The Forgotten and Buried Intelligence Lessons of Pearl Harbor, December 7th 1941

December 7th 2019 is the 78th anniversary of the Imperial Japanese Navy’s surprise Pearl Harbor attack on the capitol ship battle line of the US Pacific Fleet.  After that attack there was a round of American elite political and military leaders a collective swearing of “Never Again.”  That is, “Never again will the USA be so surprised by a foreign enemy.”

Pearl Harbor Through Japanese bomb sights
This is what Pearl Harbor looked like through Imperial Japanese Naval Air Force (IJNAF) bomb sights on December 7th 1941.

Yet despite that, America has indeed been “surprised” in exactly the way of Pearl Harbor repeatedly since 1941.  The Korean war is one example five years after WW2 ended.  The Soviet Invasions of both Czechoslovakia and Afghanistan in 1968 and 1979 are two others   It was certainly an intelligence surprise on 9/11/2001 with the attacks on the World Trade Center in NY City and the Pentagon in Washington D.C.,  and the “surprise” of there being few/no Weapons of Mass destruction in post 2003 Iraq, and Iran’s recent drone and cruise missile attack on Saudi Arabian oil refining facilities.

The reason for this pattern of failure boils down to the forgotten and unlearned  — frankly impossible for American elites to learn —  intelligence lessons of Pearl Harbor.  Those unlearned lessons being that the interlocking  patron-client political relations inside the American federal civil government, military and intelligence organizations lead to narrow self-interested group think over the concerns of outside reality.  And that this tendency towards self-interested group think is at its absolute worse when facing a foreign enemy with a police state internal security system that is running a campaign of strategic deception and denial.

If that “worst case” foreign enemy sounds a lot like Imperial Japan, the People’s Republic of North Korea, China, the Soviet Union, Iraq and Iran. It means you have paid attention to both American history since Pearl Harbor and to current events.

The Role of Clientelism in American Intelligence Since 1941

Clientelism is the one-word description of patron-client relationships whose synonyms include words like patronage, cronyism and corruption. [1]  For the operation s of the modern American state, the terms “Military-Industrial Complex” or “Iron Triangle” have grown up since Pearl Harbor to describe the aligned interests of elected civil, military, intelligence and other federal bureaucratic elites in the Federal Government who are patrons of large industrial clients of Federal government largess.

It wasn’t until Samuel Huntington’s book  The Soldier and the State – the Theory and Politics of Civil-Military Relations  in 1957 that “Civil-Military Relations” describing these relationships in academic terms was written. [2]  And it wasn’t until Amy Zegart’s 2000 book Flawed by Design: The Evolution of the CIA, JCS, and NSC that how these various elites operated in creating the intelligence community that simply can’t ever do it’s post-Pearl Harbor job of making sure of “Never Again.” [3]

The following is from Zegaet’s book marketing on Amazon:


“…Zegart asks what forces shaped the initial design of the Central Intelligence Agency, the Joint Chiefs of Staff, and the National Security Council in ways that meant they were handicapped from birth.


Ironically, she finds that much of the blame can be ascribed to cherished features of American democracy―frequent elections, the separation of powers, majority rule, political compromise―all of which constrain presidential power and give Congress little incentive to create an effective foreign policy system. At the same time, bureaucrats in rival departments had the expertise, the staying power, and the incentives to sabotage the creation of effective competitors, and this is exactly what they did.


Historical evidence suggests that most political players did not consider broad national concerns when they forged the CIA, JCS, and NSC in the late 1940s. Although President Truman aimed to establish a functional foreign policy system, he was stymied by self-interested bureaucrats, legislators, and military leaders. The NSC was established by accident, as a byproduct of political compromise; Navy opposition crippled the JCS from the outset; and the CIA emerged without the statutory authority to fulfill its assigned role thanks to the Navy, War, State, and Justice departments, which fought to protect their own intelligence apparatus.


Not surprisingly, the new security agencies performed poorly as they struggled to overcome their crippled evolution. Only the NSC overcame its initial handicaps as several presidents exploited loopholes in the National Security Act of 1947 to reinvent the NSC staff. The JCS, by contrast, remained mired in its ineffective design for nearly forty years―i.e., throughout the Cold War―and the CIA’s pivotal analysis branch has never recovered from its origins. In sum, the author paints an astonishing picture: the agencies Americans count on most to protect them from enemies abroad are, by design, largely incapable of doing so.”

Zegaet’s description was achingly prophetic come 9/11/2001.  Yet her conclusion’s regard the National Security Council moving beyond those “Flawed at the Beginning” limits had a very short sell-by date in the post-Iraq invasion Weapons of Mass Destruction debacle. The NSC had no more escaped the Clientelism trap of the JCS and CIA than did the Departments of Navy, State and War in December 1941.

That trap also has another name, “Group Think.”

Clientelism, American Intelligence, and the Role of  Group Think

The amazing thing about the failures of American intelligence of the interwar-period of mid-1930’s to 1941 on Japan and that of Saddam Hussein’s Iraq from 1991 to 2003 are the intelligence group think parallels in both that over rode available data in the face of consistent denial and deception efforts by the foreign regimes involved in both wars.

The dominant historiography of American intelligence failures before Pearl Harbor  blames the racism of American (and British) military intelligence officers, Flag Rank military officers and elected political leaders for missing the arrival of Imperial Japan as a military “peer competitor” (to use a modern term of art)  in the late 1930’s to 1941…until the the reality of torpedoes of the Kido Butai arrived in the hulls of the Pacific Fleet’s battle line.  This historiography’s apogee was reached with John Dower’s 1986 book War without Mercy: Race and Power in the Pacific War.  [4]

I’ve always cast a gimlet eye on this “Racism was the sole cause” historiography as being an easy and far too simplistic approach that does a disservice to both history and the the people involved.  Yes racism played a role. But to say it was the _Sole Reason_ for Intelligence failure denies the Imperial Japanese agency. (Which is another form of racism, when you think about it.)

The competence of the Imperial Japanese military and state had a whole lot to do with their success at Pearl Harbor, and everywhere else, until the Battle of Midway and the Guadalcanal campaign.  In short: The enemy gets a vote.  That’s why they are called “the enemy.”

So, if Racism was neither the sole nor the primary cause of American intelligence failures of that time.  You have to ask the question “What was the cause of this intelligence failure?”  Or perhaps more appropriately, “What did American intelligence know about the Japanese, when did it know it, and why did it get so much wrong by Dec 6th 1941?

There is a historiography doing just that.   In chronological order see the following articles of this emerging historiography:

  • Ralph Lee Defalco III  “Blind to the Sun: U.S. Intelligence Failures Before the War with Japan” (2003),
  • R.J. Hanyok’s “Blinded by the Rising Sun: Japanese Radio Deception Before Pearl Harbor” (2006), “Catching the Fox Unaware”—Japanese Radio Denial and Deception and the Attack on Pearl Harbor” (2008) and “How the Japanese Did It” (2009),
  • Bob Bergin’s “Claire Lee Chennault and the Problem of Intelligence in China,” Studies in Intelligence (2010), and
  • Justin Pike’s “”Blinded by the Rising Sun? American Intelligence Assessments of Japanese Air Power, 1920-41” serialized in three parts on the Balloon’s to Drones web site in August and September 2017 [5]

Defalco’s and Bergin’s works cover the sole American who got it right about Imperial Japanese air power pre-WW2 — including the capabilities of the A6M Mitsubishi Zero fighter — then retired captain and future USAAF General Claire Chennault.  General Chennault’s memoir “Way of a Fighter” makes clear  he was as much a racist towards the Japanese as any other American military officer of his times…but he was also right about their aerial war making capabilities.[6]  When everyone else in American pre-war intelligence was wrong.  Defalco and Bergin explain why that was.

Hanyok’s works are on how Imperial Japanese naval intelligence determined what Anglo-American signals intelligence capabilities were.  How the IJN planned the denial and deception measures to blind them as to the movements of their Kido Butai carrier fleet and how well they executed that plan up to Pearl harbor.  Taken together, they paint a picture of Imperial Japan as a fell “high tech” foe, an enemy fully versed in the latest in electronic intelligence…and the means to deceive it.

Pike’s serialized work does a forensic analysis of classified American intelligence on the Japanese from the end of World War I to the beginning of World War II.  Pike finds little if any outright racism.  What he does find is that American intelligence was highly accurate in the 1920’s to early 1930’s, when the Imperial Japanese allowed open access to their society. This is how he closed part one of his series:

Taken as a whole, American intelligence assessments of Japanese air power during the 1920s were highly accurate from the strategic and industrial spheres down to the tactical and technological level. Lax information security measures within Japan provided American observers with a remarkable level of freedom. American reports assessed the ability of Japan to fight a protracted war in the air, where aircraft production figures, industrial efficiency, innovative aircraft design, strong pilot training programs, and sizeable pilot reserves were critical to achieving success. The correct conclusion was Japan did not yet possess air power that could seriously threaten the Western powers, but this would begin to change in the 1930s.

When the Imperial Japanese Military closed that access in the early-1930’s due to the war in China.  The American intelligence work increasingly diverged from the changing Japanese reality and started filling the lack of intelligence with regurgitated open source articles that repeated  the 1920’s tropes of lack of originality in design and backwardness in tactics and equipment.

In time, the weight of old and incorrect “conventional wisdom” meant saying saying anything else became threat to an intelligence officer’s opportunities for advancement.  Thus, by 1937, when the Imperial Japanese were making truly original and innovative aircraft a generation past anything they previously copied.  And when Claire Chennault started providing the naval attache’ at the US embassy with accurate reports and captured Japanese aircraft components from downed planes.  American military intelligence officers simply could not go there. Bucking the “conventional wisdom” — group think —  was too professionally dangerous given the decade and a half of ingrained and by then horrid intelligence reports that had become belief system of the flag rank patrons above them.

This is how Bob Bergin put it regards Chennault’s bumping conventional wisdom group think in his “Claire Lee Chennault and the Problem of Intelligence in China” –

Intelligence was now a major concern. Within the US military establishment, “current intelligence on the Orient just didn’t exist,” he wrote. He looked for ways to learn about his enemy, and what he learned he shared with the US embassy. From Japanese airplanes that crashed during the first air battles he salvaged equipment and sent the best of the materiel to the US naval attaché. With the Japanese advancing on Nanking, the attaché secured it in the safest place he knew, aboard the US gunboat Panay. Two days later the Panay was attacked by the Japanese and sent to the bottom of the Yangtze. With it went Chennault’s collection of Japanese military equipment.5


Chennault continued to collect everything he could about the Japanese Air Force, but his efforts made little impression back in Washington. In 1939, the Chinese captured an intact Japanese Type 97 “Nate” fighter. Chennault had it flown in extensive tests against comparable British, American and Russian aircraft and compiled a thick dossier on the Nate’s construction and performance. He believed it was one of the best acrobatic airplanes ever built—“climbs like a skyrocket and maneuvers like a squirrel”— and turned the dossier over to US military intelligence.


In time Chennault received a letter from the War Department. It said that “aeronautical experts believed it was impossible to build an airplane with such performance… with the specifications submitted.” In late 1940, he visited Washington and brought with him data on the first model “Zero.” That information was never disseminated. “American pilots got their first information on its performance from the Zero’s 20-mm cannon a year later over Oahu and the Philippines.”6

Such was the level of group think in American military intelligence about Japan’s aerial military power at that point. That had the Japanese aerial equipment Chennault shipped on the USS Panay actually made it to the USA for analysis.  The 1940 American military intelligence report would have played a game of “…the Japanese copied from fill in the blank foreign plane here” quoting the same “aeronautical experts”  who had dissed the 1939 Chinese report on their captured Japanese Type 97 “Nate” fighter.

From Chennault’s Type 97 Fighter to Saddam’s Real WMD’s.

The inability of 1930’s American military intelligence to digest valid intelligence data against the conventional wisdom of elites are all too familiar to students of the 2003 Iraqi WMD debacle.  Iraq’s Saddam Hussein regime was a Soviet style police state and as such was past master of the sort of deception and denial the likes of which has bedeviled American intelligence since World War II.  In particular, it had utterly surprised American intelligence in the aftermath of the 1991 Gulf War when it revealed in April 1991 a almost completely indigenous nuclear weapons program that used “obsolete” Electro-Magnetic Isotope Separation (EMIS) AKA “Calutrons” and had and 10.97 kilograms of 80% enriched (bomb grade) U-235. [7]

This Iraqi 10-year Deception and Denial success — from the 1981 Israeli bombing of Iraq’s French built Osirak nuclear reactor at Tuwaitha to the 1991 invasion — utterly biased future American political assessments of intelligence community product.  On issues of Iraqi WMD’s, the intelligence community had lost it’s professional credibility with the executive branch filling political elites of both US political parties.

While most Democratic party and foreign policy elites now blame the Pres. George W. Bush Administration for lying in front of the UN and Congress in the run up to the 2003 conquest of Iraq.  This Jeremy R. Hammond’s 2012  Foreign Policy Journal piece titled ‘The Lies that Led to the Iraq War and the Persistent Myth of ‘Intelligence Failure’ is typical of this “conventional wisdom.” [8]   There is a systematic exclusion of the October 2001 Hart office building and postal Anthrax attack and how it affected the thinking of the Pres. George W. Bush administration in this assessment.

Whatever the Mueller FBI had said about it’s two USAMRIID suspects in the Senate Anthrax case. [9]  Before the 2003 invasion of Iraq, the CIA had credibly connected the anthrax silica transport media used in the Senate Hart Office building and US post offices to a report of a then unidentified Iraqi silica compound impregnated by mustard gas against Iranian forces.

See this passage from the 2009 H.W. Beuttel article, “Chemical Weapons and Iranian Casualties in the Iran-Iraq War: A Further Note and Update” [10] —

Further, as regards the lethality of mustard gas in particular, deaths per wounded soldier in WWI were about 2%. If 16,000 were indeed killed by mustard, then this would suggest Iran’s chemical wounded from mustard alone were on the order of 800,000 or eight times the highest total Iranian acknowledged chemical casualties! However, if you are going to die from any chemical agent, mustard is a good bet. Of 1,221 hospital deaths from chemical agents experienced by the AEF in WWI, 600 (50%) were due to mustard. By contrast, the arsenic-based German “Blue Cross” (diphenyl chloroarsine) produced only 3 deaths in the AEF out of 580 total casualties from this agent (0.5% lethality)!106 There are other reports of as many as 5,000 Iranian chemical deaths from mustard gas, and the vast majority of post war chemical injured are mustard casualties. According to the CIA, Iraqi forces used an unidentified silica compound impregnated by mustard gas against Iranian forces. This substance was delivered in White Phosphorus shells. The silica compound reduced the amount of mustard gas the shell could carry, but actually decreased the dose rate required to produce a casualty, resulting in effectiveness five times the standard shell. It apparently helped the agent create a vapor rather than a contact hazard among those exposed. It was noted that Iranian soldiers exposed to mustard gas had unusually high amounts of respiratory injuries as opposed to the more common skin blistering.107 The higher proportion of lung injuries among Iranian soldiers would increase the agent’s overall lethality.


107 “Mustard Gas Used By Iraq in War with Iran,” cia_62648_61898_01.txt

When the above, secret in 2003, CIA report was added to the following 9/11/2001 open source reports:

1. The disputed report that Czech intelligence reported a meeting between an Iraqi agent and the 9/11 ringleader Mohammed Atta that might have been the Iraqis handing off anthrax spores.

2. The fact that one of the 9/11 hijackers was treated by a doctor in Florida for an infection prior to the attack.

3. Which afterwards, subsequent to the anthrax outbreaks, the doctor who had treated the hijacker looked up his medical books and thought that the infection was cutaneous anthrax.

You had a “Fog of War” first impression impression that utterly convinced the George W. Bush Administration it was facing an irrational regime with biological weapons of mass destruction…one that had used them

There was simply no way most American military or civilian intelligence officials in their right minds were going to get in the way of that political patron belief and say “There are no WMD in Iraq.”  And the few voices that did said so were ignored, side lined or removed because of the Iraqi nuclear bomb shock of April 1991.

Jackson Landers Sept 2016 article “The Anthrax Letters That Terrorized a Nation Are Now Decontaminated and on Public View” captures some of the George W. Bush Administration push against the intelligence community, but not the security classification hidden, wide eyed, terror engendered by the CIA’s report of Iraqi silica-mustard gas delivery media. [11]

Deception, Denial, Iraqi Fictitious WMD’s & the Perils of “Never Again”

It is at this point in the story where American political-intelligence elite group think and clientelism meets the Deception and Denial games of Saddam Hussein yet again.  While all the above was going on with American elites after the 9/11/2001 shock.  The survival needs of the Saddam regime after the 1991 Gulf War required that the Iraqi Army and Republican Guards believe that Saddam still had nerve gas filled multiple rocket launchers to put down revolts.  So after Saddam had surrendered his stocks of WMD to the UN following the 1991 Gulf War.  He started a deception and denial campaign aimed at his own population that he still had WMD’s.

It was successful. [12]

So successful that high level Iraqi defectors in the late 1990’s and early 2000’s brought that “Saddam still has secret WMD caches” belief to Arab. Israeli and Western intelligence agencies.

Thus you again have in the 2003 Iraq invasion the triple witching hour of American intelligence group-think and institutional clientelism meeting foreign enemy deception and denial campaigns as we had with the Imperial Japanese in December 1941.

In a real sense the lessons of the surprise of Pearl Harbor and the 2003 Iraqi WMD debacle were buried because they were too painful to learn.

Namely, no bureaucratic intelligence structure or political reform will fix the clientelism or group think inherent to the political-military intelligence structure of the American state that existed in 1941, in 2003 or now. America and American elites in particular were not hurt badly enough to be willing to change. It will take another Pearl Harbor, with mass casualties directly to those group-thinking American political-military-intelligence elites, before their replacements will learn.

It hasn’t happened yet…but it will.



Notes & Sources:

[1] Clientelism
From Wikipedia, the free encyclopedia

[2] Huntington, Samuel P. The Soldier and the State – the Theory and Politics of Civil-Military Relations. Cambridge, Massachusetts: The Belknap Press of Harvard University Press, (1957). ISBN-13: 978-0674817364 ISBN-10: 0674817362

[3] Amy Zegart, Flawed by Design: The Evolution of the CIA, JCS, and NSC 1st Edition, Stanford University Press; 1 edition (August 25, 2000) ISBN-13: 978-0804741316, ISBN-10: 080474131X

[4] John Dower , War without Mercy: Race and Power in the Pacific War, Pantheon; (1986) ISBN-13: 978-0394751726, ISBN-10: 0394751728

[5] Full article citations and links listed below:

Ralph Lee Defalco III (2003) Blind to the Sun: U.S. Intelligence Failures Before the War with Japan, International Journal of Intelligence and CounterIntelligence, 16:1, 95-107, DOI: 10.1080/713830379 | Published online: 15 Dec 2010

R.J. Hanyok “Blinded by the Rising Sun: Japanese Radio Deception Before Pearl Harbor” World War II Magazine,  December 2006

Robert J. Hanyok (2008) ““Catching the Fox Unaware”—Japanese Radio Denial and Deception and the Attack on Pearl Harbor,” Naval War College Review: Vol. 61 : No. 4 , Article 10.

Robert J. Hanyok “How the Japanese Did It” December 2009 Naval History Magazine Volume 23, Number 6

Bob Bergin, “Claire Lee Chennault and the Problem of Intelligence in China,” Studies in Intelligence, Vol. 54 No. 3 (June 2010) Pages 1 – 40.

Justin Pyke “Blinded by the Rising Sun? American Intelligence Assessments of Japanese Air Power, 1920-41: Part 1 – The 1920s”
August 24, 2017

Justin Pyke “Blinded by the Rising Sun? American Intelligence Assessments of Japanese Air Power, 1920-41: Part 2 – 1930-1937”
August 29, 2017

Justin Pyke “Blinded by the Rising Sun? American Intelligence Assessments of Japanese Air Power, 1920-41: Part 3 – 1937-41”
September 6, 2017

[6] Claire Lee Chennault (Author), Robert Hotz (Editor), Richard Edes Harrison (Illustrator) Way of a Fighter: The Memoirs of Claire Lee Chennault (History United States Series) 1st Edition, G. P. Putnam’s Sons; 1st edition (1949), ISBN-10: 0781248132 ISBN-13: 978-0781248136 

[7]  Iraqi Nuclear Weapons

[8] Jeremy R. Hammond, The Lies that Led to the Iraq War and the Persistent Myth of ‘Intelligence Failure’
Sep 8, 2012

[9] US News & World Report and later Washington Examiner Senior Political Analyst Michael Barone followed the twists and turns of the FBI Anthrax investigation closely for 10-years until the FBI cases against USMRIID doctor’s Hatfield and Ivins both collapsed in 2010 without any further suspects. See the followings (USN&WR links require the Wayback Machine):

Who’s behind the anthrax scare?
Web exclusive 10/17/01

September 25, 2006

Anthrax and al Qaeda
November 13, 2007

Who was behind the September 2001 anthrax attacks?
01/01/10 6:59 PM EST

Anthrax attacks still unexplained
01/29/10 4:05 PM EST

[10] H.W. Beuttel, “Chemical Weapons and Iranian Casualties in the Iran-Iraq War: A Further Note
and Update,” pages 21 – 32 The International TNDM Newsletter Volume 3, Number 1 Summer 2009

[11]  Jackson Landers “The Anthrax Letters That Terrorized a Nation Are Now Decontaminated and on Public View”
SEPTEMBER 12, 2016

[12] If you have enough time and a strong stomach.  You can tease out the out story of Saddam’s ultimately self-destructive WMD deception and denial campaign past the…asset covering…in this report.











52 thoughts on “The Forgotten and Buried Intelligence Lessons of Pearl Harbor, December 7th 1941”

  1. Trent, good post.

    Not sure if any institutional reform could fix or even mitigate this situation.

    The Cold War security set-up never worked. It’s amazing we survived. Only the worse pathologies of Communism saved us. They beat us in a race to the bottom.

    The recent shooting in Florida looks like a similar intelligence failure.

  2. I am not sure about this. If anyone wants to make the case that the US Government bureaucracy is as incompetent as any other bureaucracy eventually becomes — no argument; that is a statement of the obvious. If some Politically Correct academic wants to ascribe this incompetence to that tired meaningless old trope of “Racism” — well, all that demonstrates is the analogous incompetence & group-think of the academic bureaucracy.

    There are two important missing points.

    First, that the sainted FDR was a duplicitous liar who campaigned on keeping the US out of WWII while straining every muscle to drag the US into the war. If the Japanese Command had sent FDR an advance copy of their plan of attack on Pearl Harbor, he would have thrown it into the trash. That particular fish rotted from the head.

    Second, there is no question that Saddam Hussein had chemical weapons and an active nuclear weapons development program. Nor is there any question that he would have used those weapons once they were fully developed. Removing Saddam Hussein was akin to hypothetically having removed Hitler after his advance into the Sudetenland; if that had been done, the same group-thinking kind of Far Leftists would have berated the Allies for attacking Germany when it was weak and did not have means to wage war on any serious enemy. Our modern anti-American media types and academics were going to criticize the US effort in Iraq over something — anything! Their brain-dead group-think made them focus on their own dumb misunderstanding of Saddam Hussein’s weapons program.

    The bigger issue here is the unsolved issue of bureaucracy — which has negatively effected much more than just the US government. What about Boeing, General Motors, General Electric? How to tame a bureaucracy? — That is the real question.

  3. Gavin,

    The American Departments of Navy, State, & War intelligence services, plus the FBI, didn’t need FDR to be completely screwed up.

    They did that all by themselves.

    The parallels the various between American intelligence agencies ability to cooperate immediately prior to WW2 and 9/11/2001 to this description of the German intelligence agencies during WW2 is far too close for me

    LTC Earle Lund, USAF “The Battle of Britian – A German Perspective”
    Luftwaffe Air Intelligence During the Battle of Britain

    Air intelligence was subordinated to the operations staff at the major levels of the Luftwaffe. (See Appendices 6 and 7.) At the General Staff level, the 5th Abteilung (Detachment) served as the senior intelligence agency. A similar position was retained at the air fleet (luftflotte) level. It is also significant to note that no intelligence organizations were stationed below the fliegerkorps until 1944.
    Because of the organizational subordination of intelligence to the operations staff, it was very often the operations staff officers themselves who would prepare intelligence assessments of the situation. Their reports sometimes included inputs from the intelligence departments but most frequently they did not. This was apparently not considered unreasonable because these “intelligence assessments” also reflected the Luftwaffe’s future “operational intentions, objectives or missions.”1
    In effect, intelligence officers were perceived as “maids of all work,” and were manned with low-quality personnel whose inputs were considered of limited usefulness to the conduct of future operations.2
    Knowledge is power. Nowhere is this axiom more prevalent than within the wartime German state, within the Wehrmacht and of particular importance here, within the Luftwaffe. More than a dozen intelligence collection agencies existed outside the realm of the armed forces.3 All of these agencies competed with one another; none fully cooperated with the others and only at the very highest level–Hitler–did the potential for a true picture exist. The result was information passed “largely vertically, and seldom horizontally.”Even within the Luftwaffe’s own intelligence agencies the rivalry and mistrust was so great that the 3d Abteilung (signal intelligence; also under the operations staff) rarely coordinated with the 5th Abteilung. The “friction and rivalry between [the two detachments] led directly to erroneous assessments.”4
    Chastise the bearer of unhappy tidings. If not the motto of the Nazi regime, certainly this was the apparent attitude of many individuals, including Hitler, Goering and even Jeschonnek. All three demonstrated a dislike of intelligence reports that did not fit their own personal visions. Intelligence analysis was often watered down to reach conclusions more acceptable to the intended reader. Thus the reputation of the 5th Abteilung’s chief, Col “Beppo” Schmid, evolved as one renown “within the Luftwaffe for garnishing his reports to make them more palatable to Goering.”5
    Generally speaking, it was the nature of the German organizations assigned the tasks of collecting information, analysis and the subsequent dissemination of intelligence that proved the fatal flaw. Jealously guarded, intelligence meant power to the chiefs of the various agencies. Intelligence, when made available to military commanders, was often looked upon with distrust and deemed of limited usefulness. Or, conversely, the reports were selectively believed to their fullest extent. The failings of the system “were so intimately bound up with the political structure of the Third Reich that only a change in regime could have made any fundamental difference . . . the failings of German intelligence can nearly all be traced to the nature of the intelligence organization that had been created.”6″

  4. How to tame a bureaucracy? — That is the real question.

    In the case of Boeing, GM and GE, they are accountable to their customers and the free market tames or starves them. Creative destruction is a powerful tool when allowed to function. But it comes at the cost of current chaos for long term gain. Think the Pennsylvania Railroad. Government intervenes to prevent chaos through Conrail. Finally, the situation stabilized, the ICC was abolished and our current freight transport system emerged.

    The problem with government bureaucracies is that, to paraphrase Ronald Reagan, they are the closest thing to eternal life we are likely to see on earth, the ICC being the proof of the pudding.

    To me, even more frightening than their conventional wisdom group think regarding specific intelligence matters is their general hubris and arrogance. The current conflict with Trump reveals an Interagency that is becoming Praetorian in its desire to wrest control of policy from our politically accountable elected leaders. I used to think the NEA was the greatest threat to the country, but now I am beginning to believe it is the Interagency.

    I hope Trump can tame the Interagency, but I have my doubts. And I don’t see anyone else ready to do so, except some young Turks like Hawley, Cotton and others who are currently far from the levers of power. But even that may be wishful thinking. Durham needs to send Brennan, Clapper and Comey to Leavenworth. In his second term Trump needs to purge all the Obama flag officers in the military. Better minds than mine can come up with the institutional restructuring needed. But its hard to imagine the best institutional structure operating effectively if the people in it are as thoroughly corrupt as the incumbents in the Interagency.

  5. I had to stop reading Clancy after 9/11. I became clear that these books were fairy tales as grounded in reality as the Brothers Grimm. I couldn’t stomach that while real Americans were dying in the Middle East.

    Ignoring all of the pathologies brought out above, I wonder if the best intelligence imaginable can percolate through all of the levels necessary to reach decision makers as anything but random noise.

    The more I discover about the “Miracle at Midway”, the more I see it as a true miracle that proves the point Trent makes above as forcefully as all of the disasters before and since. We weren’t good, we were just lucky.

  6. sum of all fears, yes that had an idealized version of the Saudis, certainly, re yamamoto, from ian toll, you find out he was certainly a moderate in the ruling circles, of the control group junta, probably akin to prince turki in the months before September 11th, that doesn’t mean he was complicit in the operation, but he was familiar enough with the structures that had supported the hijackers like the ones who had been in Chechnya and bosnia,

  7. sum of all fears, yes that had an idealized version of the Saudis,

    I think you are referring to the battle depicted with Iran having taken over Iraq. It’s been years since I read those but he was very prescient. I had forgotten which book that was in.

    Clancy gave far too much credibility to the CIA but was very good on lots of issues nobody else thought of at the time.

    He also liked the Saudis, probably more than they deserve. The Democrats seem oblivious to the effects of fracking freeing us from our dependence on the Middle East.

  8. Mrs. Davis,

    That you know of this and its importance:

    To me, even more frightening than their conventional wisdom group think regarding specific intelligence matters is their general hubris and arrogance. The current conflict with Trump reveals an Interagency that is becoming Praetorian in its desire to wrest control of policy from our politically accountable elected leaders. I used to think the NEA was the greatest threat to the country, but now I am beginning to believe it is the Interagency.

    I hope Trump can tame the Interagency, but I have my doubts. And I don’t see anyone else ready to do so, except some young Turks like Hawley, Cotton and others who are currently far from the levers of power.

    …amounts to a huge defacto reduction in the Interagency’s power and influence.

    The “Deep State” looks neither powerful nor competent.

    Especially not the latter after the House impeachment testimony.

    And a failed impeachment plus re-election will give Trump the power to simply abolish the whole mess.

  9. well consider who one of their top men, their Sammy glick was prince bandar, and he wasn’t the sharpest scimitar in the room, prince turki mentioned above, was tangentially involved with bcci, an investigation that mueller shut down rather precipitously, I guess he learned from boston,

    re current events, prince salman, is trying to make good, perhaps in the not the most tactful ways, in the business his father the king, established in the 80s and 90s.

  10. I happen to be reading “1942” by Winston Grove on my Kindle and there are a few points he makes that bear upon some of the others’ comments.
    – Re. FDR and his inclination to intervene earlier – The country was not in favor of intervention (the Neutrality Act forbade it) and above all FDR was an astute politician and got around it through the leasing of “vintage” destroyers for Caribbean and Atlantic bases after his 3rd re-election. He also “persuaded Congress” to institute a 900,000 draft in Sept. 1940. All this and a modified war (production) footing at the height of isolationism just before 12/7/41.
    – Yamamoto said that if ordered he’d “run wild for the first six months or year, but have utterly no confidence for the second and third years.”
    – One odd, pertinent item really strikes me: At the end of November 1941 the Intel. officers in Hawaii lost track of the two full Jap. carrier divisions (radio silence) that had been near Japan and reported the same to the Pearl Harbor commander. The commander was apparently concerned but no further action appears to have been taken (at least the author makes no note of any action made to investigate further). There was an assumption by intel. that they were “still in home waters but couldn’t be sure”. (One notes that both Army and Navy commanders at Pearl were fired shortly after the attack, although perhaps not as a direct result of this particular situation which looks like a lack of innitiative and imagination. One assumes that this lack of intell was passed on up the line to Washington…)


  11. Gordon Prange’s “At Dawn We Slept” is still a good account of everything that lead up to the attack. The title is as good a summary as any I can think of of what happened. We had ample information, most was ignored and the rest systematically misinterpreted.

    Bare this in mind the next time some spokesman repeats the phrase “no credible threat”. The world is full of people sworn to do us all the damage they can, sooner or later they will learn not to advertise in advance. They may stop buying their bombs from the FBI as well.

    The mystery about the Saudi in Pensacola is the he was in line to be in an airplane which would have given him a much better weapon than a pistol.

    Of course, the thousands coming across the border are no concern at all.

  12. Is there any evidence that anyone in the IC gets promoted (or demoted) based on their analytic/predictive skills? Anyone get promoted for predicting the collapse of the Iron Curtain? Pakistan/Indian nukes? 9/11? It seems like something bad happens and IC budgets get boosted but the same people remain, or (even worse) they hire tons more people who get trained by the same old failed insiders.
    It seems to me that “intelligence” should be referred to as spying again, so it’s clear that it’s a fundamentally disreputable business that should not be a career, or a way to power or influence. Similar to journalists, spies should not be allowed at the nice parties.

  13. This —

    >>I like your optimism.

    Isn’t optimism so much as it is a read of Pres. Trump’s character and the corruption of GOP senators.

    The latter first, Republican senators have to survive their next GOP primary election. Voting to remove Trump as President will eliminate that possibility.

    And as for the first, Pres. Trump’s life shows he has a well developed taste for vengeance and a will to protect his kids.

  14. “Pres. Trump’s life shows he has a well developed taste for vengeance and a will to protect his kids.”
    Imagine a reelected Trump putting a vindicated Michael Flynn in charge of the entire IC like he was supposed to be, with a new generation of GOP Senators (need to get rid of Burr, etc.). They can hopefully start to clean out the filthy stables.
    The alternative is too horrible to contemplate–a victory for the police state and the Dems will make sure their mistakes from last time can’t be repeated, and no chances be taken ever again.

  15. On bureaucracy — which is the underlying issue in this discussion — the best concept I have seen is Prof. Charles Handy’s “Sigmoid Curve”.

    Every organization starts off with an investment phase, where resources are injected and not much useful comes out. Then it develops a critical momentum and starts to produce useful output. Growth follows — the Happy Days! Eventually, useful output crests and starts to decline, ultimately leading to the collapse of the organization — unless an organization is smart enough to renew itself by investing in new lines of activity and generating further Sigmoid Curves.

    This provides a neat, albeit greatly over-simplified, description of the life cycle of the Roman Empire, most European royalty, the British Empire, the Catholic Church, Hitler’s Germany, USSR, United Autoworkers Union … and maybe even someday the United States of America.

    But describing the problem does not fix the problem. In the real world, it seems that eventually the Peter Principle ensures smooth incompetents take the place of rough innovators, and decline necessarily follows. Perhaps the birth & death of human organizations is as inevitable as the birth & death of human bodies?

    If that speculation is correct, then the only way to deal with bureaucracies would be to practice euthanasia regularly, and tear down organizations at the first sign of them cresting. But that approach was essentially what Mao attempted to do when he released the Red Guards to disrupt a Communist bureaucracy which was becoming entrenched, corrupt, and ineffective. The cure can be as damaging as the disease!

    This leads to a further speculation — a possible explanation of why today’s Communist leadership is apparently so much more competent than the petty politicians we have in the West. Western kids who grew up in the Great Depression of the 1930s knew how tenuous life could be and how much hard work it takes to keep a system going. That traumatic experience influenced them positively for the rest of their working lives. It was when that generation started to retire in the 1970s that the West jumped the track. Perhaps the reason today’s Chinese Communist bureaucracy is so much more effective than ours in the West is that the Chinese bureaucrats are similarly marked by their own memories of the Red Guards?

  16. Brian,

    They are punished for predictive skills, but they are also punished for making predictions which deviate in the least from mere projections of current trends.

  17. One problem is that large organizations have a hard time taking *small things* seriously; yet, it is often things that are small at the moment that will have the most potential for major growth in the future.

    A very smart and successful CEO once remarked to me that “the key to startups is that you have very smart people working on small things.” By “small”, he didn’t mean “unimportant”, rather, he meant small in terms of current revenue/profit value.

    I noticed the other day that GE Healthcare, in describing the acquisitions that is may or may not be interested in, says: “n general we are not investing in Seed stage or pre-revenue companies.” This is extremely dumb, IMO. This leaves them with the alternatives of entering new product categories by (a) internal development, which is probably overall lowest-cost but also takes the most time, or by (b) buying already-successful companies, which is expensive…sometimes *very* expensive…and often will involve integration problems and sales channel conflicts. Not smart to exclude companies which have already done much of the technology work but not yet launched it into the marketplace.

  18. Regards this —

    >>Perhaps the reason today’s Chinese Communist bureaucracy is so much more effective than ours in the West is that the Chinese bureaucrats are similarly marked by their own memories of the Red Guards?

    Never believe a Chinese Communist Party press release. Please read and head the following:

    1. Chinese imports to the USA are down 23% year over year:

    …and 2. Their financial markets are fraud city:

    China and the CCP now are as much a ponzi deal as the Soviet Union was in 1989-1991.

    The smart money has already left China generally, and Hong Kong in particular.

    All the Western money in China that is left are with the con men, the desperate and the stupid walking circles around the last chair, waiting for the music to stop.

  19. Lex,

    It’s all about the money.

    Show Congress ‘critters all that KBR, Halaburton, Dyncorp lobbying money and foreign kick backs.

  20. Trent T: “China and the CCP now are as much a ponzi deal as the Soviet Union was in 1989-1991.”

    For the avoidance of doubt, I am not sticking up for the Chinese Communist Party — but we in the West should be cautious talking about Ponzi deals when we have growing National Debts that can never be repaid and growing pension & Social Security commitments that can never be honored.

    What fascinates me about China is the sheer competence they apparently display. They get things done!

    For sure, China gets things done by lying, stealing, & bribing as well as by working hard & being smart — but they do get things done. China has gone from next to nothing in steel production to the world’s largest producer by a country mile. They have gone from next to nothing in shipbuilding to the world’s largest shipbuilder. Same in automobiles, and now they are working on building their aircraft industry. No question that China got its high speed rail technology from abroad, but then made sure almost everything was manufactured in China and went ahead and built the world’s largest high speed rail network; and now they are actually building the magnetic-levitation trains that the West has only talked about for decades Sure, China got its rocket guidance technology by bribing the Clinton Administration — but then they extend that to put the first lunar lander on the far side of the Moon.

    To get back to the original intelligence thrust of this thread, when it is obvious to a blind dog on a dark night that China is somehow able to get things done while we are not — it is worth taking a closer look to find out if there are any lessons which could be learned by a US that used to be the “can-do” country that led the world.

  21. “China gets things done by lying, stealing, & bribing as well as by working hard & being smart”
    Also mass murder. Don’t forget that. That’s kind of critical to the whole operation.

  22. the best intel insight came from general Flynn, he designed the tribal based roadmap for the counterinsurgency strategy, was was delegated to biden, because of course he would have better insights

  23. A lot of what China appears to accomplish is through lying, fabricating and obfuscating. Some things like the ship building can’t be faked but they are very dependent on Western expertise and components.

    In a lot of other areas it’s impossible to sort the truth from what the CCP wants the world to believe. And then there are wide areas where what the CCP thinks it knows is wrong. Pretty much the whole economy being one.

    The preternatural competence of the CCP, the ability to “get things done”, will come to the same end as it did in the Soviet Union and probably in the next five years.

    The problem with Afghanistan is that no such place actually exists and never has. A hundred years of the sort of rule that the Soviets tried to impose might have made a start but they learned the lesson of every past would be conqueror: There isn’t enough there to feed the population let alone support an occupation. They couldn’t afford it and neither can we.

  24. MCS: “In a lot of other areas it’s impossible to sort the truth from what the CCP wants the world to believe.”

    Agreed, it is a good idea to be skeptical about all governments. But we also have to give some credit to our own lying eyes.

    I still remember the first time I flew into LA on a clear night: a grid of lights spread out to the horizon, like a scene from the movie “2001” — Amazing!. Flying into Shanghai on a clear night creates the same amazement, but on an even larger scale.

    OK, China benefits from the fact that a lot of their infrastructure is fairly new, and thus built to modern standards. Even so, the airports are impressive; the metro systems are first rate; the urban freeways are excellent; the rural toll expressways are smooth & fast; the bridges are a civil engineers dream; the Chinese-made cars run well and have great fit & finish; the high speed rail is world class. See all of that with your own eyes, and you can’t deny that China is making a lot of progress; it is not a Potemkin village.

    Many of us are using Chinese-made cell phones and Chinese-made computers, or taking Chinese-made medications — things which we cannot make in the US, thanks to the foolishness of our Ivy League credentialed leaders. Undoubtedly there is a lot wrong with China — but we should not underestimate them either, the way the US Establishment underestimated the Japanese before Pearl Harbor.

  25. Chinese assembled cell phones designed and most components manufactured elsewhere. Drugs developed from research in the West, manufactured in the West partially from bulk chemicals produced in China. Chinese produced generic drugs when they haven’t been withdrawn because of contamination, the IP developed somewhere else.

    As the China Law Blog mentioned above points out, many outfits are pulling out for other countries. The proof will be what happens when the Chinese are largely on their own. They’ll find few people foolish enough to trust them after they’ve burned so many. My personal opinion is that they are close to having eaten all their seed corn and will be in for a long, cold winter with nothing to plant in the spring. Those impressive buildings and massive cities will be rather less livable if they can’t keep the lights on.

    The next few years could get very interesting. The convulsions that have killed so many Chinese over the centuries passed without note in the rest of the world, they didn’t have nukes then. I don’t think the present establishment is up to accurately judging the danger to the rest of us from a government that caused the death of around 50 million of its own citizens with no consequences to itself.

  26. I should also add that Chinese scientists and engineers are often a very capable part of developing many technologies. They also form a direct conduit for stealing the same technology. Austin Bay has talked about Chinese government programs that provide capital to returning technologists to develop what they bring with them from their time in the West without regard to the actual ownership of the IP. Numerous recent prosecutions show that they don’t even have to return.

  27. Gavin,

    China was set up by the “Wizards of Wall Street” after 1989 as a intermediate goods manufacturing hub because they made 2% on the international loans building out Chinese manufacturing and other infrastructure and the multinationals made a percentage being front men for those intermediate manufactured goods to the USA.

    The Trump tariff’s and the now certain signing of USMCA have killed that game for both those players.

    Chinese imports to the USA are down 23% year over year based on Nov 2019 data:

    The Chinese Yuan devaluations to try and keep market share in that past year mean their real dollar foreign exchange is now down 27-to-30% year over year.

    The passage of USMCA in January 2020 means China is looking at several years just like the last one in terms of losing trade in US dollars.

    That anticipated foreign exchange loss is showing up in the slow down of China’s aircraft carrier program. It is beginning to look like the Chinese navy, and it’s carriers in particular, are going the way of the Soviet Union’s Red Fleet for the same reason. Both fleets are an unaffordable white elephants in terms of foreign currency.

    The Chinese have had a plan to do a pause after building four carriers, both to learn how to use a operate two carrier battle group, and to get their nuclear plants working while waiting for the US Navy to s–t or get off the pot in terms of steam catapults versus the electro-magnetic launch aircraft catapults.

    The problem for the PLAN executing that plan boils down to foreign currency. They need it to fill their carriers, air groups & surface combatants with the 1st rate electronics to build them and the fuel to run them.

    And the Trump tariff’s have killed that cash flow.

    This has meant the Chinese had to cut all discretionary foreign exchange spending, and what is instructive here is the first thing they killed was the dredging operations in the South China Sea for their artificial military islands.

    All that dredging required oil and diesel fuel which in turn required US Dollars to buy the oil. So the Chinese stopped doing dredging almost a year ago.

    What does a conventional carrier operating a modern jet air group with a full screen of DDG’s require a whole lot of to operate?

    A whole lot more than the SCS dredging operations, that is for sure.

    Read the following article in light of what I just laid out.

    Technical Problems, Slowing Economy Cut China’s Carrier Ambitions
    Plans to build more than four aircraft carriers apparently put on hold.
    By Steven Stashwick
    December 04, 2019

  28. By the way, the US intelligence community foresaw exactly none of the above regards Trump trade tariff’s, Chinese carriers and the future military threat to the USA.

    It was all straight line projections from all the data pre-2016 about the growing “Chinese threat” eclipsing the US Navy just like China was going to eclipse the size of the US Economy.

    It was all “How do we accommodate the displacement of the USA in the world stage and avoid the Thucydides Trap.”

    Exhibit A:

    Between the effects of Trump’s China tariff’s, and the promotion US fracking infrastructure build outs via deregulation, neither of those “Growth of China” straight line assumption is true any longer.

    China has been kicked back to “normal growth” economic growth while the USA has been ignited towards higher than Obama 1% normal economic growth.

    That is, both economies are now on a 3% annual growth trajectory long term.

    Pres. Trump’s “The Chinese Thucydides has no cloths” moment has utterly changed the calculus of world power and China is never going to get back the financial advantage it has 1989-2016.

    The uniformed side of the Deep State really hates the thought of accommodating anyone and the Congressional wing of the “Military-Industrial complex” likes the thought of Soviet Union-like long term military competition.

  29. The passage of USMCA in January 2020 means China is looking at several years just like the last one in terms of losing trade in US dollars.

    I have wondered for a while about Mitch McConnell’s relationship to China. He has announced that the trade deal will wait for impeachment.

    CTH has had some interesting speculation about Mitch.

    If any of the republican Senators attempt to disrupt this UniParty business model McConnell excommunicates them from the legislative process; the best reference for the ‘incommunicado’ approach is former U.S. Senator Jim DeMint (R-SC).

    Additional references for how McConnell operates this scheme as the Minority Leader can be found in the Corker-Cardin amendment which allowed the Iran nuclear deal/payments under Obama; and/or the “fast track” Trade Promotion Authority deal for TPP passage, again for President Obama’s maximum benefit. In these examples McConnell worked with Harry Reid to flip the vote threshold from votes to approve, to votes needed to deny.

    Within TPP Minority Leader Mitch McConnell was again working on the priorities of U.S. Chamber of Commerce President Tom Donohue. McConnell and Donohue have been working together on UniParty trade and domestic legislative issues for around twenty years. It is well established that Senate Leader Mitch McConnell has one major career alliance that has been unbroken and unchanged for well over two decades. That alliance is with the U.S. Chamber of Commerce, and specifically with CoC President Tom Donohue.

    I just might do a bit of research on the Jim DeMint story.

  30. I guess DeMint was too conservative for Mitch.

    DeMint founded the Senate Conservatives Fund in 2008 when he was on Capitol Hill. He is now president of the Heritage Foundation. The group is aligned with the tea party and has bashed Republicans it considers not conservative enough.

    That’s not the whole story as This guy at American Conservative doesn’t like DeMint.

    If McConnell is “that most rightwing of Republicans,” the left-right political spectrum truly has no meaning. Indeed, the opposition to the deal from the Club for Growth and Jim DeMint underscores that McConnell does not represent the right wing of his party, and it suggests that McConnell may not be able to force the conservative members of his caucus to accept the deal he has hammered out.

    That was from 2010.

  31. well they often make the perfect the enemy of the good, now does miss McConnell’s father’s thriving Taiwanese shipping firm, which has had some cargo handling issues that pete Schweitzer explored in secret empires, have some influence here, now who is one of the leading funders of mcturtle’s various pacs well none other than paul singer, que sorpresa, as they would say in my native tongue,

  32. Trent T: “The problem for the PLAN executing that plan boils down to foreign currency.”

    Reportedly, China’s foreign exchange reserves currently stand at about $3,096 Billion — the product of decades worth of trade surpluses. And President Trump seems to be the only US leader in the last 20+ years who has cared about the unsustainable US trade deficit with China. There may be many constraints on what PLAN can do — but foreign currency really is not one of them.

    “… China is never going to get back the financial advantage it has 1989-2016.”

    Let’s hope so. But I for one do not trust the US Political Class to do right by the US. The Clintons are standing proof of that. China knows it can buy just about anyone in the US Establishment.

    Let’s not fall into the trap that our expensive “intelligence” agencies fall into, the one where they fail to recognize change. The US has long been the world leader in innovation — but go to any US university today and there technical/scientific graduate programs are packed with Chinese and Indian students, not US students; to make things worse, our dumb immigration laws often do not allow those MS & PhDs to remain in the US after graduation. The US has long been the world leader in manufacturing — but today everything from the steel mills to the computer chip foundries have been sent overseas, often to China.

    The worst part is that the US Political Class (with the glorious exception of President Trump) does not even see this loss of domestic capabilities as a problem. The problem can be solved, but first we (or our “leaders”) have to recognize there is a problem.

  33. Here’s a question that occurred to me after I made the comment above about IP theft. Automotive companies have been building cars in Latin America for a long time; in all that time, I’m not aware of a single indigenous Latin American car manufacturer. Why is this? IP theft there was never a problem because there was nobody that cared.

    Contrast this with the situation in China after barely 20 years. If they could continue on the same trajectory, I have no doubt that they could probably pull ahead of us. Instead they seem to have peeked and will likely have considerable difficulty maintaining their status quo.

  34. Some of this depends on what happens in Hong Kong and what effect it has on CCP. Do they crush Hong Kong?

    Does that crush innovation and return to a Manchu Dynasty situation ?

    Does Hong Kong somehow win ? What does that do ?

  35. I think the CCP has made it as clear as it could possibly be that they will go to any length to stifle descent. I’m pretty sure that they view Hong Kong as an existential threat that they will have to eliminate. What remains to be seen is how the rest of the world will react when that happens.

    On a different note, the Pensacola attack is paying dividends in delineating the stupidity of various people. The shooter was taking flight training. Eventually he would have been in control of a 30 ton airplane capable of flying faster than most bullets with live weapons and our SECNAV thinks that his being able to buy a gun legally is the problem.

  36. MCS: “… our SECNAV thinks that his being able to buy a gun legally is the problem.”

    This is the bad news — our “leadership” is worthless. It is also the good news — the problem lies in “our” leadership. The problem is internal, and we can in principle deal with it. I wish I had more confidence that we will indeed deal with it.

    It is inevitable that a crisis will come — a turning point. Then we will either replace most of the current “leadership” and rebound, or we will go the way of Venezuela. One thing is for sure — our worthless Political Class will not go quietly into the long dark night.

  37. Gavin,

    There are several issues with your facile assumption regarding Chinese foreign exchange holdings. The first is with the extent to which those rely on Chinese financial statistics. Any data supplied by China should be viewed with suspicion.

    Second is the extent to which those rely on the value of anything in Hong Kong, where values will drop dramatically when China’s government suppreses the place. There are additional issues because Hong Kong was a favorite place for corrupt Chinese elites to stash their stolen money. Stolen money is itself easily stolen. We’ll find out how much of this stolen money still really exists.

    And in addition to all the fraud and dodgy statistics, there is the British experience in World War Two to keep in mind. They had to liquidate almost all of their foreign holdings to finance their war effort, and found it difficult to do so because so much was illiquid, and the need to dump it quickly created marketing problems. Something like a third of it had to be sold to the US for a fraction of its worth if the British had had the time to dispose of it in a slower and more orderly manner, and that was in 1943-44, 5-6 years after the British had begun selling their foreign holdings to finance their military production.

    Basically at most a quarter of purported Chinese foreign holdings is at all liquid. About another quarter can be accessed in an orderly fashion over about a 2-3 year period. After that diminishing returns will set in.

  38. apparently the pornstache comment, doesn’t that sound like the san Bernardino pretext, or self hating gay in the case of pulse or ‘at war with himself’ in the case of boston, more like inspired by some salafi imams since 2015,

  39. My brother was a ground crew chief at bases where Saudis were being trained in the 70’s-80’s. We’ve been doing it a long time. He said that they had a lot more attitude than skill and had an especially hard time dealing with enlisted personnel and owning up to very common hard landings and bent airplanes.

    My suspicion is that pornstache was about to wash out. We’ll probably never know.

  40. I was at Lackland AFB as a trainee baby airman, where they were training Saudi and Iranian troops, in 1997 – the Sauds were awful. The most miserable experience I ever had was when a small party of four of us had to stand at attention to let a troop of Saudi trainees go past us. Yeah, the full-fell experience of nasty cat-calls, suggestive remarks and worse, as that troop went past us. And we had to sit there and take it. Our TI was furious when we told her afterwards – but it was afterwards and not much that she could do about it.

  41. Tom H: “Any data supplied by China should be viewed with suspicion.”

    Agreed! Unfortunately, that caution about government statistics applies to more than just China.

    Anyway, your interpretation is that China could spend about $750 Billion on foreign purchases pretty well immediately, and another $750 Billion over the next 2-3 years. That would seem to support the concept that foreign exchange need not be much of a limitation on PLAN — if the Chinese government chooses to spend its money that way.

    It is a safe bet that there are analysts in China pointing to the shrunken size of the over-stretched US Navy and its unimpressive feminized Politically Correct officer corps which runs its ships into cargo vessels the size of islands. Those analysts would also correctly point out that USN clearly does not have enough trained personnel to keep all their impressive high-tech gear in working order. There is a rational case that it would be wasteful for China to over-invest in preparing to fight a paper tiger.

    We know that US “Intelligence” agencies have missed most of the big items in the last half century. They tended to read the newspapers instead of doing real on-the-ground research. Let’s not make the same mistake today by under-estimating China’s capabilities, at a time when China has taken advantage of Western short-sightedness to turn itself into the Workshop of the World. That would be truly facile.

    I sympathize that looking objectively at the situation is uncomfortable. It is certainly uncomfortable for me! And the worst part is that we have done this to ourselves, by electing a generation of worthless self-serving politicians.

  42. It is a safe bet that there are analysts in China pointing to the shrunken size of the over-stretched US Navy and its unimpressive feminized Politically Correct officer corps which runs its ships into cargo vessels the size of islands.

    The Navy is a mess and there is no Earnest J King to be called out of retirement to save it. It need to have the top 10% pruned off and retired. The same should apply to the FBI, which failed us again with the Pensacola shooter. The CIA, on the other hand should be closed down and the useful bits transferred to army intelligence or all three services.

  43. maybe general Flynn can be brought back, to head this new agency, his dia was very perceptive, so this shooter, whose tribal name comes from asir, the troublesome province that the kingdom annexed in 1934, widely expressed support for various salafi sheiks as far back as 2015, when prince salman started going after the likes of al hawala and al awda, (that’s the one ‘leaky’ leahy, had crocodile tears over his execution,

    here on or near the space coasts, we get a lot of flight students from the red sea area, all the way to Persian gulf, civilian flight training, they seem affable enough then again so did oded fehr’s character in sleeper cell, who pretended to be Israeli in the first season,

  44. Gavin,

    The Chinese do not have $750 billion immediately available.

    The number was $200 billion less in August 2019, when the NY Times mentioned it once.


    China’s private sector turns to IOU drip feed
    Companies switching to ‘commercial acceptable bills’ as Beijing’s pledge to increase corporate funding stalls
    By Gordon Watts

    “[Roughly,] US$200 billion in i.o.u.s are floating around the Chinese financial system, according to government data,” The New York Times
    reported earlier this week.

    and later in the piece:

    Credit squeeze
    Indeed, this credit squeeze has tightened because the “big five” state-owned banks are reluctant to lend to the private sector, despite Li’s incessant statements to loosen the purse strings.

    “China’s private sector is shrinking for the first time in two decades – an extraordinary development contrary to the hopes seeded by

    [China’s] 2013 economic reform objectives and decades of talk about withdrawing the state from the marketplace,” a report released last
    year by the Asia Society Policy Institute and the Rhodium Group pointed out.

    The ramifications of that statement are immense.

    There are 27 million private companies and they are vital to the nation’s economy as they contribute more than 50% of the tax revenue, 60% of GDP, or gross domestic product, and 70% of technological innovation.

    They also supply 80% of the jobs in urban areas, including 90% of new employment opportunities.

    “The private sector and the country’s economic and social development have been closely related to each other, and formed a community of a shared future,” Liu Shijin, the deputy director of the economic committee of the National Committee of the Chinese People’s Political.

    And the calculated “Dollar burn rate” based in information in the NY Times was on the order of $50 billion a month.

    It is now December 2019, four months later.

  45. Gavin,

    This is the original NY Time piece:

    Circulating in China’s Financial System: More Than $200 Billion in I.O.U.s

    As the trade war escalates, Beijing needs private companies to pull China’s economy out of its rut. But for some, ready money can be hard
    to find.

    And this is effectively the “IOU update” the NY Times published last Thursday:

    China’s Companies Binged on Debt. Now They Can’t Pay the Bill.
    Rising bond defaults raise new questions about whether Beijing can effectively address its huge debt problem.
    Dec 12, 2019

    The XI government literally cannot spend any of the liquid and available $3 trillion foreign currency reserve to fix the IOU issue with the financial fall out of a Hong Kong suppression staring it in the face.

    This is why China signed the Phase one deal with the Trump administration, even though buying $50 billion in Agricultural products will help his reelection campaign.

    The Chinese have to slow the foreign currency bleeding in the short term.

    No matter that they cannot keep their word on IP theft and avoid violently suppressing Hong Kong before the Nov 2020 election.

    This is a classic Trump strategy tree where no matter what Pres. Xi does, Pres. Trump benefits and China loses.

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