Is financial innovation a good thing?

Wednesday, April 6th, 2022

Is financial innovation a good thing?

In the context of a free market, innovation is a positive-sum game. The innovations that survive — most don’t — are the ones that conserve resources and improve quality. In the case of financial innovation, improving quality could mean better risk management.

But financial innovation does not take place in the context of a free market. Our financial system is permeated with government guarantees. Some guarantees, like deposit insurance or pension guarantees, are explicit. Other guarantees, like “too big to fail,” are implicit.

These guarantees can be exploited by firms that take on excessive risk. If a gamble pays off, the gains go to owners and managers of the firm. If the gamble turns out badly, some of the losses go to taxpayers. Even though managers might not consciously be searching for ways to game the system, the competition for returns will push them in the direction of doing so.

Innovative financial instruments and practices can facilitate gaming the system, without regulators realizing it. Clever innovations can enable a bank to comply with the letter of a regulation while violating its spirit. Sometimes, even the executives of the bank are fooled. They do not realize that their profits are coming from this “regulatory arbitrage,” rather than from real business skill.

This was how America acted when it was serious

Friday, April 1st, 2022

Kill Chain by Christian BroseIt is difficult to overstate the all-encompassing sense of urgency that Washington felt in the early years of the Cold War, Christian Brose explains (in The Kill Chain):

The way Eisenhower saw it, Washington’s primary role was to get the big things right. That started with picking the right people—not necessarily good people or nice people, but exceptional people, the kinds of people who might today be called “founders.” Eisenhower believed in empowering these founders by giving them broad authority to solve clearly defined problems, providing them all of the resources and support they needed to be successful, and then holding them strictly accountable for delivering results. In short, it was a strategy of concentration—of priorities, money, effort, and, most importantly, people.

[…]

He awarded gigantic contracts with fat margins to companies and technologists and integrated them into one military-industrial team. He scraped a space launch center out of a boggy stretch of Florida wetland called Cape Canaveral. He repeatedly blew up rocket engines and missile prototypes on the launchpad. But along the way, Eisenhower defended Schriever, got him more money when he needed it, and protected him from bureaucrats and staunch rivals, such as fellow Air Force general Curtis LeMay, who tried to kill the project at every turn…

Eventually, Schriever and his team did the impossible: they developed the Thor, Atlas, Titan, and Minuteman missiles that could deliver nuclear weapons to precise locations on the other side of the planet in minutes.

[…]

This was how America acted when it was serious. The paramount concern was picking winners: the priorities that were more important than anything else, the people who could succeed where others could not, and the industrialists who could quickly build amazing technology that worked.

[…]

This is how Silicon Valley originated: as a start-up incubated by the Department of Defense. Margaret O’Mara, a historian and former staffer for Vice President Al Gore, has observed, “Defense contracts during and after World War II turned Silicon Valley from a somnolent landscape of fruit orchards into a hub of electronics production and innovations ranging from mainframes to microprocessors to the internet.”

[…]

A sprawling bureaucracy materialized in the 1960s to administer and discipline the military-industrial complex. Eisenhower’s more personalized approach to military acquisition and innovation, which was based on picking winners and holding them accountable, became bureaucratized amid the broader adoption of the industrial age management practices that had come into vogue in leading companies.

No one did more to further this trend than Robert McNamara, a veteran of Ford Motor Company who ran the Pentagon for much of the 1960s. Under his tenure, in the spirit of improving efficiency, new layers of oversight, analysis, and management were added, and these grew and began choking off the ability to develop breakthrough technologies quickly.

[…]

The result was that the process of developing military technology became harder, slower, and less creative. This outcome only intensified in the early 1970s, when many engineers in Silicon Valley began growing uncomfortable working for the US government as the Vietnam War grew more divisive.

There have been only three unicorns in 35 years in the defense space

Thursday, March 31st, 2022

In 2016, Facebook unceremoniously pushed Palmer Luckey out of the virtual reality startup he founded, Oculus. Then Luckey founded Anduril:

Luckey is now winning billion-dollar Pentagon contracts. One of them is for a counter-drone system based on its “battlefield operating system,” called Lattice. Anduril’s demo video shows one of the company’s sentry surveillance towers detecting a hostile drone and dispatching a small high-speed drone of its own to literally knock the intruder out of the sky. Recently, Anduril acquired a company that makes robot submarines.

[…]

Anduril has a valuation of nearly $5 billion, making Luckey a rare founder of two unicorns. He is unusual for a military contractor. Perpetually garbed in a Hawaiian shirt, and occasionally still in cosplay threads, his vibe is much more cheerful hacker. His conservative politics also make him an awkward figure in Silicon Valley. (One of his sisters is married to the right-wing provocateur and congress member Matt Gaetz.)

[…]

There have been only three unicorns in 35 years in the defense space: Palantir, SpaceX, and Anduril. All three of those companies were founded by people who had just sold their previous company for billions of dollars.

They were ignoring Reason and basing all of their opinions on three thousand year old fairy-tales

Wednesday, March 30th, 2022

The rise of the Internet broadened our intellectual horizons, Scott Alexander argues:

We got access to a whole new world of people with totally different standards, norms, and ideologies opposed to our own. When the Internet was small and confined to an optimistic group of technophile intellectuals, this spawned Early Internet Argument Culture, where we tried to iron out our differences through Reason. We hoped that the new world the Web revealed to us could be managed in the same friendly way we managed differences with our crazy uncle or the next-door neighbor.

As friendly debate started feeling more and more inadequate, and as newer and less nerdy people started taking over the Internet, this dream receded. In its place, we were left with an intolerable truth: a lot of people seem really horrible, and refuse to stop being horrible even when we ask them nicely. They seem to believe awful things. They seem to act in awful ways. When we tell them the obviously correct reasons they should be more like us, they refuse to listen to them, and instead spout insane moon gibberish about how they are right and we are wrong.

I can only describe this experience from my own side of the aisle, which was the progressive side. We watched the US population elect George W Bush and act like this was a remotely reasonable thing to do. We saw people destroying the environment, leaving the poor to starve, and denying gay people their right to live as normal members of society. We saw people endorsing weird ideas and conspiracy theories, from homeopathy and creationism to the Clintons murdering their enemies. We were always vaguely aware from reading the newspapers that some of these people existed. But now we were seeing and conversing with them every day.

[…]

And so we asked ourselves: what the hell is wrong with these people?

And New Atheism had an answer: religion.

That was it. It was beautiful, it was simple, it was perfect. We were the “reality-based community”. They were ignoring Reason and basing all of their opinions on three thousand year old fairy-tales because people told them they would burn in Hell forever if they didn’t. There was nothing confusing or unsettling at all about the situation, and we did not need to question any of our own beliefs. It was just that some people had been brainwashed by their church/mosque/synagogue to believe transparently wrong things, so they did. Sin began with the apple tree in Eden; conservatism began with the Bible in Jerusalem. Language separates us from the apes; not being blinded by religion separates us from the Republicans.

This was a socially momentous proposal. The Democratic Party is centuries old, but the Blue Tribe — the Democratic Party as a social phenomenon with strong demographic and ideological implications — can be said to have started in 2004.

It does not amount to “formalized” training

Tuesday, March 29th, 2022

President Joe Biden said on Monday that US troops stationed in Poland have been “helping train the Ukrainian troops” in that country — but this has been clarified:

The sources told CNN that while US troops are indeed providing some instruction to the Ukrainians at a military base in Poland, it does not amount to “formalized” training.

Rather, the coaching is more tactical and in-the-moment, the sources explained. That includes showing the Ukrainian soldiers picking up the weapons shipments in Poland how to use some of that equipment, like the Javelin anti-tank missiles that the West has been sending in large numbers. Poland has become the central transit point of arms transfers into Ukraine.

The US has allocated $1 billion in security assistance to Ukraine in the last month alone, and intends to provide Ukraine’s armed forces with more than 9,000 shoulder-fired anti-tank weapons, including Javelins; nearly 7,000 small arms including machine guns and grenade launchers; 20 million rounds of ammunition; and 100 armed drones.

“These are direct transfers of equipment from our Department of Defense to the Ukrainian military to help them as they fight against this invasion,” Biden said earlier this month. “We’re going to continue to do more in the days and weeks ahead.”

NATO Supreme Allied Commander Gen. Tod D. Wolters told US lawmakers on Tuesday that the US had been providing “advice and assistance with respect to materiel” going into Ukraine, but that the US forces are not “in the process of currently training military forces from Ukraine in Poland.”

“There are liaisons that are there that are being given advice, and that is different than what I think you are referring to with respect to training,” Wolters told Republican Sen. Tom Cotton of Arkansas when asked about the training.

Wolters said separately during the hearing that “as you well know we’ve made dramatic improvements in our information sharing and intelligence sharing, and as [the Ukrainians] continue to pursue their campaign, our advice and our assistance with respect to material will be very, very important,” Wolters said.

Some of the technologies behind China’s Assassin’s Mace weapons were indigenously developed

Tuesday, March 29th, 2022

Kill Chain by Christian BroseAfter the Gulf War, Christian Brose explains (in The Kill Chain), the Russians weren’t the only ones to notice the US military’s success:

Upon visiting Baghdad, Chinese military officials learned that Saddam Hussein had the same aging Soviet air defenses and other weapons that China did, and in some cases, Iraq’s were better.

[…]

What unnerved the Chinese Communist Party was not just the stealth and precision of US forces but also their ability to achieve victory without completely annihilating the Iraqi military.

[…]

In 1996, as tensions between China and Taiwan flared, the United States sailed an aircraft carrier battle group into the Taiwan Strait, one hundred miles from China’s mainland, and the Chinese military struggled to locate its exact position. Three years later, China watched again as the same US way of war that had triumphed in Iraq destroyed Serbia’s ability to fight and forced Milosevic to capitulate. This time, however, it was personal, because a US airstrike had destroyed the Chinese embassy in Belgrade.

[…]

Under what it called its 995 Plan (named for the Belgrade embassy attack in May 1999), China accelerated work to build a different kind of military. It continued to spend money on traditional military systems, such as ships and tanks, but its priority was to develop what it called “Assassin’s Mace” weapons. The name refers to special weapons that were used in Chinese history to defeat more powerful adversaries.

[…]

In the event of a war in Asia, the US military would build up its iron mountains in these forward bases, much as it had used similar bases to wage the wars in Iraq and the Balkans, and this would enable US forces to fight how, when, and where they wished. China knew that Washington assumed all of this, and it built larger and larger quantities of increasingly capable missiles, primarily medium-range and long-range ballistic missiles, to wipe out America’s critical warfighting infrastructure in Asia.

[…]

As a result, China developed early-warning and long-range radars to spot approaching US aircraft from as far away as possible. It also built dense and formidable networks of integrated air and missile defense systems that would aim to shoot down US planes from greater distances and high-powered jammers that would seek to destroy their ability to communicate.

[…]

The fact that aircraft carriers could move — so first had to be located — made them much tougher targets than land bases. But China knew that most US carriers were not based in Asia and would need to sail into the region from elsewhere in the event of conflict.

[…]

So, China set about building over-the-horizon radars, long-range reconnaissance satellites and aircraft, and other means of hunting America’s floating airfields as they made their long journey across the Pacific Ocean.

[…]

The DF-21, the world’s first ever anti-ship ballistic missile, was designed to do just that — fly out more than one thousand miles, slam into a carrier, and cripple its ability to fight, if not sink it altogether.

[…]

As Washington lurched from one costly military acquisition debacle to another, Beijing fielded an even more capable carrier killer missile, the DF-26, which may be able to fly twice as far as the DF-21, possibly farther, carry a larger warhead, and strike more precisely. It also fielded quiet diesel submarines and anti-ship cruise missiles that were harder to detect and defeat because they could fly low and maneuver unpredictably.

[…]

An additional set of Assassin’s Mace weapons focused on doing to the US military what it had done to Iraq in 1991: destroying the underlying systems that sustained the ability to wage war. In America’s case, this was its communications and intelligence satellites, especially its Global Positioning System (GPS), which enabled US weapons to find their targets. It was the information networks that moved targeting data from sensors to shooters. And it was the logistics enterprise that allowed US forces to flow into theaters of operations and sustained forces in combat with food, fuel, and supplies.

[…]

This was all part of a broader warfighting doctrine that Chinese military officials ultimately called “systems destruction warfare.”

[…]

Some of the technologies behind China’s Assassin’s Mace weapons were indigenously developed, but many fell into Chinese hands as the result of a long-term and large-scale campaign of state-sponsored theft.

[…]

It was often noted, for example, that China’s CH-4B unmanned aircraft was a spitting image of the US Predator drone, and that its J-20 fifth-generation fighter jet looked strikingly similar to the F-35 Joint Strike Fighter. Indeed, some joked in Washington that all of the multi-billion-dollar acquisition disasters that plagued the US military were actually part of an ingenious plot to sabotage China when it tried to copy them.

[…]

By 2012, General Keith Alexander, director of the National Security Agency and commander of US Cyber Command, estimated that the United States was losing a quarter of $1 trillion every year to cyber-enabled industrial espionage, much of it by China. He called it “the greatest transfer of wealth in history.”

Why assassin’s mace?

A club-type weapon sounds like a rather unsuitable weapon for an assassin. The actual Chinese term is Sha Shou Jian (literally “killing hand club”), which refers to a pair of short wooden or metal rods used as a martial arts weapon. “Jian” normally denotes a long Chinese swordbut Sha Shou Jian are blunt and heavy. They could be concealed in the long sleeves of court robes and used to make surprise attacks — hence the association with assassins.

And although some Western commentators like the *New Atlantis *claim that the meaning of the assassin’s mace “remains elusive, ” it’s no mystery to Mandarin speakers. Sha Shou Jian a popular expression used by sports commentators, businessmen and even in romantic advice columns. Alastair Johnston of Harvard University criticizes the way Washington pundits want to make the Assassin’s Mace “mysterious and exotic”: it’s simply the decisive, winning quality. In sports, the Assassin’s Mace may be the key goal-scorer; in business, it’s any quality that puts you ahead of the competition; in love, it might be the subtle smile that wins over the object of your affections. Johnston suggests that a fairly idiomatic translation would be “silver bullet” and that the concept behind it is less fiendishly oriental than is often supposed.

[…]

The Pentagon defines the Maces as technologies that might afford an inferior military an advantage in a conflict with a superior power. In this view, an Assassin’s Mace is anything which provides a cheap means of countering an expensive weapon. Other examples might include Chinese anti-satellite weapons, which might instantly knock out U.S. space assets, or a conventional ballistic missile, designed to take out a supercarrier and all its aircraft in one hit. It’s an interesting contrast to the perspective of the American arms industry, which can end up spending vast amounts countering low-tech, low-cost threats like mines and IEDs.

The battlefield would now be everywhere

Sunday, March 27th, 2022

Kill Chain by Christian BroseRussia’s exploits from a few years ago, Christian Brose explains (in The Kill Chain), demonstrated a type of modern political warfare that became known as the “Gerasimov doctrine”:

“The very ‘rules of war’ have changed,” Gerasimov wrote. “The role of non-military means of achieving political and strategic goals has grown, and, in many cases, they have exceeded the power of force of weapons in their effectiveness.”

Put another way, the reconnaissance-strike complex now included the ability to surveil the political and social fault lines in countries and strike directly at the heart of them through “military means of a concealed character.” This included misinformation campaigns, political subversion, assassination, cyberattacks, and “active measures” using social media to tear at the fabric of diverse and democratic societies. The battlefield would now be everywhere.

Facts are useful, but not enough to actually fix the issue

Saturday, March 26th, 2022

David Epstein talks to Lisa Fazio, a Vanderbilt psychologist who studies misinformation , about the illusory truth effect:

This is a term we use for the finding that when you hear something multiple times, you’re more likely to believe that it’s true. So, for example, in studies, say that you know that the short, pleated skirt that men wear in Scotland is called a “kilt,” but then you see something that says it’s a “sari.” You’re likely to think that’s definitely false. If you see it twice, most people still think it’s false, but they give it a slightly higher likelihood of being true. The illusory truth effect is simply that repetition of these statements leads to familiarity and also to this feeling of truth.

[…]

We’ve done studies where we get people to pause and tell us how they know that the statement is true or false. And when people do that, they seem to be less likely to rely on repetition.

[…]

We’ve seen the illusory truth effect from five-year-olds to Vanderbilt undergrads, and other adults. I think that’s one of the big takeaways from all of the research we’ve done on misinformation is that we all like to believe that this is something that only happens to other people. But, in reality, just given the way our brains work, we’re all vulnerable to these effects.

[…]

Facts are useful, but not enough to actually fix the issue. You have to address the false information directly. So in a truth sandwich, you start with true information, then discuss the false information and why it’s wrong — and who might have motivation for spreading it — and come back to the true information. It’s especially useful when people are deliberately misinforming the public.

[…]

People have already created this causal story in their mind of how something happened. So in a lot of the experiments, there’s a story about how a warehouse fire happens. And initially people are provided with some evidence that it was arson — there were gas cans found on the scene of the crime. And then in one case you just tell people, “Oh, oops, sorry, that was wrong. There were no gas cans found there.” Versus in another you give them an alternative story to replace it — that there weren’t any gas cans at all; instead, it turns out that there was a faulty electrical switch that caused the fire. If you only tell people the gas cans weren’t there, they still think it’s arson. They just are like, “Oh, yeah. The gas cans weren’t there, but it was still arson, of course.” Whereas in the second story, they’ll actually revise the story they had in mind and now remember it was actually accidental.

[…]

Yeah, and with false information you can make it really engaging, really catchy, really easy to believe. And the truth is often complicated and nuanced and much more complex. So it can be really hard to come up with easy ways of describing complicated information in a way that makes it as easy to believe as the false information.

All of this military modernization had one explicit purpose

Friday, March 25th, 2022

Kill Chain by Christian BroseWhat each president was slow to learn, Christian Brose suggests (in The Kill Chain), was that Russia was more interested in restoring the great-power status it lost in 1991 than in becoming the partner the United States hoped it would be:

This was especially true once Vladimir Putin became president on New Year’s Eve 1999.

[...]

A ruler who referred to the demise of the Soviet Union as “the greatest geopolitical catastrophe of the 20th century” set about restoring what he believed was Russia’s rightful place in the global balance of military power.

[...]

So, as the Obama administration was going out of its way to “reset” US relations with Russia, Putin was pouring money into the construction of an arsenal of technologically sophisticated weapons: long-range missiles and rockets, highly capable special operations forces, advanced air defenses, electronic warfare, cyber weapons, lasers to blind satellites, missiles to shoot them down, and tactical nuclear weapons.

[...]

All of this military modernization had one explicit purpose: to render the United States incapable of projecting military power into Europe and defending its NATO allies, especially the many parts of Europe that Putin still believed should be part of a greater Russia.

This insurance was supposed to pay off in case those bonds lost value

Tuesday, March 22nd, 2022

Many money managers who had bought Russian bonds in the past had purchased credit insurance from other companies:

This insurance was supposed to pay off in case those bonds lost value, which they clearly have as a result of sanctions.

Under terms of some of these contracts, some money managers have been able to collect insurance claims. But other insurance contracts stated that in order to be paid, the money manager had to transfer the bonds to the insurer. But the sanctions will not allow the bonds to be transferred! Once again, innovative financial instruments proved to be fragile in ways that were not anticipated.

Between them, they control the commanding heights of politics and culture

Tuesday, March 22nd, 2022

Linking to a Sesame Street celebration of “Latinx culture,” Antonio García Martínez quipped:

One of the great mysteries is how every elite institution, from universities to corporations to media to even Sesame Street, all spontaneously coalesced on the same narrow set of values all of a sudden.

In the scope and rapidity of institutional embrace, Martin Gurri notes, nothing like it has transpired since the conversion of Constantine:

The cult of identity, properly understood, consists of a series of platitudes and stereotypes invariably leading to gestures of repudiation and calls for the ritual purification of society. By definition, there can be no missionaries of identity. True believers have shown little interest in persuasion: their faith has spread not because of clever arguments but by relegating rival creeds beyond the pale of moral consideration. Hence the obsession with nomenclature — with the magical force of words.

Conversion has entailed drastically different experiences, depending on where you stand in the social pyramid. From below, at the level of the young professional and the college student, the cult provides a vision of truth and a source of meaning in a romantic struggle against the systemic evil represented by the rest of us. From above, at the level of high government and corporate officials, ostentatious adherence to the cult is a tool of control.

The dance between the generations has been awkward. Young activists are eternally on the hunt to identify and attack injustice, typically revealed by the utterance of certain taboo words. They dwell in a world of weakened religious and family ties, and their idea of community is a website. The cult of identity fills an existential void and raises up the young to be the vanguard of avenging virtue in a sinful world. This cohort is driven by the urge to purify — that is, by negation to the edge of nihilism.

Older institutional types, on the other hand, have seen their influence and authority plummet over the past decade. Of this vertiginous fall from grace, Trump was merely a symptom, not the cause. The digital age will not tolerate the steep hierarchies of the twentieth century: these will either be reconfigured or smashed. Stripped of the splendor of their titles, panicky elites have cast about for some principle that will allow them to maintain their distance from the public.

The puritanical slogans pouring out of anti-Trump protesters must have sounded, to this group, like an opportunity. They could reorganize society on woke values, with themselves in charge as high commissioners of purity. They could trade institutional authority for social control. With uneven measures of sincerity and cynicism, the cult of identity could be appropriated by power.

The young, as might be expected, despise these graying warriors, whom they consider hypocrites tainted by the very sins of racism and privilege they pretend to oppose. Periodically, woke institutions like Google and the New York Times are shaken by revolts from below, and liberal governors and CEOs get consumed in inquisitional fires. As a matter of unromantic reality, however, protesters need elite politicians and executives to be the applauding audience in the theater of grievance: they have no choice but to rely on the institutions to expand their reach and adjudicate the cult’s contradictions into some sort of bureaucratic order.

The elites, just as naturally, fear and detest the youthful zealots, whose proximity has an effect similar to that of a ticking bomb. Yet every political system needs fear-inducing enforcers. The elite class learned long ago that it inspires mostly scorn, so it has conscripted true believers to be the attack dogs of virtue and the digital SWAT teams that will keep the rabble quiet on behalf of a purified establishment.

This is the uneasy bargain that, in García Martínez’s phrase, “spontaneously coalesced” during the Trump years and today rules over every prestigious corner of America. For all the differences in age and status, the two groups come from the same stock: upwardly mobile, hyper-educated, and largely white. It’s really a family arrangement among parents and children in the upper echelons of the great American middle class.

Together, they constitute a small minority of the electorate. Between them, they control the commanding heights of politics and culture, and they may possess the means to intimidate a surly public into silence.

[…]

Christianity advanced on the strength of a double-edged strategy. From above, the government redirected its subsidies from pagan to Christian institutions, creating a potent incentive for the upper classes to see the light. From below, mobs of exalted souls ransacked pagan temples while the police stood by, intimidating ordinary people into abandoning the old gods.

But the process took generations.

They were simply new versions of old things

Monday, March 21st, 2022

Kill Chain by Christian BroseMany of the high-tech weapons systems that Rumsfeld and others billed as “transformational” were not actually transformational, Christian Brose explains (in The Kill Chain) — at least not in the way that Andrew Marshall and like-minded thinkers intended, when they proposed a “revolution in military affairs” years earlier:

These systems did not represent better, faster ways to close the kill chain. They were simply new versions of old things.

[…]

The bigger issue is that most of these allegedly information age military systems struggle to share information and communicate directly with one another to a degree that would shock most Americans. For example, the F-22 and F-35A fighter jets cannot directly share basic airborne positioning and targeting data despite the fact that they are both Air Force programs and built by the same company.

[…]

If one aircraft identifies a target, the only way it can transmit that data to the other is how it was done in the last century: by a person speaking on a radio.

[…]

The ability of these things to share information is often an afterthought. In fact, the incentives usually cut the other way: Defense companies have profited more by building closed systems of proprietary technologies that make the military more dependent on a given company to maintain and upgrade those platforms for the decades they are in service, which is where companies make their real money. This behavior stems not from malice but a rational pursuit of self-interest in a platform-centered defense market.

[…]

The connections between our military systems tend to be highly rigid, excessively manual, rather brittle, and thus slow. We have largely focused on connecting specific military systems together to generate understanding, facilitate decisions, and take actions against specific kinds of targets. But those kill chains do not easily adapt to threats that are different from those they were specifically built to address. They may be highly effective against preplanned objectives that do not change much, such as striking stationary targets in the opening days of a conflict. But our kill chains struggle to confront dynamic threats, such as moving targets, or multiple dilemmas at once.

It will be a life-and-death battle between those for and against Western democracy

Sunday, March 20th, 2022

The U.S.-China Perception Monitor published an essay in both English and Chinese by Hu Wei, a prominent think-tanker in Shanghai, T. Greer explains:

It argues that the war in Ukraine is bound to go poorly for Russia and thus China must moderate its support for Putin’s failing regime lest the post-Putin world turn against the PRC.

This essay has gotten a lot of play in China hand circles. People are eager for any news that might hasten Russian defeat. A decision by Beijing to retreat from a growing partnership with Moscow would certainly slow Putin’s cause. But there is no evidence this essay will have any such effect: this week the Chinese have agreed to ship supplies and weapons Russia, Hu Wei’s essay was scrubbed from the Chinese internet shortly after it went up, and as of today, the U.S.-China Perception Monitor is now censored in China. The highest circle of decision making in Beijing clearly does not fear events will unfold as Hu predicts.

In my mind, this essay is less interesting for what it says about Chinese intentions towards Russia and Ukraine than what it says about Chinese perceptions of the United States. If Hu has any moral objections to Putin’s war in Ukraine, he does not state them. His argument is stated purely in terms of China’s national interests. Here is the disaster Hu believes will unfold if the Chinese don’t pressure Putin to the negotiating table before his political position collapses:

[If Putin falls or is dragged into a multiyear insurgency] the United States would regain leadership in the Western world… the US and Europe would form a closer community of shared future, and American leadership in the Western world will rebound.

The “Iron Curtain” would fall again not only from the Baltic Sea to the Black Sea, but also to the final confrontation between the Western-dominated camp and its competitors. The West will draw the line between democracies and authoritarian states, defining the divide with Russia as a struggle between democracy and dictatorship… It will be a life-and-death battle between those for and against Western democracy. The unity of the Western world under the Iron Curtain will have a siphon effect on other countries: the U.S. Indo-Pacific strategy will be consolidated, and other countries like Japan will stick even closer to the U.S., which will form an unprecedentedly broad democratic united front.

The power of the West will grow significantly, NATO will continue to expand, and U.S. influence in the non-Western world will increase. After the Russo-Ukrainian War, no matter how Russia achieves its political transformation, it will greatly weaken the anti-Western forces in the world. The scene after the 1991 Soviet and Eastern upheavals may repeat itself: theories on “the end of ideology” may reappear, the resurgence of the third wave of democratization will gain momentum, and more third world countries will embrace the West. The West will possess more “hegemony” both in terms of military power and in terms of values and institutions, its hard power and soft power will reach new heights.

China will become more isolated under the established framework. For the above reasons, if China does not take proactive measures to respond, it will encounter further containment from the US and the West. Once Putin falls, the U.S. will no longer face two strategic competitors but only have to lock China in strategic containment. Europe will further cut itself off from China; Japan will become the anti-China vanguard; South Korea will further fall to the U.S.; Taiwan will join the anti-China chorus, and the rest of the world will have to choose sides under herd mentality. China will not only be militarily encircled by the U.S., NATO, the QUAD, and AUKUS, but also be challenged by Western values and systems.

At least some of the fierce resistance by Ukrainian forces has its roots in a now shuttered covert CIA training program

Saturday, March 19th, 2022

As the battle lines hardened in Donbas, back in 2014, CIA paramilitaries made their first secret trips to the frontlines:

Ukrainian snipers had a problem: Russian forces in eastern Ukraine were trying to blind them.

As the Ukrainians were looking through their scopes in order to find their targets, the Russians had begun pinpointing their location using the glare of the glass, and were shooting high-energy lasers into them, damaging the snipers’ eyesight.

[…]

CIA paramilitaries soon concluded that, in Russia and its proxies, the agency was facing an adversary whose capabilities far outmatched the Islamist groups that CIA had been battling in the post-9/11 wars. “We learned a lot real quick,” says a former senior intelligence official — including about the Russians’ laser-blinding techniques. “That s*** wouldn’t happen with the Taliban.”

[…]

At least some of the fierce resistance by Ukrainian forces has its roots in a now shuttered covert CIA training program run from Ukraine’s eastern frontlines, former intelligence officials tell Yahoo News. The initiative was described to Yahoo News by over half a dozen former officials, all of whom requested anonymity to speak freely about sensitive intelligence matters.

The program was run under previously existing authorities for the CIA and did not require a new legal determination for the agency, known as a covert action finding, according to a former national security official.

As part of the Ukraine-based training program, CIA paramilitaries taught their Ukrainian counterparts sniper techniques; how to operate U.S.-supplied Javelin anti-tank missiles and other equipment; how to evade digital tracking the Russians used to pinpoint the location of Ukrainian troops, which had left them vulnerable to attacks by artillery; how to use covert communications tools; and how to remain undetected in the war zone while also drawing out Russian and insurgent forces from their positions, among other skills, according to former officials.

After Russia’s 2014 incursion, the U.S. military also helped run a long-standing, publicly acknowledged training program for Ukrainian troops in the country’s western region, far from the frontlines. That program also included instruction in how to use Javelin anti-tank missiles and sniper training.

Yahoo News reported in January on the CIA’s secret U.S.-based training initiative for Ukrainian special operations forces and other intelligence personnel. That program, which began in 2015, also included instruction in firearms, camouflage techniques and covert communications. Yahoo News’ prior report also revealed that CIA paramilitaries had traveled to eastern Ukraine to assist forces loyal to Kyiv in their fight against Russia and its separatist allies.

On-duty police fatally shoot about 1,000 people every year

Thursday, March 17th, 2022

When Ferguson burst into flames, Robert VerBruggen notes, we knew very little about the true number of people killed by police, unarmed or otherwise:

In a survey conducted by Manhattan Institute colleague Eric Kaufmann, for example, eight in 10 African-Americans and about half of white Biden voters said that they thought that young black men were more likely to be shot to death by police than to die in a car accident — one of the largest mortality risks to the young and healthy. Another survey, by Skeptic magazine, showed that more than a third of liberal and very liberal respondents thought that the number of unarmed blacks killed by police each year was “about 1,000” or more. About a fifth of those calling themselves “very conservative” thought the same thing. Yet another survey, from a trio of academics, found that about four in 10 African-Americans reported being “very afraid” of being killed by the police, which was roughly twice the share of black respondents who reported being “very afraid” of being murdered by criminals, as well as about four times the share of whites who reported being “very afraid” of being killed by the police.

[…]

So what do the basic numbers and five years of research reveal? These are the major findings detailed in the following pages:

On-duty police fatally shoot about 1,000 people every year. This number and its racial breakdown have remained remarkably steady since 2015. The overall Post tally has ranged from a low of 958 in 2016, to a “record” of 1,055 in 2021 (reported as this paper went to press), with any pattern difficult to distinguish from random chance.

Approximately a quarter of those killed are black. This is roughly double the black share of the overall population, but it is in line with — and sometimes below — many other “bench-marks” that one might use for comparison, such as the racial breakdowns of arrests, murders, and violent-crime offenders as reported by victims in surveys.

Blacks are an even higher percentage of unarmed civilians shot and killed by police (34%), which is a potential sign of bias. However, not all shootings of unarmed civilians are unjustified, and it is difficult to objectively classify these cases in a more granular fashion. And contrary to the popular perceptions outlined above, confirmed fatal police shootings of unarmed African-Americans number about 22 per year.

More rigorous research into the question of whether police killings reflect racial bias is in its infancy, and it has been subject to intense debates over the appropriate methods. But existing studies are divided on the bias question. Many papers fail to find bias in lethal force, though one of the most careful studies in the literature — of an unnamed city with a high murder rate — does find that white cops discharge their guns several times as often as black cops when sent to 911 calls in heavily black neighborhoods.