The Gap Again Widens

 The September trade numbers are out and America’s Trade deficit increased significantly since August. Not only did it increase, but it made the largest percentage increase since February of 1999. Of course, part of that dramatic note is due to the contraction that resulted as part of the economic down-turn.

An AP article (see: http://www.google.com/hostednews/ap/article/ALeqM5gNiyJ905Ho0Ur96V2TQhsBX19lGwD9BUNGF80) sites authorities who suggest that the increase in energy prices is outstripping the benefit gained in the export sector by a falling dollar.

As President Obama travels through Asia this will no doubt be a subject of discussion. A Chinese Yuan that is kept artificially low is credited with a not insignificant portion of the problem. The Chinese have indicated a willingness to let the Yuan adjust a little, but are, not unexpectedly, quite concerned about the state of the dollar (being holders of vast quantities of dollar assets.)

Source: www.kremlin.ru

The venerated first Strategic Arms Reduction Treaty (START I) will expire on December 5, 2009. The importance of this treaty lies not merely in the fact that it reduced the numbers of nuclear warheads and the platforms on which they reside in both the Soviet and US arsenals (later the five weapon holding successor states of the Soviet Union and the US.) Perhaps more important were the unprecedented levels of verification and information exchange incorporated into the Treaty- a codification of President Reagan’s often quoted “trust, but verify” line.

Currently, negotiations are underway to replace the expiring START. Reports indicate that there are two major outstanding bones of contention. The first involves the issue of ground-based mobile launchers, which the Russians have but the US does not. The US would apparently like to see more control over them, but the Russians object to what they see as a unilateral concession. This may be a gambit in search of a concession on the US side. The second issue deals with the details of the allowable numbers of various weapon platforms.

There has been talk in the US Senate of extending START I six months because, even if a new treaty is concluded in the next three weeks, it won’t be ratified and enter into force until much later.

I was disappointed to see that the Obama administration rejected a meeting with the Dalai Lama on his upcoming visit to Washington DC. This symbolic act of deference to the Chinese seems like an interesting follow up to slapping a massive 35 percent tariff on tires imported from China.

This shows just how politics results in bass-ackwards policy. While comparing the Chinese Tire Tariff to the Hawley Smoot Tariff Act may be hyperbole, it cannot be said to be sound economic policy by any stretch of the imagination. (Proponents of tariffs often forget that the US exports things as well, and life gets a lot harder for those US companies that export goods and services when tariffs are imposed. [Why shouldn't other countries return the favor.] So, in essence, you are hamstringing the companies that do things well relative to the rest of the world in support of those companies that are not competitive of their own faculties.) Of course, the tariff is not an economic policy in that it is not a plan of action designed to achieve an optimal effect on US national income. Instead, it is a political policy designed to increase / maintain support for a political party, and no doubt there was some sort of tit-for-tat agreement (presumably related to support for healthcare and / or carbon constraints) that played into the agreement.

On the other hand, because there are relatively few voters of Tibetan origin in the US, it is quite easy to use turning down a meeting with a the Tibetan religious leader as a means to buy good will with the Chinese. Of course, the Chinese may gladly accept the actual injury imposed by the tariff in exchange for the imagined victory of being able to point out that the US doesn’t recognize the Dalai Lama’s status. The Chinese often seem more concerned about what appears trivial and symbolic than real offenses. However, from the Communist Party of China’s perspective, the economic cost of a tire tariff may be inconsequential compared to the boon of realizing that they can do as they please domestically and regionally without suffering the slightest loss of legitimacy on the international stage.

Of course, as we in the United States have gleefully accepted a situation in which we gluttonously overspend while the Chinese willingly buy up our debt, we are not in a great position to say anything if the Chinese say… abscond with a little boy in order to usurp a religious lineage (particularly one which has relatively few adherents / voters in the US.) [This referring to the Panchen Lama, who disappeared and was replaced with a Party-sanctioned puppet. I, of course, don't know that he was killed, just that he has been kept out of the public eye and incommunicado.]   

 Needless to say, I think, in this particular case, the Obama Administration got it entirely wrong. The Administration should foster free trade, and not encourage China to believe that they can set the White House’s meeting agenda and /or replace religious leaders without loss of legitimacy. It was big news that Italy dropped in the most recent Freedom House rankings from “Free” to “Partially Free”, but no one would imagine that Italy could get away with saying: “Sorry Cardinals, we know you picked this ‘Benedict’ guy, but we’ve got this other guy- ‘Antonio’, and he’s now the real Pope. By the way, before you complain, Vatican City is no longer a sovereign country - we took it over as it was never really its own country anyway.”  There would be outrage, and people would stop treating Italy like a first world power.

Iran’s President Ahmedinejad has a lot to keep straight. When he’s inside Iran, the Holocaust didn’t happen, but when abroad it did happen (no, may have happened?) – but is irrelevant to today’s world. Is it any wonder that it would have slipped his mind to mention to the International Atomic Energy Agency (IAEA) that Iran was building another uranium enrichment facility until, once again, Tehran was caught with its hand in the cookie jar.

This does answer a question that I’ve asked many times, which is how Iran intended to get from its current position to having a nuclear weapon without the intervening event of having its offending nuclear infrastructure bombed to smithereens. There were essentially two paths available to an Iran bent on having the bomb. The first was to build yet another covert facility (which is apparently what Tehran chose to do.) The second, and this is the one I’ve never heard a convincing explanation of the process by which it could succeed, would be a “strategic breakout” of the Nuclear Nonproliferation Treaty (NPT) regime. The idea of strategic breakout is to get all your ducks in a row, and then withdraw from the NPT and kick inspectors out of the country / remove surveillance equipment. The problem with this is that it is essentially saying “we’d like to build our atomic bomb now, please leave us in peace.” While it is true that they could get a lot of their affairs in order, there would seem to be plenty of time between their announcement and the production and machining of the requisite material to allow a country to bomb the facilities into oblivion, perhaps even with a Security Council resolution in hand.  The second covert facility was the only path I’ve ever suspected was workable, though there have been proponents of a strategic breakout scenario.

This building of covert facilities only to have them discovered has got to get prohibitively expensive at some point. I’m not saying Allah is trying to send you a message, Mr. Ahmedinejad, but maybe you should consider it a hint. Allah might just find an Iran with a nuclear weapon to be as disturbing a prospect as the rest of us do.

Two news stories this morning highlight the bold independent-mindedness of a couple of South Asian scientists, and how they might yet manage to get tens of millions of people killed.

The first story involves the complete unshackling of Abdul Qadeer Khan from the last “official” vestiges of restriction on his movement. [I say "official" because he probably can't leave the country without being abducted for interrogation - there remains a great deal that is unknown about the extent of his proliferation network and who it gave what.] Better known in the West as A.Q. Khan, this Pakistani national hero is responsible for spreading the technology and knowledge necessary to build nuclear bombs to anyone willing and able to pay. Among most well-known customers are / were Iran, North Korea, and Libya. While Libya has since verifiably disarmed of Weapons of Mass Destruction and the technologies used to produce them and is in such good stead that they are now being handed back their brutal terrorists from decades past, Iran and North Korea are probably both much closer to a working nuclear weapon than they would have been without the “Johnny Appleseed of Nuclear Weapons”, Khan. While Islamists love to portray Khan as a great equilizer who has helped spread nuclear weapons technology in the Islamic world, they forget that North Korea, whose position on religion is that it is the opiate of the masses and should either be brutally crushed or usurped by the party, was also a customer. This makes Khan more of a greedy bastard who is willing to put the whole world in peril to make some cash than any kind of hero to Islam.

The other story involves Indian scientist, K Santhanam, who claims that his country’s 1998 test of a thermonuclear device was actually a dud. Santhanam goes on to state that because of this unexpectedly low yeild, that India needs to conduct further testing in order to have a reliable nuclear deterrent. The Indian government and high-ranking military officers have dismissed this suggestion. Why might a citizen of India shout from the roof-tops that his country’s strategic forces are defective? [If you were worried that a criminal had entered your house, would you shout out that you didn't have a gun?] A prevailing theory is that not only do Santhanam and a few others want more tests to be conducted, they want to put the kibosh on any momentum toward India’s signing and ratification of the Comprehensive Test Ban Treaty (CTBT). The CTBT will have a profound impact on nonproliferation because members that don’t have nuclear weapons won’t be able to develop any sophisticated weapons while complying with the treaty, and states that do have nuclear weapons will not be able to build new models.

Yesterday was a sad day for Highlander and Braveheart fans, as it will forever mark the day that Scotland went Nancy on us. Scotland has a long proud history of being a country of men’s men. Sure they wear the same skirts as Catholic schoolgirls, but they were able to carry it off because they had reason, by way of mastery of head-butts and telephone-pole throwing, to be secure in their national manhood.  

Now, having let a terrorist responsible for killing almost 300 people go free on a hardship release, the Scots have surpassed France’s valiant 12 minute defense of Paris in 1940 to take the prize for the All-time Fancy Cakes and Doilies Act of National Wussitude. Soon, once hyper-masculine names like Angus McLeod and Clyde Wardlaw will replace Jean Floubert and Remy Christian as the kind of names mothers give sons who they want to grow up to be top-ranked figure-skaters. Not to cast aspersions on moms, most of whom would probably respond to the argument that al-Megrahi was dying of cancer with a brusk: “He might have thought about that possibility before he vaporized 300 people.”

What’s next Scotland, might you let your pedophile inmates take recess at the local elementary school to ease their jangled nerves? Perhaps let everyone with an enlarged prostate go free? I hear there is a lot of that going around in prisons.

Love it, hate it, or satire it hilariously (ala. Dr. Strangelove), it is hard to argue that there isn’t a satisfying elegance to the concept of Mutually Assured Destruction (MAD). By satisfying, I mean that there is a clearly defined logic that results in unambiguous policy prescriptions. If two countries each have the “absolute weapon” [i.e. weaponized thermonuclear warheads], and can retain the ability to blow the hell out of each other, they won’t go to war. It is as simple as that. It is true that the policy prescriptions often sound completely daft at worst or faintly fortune-cookie-esque at best, as in: “defending yourself increases your danger”, or “targeting cities is less belligerent than targeting missile silos.” 

If you take a positive view of MAD, and turn the words around to “increases your danger, defending yourself does”, it sounds sage – like something Yoda might say. However, for those opposed to MAD,  it sounds like the kind of thing you might hear a crazy homeless person mumble to themselves as they push their shopping cart down the street, just like “I get drunk to think clearly”, “I built this city from pudding and matchsticks”, or “buying up mortgage-back securities,…how could I lose?” However, the Zen koan-like quality of the policy prescriptions aside, it is a pleasant rarity to not have counter-veiling forces pulling policy in multiple directions. ”Cash for clunkers” results in a lot of energy and material being expended on vehicles that might not otherwise be built, and may result in people going through more vehicles than they otherwise would (i.e. the environmental laudableness of the program is not as patently clear as it first seems.)  Increasing minimum wages will, under most conditions, increase unemployment. Subsidizing farmers results in more grain production and depressed grain prices (exacerbating the condition that led to the policy in the first place.) In short, the realm of policy-making is rife with catch-22s, but MAD seems, ironically, straight forward.

 The challenge before us is to find an equally compelling logic of strategic stability in a world disarmed of nuclear weapons. It may require taking the most brilliant people in the country and shipping them off to someplace like Santa Monica for a few years (just like the formation of RAND after Word War II, whose eminent scholars were largely responsible for MAD), but I’m confident there is a way.

India’s first indigenously-built nuclear reactor-propelled submarine today begins a two year shake-down that, if successful, will result in its addition to the fleet of the Indian Navy. It is interesting to consider the potential strategic ramifications of the sub. It should be noted that this is not India’s first submarine (it has purchased from other countries in the past – notably Russia, who was credited in assisting in this project as well) and that, as mentioned, it’s launch ceremony is not synonymous with it entering service because it is still untried.

In general, nuclear submarines have a mixed influence on strategic stability. A  sub’s ability to hide beneath the seas and to operate there exceptionally quietly for extended periods, means that it is a weapons platform whose survivability is high. This is consistent with deterrence theory. A state needs survivable weapons so that the enemy knows that massive retaliation to an attack is imminent, and that there is no use in trying to swamp an enemy’s deterrent capability.

On the other hand, submarines make the opponent exceedingly concerned about the sub owner’s intentions. Because a sub can pop up off-shore and launch along varying azimuths relatively close and without warning, there is a fear that they will be used to eliminate the enemy’s retaliatory capability as part of a plan to negate the opposition’s deterrent. Both China and Pakistan have small arsenals, and are, therefore, theoretically vulnerable to having their deterrent destroyed by a first strike. In reality China’s deterrent is apparently heavily fortified by being built into a mountain and is not so tiny as to make an opponent confident about knocking it out.

It should be noted that Prime Minister Singh emphasized during the launch speach that India did not have agressive intentions with the new weapon system . Of course, talk is cheap, and whether Pakistan and China believe the rhetoric will be determined by more than word choice. It will be interesting to see what effect, if any, the new system has on regional stability.

The magnitude of the United States’ Department of Defense (DoD) is, on many levels, awe-inspiring. This led me to create this little trivia game called “DoD or Country” that considers which is larger in various aspects - our defense complex or given countries. I hope you enjoy it. The anwers appear below. Don’t peak.

 Questions:  

1.) Weighing in at $583 billion US dollars, which is more expensive: the US DoD budget or the budget of the entire government of Australia?

2.) At 9,500 square kilometers, which is more extensive: America’s largest military installation -White Sands Missile Range – or the country of Cyprus?

3.) Consisting of about 3,600,000 people, which is larger: the combined active, reserve, and civilian components of the DoD or the population of Mongolia?

4.) At 440,000 barrels per day, who consumed more oil in 2006: the Department of Defense or the country of Argentina?

5.) Consisting of 45 ships, which is larger: the US Naval Fleet Auxillary Force (i.e. the ships that supply the Navy’s combat fleet) or the merchant marine fleet of Lithuania? 

6.) Consisting of 185 aircraft, which contains more aircraft:  the current C-17 cargo plane fleet of the US Air Force or the current Singapore Airline’s fleet (all models of aircraft combined)?

7.) At 764 dead, which involved a greater number of lost lives: the US military’s Killed in Action figure for 2007 or the number of fatalities due to terrorism (as defined by the US NCTC) in Somalia in the same year.

8.)At 2,150 Megawatts (electrical) [MW(e)], which has a higher combined output rating from all nuclear reactors: all of the active  aircraft carriers of the US Navy or all the commercial nuclear power plants in Brazil?

Answers:

1.) DoD; Australia’s annual budget in the same year (2008) was a mere $340 billion.

2.) Cyprus; White Sands is 8,300 square kilometers (1,2oo km. sq. less.)

3.) DoD; Mongolia’s population is only about 3.041 million.

4.) Argentina; The South American nation’s oil consumption was 120,000 barrels per day more.

5.) Lithuania; The Baltic state’s fleet consists of about five more merchant ships than the US Navy’s Auxillary force. (Perhaps a few more than that depending upon how you define “ship.”)

6.) DoD; The Air Force has almost 80 more C-17s (of all varients) than the Singapore Airline has in total aircraft (of all models.)

7.) DoD; The DoD reported 25 more killed in action in 2007 than was the number of Somali terrorism fatalities (739) that year.

8.) DoD; Brazil’s two reactors are rated at 2,007 MW(e), while the 10 Nimitz and one Enterprise class carriers have ratings of 194 MW(e) (both reactors on a Nimitz combined [times 10]) and 210 MW(e) (all eight Enterprise reactors combined).

Yesterday the New York Timesreported that the Obama administration had judged that there was a high likelihood that the North Korean freighter, Kang Nam, was probably just leading the US on a wild goose chase. In other words, that the rusty ship probably had no illicit cargo onboard, and was hoping that it could draw the US or one of America’s allies into the embarrasing position of searching the boat only to find no booty. (See: http://www.nytimes.com/2009/07/01/world/asia/01sanger.html?hp)

The US Navy has been tracking and monitoring the ship’s movements since it left North Korean waters, and it had earlier been speculated that the ship might contain a small arms shipment for Burma. The question has been whether UN Security Council Resolution 1874 that encourages states to board and search North Korean vessels suspected of violating the arms export embargo would be put to the test. The DPRK had said it would consider such a search a violation of its sovereignty, and an act of war.  (See: http://www.un.org/News/Press/docs/2009/sc9679.doc.htm)

The latest news seems to be that the Kang Nam has turned around, and, for the moment, is headed back in the direction of North Korea. (See: http://www.chicagotribune.com/news/nationworld/chi-tc-nw-briefs-0630-07014jul01,0,3444662.story)

There has been speculation about the rationale for making such a jaunt, but it seems to be a quite beneficial test for the DPRK. I think the little vessel’s voyage is disconcerting. If North Korea wants to ship missiles in order to earn some funds, one of the few ways it is able to, then it would not send those missiles out on the first voyage. Rather, conducting a test is a win – win for the Kim’s. If they don’t get searched, they gain confidence that they won’t be searched in the future – as long as the level of intelligence remains the same. If they had been boarded, they would have also made it hard for the US to repeat the venture in the future without a much higher standard of intelligence. It is true that they would have had to deal with the fact that they had said such a search would be an act of war, but since the Korean War is not legally over, the Kim’s could worm their way out of that threat at low-cost manner.  The question of the day is what happens if the next time the Kang Nam goes out (or the third time or the sixth time) it does have missiles on it. We can’t count on having better information, so at best there is the lucky guess possibility. For those who want to dismiss the Kim dynasty leaders as irrational and incompetent (and I, myself, have certainly had trouble accounting for some behaviors with motives other than childishness or narcissism), consider the masterstroke of this gambit.