Why the Chinese military can only get so big

Pentagon hawks tend to do these wonderful extrapolations of Chinese defense spending: taking the highest estimates of gross economic size and then imagining that nothing changes in Chinese politics or economics or society that would threaten the military's share.

This is, of course, complete and utter nonsense, to wit:

WSJ interview with CEO of Frensenius, one of the largest health-care companies in the world.  Based in Germany, already huge around the planet (one-third of the dialysis in US), and gearing up for a big push into China.

The focus?  Dialysis.

What? China has all these patients all of a sudden?

Well, yes.

Yes in that it's always had a sizeable portion of people who've needed it, but maybe had their demand unmet due to poverty.

Yes also in that dialysis requirements tend to rise with the wealth of a country.  The truly poor tend to go without, but the middle class and rich, as their numbers swell . . . tend to demand it - go figure.

Then there's the rising "wealth" of the government itself: China can, and is more willing to, pay for such services as part of government-sponsored health-care:

WSJ: How's the dialysis business in emerging markets?

Mr. Schneider: Fantastically well. [Historically] there's not that much demand for dialysis products or services because it's a fairly expensive treatment. Now, there's a whole lot of catch-up demand. Once a country nears $8,000 to $10,000 in annual per capita GDP, [governments] and insurers really start to pay for dialysis. That's when things take off.

Coincidentally, a lot of non-democratic governments tend to go democratic in that range.

Chart of the day: Economist's listing of top 15 natural gas resources

On the unconvential (shale): the usual list that I work with, with the addition of Russia as #3 in world.  Most experts don't talk all that much about Russia because, with all their conventional gas, there's not a great need to exploit.

But the real kicker for me in the charts is the bottom right one, which is a stunner: by 2030 the projection that gas, coal and oil all converge in the high 20s as basically equal shares in world primary energy usage.  Several stories here:

• Gas displacing coal (not surprising)
• Long slow increase in nat gas production/use
• And then the true stunner of such a huge drop in oil (about 45% in 1970 to high 20s in 2030).

Fascinating stuff.

Where China and the US are clearly collaborating

Nifty WSJ full-page report in mid-June entitled, "Beneath a war of words, money paints a different China-U.S. picture."  The subject?  Chinese investments in US renewable energy efforts.

Just like in the case of hydraulic fracking, we see the Chinese eager to collaborate.

Naturally, as the less advanced technology economy, the Chinese are eager to go beyond collaboration into . . . ahem . . . aggressive collaboration, let's say.  But let's be honest: that's the incentive for the less-technologically gifted party in any technological investment. For the more advanced party, the goal is an expanded pool of opportunity over time:

Read the headlines and you find a war of words between the U.S. and China over clean energy, with the two countries trading barbs over whether Chinese solar-panel makers are dumping their wares onto the U.S. market at prices so low they're illegal. Follow the money more broadly, however, and you see something different: clean-energy investors and executives from the two countries starting to do deals.

Chinese businesses, typically with Beijing's support, are beginning to buy stakes in U.S. clean-energy companies and projects, often with Washington cheering. The deals span technologies from cleaner ways to burn coal to cheaper ways to use renewable power.

Each side has reasons to expand this capital flow. The Americans get the Chinese money and, with it, access to China's vast market, which is far hungrier for clean-energy innovation than the U.S. The Chinese get U.S. technology to help sate their soaring energy demand, and a place to invest that looks positively low-risk compared with their home turf.

As for the fears? Money talks - no matter the language.

One reason is economic. Federal stimulus money for the energy industry is tapering off, and other federal clean-energy subsidies, many of which failed to deliver enough bang for the buck, are likely to get pared back, too. More than ever, U.S. clean-energy companies could use the help of China's investors and consumers.

Another reason is environmental. Many clean-energy technologies are getting cheaper but are still too expensive to compete against conventional fossil fuels. The only way they stand much chance of gaining real scale is if the world develops and deploys them in the most economically efficient way: across national borders. Moreover, if American clean-energy technologies aren't deployed in China, where air pollution is thick and greenhouse-gas emissions are rising, then whatever cleanup those technologies accomplish on U.S. soil won't much matter.

Thank God for the logic of businesspeople.  Imagine if the Pentagon could aspire to such thinking.

Wikistrat's blog shifts into higher gear

Wikistrat has had a blog for months now, but the postings were pretty much limited to noting analytic products as they emerged from simulations, so a relatively low frequency.

That changes now, as Wikistrat starts making the blog available for the global community of analysts to start populating with their own material in sort of a group blog dynamic.

Examples:  

• Nice post by Dr. Dr. Ehsan Ahrari, CEO of Strategic Paradigms, on Russian-Syrian relations.
• Summary analysis of recent global events by the Counter-Terrorism Desk.
• And a 24-hour ask-the-expert drill with Senior Expert Zacharias Michas, currently Director of Studies at the Institute for Security and Defense Analysis in Athens.

Over time, the goal is to get the group blog as the primary public "center of online gravity" for Wikistrat, as we switch from a more "this is Wikistrat" public-facing site.  Of course, a start-up sticks with that sort of here-we-are approach for as long as necessary to build up its initial clientele.  But as that process proceeds quite nicely across 2012, the natural maturation of the site begins - meaning we shift from attracting eyes with our company story to doing the same with analytic product that flows in ever-increasing amounts.

TSA @ SFO, WTF?

You know you're really old when . . . TSA totally writes you off as a terrorist threat.

And here I was all excited about being able to run in the 50-59 pool at road races!

Still, something to look forward to, heh?

Naturally, al-Qaida will adjust . . .

The struggle continues to unfold across Africa

Interesting op-ed in the WSJ over the weekend, from a writer who writes frequently for the paper.

The recent spate of attacks on Muslim historic and religious sites in the ancient city of Timbuktu calls to mind the Taliban's destruction of the Bamiyan Buddhas in Afghanistan over a decade ago. The Taliban, of course, were obliterating the icons of a rival religion, as they saw it. The Salafist militias that have lately overrun Timbuktu and Mali are obliterating a rival tradition within their own faith . . .

Such incidents have now become a global phenomenon. In effect, primitive iconoclastic strains of tribal Islam have burst out of their historical isolation on the margins of civilization and coalesced globally to attack the more cosmopolitan, syncretistic and culturally advanced centers of their faith.

To Western minds, Mali denotes the most marginal of places in the African desert. But it is home to African Islam . . . 

This is the new power topography of the Muslim geosphere. Oil money has funded extremist madrassas, or religious schools, to propagate a stripped-down, one-size-fits all ideology precisely suited for pollination across impoverished regions such as Somalia, Yemen, Nigeria, the Pakistani-Afghan border and the like. With money and threats, this international extremist franchise has targeted peaceful Muslim lands where the faith had blended with local customs or become more cosmopolitan through contact with other cultures. Places, in other words, where Islam had lost its aggression and exclusivity.

Today, radicalized imams from the outside infiltrate such places and rebuke the natives for their superstitions and weakness, their relaxed and idolatrous ways. Few can resist the irruption of money and guns legitimized by a virulent Quranic rhetoric, however pious they may be.

Some of the oldest communities in Islam, loosely categorized as Sufi for their mystical bent and ecstatic rituals often involving dance and music, have come under attack . . . 

In the radical worldview, violence furnishes the litmus test: All authentic Muslims are jihadists, or holy warriors. The addition of anti-imperialism to the religious ideological mix happened under the Afghan resistance to the Russian occupation. Anti-imperialism has become so central to radical Islam's message and appeal that these days any fellow Muslim daring to demur gets branded a foreign agent.

Yet the real imperialists, the outsiders bent on conquest and control, are the radicals themselves . . . 

Been a projection of mine going back through all three books:  the Mideast middle-ages, going from a median age of about 22 to one in the early-mid 30s by the 2030s.  We are watching that journey now unfold with the Arab Spring.  So the question has long been:  where does the Salafist impulse go?

Two "bottom billion" pools:  interior Africa and Central Asia.  Basically fake states in both instances, created by outsiders.  That artificiality makes the political situation brittle enough for enough money and guns to matter.  

I've never been a betting man regarding Central Asia:  too many great powers too eager to snuff out that situation.  The Shanghai Cooperation Organisation was basically created for this purpose.

Africa doesn't offer rich soil in terms of the local Muslim, who tend to be, as the op-ed points out, moderate in just about all ways.  But I never predicted Africa was suffer this problem because of the nature of Islam there.  the problem is the weakness of the states to deflect the impulse.

That's why America created Africom - in a nutshell.  I know people want to paint the oil, but that's a weak attractor and it flows pretty much no matter what (hasn't exactly stopped out of the PG, has it these past 3 decades?).

No, I don't think radical Islam wins in Africa.  I just think it'll be the last great fight - and it won't go quickly.

Galrahn finally getting his own well-deserved press coverage

Solid Danger Room piece by David Axe (HT Craig Nordin) on Raymond Pritchett and his Information Dissemination blog and the impact it's clearly having on USN thinking over time.

Very nice to see.  Ray (pictured left) is a very nice guy who deserves any positive coverage he gets.

Chart of the Day: the oil sanctions are working on Iran

Arguably the primary reason why Israel holds off attacking - that and its modest satisfaction with the success of the combination strategy of cyber warfare attacks and assassinations of technical personnel.

You can see that the sanctions have taken about a million barrels a day - or about 40% of daily production denied in terms of sales.

That is significant - and a genuine success for Obama.

The hottest subject in oil deals today involves anybody who has been a regular buyer of Iran.  All of these states are looking to replace - now.

And no, they don't all go running to the Saudis.

This chart is a month old.  More recent news says roughly 50% drop in May-June alone.  Not sure I buy that. Lots of desperate deals happening out there involving Iran.  But clearly, the trend is downward and steep.

I honestly do believe that the Arab Spring is helping plenty.  With Syria on the ropes, the anti-Iran long knives are out.

The generational shift emerging in Chinese society

Nifty FT piece on the emerging post-Tiananmen generation - or anyone too young to remember that. Here they're talking only up to 24 years old, but in truth, you could easily go as high as 30-32, because people don't come of age on political matters til around 13 at the earliest.

As it is (rough eye-balling here), you think the under-25 crowd in China is close to 1/3rd of the population.

Piece argues that recent enviro demonstration "exposed a new vein of activism" among this crowd.

You know the old bit (repeated by me) where Chinese activists said, "Before Tiananmen, we thought freedom was 90% political and 10% economic.  After Tiananmen, we decided that freedom was 90% economic and 10% political."

When I first heard that bit, I loved it immediately as a basic expression of the lesson that virtually all revolutionary generations learn throughout history:  it's easier to revolutionize the environment through technology and commerce than through politics (which, in Marxian fashion, reflect those deep underlying realities).  So what I'm saying here is that most revolutionary generations learn that it's smarter to inexorably reshape the base than attempt to smash - one afternoon - the superstructure.

Why environmentalism is such a signpost of change: it's the political issue that translates so clearly to economic progress, because it defines the point where people look up from their economic successes and start asking the tradeoff questions. Yes, labor wages tend to precede as an issue, but that's such an intra-business issue (especially in a place like China where you're talking foreign owners). Environmentalism, in contrast, is undeniably local - even intimate (your bodies and what you put in them).

Overall, a great piece worth reading.  The "post-90" generation is starting to graduate from college and displaying a keen interest in politics.  With a tougher economy awaiting them, the instinct to seek better answers will be strong - along with the communication capacity for self-organization (see the unsurprising youth skew on "netizens").

No, I don't see some fast wave a'coming.  I see about a two-decade struggle where the government and Party consistently yield ground because it's the best choice for continued growth accompanied by political stability.

Time's Battleland: (CYBER) New Air Force Mission: Cyberwar Belongs to Us

The Wall Street Journal noted last Friday about how the “Pentagon digs in on cyberwar front.” Bit misleading, as it’s really the Air Force that’s desperate to corner that market. You know the general story of Big War Blue (Navy, Air Force) feeling disrespected and underfunded across the “war on terror” era, and you’ve been treated ad nauseum to their budgetary counter-revolution in the form of the AirSea Battle Concept (whose combined Air-Navy motto should be: “It’s China’s turn — as well as ours!”).

Read the entire post at Time's Battleland blog.

Chart of the day: Why US ag subsidies are going away

From an Economist story about how Congress will eventually dismantle the ag subsidies long distributed to US farmers and ag corps.

"Disruptive Technology and Reforming the Pentagon Establishment (5 part series)

Series at Small Wars Journal on military innovation by Thaddeus Jankowski, long-time reader, source and colleague.

From the start:

Introduction

In 2006-2007 I was one of the first few officers within U.S. Central Command to initiate the comprehensive Mine Resistant Ambush Protected (MRAP) vehicle program as we know it today—for all the Services. MRAPs rapidly became the largest land acquisition program in DoD history, comparing favorably in the history of American warfare to toolsets such as Higgins boats, F16s/F18s, A10s and LAVs in terms of breadth of use and overall importance.  Since thousands are alive today because of innovations like this, a few perspectives from an actual innovator of this and other technologies may help the Pentagon better understand technology in wartime.  On the battlefield, military officers have embraced change, rapid maneuver and chaos; now we must learn to extend these time-based theories to the support establishment.

My experience initiating MRAPs, along with many other important new devices of counter insurgency warfare, suggests that little has changed since Col. Burton wrote the words above.  From 2006 to 2010, I systematically and repeatedly advocated for something that was common in civilian businesses but lacking in the Department of Defense: application of maneuver warfare principles to the support establishment. We needed a disciplined, transparent, rapid technology initiation process. 

The opening piece is a great one. The other four articles in the series are coming out one per week over the next four weeks.  All will be worth reading.

India: a nice signpost of the - necessarily - coming progressive era

Nice WSJ weekend piece that chronicles the recent media rise of a sort of muckraking Phil Donahue (the original US avatar of the wave of "truth" exposing shows that blossomed in his wake - Sally Jesse, Oprah, and so on) in India:

The format of "Truth Alone Prevails" is simple. (The show airs on the Star network, which, like The Wall Street Journal, is owned by News Corp.) Mr. Khan introduces the issue of the day to a live studio audience; a short video is shown, featuring a real-world case of hardship or injustice; and then, with only a modest amount of television wizardry, the lights come up and the person from the video is on stage, seated opposite Mr. Khan. And they begin to talk. Mr. Khan does not dazzle the audience with his star power; for the most part, he just listens. It is his guests, often heartbreakingly ordinary, who do the talking.

What emerges from their stories is a creeping horror, a vision of modern India that is stark and deeply unsettling: the family whose mother's life is snatched away, they say, in a botched and unauthorized organ transplant; the 12-year-old girl who accuses a 55-year-old family friend of sexual abuse; the call-center worker who tells of the forced abortion of her female fetuses—six times in eight years—at the hands of her husband's family. Mr. Khan's style is wry and laid back, but occasionally the stories are too much for him, and his eyes well with tears.

“Though all manner of cruelty and casual violence are on display, the show is essentially uplifting.”

India has not always been comfortable looking this hard at itself. Mr. Khan's show indicates a new candor and boldness, and the response has been staggering. As he told me, "We used to sit back, my team and I, and discuss how people would react, what they would feel. And the kind of response we dreamed of, and hoped for, that is exactly what we're getting." He admits to being emotionally drained by the show at times: "There's a lot of trauma, a lot of distress, a lot of injustice" out there, he said, and he has yet to commit to a second season. But he also says that he encountered an "equal number of examples of courage, high levels of integrity and deeply honed values."

Critics have accused Mr. Khan of being far less reliable on scientific issues than he is on social ones. Some also say that the show is preachy, even messianic, and that its research is not always up to scratch. 

This, and the rise of "bureacratic lit" (obliquely critical books on Chinese officialdom), are signposts - in my mind - of the inevitable progressive wave (lasting decades in length) that both India and China are doomed to "suffer." It's just what comes next . . . after such tumultuous rises where so much of society is exposed to opportunity in which many succeed, some take cruel advantage (nothing succeeds like excess), and plenty feel screwed over (the populist anger impulse).

The end of the WSJ says it all:

What gives "Truth Alone Prevails" its optimism is the voice of India's new middle class, which is increasingly politically and socially aware, though still unsure of itself and its newfound wealth and security. If the old India of my childhood [writer is an Indian part-time expat] - which was a far bleaker place - is to be superseded, it will depend on this new class' ability to understand and defend the freedoms that have enriched it.

Beautifully written and very perceptive piece, and a genuine signpost for analysts who track strategic trends.

Hopeful sign of a sustained Africa take-off?

WSJ story on how Africans are starting to invest in Africa in a big way.  We're talking FDI, or foreign direct invesment that crosses borders and, in contrast to stock markets, represents "sticky money" in that it involves investment "directly" into assets.

Historically, when a region takes off, it's local money followed by extra-regional money in terms of sequencing. Same holds with panics: local money freaks first, triggering same with extra-regional.

Afric is different, because so much of its wealth, once captured by its elites, has gone abroad (I've seen estimates as high as 40%).  Word has been that a good portion of that money is now coming back to take advantage of things.

But this story is about big commercial entities across Africa getting more into cross-border investments, which is incredibly positive. I have run into a certain amount of this in my own dealings on the continent, with tiny Mauritius playing the Singapore role.

What the charts show:  Although the financial panic of late 2008 didn't make a dent, because Africa's financial connectivity (hence exposure) is limited, the slow down does eventually impact extra-Africa FDI: big Western markets slow and that slows Asian exports and that slows FDI into Africa generally because the continent is first and foremost a raw materials supplier.

But the good news of the piece: Africans themselves have picked up a decent portion of the slack, which is quite encouraging.

Total self-sustainable liftoff?  Hardly.  Africa's great hope of the past few years is that rising Asia (and other developing risers) might provide a sustained demand for materials that the West, in its more isolated boom-and-bust cycles of the Cold War, ever could.

Some concern there as we all now watch China slow down - inevitably - as it moves from extensive (at least along the coast) to intensive growth.  The hidden hope there?  China goes intensive along the coast and keeps taking advantage of extensive growth in the interior.

Something to watch re: global stability

FT piece on how the intense heat and drought currently across most of the US farm belt is causing grain futures to rise.

From lead:

Few farmers in America's corn belt have seen anything like it. Only weeks ago, they were looking at a record-breaking harves.  Those hopes are fast turning into a mirage.

The hote summer in the US, the world's biggest exporter of corn, soyabeans and wheat, could have far-reaching effects on global agricultural markets, where memories of the 2008-08 food crisis are still fresh and price have been volatile on the back of a drought in South America.

Indiana is a big corn and soybean producer, and I can tell you that, after a very dry winter and unusually non-rainy spring, we haven't seen significant (more than half an inch) rain since 1 May.  We are thus phenomenally dry - as in, unless you irrigate your lawn, you're done mowing (as I have been) for about 4 weeks now.

Example of US corn: farmers here planted 5% more acreage this year, and under reasonable circumstances, there were very solid expectations for record harvest.

Point being, we are looking at very far-reaching - as in, global - repurcussions on food prices, which - by extension, determine a lot of political stability in countries with high import requirments (Southwest Asia leads the way) and where well over half of family household budget is spent on food (virtually the entire Gap).

India's exploding energy requirements

Good article start, which, in true inverted pyramid fashion, gets all the work done right up front.

India is facing an energy crisis that is slowing economic growth in the world's largest democracy.

At stake is India's ability to bring electricity to 400 million rural residents—a third of the population—as well as keep the lights on at corporate office towers and provide enough fuel for 1.5 million new vehicles added to the roads each month.

Shortages of coal, oil and natural gas will require India to import increasing amounts of high-cost fossil fuels, say energy experts, risking inflation and putting the country in stepped-up competition with China, Japan and South Korea. Buying oil from Iran, one of India's biggest suppliers, is tougher because of U.S. and European sanctions aimed at curbing Tehran's nuclear ambitions.

With annual demand expected to more than double in the next two decades to the equivalent of six billion barrels of oil, the energy crunch threatens to knock India off its growth path. The national economy has already slowed amid paltry business investment and stalled reforms. It tallied just 5.3% growth in the quarter that ended March 31, the lowest level in almost a decade and well shy of the country's 9% goal.

With annual demand expected to more than double in the next two decades to the equivalent of six billion barrels of oil, the energy crunch threatens to knock India off its growth path. The national economy has already slowed amid paltry business investment and stalled reforms. It tallied just 5.3% growth in the quarter that ended March 31, the lowest level in almost a decade and well shy of the country's 9% goal.

The charts above lay out the problem:  Electricity growth is pretty much a proxy for GDP growth.  If you want to grow your economy fast, you have to grow your grid capacity similarly.  China is getting it done. India is not.

The oil imports stuff is pretty classic for the trajectory: roughly a 5-fold increase since just 2004.  I see this growing demand expressed in deals I'm structuring.

But the one that jumped out at me, per the recent Wikistrat sim on "North America's Energy Export Boom," was the coal shortfall now covered by imports.  Our sim was mostly about natural gas, of course, but the displacement effect in electricity generation means we have a lot of stranded coal capacity emerging here in the US - coal that could go abroad effectively because it's energy quotient is world class.  The story describes recently constructed coal-burning electricity-generation plants that are operating below capacity - or worse, are idled - for lack of coal.

I've seen industry estimates by US coal experts that say India will be a prime source of export growth over the next couple of decades.  This article makes clear the "why."

A perfectly stupid 4th of July WAPO feature

Ann! You could be doing this 8 hours a day instead of writing this quasi-apocalyptic crap for WAPO!

We are slaves to technology and connectivity!  Slaves, I tell you!

By Ann Gerhart, who checked out an island of civilization in a DC Starbucks during an extended power outtage as research for this thoughtful piece.

The truly goofy start ...

Americans are a freedom-loving people.

Or, we used to be.

Before clutter, before Google and Facebook and voluntary enslavement to our kids. Before cellphones that make us always reachable and never alone. Before financial institutions reaching into our “convenient” online bill-paying mechanisms and taking fees. Before electric grids and fiber-optics and wireless transmissions that, when they go down, go down really big — and drag our self-reliance down with them.

Before we built our shaded backyard retreat but gave up our free time.

We may fly the tea party flag and protest against the tyranny of federal power, but in our daily lives we now are a freedom-surrendering people. Government mandates and perceived incursions into our rights as enshrined by the Founders? The least of our problems.

We diminish our independent selves all by ourselves.

The rest is a bunch of bitchy, whiney material leveraging the extended power outtage in and around DC. If she's trying to be funny, she's not trying hard enough.  Instead of real humor, we are left with fanciful insinuations of "societal collapse" just around the corner.  Ann clearly needs to get outside the Beltway now and then.

I suggest a trip to Plimouth Plantation in Massachusetts to get a clear sense of the "good old days" when we had real freedom . . . to crap in a hole in the ground . . . to carry water in buckets . . . to watch our children die half the time before reaching age 5 . . . to treat our women like property . . . to own slaves . . . to commit genocide against Native Americans, you know, back when freedom was real and we were genuinely self-reliant and were born with a life-expectancy well below 50!

That was living.

Now we're just all enslaved to Apple or Google Maps.  Oh, the inhumanity!

These devices and services don't free us whatsoever.  Just look around DC after the storm: this is true freedom my friends!

Freedom to write crap like this!

The Apprentice . . . without that jackass Trump

Fascinating WSJ piece from a few days back describing how German companies excel at training up their poorly prepared new workers so well that they're starting to spread their best practices globally.  It's basically a revival of classic apprenticeship training, and apparently German firms like VW are so good at it that companies and states and the fed in the US are looking to copy their methods.

Why?

There are 600,000 skilled, middle-class manufacturing jobs in the US that are - get this! - currently unfillable.

The VW HR person's blunt statement:

We've learned it is better to build our own workforce instead of just relying on the market.

VW's apprenticeship program runs 3 years.

I've gotten asked such questions about the US education system for years at my briefings all over America.  And I've always answered with some variation on the need for companies to both train up poorly prepared workers and reach down into educational systems to do much the same (what if VW oversaw the same sort of thing - for profit - at the right colleges/votec/institutes/etc.?).

But I've never actually come across an MSM article that captured it like this one does.

More:

In Germany, nearly two-thirds of the country's workers are trained through partnerships among companies, technical schools and trade guids. Last year, German companies took on and trained nearly 600,000 paid apprentices

Nice numerical symmetry there - huh?

Story talks also about Charlotte community college that is pursuing the same sort of collaboration with 18 local firms - mostly European.  As one German exec put it:

We think we've found the missing link in the education system between high school and starting college.

In the U.S., falling into that gap costs lifetime earnings that are stunning.

This seems like a way of filling in that void.

It's one of those everything-old-is-new-again stories.

The political/generational impact of the Great Recession

Check out this bit from today's NYT:

In the four years since President Obama swept into office in large part with the support of a vast army of young people, a new corps of men and women have come of voting age with views shaped largely by the recession. And unlike their counterparts in the millennial generation who showed high levels of enthusiasm for Mr. Obama at this point in 2008, the nation’s first-time voters are less enthusiastic about him, are significantly more likely to identify as conservative and cite a growing lack of faith in government in general, according to interviews, experts and recent polls.

Polls show that Americans under 30 are still inclined to support Mr. Obama by a wide margin. But the president may face a particular challenge among voters ages 18 to 24. In that group, his lead over Mitt Romney — 12 points — is about half of what it is among 25- to 29-year-olds, according to an online survey this spring by the Harvard Institute of Politics.  And among whites in the younger group, Mr. Obama’s lead vanishes altogether.

Among all 18- to 29-year-olds, the poll found a high level of undecided voters; 30 percent indicated that they had not yet made up their mind. And turnout among this group is expected to be significantly lower than for older voters.

“The concern for Obama, and the opportunity for Romney, is in the 18- to 24-year-olds who don’t have the historical or direct connection to the campaign or the movement of four years ago,” said John Della Volpe, director of polling at the Harvard Institute of Politics. “We’re also seeing that these younger members of this generation are beginning to show some more conservative traits. It doesn’t mean they are Republican. It means Republicans have an opportunity.”

There is the strong evidence that a minority-white/majority non-white America favors the Dems long term, but history also says that an extended "tough time" favors the GOP, especially when you remember that the average voters behaves - over the course of his or her life - much like a car-buyer, meaning your first "purchase" typically creates a brand loyalty that is highly consistent over your life (meaning, it has an imprinting function that is profound).  Simple example:  If the first car you buy is a Ford, you will  - on average - buy more Fords over the rest of your life than any other car - hands down.  Same is true in voting for president.

Point being, while the demographic shift will still favor Dems (as currently defined) against Republicans (as currently configured), this long recession will have its own profound imprinting impact as well.  I see it in kids through the prism of my 20-year-old daughter (now in college).  They face a hostile labor market not unlike the one my generation faced in the early 1980s.  Between that point and 2008, college-age cohorts faced a fantastically (in historical terms) consistent positive labor environment. But my impression is that those days are gone - probably for good given the competitive landscape now created by a maturing globalization.

So, again, you have your demographic trends and you have your economic realities trend.  Both are profound influencers. I'm just saying nothing is carved in stone in terms of long-run trends, especially as I expect both parties to be significantly reshaped by these dueling trends over the next decade or so.

Still, I see little in any of these reports that convinces me Obama will fall in the Fall.

Movie of My Week: "Red Cliff" (2008)

Nice conversation with a colleague in the energy field who has lived for years now in the northern Chinese city of Shenyang.  We started talking Chinese history and he vigorously recommended these films - by John Woo no less!  I had heard that Woo was going to concentrate on Chinese history for a bit.  It's a two-parter covering the Three Kingdom's warring period (3rd century AD).

I haven't seen it yet but plan on getting it this nice combo BluRay version.