaulle.  Ann Marlow’s return to an original geopolitical fault line should fortify those willing to unveil ugly truths about Qaddafi, the French enlightenment and the future of Islamism in western Europe.

Marlow reveals how Qaddafi’s longtime spy chief Abdullah Senussi has been spotted dining at fancy restaurants at the Tripoli hotel since being released from prison in July 2015.  Although sentenced to death for decades of officially sanctioned murder, his release portends a unwelcome reckoning for fellow Libyans.

Abdullah Senussi was responsible for murdering 170 people on a UTA flight 772 on September 19, 1989.  Qaddafi’s anger at witnessing France outmaneuver regional competitors in the Libyan-Chad conflict remains the ideological cause for blowing up flight 772.

Having departed from Brazzaville, Congo, stopping in N’Djamena, Chad.  A Congolese named Apollinaire Mangatany loaded a suitcase of explosives onto the flight.  The plane broke apart mid-flight and plunged into the Niger desert.

Authorities pieced together wreckage to assemble a green plastic circuit board tied to a German electrician who sold timers to Taiwan.  Libyan officials provided plausible deniability in forging alias’ that they were seeking battery operated timers for runway lights.  Sealing the deal, the Libyan Mukhabarat (intelligence services) serviced Qaddafi’s terror ambitions.  Flight 772 would be a dry run for Lockerbie.  Qaddafi’s service agents named Abdel-baset al-Megrahi and Lamin Khalifah Fhimah rendered terror again on December 21, 1988 over Scotland, killing 259 passengers.

In 2007, a memorial was built in the Niger desert to memorialize those murdered in flight 772.  Building a haunting silhouette of a airplane using black volcanic rock, the memorial is best witnessed using satellites.

Check out Ann Marlow’s latest on Libyan terror agents in The Weekly Standard, reviewing Stuart H. Newberger’s book The Forgotten Flight:  Terrorism, Diplomacy & the Pursuit of Justice.


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The Challenge Shaping African Political Economies: Geography, History & Cultural Patrimony

Africa shouldn’t have the sobriquet:  the dark continent; even clowns like Hugh Trevor Roper, Cambridge Regis chair in modern history knew the limitations of his myopic pronouncement that “Africa had no history“, but the damage was done! Nevertheless, following Hegel should fortify every intellectual in town to the ramifications of silly statements with 24 hour news cycles.  Remember Nixon’s defensive retort to his executive staff, an insight prior to the Saturday Night Massacre, “they’ll always get to weather” referenced a laziness insulating Nixon and his administration from the wiles of reality. Knowing that news networks have to get to weather, coddled Nixon toward Watergate and careening both his career, the nation and family.

Its no different with the dismal science and its hold on the emerging challenges of Africa’s political economy.  What old colonists knew is true enough today, geography, history and theology are foundation stones for political economy.  The African continent is too unwieldy to study cohesively, quadrants dividing the continent along geographic axis makes it easier to view the informing contours that shape Africa.

Here’s a difficult indigenous truth that’s coming clear in Africa’s engagement in ‘the long war.’  African nation states are quickly coalescing in favor of Israeli bilateral ties eviscerating long held racial typologies that have underwritten previous imperial, Islamic regimes. These fault lines are discovered deep inside East Africa, especially the Horn of Africa where we find hybrid ecumenism of the Swahili linking medieval nation states along Zimbabwe’s Limpopo River, Tanzania, Mozambique and Kenya to Mughal dynasties in Kabul.  The truth is, U.S. war planners in AFRICOM and Defense-State have unrivaled resources at their hands when they link the challenges of economic growth to regime change in Africa.

I mean something very specific.

Its a defeat in Malthusian proportions, but more of Africa’s population growth is moving out from agriculture and subsistence living into service economies.  The challenge for African leadership is a difficult one because trade patterns change quickly; Africans are not just competing with low wage workers in Bangladesh, but with automation.

We’ve left the paradigm followed by East Asian ‘tiger’ regimes.  China, Taiwan, Japan and South Korea moved from agriculture to manufacturing.  Most are transitioning toward service based economies.  But Africa must discover a way to insert themselves into supply chains that are global.  This means a view of structural reform outside the positivist hold of Keynes.  It means African nation states that readily avail themselves to the challenge of human capital will succeed.  It means examining the religious foundation of African culture.

A quote from Churchill’s The River War:  “How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in a dog, there is this fearful fatalistic apathy. The effects are apparent in many countries. Improvident habits, slovenly systems of agriculture, sluggish methods of commerce, and insecurity of property exist wherever the followers of the Prophet rule or live. A degraded sensualism deprives this life of its grace and refinement; the next of its dignity and sanctity. The fact that in Mohammedan law every woman must belong to some man as his absolute property – either as a child, a wife, or a concubine – must delay the final extinction of slavery until the faith of Islam has ceased to be a great power among men. Thousands become the brave and loyal soldiers of the faith: all know how to die but the influence of the religion paralyses the social development of those who follow it. No stronger retrograde force exists in the world. Far from being moribund, Mohammedanism is a militant and proselytizing faith. It has already spread throughout Central Africa, raising fearless warriors at every step; and were it not that Christianity is sheltered in the strong arms of science, the science against which it had vainly struggled, the civilisation of modern Europe might fall, as fell the civilisation of ancient Rome.”

Revisiting our map of the African continent subdivided along an axis reveals a startling insight; those nation states that succumbed to Imperial Christian Europe have a patrimony from which to defeat both militant Islam, atheist secularism and Keynes.

Remember how Arthur Lewis observed a simple paradigm that fast growth accompanies labor shifts out of subsistence farming into heavy capitalist production.  Well, movement out from heavy capital intensive productivity procured by technologically lead structural change has elicited a surprising new challenge; sectoral distribution of productivity variants no longer requires mass, its endemic to digital mediums. Those nation states that possess a strong Judaeo-Christian moral framework are poised for a run!

Look at it this way, massive productivity growth throughout sub-Saharan Africa was the result of population shifts out of agriculture.  By any reckoning, Africa’s manufacturing has stagnated; but illicit markets in service based industries are booming.  While Asian chaebol’s needed government authority to monopolize and thrive, African nation states with minimum comity can launch themselves into productivity with minimum effort.

So how does Africa take off?

Simple.  It openly promotes easily tradable, transferable sectors that don’t require heavy capital; it simply permits the liberty of Adam Smith’s invisible hand.

The immediate future of the African continent can no longer be reduced to quantifiable data encapsulated by neoclassical shop talk.  Its future lays in unleashing the very capital   cherished by Christianity:  the gift of humanness, as a unique repository of value, not chattel property.


Zheng He Arrives In China with Giraffe


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Warcraft As Statecraft: A Synoptic View of Hegemony from Asia

The opening of BRICS summit in Xiamen China yesterday was instructive, for it taught American force planners how best to view our own weaknesses regarding the dismal science, conflict and trade.  Asian political economies aren’t dovish; Hayek’s concept of an extended order originating spontaneously masked dangerous indigenous configurations of culture that China exploits.  American leadership will need to anticipate offensive behavior in a manner reminiscent of 19th century statesman.  In a word, its back to the future.

In an open joint statement, both Beijing and New Delhi called on the WTO to eliminate U.S. farm subsidies.  You read that right!  And what was the efficient cause of the Arab Spring?  It was skyrocketing prices of staple products from the United States to subsistence economies. Kindly remember, those working at the commanding heights of our economy are specialists, they don’t study the impact of policy; they don’t get paid to think, their job is to keep their job.  Simply put, Lenin’s concept of exporting the revolution has monetary patrimony.  If the U.S. Congress actually dumped farm subsidies, it could wreck havoc.  The equilibrium sought should be from a supply side policy mix of engaged monetary, fiscal leadership.  Although the U.S. greenback is down, our industrial policy is shaped from within the Keynesian confines of Bretton-Woods.  This means we’ve historically been very wary of an appreciative greenback.  If anything, the U.S. should actively seek comity throughout our North American partners in Mexico, South-Central America and Canada to strengthen global food supply chains.  The error is seeking a quick fix  in American food subsidies.  Long term, the U.S. has no interest in the regulated monopoly that has become our farm belt.

Beijing has been on a war footing for two decades.  It’s only becoming apparent now.  It conceives of trade policy identical to OPEC in 1973.  The One Belt-One Road initiative is Keynesian in both outlook and temper; its a policy tool from which Beijing seeks to perpetuate itself by tying its political fortunes to the failed Keynesian multiplier.  China conceives of trade within the confines of a strategic aim or purview.  The American’s don’t and cannot do so, for institutional reasons.

For the American’s to compete, we’ll need to admit that China and other revolutionary regimes are competitors.  Secondly, we’ll need to shape the formal institutions of our Republic to resemble true Constitutional federalism; this means we need institutional memory.

China and other competitors will change up to anticipate our initial advances.  What we can hope to achieve initially is that Beijing and others get tied up in rigid disputes that multiply bilateral strains.  The American regime knows how to work when it is configured properly; decentralized, with hordes of strong human capital sprung from a vibrant civil society.  This isn’t a policy that can be replicated institutionally or formally.

This means we must adhere to a synoptic view of tax reform; viewing it outside the travails of Keynesian gnomes that troll Congress, State houses and dominant media.

What did the Himalayan standoff reveal?

It demonstrated that New Delhi’s apprehension was correct; that Beijing continues to devise racial stratagems to peel off weaker nation states in open, quiet confrontation.  All by the construction of a road through neutral territory held in covenant.  For India and others throughout Asia that aren’t used to being bullied, the U.S. remains their only hope. We’ll need to open up an old framework from the 19th century; one that recognized the cynicism at play in national strategy abroad.  New Delhi was right, the road built on an open plateau in Bhutan will be used to expropriate territorial ambitions.

Here’s the ugly part that we in the west refuse to admit; the Han that rule from Beijing openly seek confrontation with smaller, weaker nation states; not because they can, but because the Han relish a sick social-Darwinian afterthought reminiscent of a certain German corporal; a racial undertone fit for archaic vanquished leadership.

Bring on the Han, their dementia can’t stand the realism of a Truman, Reagan, or Kennedy.

Just ask Berlin!


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Framework & Rhetoric: Structuring A Coherent South Asian Policy

The overt managerial didacticism on display last Monday isn’t helpful in the articulation and execution of statecraft.  Our enemies are on the rise throughout South Asia, this isn’t something anyone on the alternate right really understands.  We don’t have the resources to shape outcomes in South Asia, hence the need to dampen official policy pronouncements riling trolls throughout the American right.  I sympathize with their plight in identifying with a strong, coherent U.S. approach to foreign policy, we haven’t had enough realism since Reagan, but if we’re going to engage the soft miasma that is South Asia, we’ll need all the deft handlers we got at State, Pentagon, Defense and the entire Executive, including the Cabinet.  We don’t have that kind of gravitas, and until American force planners at Pentagon, State and throughout Defense begin thinking synoptically about how to craft sufficient instruments openly soliciting wide swaths of South West Asia, we can’t hope to shape policy outcomes throughout the wild Hindu Kush.

Acting Imperial would work, but we cannot contend with 24 hour news cycles that actually frame policy, so we’re left biding our time, by any calculus, we’re out of time.

Former American U.N. ambassador John Bolton was right to acknowledge that our conflict in Afghanistan will be won in Pakistan.  The Punjabi’s that run the Citadel know this, so do the Pashtuns running both divides of Durand; these privileged sanctuaries redouble FATA and the administrative highlands of the northwest passage that Imperial Brits couldn’t tame with musket and iron.  Haqqani, Hekmatyar, the Islamic State are all eating away at the innards that is Pakistan.  Islamabad knows it.  Pakistan’s principal adversary is cultural, not India.  Envelopment frightens the Punjabi’s that run Islamabad.   To fix the Citadel, we’ll need to address the political core that is Pakistan, namely its dysfunctional civil-military relation, we cannot do this as a war aim.  

Our task coincides with strategic patience, prudence, luck and deft statecraft in softening the north west passage by normalizing relations between New Delhi & Islamabad.

The problem remains insufficient administrative culture in Pakistan, for Indian administrative culture can handle the monetary, fiscal and logistic engagement of normalizing relations; but can the land of the pure compete?  Tacit knowledge has cognitive antecedents, this will derail Pakistan in any engagement with New Delhi, so we’ll need Punjabi trust in the engagement; this cannot occur if we continue to frame Pakistan from the podium at D.C.

We won’t succeed in South Asia by acting straightforward.  Ironically, this is implicitly understood in business, oddly enough Trump does not understand this nettle of executive statecraft.  He should remember Gorbachev’s anguish at Reagan, having to admit being beaten by a good man who was also a fox, hurt Gorbachev.  The tacit craft of executive statecraft isn’t naiveté; only a frontiersman like Lincoln or Reagan understood this.

How should we proceed?

We should threaten China by flanking its leadership toward the soft interior.  The most dangerous place for the middle kingdom is its interior.  Remember, China spends more on domestic defense of its interior than all its military expenditure.  Openly crafting a solicitous policy of egalitarianism among the Uighurs as well as confronting the profound historical grievances of non-Han within China remains a sore spot for Beijing as does the entire southern hemisphere of China’s ‘bread basket‘ from the Mekong moving south to the South China Sea.  The soft interior and China’s southern littoral are nerve centers of profound social, historical unrest.  They need to get hot for China to return your calls.

Want help with Pyongyang, flank the interior of China.  Want little Kim to play nice?  Eviscerate the biological, racial components that underwrite the mythical status of ‘The Han‘.

Here’s what only a businessman understands; if you want the boys in Being to respect you, play hard!

Mattis, McMaster, Kelly and Trump need to unleash the dogs of war.


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