The knock on NOC's

"Paying the Pumper," J. Robinson West, Washington Post, 23 July, p. A29.

"Scrutinizing the Saudi Connection: Questions the 9/11 commission left unanswered," by Gerald Posner, New York Times, 27 July, p. A19.

Lotta people sending me info on the infamous Hubbert curve analysis that "proves" global oil production is irrevocably peaking and thus inevitably heading toward a crash. The analysis is essentially correct but fundamentally myopic, because it largely misses a fundamental fact about global oil markets: they are not run by multinational corporations but far more by national oil companies, or NOCs. NOCs control 60% of production but control close to 90% of reserves, as West points out in his excellent op-ed in the Post:

The capabilities of the national oil companies vary widely. Some are as competent as the international firms. Others are deeply corrupt and lack the capital and skill to meet the sophisticated requirements of portfolio and reservoir management. Furthermore, exploration for new reserves can involve massive risks, which most governments are unwilling to underwrite, whereas the internationals, with huge balance sheets and diversified portfolios, are quite comfortable with these risks.

The thesis of the Hubbert curve is correct, but the conclusion that a fall in global oil production has inevitably begun is not. The Hubbert curve analysis applies where full commercial exploitation has taken place, but in many areas, other factors, including politics and policy, weigh in. It is true that production in most of the United States, Canada and the North Sea is in declineóthere, exploration and production have been exhaustive. But the most oil-rich areas, notably Mexico, Venezuela, Russia and the Middle East, have not been fully explored.

As West so aptly puts it: "National companies are government agencies accountable to their governments first and the international markets second." Why don't NOCs fully exploit their reserves? As West states, "The indigenous oil industries in these countries, usually national companies, resist international foreign investment. They don't want the competition, nor do they wish to share the economic rent from the oil."

If the NOCs were to open up their national industries to competition, there would be a bigger pie for the country as a whole, but less control for the elites who dominate the NOCs andólikewiseóthe governments that own them. This is classic Gap state behavior: preferring a smaller pie that they can control more fully than a larger one that might escape their control. This is the essence of the oil curse: you treat wealth as a zero-sum concept. You act as though there is only so much wealth in the world, so you must hoard what you have. Getting Gap states off the oil curse forces them to treat wealth-generation as non-zero-sum, meaning everyone can get richer with the right investment in things like education, information connectivity, and tax incentives for foreign investment. Countries without such natural resources simply have to develop their people first and foremost if they want to get ahead in the global economy. Theyíve got no choice.

What is wrong with the Middle East can't be solved by stopping the flow of financial support to terrorists groups. Yes, it would be nice if rich Saudis didn't fund al Qaeda, but that is only a symptom of what's really wrong with the Middle East: elites that hoard the natural wealth of the country while keeping the massesóespecially the womenódown and far too ignorant. Whenever publicly-owned companies dominate an economy, broadband economic development will be retardedóplain and simple. That skewed development pattern gives rise to political rigidity on top and suppressed anger below, and that's what defines the latent and real instability of much of the Gap. Deal with that realityóthat fundamental disconnectednessóand you deal with the real roots of terrorism.

Let's see . . . plus up foreign aid or search every cargo container?

"At Nation's Ports, Cargo Backlog Raises Question of Security," by John M. Broder, New York Times, 27 July, p. A12.

Should America's big ports possess the best, most sophisticated technologies and terminal systems for transmodal operations? Certainly, we should aim for the same standards now achieved in Singapore, Hong Kong and Rotterdam, because such efficiency determines economic competitiveness to a large degree.

But how much should we focus on port security? Stephen Flynn, with his new book "America the Vulnerable," is generating a lot of sales and buzz like this article, by speaking of containers as "the poor man's missile" and saying "the question is when, not if" such containers will be used to deliver WMD into the U.S. He may well be right in his fears, but because he offers no context and thinks only of worst-case vertical scenarios, he tends to oversell his case. We've got the "bin Laden tax" already on the airline industry, and inevitably it gets place squarely on the shipping industry as well, either out of preemptive fear or in response to actual attack. But what we really have to ask ourselves is how much protection do we actually buy with such investments? There is simply no sense of balance in these arguments, or in this America-at-risk plethora of books now hitting the market.

Firewalling America off from the outside world may seem logical, but it really comes down to spending a lot of money on ourselves in order to reduce our connectivity with the global economy. Efficiency yes, but universal transparency is a chimeraóa goal far more likely to reduce our connectivity than enhance or protect it. Plus, it does nothing at all in terms of reducing the sources of terrorism, or shrinking the Gap.

We are losing our sense of proportion in this global war on terrorism. Our instincts are always to pull back and look out for ourselves, instead of stepping forward and embracing the world for what it needs from us.

Port security is not about winning a GWOT, just about not losing one. When you play primarily not to lose, I guarantee you can't win.

Flynn can spread fear all he wants, and yes, he will inevitably be right, as even a broken clock is twice a day, but this is not a strategic approach to the problem set. We cannot prevent vertical scenarios like 9/11, and spending our scarce resources trying to do is misguided. We need to build robustness in terms of our ability to respond to and handle all the horizontal scenarios that result from a vertical scenario, because therein lies our true talents and strengths as the world's most horizontally networked society and economy and political system and military power.

As Peter Drucker admonishes, we need to stick with our strengths and outsource the rest. Our strength is connectivity, not firewalls. Our strength is engagement, not isolationism. This struggle is an away game, not a home game.

Good coffee is one thing, good leaders another

"Rwanda Savors the Rewards of Coffee Production," by Carter Dougherty, New York Times, 27 July, p. W1.

Interesting article on whether USAID should be focused on aid to growers' collectives or on encouraging individual entrepreneurs in the coffee business in Rwanda. Collectives are better at ensuring quality, but entrepreneurs tend to be the ones who bring in the technology that really improves production.

Here's the real meat of the article though:

Ultimately though, Rwanda's customers in the United States and Europe will deliver the final verdict on who makes the best coffee. Geoff Watts, vice president of Chicago-based Intelligentsia Coffee, began buying Rwandan coffee last year, and has found its cooperatives have delivered a quality product consistently, but Mr. Watts said that over time, their leadership tends to change, irritating customers who are looking for stable business relationships.

"The guy you're talking to this year may not be the one you deal with next year," Mr. Watts said.

Another bulk buyer of coffee put it more even more bluntly: "It doesn't matter to me whether it's a co-op or not. What I care about is the reliability of the partner."

Seems like USAID's aid should be focused on keeping stable leadership in these local enterprises more than anything else, which makes this a bit of a microcosm for a good portion of the Gap. Inside the Gap, roughly one-third of states cannot keep a leader as long as four years, and that is a terrible burden when it comes to attracting long-term trade and investment relations with the Core.

China-Taiwan: the ties that bind often chafe as well

"China Raises Economic Heat on Taiwan," by Jason Dean, Wall Street Journal, 27 July, p. A15.

China seems pissed off that all these years of economic integration with Taiwan has not paid off in a decline in Taiwanese nationalism, but this should be no surprise. Societiesóas well as individuals within themótend to compensate politically for things that unfold economically. So if economic integration is occurring, expect to see people use the political realm to compensate for their sense of lost identity and freedom of action by emphasizing that political identity and freedom of action all the more. Politics in an open system has always been about dealing with our worst fears. Taiwan fears being swallowed up economically by China, and so as that economic integration process deepens, expect ever stronger language regarding political independence from Taiwan.
China should understand this development as a sign of success in their overall strategy of drawing Taiwan closer to the mainland. Those within China's political system who argue for military action areóquite franklyóthe same ones who wouldn't mind seeing China reverse its path in terms of the political and economic freedoms that have emerged in recent years there. The hard-liners may argue for seizing Taiwan as the next logical step in China's rising global power, but it would be a disconnecting event of immense proportions that would probably only hasten the decline of the Communist Party's power. After all, someone would have to be blamed for the economic and political isolation that would result, and a more nationalized Chinese society is more likely to want to "throw the bums out" than turn against their nation's military forces.

In my opinion, if China militarily invades Taiwan, we'll be watching the Chinese Communist Party commit political suicide.

The inevitable public debate in Japan on foreigners

"Tokyo urged to open doors to foreign workers," by Mariko Sanchanta, Financial Times.com, 27 July, found on story.news.yahoo.com

Foreigners in Japan constitute barely 1 percent of the population, making Japan fairly disconnected socially even as it is enormously connected to the rest of the Core in terms of finance, trade, technology, andóincreasinglyómedia content (talk to your kids about anime). Japan has long acted like it can maintain this social isolation, but it must inevitably crumble due to its aging population.

Like any advanced society, Japan tends to blame immigrants for everything bad that happensóespecially the country's rising crime rate. But if Japan thinks it can control crime by keeping foreign workers out as its worker-to-retiree ratio plummets, then it is kidding itself.

For Japan to open up in the coming decades, it will have to change its society in some very fundamental ways. Many in Japan will decry these changes, always maintaining the superiority of the "good old days," but both the world and Japan itself will be a richer place for this human transaction. Japan will inevitably do its share to shrink the Gap becauseóin the endódemographics is destiny.

The real audience for PNM, or how I can live without a NYT review

Dateline: above the garage in Portsmouth RI, 26 July 2004

Friday I get an email from a TX-based academic who's doing a study of my work and comparing it to Niall Ferguson's. His basic take: we make similar arguments about America's role in the world, the big difference being that I describe a better future world resulting from this effort and that I include prescriptions and an actual strategy for the U.S. to employ in getting the world to that point. Ferguson, the cream-of-the-crop historian right now offers nothing of that sortóstrictly a backward-looking comparison to the British Empire which he so loves.

That, my friends, is the difference between an academic historian and a practitioner in grand strategy: Ferguson can get by with diagnostics and analysis leading nowhere, but I actually have to come up with a road map, otherwise I'm a complete failure. That's because Ferguson's main audience is fellow historians and the academic crowd in general, whereas my audience is fairly specific: 1) our military; 2) other militaries; and 3) decision-makers in Washington. Ferguson needs the approval of his peers, a scholarly reputation, and good reviews. I need the approval of the "stars" (flag officers) and "bars" (lowering-ranking officers just entering into the senior ranks), broadband acceptance by the operators in the field, and real-world proof that my ideas either reflect or influence actual policy and strategy alterations.

That I do well in Ferguson's realm is nice (media appearances, nice reviews, I got NYT BSL status and he didn't!), but completely irrelevant to the book's impact. I didn't write an academic treatise looking at it from the outside, I wrote the memoir of an actual practitioner working on the inside. As such, I don't offer analysis so much as a manifesto for change.

When I get invited to address entire student bodies of professional military educational institutions like the Naval War College and the Industrial College of the Armed Forces, that is impact. When those same colleges indicate they'll be distributing PNM to students and faculty, that is impact. When I find myself pulled into senior advisory roles with senior officers at Joint Forces Command, Special Operations Command, and Central Command, that is impact. When the administration has me repeatedly brief new service secretaries as they prepare for confirmation hearings, that is impact. When I brief foreign militaries, the House of Commons in the UK, or representatives from NATO, that is impact.

And when John Kerry's people arrange for me to brief their foreign policy task force on Pentagon issues, that is impact.

I have received more than a few reviews from academics stating that my approach isn't real-world enough to be used as a true policy guide, and that judgment is so laughably off-base as to make me cringe at the ignorance of those who offer it. I always knew PNM would have mega-impact within the defense community, because it speaks directly to them and offers them a real framework for engaging with the "everything else" they know instinctively impinges upon every intervention they undertake in this era of globalization. That the material seems unrealistic or Strangelovean to many academics is amusing to me, but nothing more, because the vast majority of what they put out in publications strikes me as completely divorced from any reality I have come to understand in working directly for and with the U.S. military over the past 15 years. For the most part, they seem to live in a dream world of theories and models, and when they do offer prescriptions, they are hopelessly naÔve.

My stuff is real-world because it was born from hundreds of presentations directly offered to real-world operators, who will call you on the bullshit faster than you can click through your next PPT animation. Why I get to brief so many senior military leaders is because whenever their subordinates come across my stuff, they instantly realize that this is the most solid package yet of the host of ideas that they themselves in many instances have long been trying to articulate up through the ranks.

You wanna know the best review I've received so far? It was from Vice Admiral Eric Olson, Deputy Commander of Special Operations Command. His view of what military forces are good for is probably 180 degrees different from mine. The guy is Leviathan through and through, and I respect the hell out of him for that. During a formal interaction with him in front of all of his senior officers, his subordinates had urged me to push my case for the Sys Admin/back half focus in transformation. These younger officers knew full well how little he appreciates this argument, but wanted me to make the case in as strong as terms as possible. So I did. Olson listens intently, pauses for a few seconds as he considers what I said, and then simply replies "thank you," indicating he has absorbed the argument and will give it serious consideration.

That is the best review I've received so far on PNM. Five minutes with one of the most hardcore operators you can find in the U.S. military, selling him a vision I know he is opposed to, but doing it in such a way that he felt compelled to consider it seriously. It has taken me a decade-and-a-half to build a standing with operators inside the U.S. military to the point where I even get invited for such face time, so I know what a privilege it is, especially when younger operators push me forward to deliver messages up the chain on their behalf. That is real trust, and that trust is the only evidence that matters to me regarding PNM's deep impact within its targeted audiences.

So when I pull open the NYT Book Review yesterday and see John Lewis Gaddis, a highly-respected academic historian, reviewing Niall Ferguson's book Colossus (the entire issue was given over to a slew of "empire" books), and noting that his review contains a calculated mix of praise for the career with the usual backbiting on the details of the book, I think to myself: I can live without a NYT review, because all I'd get is yet another academic take on the "impracticality" of my policy prescriptions. And such a review would mean almost nothing to me, coming from that detached crowd, because the approval they offer concerns the cleverness and intricacy of the argument, rather than its substance. But since I did not write PNM for that crowd, much less for their approval, I cannot expect anything but the usual sneering disdain ("What is this stuff compared to our elaborate theoretical models?").

Their arguments go on forever, conference by conference, journal article by journal article, and review by review. They can go on forever because they never have to arrive anywhere. But my ideas have to arrive somewhere, otherwise the invitations will stop, the access will be denied, and my dialogue with senior military leaders will come to an end.

And you know what? I like it that way. Because the minute my stuff stops being relevant to my clientsóthe U.S. militaryóthey should absolutely fire my ass. This business is too important for anybody to be wasting their time.

Here's the rather large catch from the Sunday NYT and today's Times and Journal:

Kerry's hope: "I can do anything better than you!"

"Voters Are Very Settled, Intense And Partisan, and It's Only July: Great Political Divide Increases as Parties Clarify Identities," by Robin Turner, New York Times, 25 July, p. A1.

"Kerry Sees Hope of Gaining Edge on Terror Issue: Promises a Safer Nation; Says Anti-Bush Rhetoric Will Be Discouraged at Boston Convention," by Adam Nagourney, NYT, 25 July, p. A1.

"A Duet That Straddles the Political Divide: The 'liberal sissy' and 'right-wing nut job' face off in this satire," by Steve Lohr, NYT, 26 July, p. C5.

The race to disconnect Iraq from the outside world is on

"Iraqi Insurgents Using Abduction As Prime Weapon; 2 Pakistanis Are Seized; By Taking Hostages, the Rebels Apply Pressure on American Allies," by James Glanz, NYT, 26 July, p. A1.

"Iraqi Urges Allies Not to Be Deterred by Kidnappings; Executive Is Seized," by Ian Fisher, NYT, 25 July, p. A8.

"Western Ways Force Iraq To Trim Water Projects: Security fears and red tape devour time and money," by James Glanz, NYT, 26 July, p. A8.

In praise of stupid government

"The New Magic Bullet: Bureaucratic Imagination; Outwitting terrorists may be beyond the ability of government," by Douglas Jehl, NYT, 25 July, p. WK1.

Non-lethals: the "star of tomorrow" for the last decade & counting

"The Pentagon is developing a new class of sci-fi-like 'non-lethal' weapons. But will they make war any safer or easier?: The Quest for the Nonkiller App," by Stephen Mihm, NYT Magazine, 25 July, p. 38.

Wars cost everyone money, including the military-industrial complex

"Defense Firms Encounter a Budget Crunch: Military Modernization Is in Jeopardy as Iraq Siphons Funds, Congress Doubts Technology," by Jonathan Karp and Andy Pazstor, Wall Street Journal, 26 July, p. B6.

Hillary's realism on globalization is as good as Bill's

"'Bestshoring' Beats Outsourcing," by Hillary Rodham Clinton, WSJ, 26 July, p. A14.

"What Works in the Rest of the World: Keep labor standards out of trade agreements," by William B. Gould IV, NYT, 26 July, p. A19.

"Trade Talks in Geneva Offer More Hope This Time," by Elizabeth Becker, NYT, 26 July, p. C1.

The cost of doing globalization: more on military-market nexus

"Foreigners Seem To Be Souring On U.S. Assets: Slowdown in Buying of Securities Reverses Trend and May Make It Harder to Finance Trade Deficit," by Craig Karmin, WSJ, 26 July, p. C1.

Latest bribe to Pyongyang fails

"North Korea Seems to Reject Butter-for-Guns Proposal From U.S.," by David E. Sanger, NYT, 25 July, p. A7.

Bad sign: WSJ editorial board souring on Putin

"Another Russian 'Ice Age,'" editorial, WSJ, 26 July, p. A14.

Brazil as the key Seam State in our neighborhood

"Brazil Carries the War on Drugs to the Air: Despite U.S. Concerns, a 6-Year-Old Plan Gets a Green Light; Drug runners may now think twice about making rude gestures to air force pilots," by Larry Rohter, NYT, 25 July, p. A6.

Oil curse works even in the Core, Norway finds

"Norway Looks for Ways to Keep Its Workers on the Job: A concern that Norwegians are losing their work ethic," by Lizette Alvarez, NYT, 25 July, p. A4.

The new Cheech and Chong for the globalization era

"High Times: A Dumb Stoner Comedy For a New American Century," by A.O. Scott, NYT, 25 July, p. AR1.

Kerry's hope: "I can do anything better than you!"

"Voters Are Very Settled, Intense And Partisan, and It's Only July: Great Political Divide Increases as Parties Clarify Identities," by Robin Turner, New York Times, 25 July, p. A1.

"Kerry Sees Hope of Gaining Edge on Terror Issue: Promises a Safer Nation; Says Anti-Bush Rhetoric Will Be Discouraged at Boston Convention," by Adam Nagourney, NYT, 25 July, p. A1.

"A Duet That Straddles the Political Divide: The 'liberal sissy' and 'right-wing nut job' face off in this satire," by Steve Lohr, NYT, 26 July, p. C5.

There really are few undecided voters out there, meaning to win the election is to dent the other guy's probables while accepting that you're not going to touch his base. As the Times article puts it:

Rarely has a presidential campaign been this intense, this polarized, this partisan, this early. The conventions historically begin the general election season, ending a lull after the primary seasons has wound down. But for months now, the general election battle has been fully joined.

Seventy-nine percent of the voting population say they've already made up their minds, compared to 64 percent who said that in 2000 at a similar stage. Only 1-in-5 votes are considered "persuadable" at this point in the election, compared to 1-in-3 back in 2000.

In my opinion, Kerry is right to base his campaign not on dumping Bush but on promising a better job by his administration:

I think I can do a better job than George Bush. I can fight a more effective war on terror. I can make America safer. I will bring allies back to our side.

Becoming president is THE major-league sales job in America. It's essentially a romancing effort, trying to convince Americans of the notion that four years of having to spend a lot of time with you is going to be tolerable, perhaps even pleasurable. While all reelection campaigns essentially pit an incumbent against his record, what the challenger must offer is a viable alternative, not just a default position. Kerry has to seem more tolerable to the remaining undecideds than Bush does, and simply calling Bush names won't be enough at a time when security issues are real. Kerry will have to inspire more trust and by doing so subtlety and indirectly call into question Bush's integrity. The real question, then, will be whether or not Bush has reached a real "tipping point" on integrity with enough Americans over the Iraq war. If he has, then he will have lost this election over the "vision thing," just like his dad did. But in Bush's case, it won't be because he disdained the vision, but because he explained it poorly.

People write me a lot saying that both parties should be employing PNM as a positive expression of what this whole global war on terrorism should really be about, because the cynicism of this race will probably dwarf that of either 1988 (is Kerry another Dukakis?) or 1992 (is Bush going down like his dad?). That's nice to hear, but it's a bit unrealistic on many levels. The PNM vision is too centric for use by one side or the other, and that is by design. That is why the Bush Administration can have me brief up nominees for top positions even as the Kerry camp invites me to brief their foreign policy camp. I want to straddle the political divide because that is exactly where national security should be located.

So let the food fight begin over personalities, and if you want a quick and dirty summation of what that will look like, check out the JibJab video on the web. It is so funny my son Kevin almost peed his pants laughing at it. We have played it in our house about 20 times and spent all of last weekend singing snippets to one another.

The race to disconnect Iraq from the outside world is on

"Iraqi Insurgents Using Abduction As Prime Weapon; 2 Pakistanis Are Seized; By Taking Hostages, the Rebels Apply Pressure on American Allies," by James Glanz, New York Times, 26 July, p. A1.

"Iraqi Urges Allies Not to Be Deterred by Kidnappings; Executive Is Seized," by Ian Fisher, NYT, 25 July, p. A8.

"Western Ways Force Iraq To Trim Water Projects: Security fears and red tape devour time and money," by James Glanz, NYT, 26 July, p. A8.

The Iraq insurgency is starting to look an awful lot like the efforts inside Saudi Arabia: targeting individual Westerners for the effect of instilling fear in the whole. Their goal is the same: get us out so that they can advance
their violent bid for power. If we leave the region militarily, you can pretty much write off most states there in terms of either reform or progressive integration into the global economy. It'll be business as usual, which means using the oil revenue to keep propped up whatever ruthless elite manages to defeat the rest for authoritarian control over the daily lives of citizens.

By casting their lot so obviously with us, the interim Iraqi government can only survive by increased connectivity with the outside world, and that reality flies directly in the face of its opponents' desires for rule, which can only be achieved by eliminating outside support for the government. This is a fight to the finish: if the interim government succeeds in generating broadband economic and social connectivity with the outside world, far too many Iraqis will then have strong self-interest in remaining free of authoritarian rule, but if that connectivity is thwarted, then it all boils down to everyone desperately seeking protection from one side or the otheróit's that simple.

The House of Saud may make brave noises about the inability of terrorists there to disconnect the Saudi economy from the outside world, but the Allawi government can afford no such bravado. This is not a surrounded West Berlin that we can airlift material into, but a chaotic situation of individual-level warfare where truck drivers are being picked off one by one. To the extent that the forces of disconnectedness succeed in Iraq, they will keep the overall situation there quite desperate in terms of infrastructure recoveryóagain forcing ordinary Iraqis into hedging their bets regarding the interim regime.

In praise of stupid government

"The New Magic Bullet: Bureaucratic Imagination; Outwitting terrorists may be beyond the ability of government," by Douglas Jehl, New York Times, 25 July, p. WK1.

Great piece by Jehl raises a good series of questions regarding how realistic it is to expect bureaucracies to become imaginative. As he points out, "government bureaucracies do not have a reputation for attracting visionary leaders who can imagine, and forestall, the next big surprise." Simply put, Americans don't want surprises from their government, but rather prefer to receive them from the private-sectoróespecially in the form of new technologies. Governments are mostly about setting rules regarding such surprises, not trying to anticipate them, which they'll never be able to do anyway.

The main push of the Commission's recommendations is on creating a cabinet-level intell czar, but there is absolutely no evidence to suggest that this will increase our nation's ability to generate a comprehensive grand strategy for the global war on terrorism. As Jehl quotes Donald Rumsfeld:

Does the U.S. need to fashion a broad, integrated plan to stop the next generation of terrorists? The U.S. is putting relatively little effort into a long-range plan, but we are putting a great deal of effort into trying to stop terrorists. The cost-benefit ratio is against us!

The U.S. Government can either chase the chimera of trying to prevent 9/11s or it can settle down and pursue the far less glamorous but far more tangible goal of making globalization truly global in a fair and just manner. Only the latter goal will render such exclusionary ideologies as radical Islam essentially harmless as a potential global or regional movement for mass violence and/or repression.

It may not seem as sexy or Tom Clancy-ish to focus on the "everything else" in the GWOT, but without doing so, we're simply limiting ourselves to the "game within the game," or what I call waging war solely within the context of war.

Non-lethals: the "star of tomorrow" for the last decade & counting

"The Pentagon is developing a new class of sci-fi-like 'non-lethal' weapons. But will they make war any safer or easier?: The Quest for the Nonkiller App," by Stephen Mihm, New York Times Magazine, 25 July, p. 38.

My association with non-lethals goes back to 1998. I was just leaving the Center for Naval Analyses after years of trying to get the management there interested in my approach on alternative global futures that described the potential pathways of the international security environment primarily in terms of economic integrationóas in, who's in and who's left outside, noses pressed to the glass? My assumption in this approach was that we could logically find the "enemy" of global stability in the latter category, or what I now call the Non-Integrating Gap.

That embryonic version of PNM never got any strong backing within CNA until after I left, and then it came not from CNA itself but from the Non-Lethal Weapons Directorate just set up down in Quanticoófirst by the Marines thanks to a push from General Tony Zinni following his negative experiences in Somalia (where he found himself wishing he had some real non-lethals at his disposal) and then subsequently expanded into a "joint" endeavor by the Joint Staff.

The directorate wanted analysis of alternative global futures that would show the broadband applicability of non-lethals, meaning analysis that showed they would be useful no matter how the international security environment evolved. My stuff fit the bill exactly, because no matter how I described the major regions of the global economy coming together in coming decades, there would always be some combination of less-advanced (or what I now call "less connected") regions left on the outside of the global economy, and therein we'd locate the vast majority of mass violence and threat in the system as a whole.

In many ways, then, the Joint Non-Lethal Weapons Directorate profiled in this article was the very first consumer of the PNM vision. No surprise there, because this directorate is very much focused on Military Operations Other Than War and that is strictly a Gap-derived function.

Overall, this is a good, if rather dated article. Basically this article was written many times over the past ten years, and there is almost nothing in this piece that is new. What is new, of course, is that it is appearing in the NYT Magazine, which only shows how the "rise of the lesser includeds," or the increasingly supremacy of individual-level warfare/peacekeeping function, has come to dominate the global strategic security landscape. In short, MOOTW has been elevated from crap to a real pillar of grand strategy, because if you can't do MOOTW, you can't shrink the Gap.

Wars cost everyone money, including the military-industrial complex

"Defense Firms Encounter a Budget Crunch: Military Modernization Is in Jeopardy as Iraq Siphons Funds, Congress Doubts Technology," by Jonathan Karp and Andy Pazstor, Wall Street Journal, 26 July, p. B6.

A great myth right now is that war is good for the military industrial complex, when in reality peace is far more profitable. When it's peaceful, then O&M (operations and maintenance) funding remains small and there's plenty of acquisition money to buy new and very expensive platforms (e.g., ships, aircraft, tanks). But when there is a war on, then O&M skyrockets and the money for acquisition gets mightily squeezed. The only way the military-industrial complex can do well is if we get far better on what I call the back-half effort, or the nation-building that must inevitably follow the regime takedown. By doing the back-half more efficiently, then the U.S. avoids being bogged down in long-term occupations that dry up acquisition funding. So the notion that the military-industrial complex wants more Iraqs per se is completely backwards. What defense firms really want is a long peace where the U.S. rarely intervenes with the outside world but instead plots endlessly for war with a distant, high-tech foe like China in the Taiwan Straits around 2025. Defense firms like to build and sell stuff, not see it actually get used for anything.

Wars force change upon the industry, which cuts into profits. The Iraq war will likely be a huge challenge for defense industry because it will shift transformation's focus from the familiar front-half or Leviathan force to the back-half or Sys Admin force. And guess what? The guys who make non-lethals aren't the same ones who build fighter aircraft.

Hillary's realism on globalization is as good as Bill's

"'Bestshoring' Beats Outsourcing," by Hillary Rodham Clinton, Wall Street Journal, 26 July, p. A14.

"What Works in the Rest of the World: Keep labor standards out of trade agreements," by William B. Gould IV, New York Times, 26 July, p. A19.

"Trade Talks in Geneva Offer More Hope This Time," by Elizabeth Becker, NYT, 26 July, p. C1.

Hillary talks a realistic course on globalization, much like Bill did in his 1992 run for the presidency. Her line is a good one: it's not about penalizing low-cost countries but about making our labor more competitive. It's not about keeping jobs at all costs, but being able to "replace the ones we have lost with even better ones." Her answers are all right on the mark: "innovation, new job creation, workforce development, connectivity expansion, and collaboration between industry, academia, labor and government."

When I compare Hillary's realism on globalization to some of the boneheaded statements coming out of Kerry and Edwards, I can't help but find myself secretly hoping for a Bush win in '04 simply to set up her winning run in '08. My wife gives money to Kerry and Edwards, but I have yet to do so. In fact, I have never given money to the Democrats, much less the Republicans. As someone in national security, I've always felt it important to keep my party politics very low key.

And yet, I think I could donate to Hillary '08 right now. She doesn't kow-tow illogically to labor on protectionism but speaks realistically on workforce development, which is frankly the only route to go in the era of globalization.

As William Gould (a fmr chairman of the National Labor Relations Board) puts it:

In many ways international trade is a domestic issue: trade brings change, and change frequently means painful dislocation that can be assuaged only by social programs. In this context national health insurance makes sense, as does a wage insurance program like the one Bill Bradley advocated in 2000. What laid-off auto and steel workers need is the same as what their outsourced service and professional counterparts need: not a new trade war, but domestic legislation on health benefits and wages. That should be the focus of the trade debate in 2004.

Meanwhile, the dead-in-the-water negotiations of the World Trade Organization in its current Doha Development Round donít seem so dysfunctional as they did a year ago, which shouldn't be a surprise. The WTO negotiations are routinely "derailed," only to be revived within months simply because the logic of freer trade is undeniable. Whoever wins in November better be ready for some serious deal-making on ag subsidies and protectionism here in the U.S. There is no making globalization truly global until we're willing to give on this issue. It's that simple.

The cost of doing globalization: more on military-market nexus

"Foreigners Seem To Be Souring On U.S. Assets: Slowdown in Buying of Securities Reverses Trend and May Make It Harder to Finance Trade Deficit," by Craig Karmin, Wall Street Journal, 26 July, p. C1.

Some scary news on the perceived falling demand for U.S. treasury bonds around the world, but specifically with the two biggest buyers of lateóJapan and China.

Potentially more troubling was the slowdown in Asian purchases of U.S. debtóespecially in Japan, which holds 16% of all U.S. Treasurys. That country's nascent economic recovery has eased the government's concerns about maintaining a weak currency to boost exports, in turn reducing the Bank of Japan's need to intervene and buy dollars.

Why is that so crucial? "Japan is to the U.S. financial markets what Saudi Arabia is to the world oil marketsóthe primary provider of capital," says one Banc of America Capital Management exec.

And what of China?

Other foreign investors' appetites for U.S. securities also have been waning, in part because rising oil prices have forced some countries to spend more of their dollar reserves on energy. That leaves fewer dollars to invest in the U.S. markets.

So China only purchases $1.7 b of U.S. Treasurys in the first five months of this year, a 91% drop from the previous year.

That is essentially how the feedback loop works now: if we do a bad job in the Iraq invasion, you see oil prices rise globally to account for the heightened uncertainty, that means China buys our debt less, and that can impact Japan's recovery as well since it's economic health is now largely based on exporting to China. If those countries can't buy our debt, we can't fund our federal deficit which right now is being fueled in no small measure by our rapidly rising defense expenditures. That means our ability to wage a GWOT gets undercut.

Is America a unilateral imperial power? It can't be, unless what it markets to the outside world in terms of security exports is something they are willing to pay for. But if we do our job poorly, we'll give such explicit and implicit allies little choice but to spend their money in an alternative fashion. That is the essence of the military-market nexus: the success of U.S. military interventions is important not just to America, but to the global economy as a whole.

Latest bribe to Pyongyang fails

"North Korea Seems to Reject Butter-for-Guns Proposal From U.S.," by David E. Sanger, New York Times, 25 July, p. A7.

No surprise here. North Korea declared it a "sham offer." Why? We actually expect them to disarm on WMD before they get the full benefits of the aid offered.

How stupid does Pyongyang think we are? They want all the butter up front and then, guess what? They'll say no on the guns again unless we offer even more butter.

This is the same old blackmail trick Kim has used for years. Don't expect it to change so long as it seems to be working.

Bad sign: WSJ editorial board souring on Putin

"Another Russian 'Ice Age,'" editorial, Wall Street Journal, 26 July, p. A14.

A bit alarmist in analysis, but a bad sign for Putin, who has otherwise garnered kudos from the international financial community. I wrote in PNM that the Yukos/Khodorkovsky trial could easily become the biggest political crisis of Putin's reign, and most of that judgment will come not from within Russia but from external sources of legitimacy like the Journal. So perception doesn't just matter here, it's almost everything.

Brazil as the key Seam State in our neighborhood

"Brazil Carries the War on Drugs to the Air: Despite U.S. Concerns, a 6-Year-Old Plan Gets a Green Light; Drug runners may now think twice about making rude gestures to air force pilots," by Larry Rohter, New York Times, 25 July, p. A6.

Here's the key analysis:

Two years ago, Brazil inaugurated the $1.4 billion Sivam radar system which uses American technology and for the first time allows the government to monitor air activity in the whole of the vast Amazon region. But after the initial decline of 30 percent, which Brazil attributed to traffickers' concerns about the improved tracking capabilities, illegal flights began rising again.

The Sivam radar effort is a good example of the major-league plus-up of military cooperation with Seam States following 9/11. But such cooperation isn't enough in and of itself, because monitoring can only get you so far. So when Brazil seeks to command its own air space like any Core nation does, it is really working hard to shrink the Gap by extending the rule of law over its own, internally lawless areas.

Oil curse works even in the Core, Norway finds

"Norway Looks for Ways to Keep Its Workers on the Job: A concern that Norwegians are losing their work ethic," by Lizette Alvarez, New York Times, 25 July, p. A4.

The oil curse is finally catching even Norway, where officials complain that years of oil wealth distributed to the masses has generated a society-wide sense of entitlement that is killing Norway's famed sense of hard work and self-reliance.

As one business leader put it, "We have become a nation of whiners."

That's the oil curse in the Core. In the Gap, those same whiners become terrorists because whining to the authoritarian governments there gets you nowhere.

The new Cheech and Chong for the globalization era

"High Times: A Dumb Stoner Comedy For a New American Century," by A.O. Scott, New York Times, 25 July, p. AR1.

Latest stoner movie ("Harold and Kumar Go To White Castle") features a Korean and a South Asian as the leads, and movie reviewer A.O. Scott captures the significance of that development:

At first glance they could be poster children for early 21st-century American diversity (either that or marijuana legalization), except that the very word would totally kill their buzz. The impressive thing about "Harold and Kumar" is that it takes such blithe account of the fact of multiculturalism while having very little use for the concept. Or really, given the standards of its genre, for any concept at all. It's not quite that ethnic differences don't exist, or that they're no big dealóbeing insulted or mocked or made to feel invisible has a way of turning into a big deal. It's more that belonging to a certain group has no inherent meaning and brings with it no particular obligations of behavior.

That is what's so scary to those groups inside the Gap trying to retain cohesive group identity: the notion that globalization/Americanization kills not only group identity but the very notion that such identity imparts obligations for certain behavior.

We watch a "Harold and Kumar" and see only another idiotic teen movie. But many in this world can be exposed to such images and see the end of their world as they know it.

Highlands Forum: the gatekeeper visits Newport

Dateline: above the garage in Portsmouth RI, 25 July 2004

Took yesterday off from blogging to work a lot of house maintenance and spend time putting things together for the great trip to China.

Friday was an interesting day I had been waiting to come about for a long time.

First, a little background: The Highlands Forum is an exclusive sort of meeting process that is put on by a private-sector organization (the Highlands Forum) for the Office of the Secretary of Defense. They hold two big meets a year and a couple of small ones as well. Coming up in December theyÔøΩll be holding their 25th meeting, and it will involve a global ten-years-ahead look that replicates an effort done years ago. The obvious reason for such a look ahead is the national election: either weÔøΩll have Bush II or a new administration.

I went to one HF back in December 1998 and I came away very impressed, not so much with the process, which is pretty standard, but with the quality of the people, which is just about unprecedented. ItÔøΩs the kind of thing people come to even though theyÔøΩre not getting their usual fabulous rates simply because itÔøΩs so cool.

The one I went to six years ago was on Y2K, and it was very good, meaning it pushed my thinking along quite a bit. In fact, some of the biggest images and concepts I came up with for the project were things I first scrolled down on paper during that meeting. Of course, I had just run one of my Y2K GroupSystems wargaming exercises days before, but the point is, the Forum really succeeds in getting the creative juices flowing.

I did not present at that meeting, but others like John Petersen and Peter Schwartz did. It was my first meeting with the legendary Andy Marshall, so fun all around.

I have waited six years to be invited back, and always wondered what it would take to get such an invite. It never came through all the path-breaking NewRuleSets.Project work with Cantor Fitzgerald, nor in any of the work I did for the Office of Force Transformation. Apparently, it took the NYT-bestselling book to get me back, along with a serious plug from Art Cebrowksi, director of OFT. In a recent meeting with Dick OÔøΩNeill, the President of HF, Art apparently told him he really needed to see my brief and consider it for the upcoming December alternative global futures event, which naturally is going to feature an all-start cast of political heavies from both KerryÔøΩs and BushÔøΩs camps, plus some media stars like Thomas Friedman, etc., plus the futurists types like myself and Schwartz, who will be running the scenario stuff. Should be a lot of fun.

Well, I have to tell you, when such an opportunity like that emerges, it usually involves me going to DC and giving a brief or two to the essential gatekeeper, or having a gatekeeper just happen to be in the audience for some previously established presentation (that happened to me in May when a Kerry camp person saw the brief and later set up a presentation that IÔøΩll be giving KerryÔøΩs foreign policy task force team in the near term). But the general pattern is clear: I travel to them, they donÔøΩt travel to me.

Well, Dick OÔøΩNeill actually spent the day and came all the way up to the Naval War College to have me give him the mega-brief over two hours. He was an easy audience in the sense that heÔøΩs so read into these kinds of things that you can go super-fast with him, plus heÔøΩs constantly leaping ahead in the logic, so heÔøΩs always anticipating downstream material in the brief. In short, no heavy-lifting on my part and very nice on the ego because heÔøΩs putting so many of the concepts together in meta-analytic statements that show he really gets the larger meaning of the material from the get-go. Briefing a guy like OÔøΩNeill (fmr Navy captain) one-on-one is like being able to run at full speed, which is great.

The whole purpose of his visit was to check me out for the December meeting, and the verdict was positive. HeÔøΩs offering me a big chunk of time early in the meeting to do both the brief and engage the high-level crowd in Q&A. No quickie 45-minute stint here, but 90 to deliver and more time for Q&A. Then I get to participate in the rest of the meetings over the 4-day affair. Plus, the book is bought by Highlands and given out to everyone there as the featured publication for the meeting. Very nice.

Getting that sort of face time with that sort of audience should be a lot of fun, the only question being how much I extend or alter the material between now and then. I have a feeling that once back from China, I will be itching to start laying out a successor brief of sorts, which means IÔøΩll be shrinking the standard pitch and adding new material on the back endÔøΩalways an interesting process. But I expect to have about a dozen or more briefing ops between now and early December to try out new material, so I should be ready with something that both sums up the book well and moves it a bit further down the road. The new material IÔøΩm imagining will be further exploration of the Leviathan-Sys Admin split, plus more on the global A-to-Z rule set on processing politically-bankrupt regimes, plus the scenario sort of stuff IÔøΩve considered as part of my interactions with Central Command (the overlapping timelines material that IÔøΩve broached on now and then in the blog).

All in all, it should be a real opportunity to spread the word and move some minds off of old dimes.

Friday was a nice sign: the gatekeeper actually coming to visit me instead of the other way around. ThatÔøΩs both a sign of respect and a measure of the growing demand. I actually had to back out of a conference at Stanford that was scheduled for September but recently got moved to early November, when I have basically promised the Office of Secretary of Defense IÔøΩd give a speech to the Australian military down in Sydney, and I have to admit, I felt relieved to see the days open up on my September schedule, because otherwise I was looking at two California trips over two weeks, and that gets to be a bit much in terms of wear and tear and time away from home. But I took itÔøΩthat sense of relief I feltÔøΩas a real sign that IÔøΩm in danger of overloading my schedule. I need to do the high-end stuff that OSD really wants and pays attention to, plus the right high-level summitry stuff in the political realm, plus the right private-sector audiences willing to keep me out of bankruptcy as I wait for PNM to ÔøΩearn outÔøΩ the advance and actually start paying me some new money. Beyond that, I need to get very picky about every small college and civic group that wants me to come and give a talk, otherwise IÔøΩll be on the road all the time and quickly succumb to travel burnout.

HereÔøΩs todayÔøΩs catch:

As in any war, itÔøΩs hurry up and wait

ÔøΩCongress Plans Special Hearings On Sept. 11 Panel: Rare Meetings in August; Commission Says It Plans to Pressure Officials to Act on Findings,ÔøΩ
by Sheryl Gay Stolberg and Philip Shenon, New York Times, 24 July, p. A1.

ÔøΩSlow Change Is Expected After Report,ÔøΩ by David Johnston, NYT, 24 July, p. A8.

ÔøΩWhy America is Still An Easy Target,ÔøΩ [book excerpt] from Stephen Flynn, America the Vulnerable, Time, 26 July, p. 38.

Grand strategy ill-defined: if weÔøΩre not bad, they must be

ÔøΩWar of Ideology,ÔøΩ by David Brooks, NYT, 24 July, p. A27.

The big GWOT troop shift: too bad Asia isnÔøΩt more like Europe

ÔøΩIn Agreement With South Korea, U.S. to Move Troops From Seoul,ÔøΩ by Thom Shanker, NYT, 24 July, p. A4.

NRIs: you can go home to India again!

ÔøΩIndians Go Home, but DonÔøΩt Leave U.S. Behind,ÔøΩ by Amy Waldman, NYT, 24 July, p. A1.

PhilippinesÔøΩ Arroyo: looking out for the OFWs

ÔøΩU.S. Rips Philippines for pulling out of Iraq,ÔøΩ by Associated Press, found in Newport Daily News, 24 July, p. A3.

As in any war, itís hurry up and wait

ìCongress Plans Special Hearings On Sept. 11 Panel: Rare Meetings in August; Commission Says It Plans to Pressure Officials to Act on Findings,î by Sheryl Gay Stolberg and Philip Shenon, New York Times, 24 July, p. A1.

ìSlow Change Is Expected After Report,î by David Johnston, NYT, 24 July, p. A8.

ìWhy America is Still An Easy Target,î [book excerpt] from Stephen Flynn, America the Vulnerable, Time, 26 July, p. 38.

Congress will want to seem responsive to the Commission report, so weíll be treated to some showy hearings in August that demonstrate how serious everyone on the Hill is regarding the reshaping of the intell community that MUST be done. Why? Because itís an election year and because everyone will want to make sure theyíre not on the hook for the next attack, whenever that comes. As I wrote in PNM, ìDoesnít it seem weird that the same senators who prattle on during Sunday news programs about how the world is a chaotic, unpredictable place still always seem to show up on C-SPAN following some security disaster to decry yet another ëintelligence failureí? Who are these people kidding?î

Theyíre kidding us, of course, and we accept it because itís what we want to hearóthat the next 9/11 can be prevented by inventing a new office or two inside the White House.

ìIf only an intelligence czar could have pieced together all the information weíve examined over the past year and instantly figured out 9/11 on 9/10, then it never would have happened!î

Remember folks, these guys were the same ones who promised to eliminate the federal debt within a decade or so. We believe because we want to believe.

The only game that matters is the away game, not the home game, because whatís broken in this world is not us, but themónot the Core but the Gap. But addressing the latter is much harder than band-aiding the former. No one will get unelected for not dealing with the roots of terror, but those same ìbumsî may well get tossed out for not preventing the next 9/11.

So we will continue to pay what Peter Schwartz likes to call the ìbin Laden tax.î Why? Because itís largely spending on ourselves instead of those who really need it in the Gap. Which, frankly, is why a Stephen Flynn is such a darling of the national security crowd. He wants to make America safe and wants to spend all available GWOT money on America itself, not the Gap whatsoever. So his sort of fear-mongering is very acceptable: ìLook at all our connectivity with the outside world! Look at how unmonitored it is! Be afraid! Search everything! Monitor everything!î

This sort of inward-looking approach is essentially our strategic abandoning of globalizationóto the extent we actually engage in this sort of thing. The return-on-investment in firewalling the Core is far less than shrinking the Gap by exporting security there. Yes, some belt-tightening makes a lot of sense, but when you see the center of the fear-selling being our border with the outside world and our inability to predict the future, you should be very afraid, for most of this effort will be completely wasted and send the worst sort of signals to the Gap: ìweíve got ours and weíll do whatever it takes to protect it!î

Isnít that just what President Arroyo of the Philippines said?