In Medias Res

What I’ve got so far:

  1. Everything’s on the table. The likelihood that your preexisting ideology or priorities are an entirely adequate match to what this situation truly requires of us is close to nil. “In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists.” ― Eric Hoffer
  2. That said, your life experience will give you insights. Privilege your experience over your ideology and nominal priorities.
  3. All disasters are local. Concentrate on your meaningfully immediate environment, which in this case will be the local market for medical resources. For most of the US, that will be our MSA. For those outside an MSA (metropolitan or micropolitan) that will be their county; and for some it will be the group of counties that feed into the one hospital in the region.
  4. Deprioritize pandemic news from outside your local area. There are people in the massive NY/NJ/MA outbreak that I worry about, but what happens there will only modestly resemble what happens in the KC MSA, not least because of the difference in population density, which can approach 20x.
  5. Mitigate or avoid your own risk (including the risk you pose to others) by both following the hygiene advice we’ve all heard and minimizing your physical interaction with anyone outside your immediate household. Internalize R₀ = b × k × d, where R₀ is the reproduction number of the virus, b is the probability of infection given contact with an infectious person, k is the contact rate, and d is the infectious duration. While the nominal R₀ of COVID-19 is ~3, your personal R₀ can be driven to < 1 by your own behavior.
  6. The general form of the challenge confronting us is abrupt wide variation in formerly relatively constant phenomena. In Talebian terms, we have migrated from “mediocristan” to “extremistan.” The multiplicative nature of a novel viral pandemic, especially by comparison to the relatively predictable seasonality of influenza viruses, has a thick-tailed (power law) probability structure and complex payoffs (notoriously ranging from large numbers of nearly asymptomatic cases to abruptly life-threatening “cytokine storm” reactions). For detail, see The Fourth Quadrant: A Map of the Limits of Statistics.
  7. So we find ourselves at serious risk of running out of ventilators, ICU beds, and even hospital beds generally, to say nothing of supplies (but see “all disasters are local,” above), raising the prospect of significant second-order mortality among those unable to obtain adequate care for entirely unrelated illnesses and injuries.
  8. In this connection, many prior customs, techniques, tools, and materials are being revealed as highly dysfunctional and, if all goes sufficiently well, will be swept into the dustbin of history. The bad news for me is that my earlier fears about easily-bottlenecked processes have been realized. But we may look forward to significant adaptation, including deregulation of medical services.
  9. Similarly, a large number of purported fixes and remedies will fail. Folk remedies, in particular, seem likely to be disastrous, and this blog’s audience needs no persuasion that attempts at central planning will fail thanks to the Hayekian local knowledge problem. In that connection, and to quote something I wrote a few years back: “John Gilmore famously said that ‘the Net interprets censorship as damage and routes around it.’ The future adaptation of representative democracies will depend on our capability, as individuals, to interpret endemic institutional dysfunctionality as damage and route around it.”
  10. The relatively vulnerable are closer to the center of the network: affluent, living in high-density major cities, well-traveled, extroverted, socially active, with large numbers of regular contacts (even if mostly in a “bubble” as per Murray’s notorious quiz). But some are the alienated and defiant who reject risk avoidance or even risk mitigation tactics (or attempt folk remedies instead), ordinarily associated with …
  11. The relatively invulnerable, who are at or near the edge of the network: impoverished, living in rural or low-density metro areas, untraveled, introverted, socially isolated, rarely in face-to-face contact with others. Many of these people have mental health issues and associated substance abuse problems. But the relatively invulnerable are also the intelligent and conscientious who promptly adopt appropriate risk management strategies.
  12. The post-pandemic preferences of the relatively invulnerable will have massive economic and cultural effects. I expect a reasonably quick partial recovery from the economic shutdown, but full recovery may take several years. Many of the “third places” which have done well over the last few decades will not regain their patronage, and as of early April 2020, we can only guess which ones. Fond hopes of some of my co-religionists aside for a sudden revival, I believe church attendance and involvement will be well down in the aftermath, and will not significantly grow until the next “Awakening,” which per Strauss and Howe should occur at mid-century. Until then, believers will be culturally marginalized and congregations will be smaller—but comprised of relatively fervent, active members.
  13. Geopolitical risks are heightened, especially US-China tensions, and if Xenakis’ “58-year hypothesis” holds, this very year will see an echo of the Cuban Missile Crisis.
  14. The most important output of this process—and it is a process, with inputs, providers, outputs, recipients, etc—will be a collective lessons-learned database, comprised of both tacit and explicit knowledge, and somehow transmitted to future generations.

Pres. Trump Sends Iran’s “Red Napoleon” to Meet The Reaper

On Friday night Jan 3, 2020, President Trump directed a successful strike killing IRGC Commander Gen. Qassem Soleiman at the Baghdad International Airport.  Four AGM-114N Metal Augmented Charge (MAC) Thermobaric Hellfire missiles launched from an General Atomics MQ-9 Reaper turned Soleiman’s SUV and his accompanying  security SUV into funeral pyres. [1]

IRGC Commander Gen. Qassem Soleiman meets three AGM-114N Metal Augmented Charge (MAC) Thermobaric Hellfire missiles launched from a a MQ-9 Reaper Drone
IRGC Commander Gen. Qassem Soleiman meets three AGM-114N Metal Augmented Charge (MAC) Thermobaric Hellfire missiles launched from an MQ-9 Reaper Drone.  Graphic Source: UK Daily Mail

See full story at this Daily Mail link:

https://www.dailymail.co.uk/news/article-7848729/Trump-taunts-Iran-saying-never-won-war-ordering-strike-killed-Soleimani.html

Some in the media have compared this strike to Operation Vengeance, the American military operation to kill Admiral Isoroku Yamamoto of the Imperial Japanese Navy on April 18, 1943.

The Trump Administration drone strike was in fact far more consequential than Operation Vengeance. If only because of how much more of the IRGC Quds force senior chain of command were eliminated compared to the Admiral Isoroku Yamamoto strike.  And how much more important Gen. Qassem Soleiman was to Iran than Yamamoto was to Imperial Japan.

Also killed in the strike were Abu Mahdi al-Muhandis also known as Jamal Jafaar Mohammed Ali Āl Ebrahim, the commander of the Iraqi Shia Kata’ib Hezbollah militia and mastermind behind the December 1983 bomb attacks on U.S. and French embassies in Kuwait.

In additional to Soleiman and al-Muhandis/Āl Ebrahim, also killed were IRGC Brigadier General Hussein Jafari Nia, Major-General Hadi Taremi, LTC. Shahroud Mozaffari Nia and Captain Waheed Zamanian. Nor does the list end there as senior pro-Iranian Iraqi Shia PMF militia leaders Heydar Ali, Muhammed Reza al-Jaberi and Hassan Abdul Hadi, were in the second SUV struck by one of four AGM-114N Hellfire guided missiles fired by the MQ-9 Reaper.

IRAN’S RED NAPOLEON

IRGC Commander Gen. Qassem Soleiman was to Iran what Heinrich Himmler, Gen Oberst Kurt Daluege, Gen Ernst Kaltenbrunner and Gen Sepp Dietrich were to Nazi Germany, all rolled into one.

In many ways Gen. Qassem Soleiman ran Iran’s foreign policy and strategy as principal adviser to the theocratic leadership. Soleiman made his bones in the 1990’s suppressing Iranian student riots in the style of Belisarius and the Nika riots. Post 9/11/2001, he has been orchestrating the killings of US service personnel, is the architect Iran’s proxy forces in Iraq, Lebanon, Syria and Yeman and ran covert ops forces world wide.

In fact, Gen. Qassem Soleiman was Iran’s “Red Napoleon.

The idea of “The Red Napoleon” came from the 1929 novel of that name by Floyd Gibbons predicting a Soviet conquest of Europe and invasion of America by The Red Napoleon’s massive multi-racial army. Written as a screed against white racial supremacy, the concept in the Western Left of a 3rd World military leader who could routinely defeat the West over and over again the same way that General and later French Emperor Bonaparte Napoleon did to the leaders of Western Europe in the late 18th and early 19th century has hung on in the Left’s Noosphere [2] in the decades since.

If anyone was a “Red Napoleon” in the 21st century,  Gen. Qassem Soleiman was that man.

On January 12, 2016, two United States Navy riverine command boats were seized by Iran's Islamic Revolutionary Guard Corps (IRGC) Navy after they entered Iranian territorial waters near Iran's Farsi Island in the Persian Gulf. The subsiquent release was hailed by the Obama administration as an unintended benefit of the new diplomatic relationship.
On January 12, 2016, two United States Navy riverine command boats were seized by Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy after they entered Iranian territorial waters near Iran’s Farsi Island in the Persian Gulf. The subsequent release was hailed by the Obama administration as an unintended benefit of the new diplomatic relationship. Source: https://en.wikipedia.org/wiki/2016_U.S.%E2%80%93Iran_naval_incident

Gen. Qassem Soleiman was a man from the 3rd World. One who had created and lead a team in the form of the Quds Force that had killed American servicemen in their hundreds, for decades, got a pair of US Navy riverine command boat crews to surrender in humiliation to support Pres. Obama’s “Opening to Iran” and executed  both the Benghazi, Libya and Baghdad, Iraq embassy assaults.

And Pres. Trump just sent Iran’s “Red Napoleon” to “…meet the Reaper.

IRGC Quds Force Commander Qassem Soleimani. He was the Iranian government’s “Red Napoleonand was killed by a thermobaric Hellfire missile launched from a MQ-9 Reaper at the orders of President Trump on 3 Jan 2020.

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Jeffrey Epstein’s Death in Federal Custody, the Suicide of Federal Government Credibility

The announced “death by suicide” of Pedo-Pimp to the Powerful Jeffrey Epstein in Federal government custody while;

  1. On a 24/7 suicide watch,
  2. After his first “suicide attempt,”  in late July, and
  3. Before there was any time for a real autopsy…

…is such utter horse manure as to utterly destroy any shred of credibility of the Federal government.

That Federal Attorney General Barr first called for an FBI investigation of Epstein’s death — to deafening loud round of public rasp-berry’s.

Then he followed that credibility destroying knee jerk response near seconds later by saying the Department of Justice Inspector General would conduct the investigation — given the non-prosecution of so many in the DoJ & FBI after the IG caught them red handed leaking FISA surveillance sources and methods to the press — amounts to an “Eff-U” slap in the face to the General Public.

This is pure “Pravda Reporting on Chernobyl” territory.  It’s all about elite posturing and “Face” while the radioactive pile burns.

America functions on the consent of the governed.  This requires the government be credible through elite replacement by elections as well as the fair administration and enforcement of justice for both the powerful as well as the least of us.

The circumstances of Mr Epstein’s death are such that I’ve completely lost any faith in the concept of “Justice” that in any way involves the institutional FBI or Department of Justice.

I hate saying that because it leaves us here:

“Those who make peaceful change impossible make violent change inevitable.”

That Rubicon has now been crossed. G-d help the people of these United States.

Please comment and tell me I’m wrong.  I’m in the mood to be lied too.

Our ‘Xanatos Gambit’ President’s Energy Export Strategy Tree

In my last post — President Trump’s ‘Xanatos Gambit’ Trade Policy — I spoke to how President Trump has set up his political strategy on trade policy to make any outcome on the USMCA Trade agreement that he negotiated to replace the NAFTA agreement would be to his advantage over House Democrats and the “purchased by the multi-national corporation China Lobby” GOP Senators.  In this post I am going to lay out President Trump’s “Global  Energy Dominance” export policy’s “Xanatos Gambit” strategy tree vis-à-vis the 2020 presidential elections.

To start with, I’m going to refer you back to this passage from my last post on how the Trump Administration is “gaming” economic growth measurements:

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

The Trump Administration upon coming into office in January 2017 had a huge windfall of energy projects that the Obama Administration had held up approval of in the Federal Energy Regulatory Commission.   This windfall neither began nor ended with the  Keystone XL oil pipeline There was a whole cornucopia of oil and natural gas energy infrastructure projects that Democratic Party interests, only some of them environmental, that the Obama Administration was using the FERC to sit on for a whole lot of reasons that I refer to as “The Economic Cold Civil War.

While the media was spending a great deal of time talking about things like the Congressional votes to open the Arctic Wildlife Refuge in the early days of the Trump Administration’s energy policy implementation.  President Trump spent a great deal of his early political capital on getting his earliest political appointments through the Senate to the FERC to get those projects turned loose as a part of President Trump’s “Global  Energy Dominance” export policy.  The first fruit of this export infrastructure energy policy focus started paying off with the  Louisiana Offshore Oil Port (LOOP) coming on-line in 2018.  See this Apr 16, 2019 article by Julianne Geiger at Oilprice.com:

U.S. Doubles Oil Exports In 2018

The United States nearly doubled its oil exports in 2018, the Energy Information Administration reporting on Monday, from 1.2 million barrels per day in 2017.

The 2.0 million barrels of oil per day exported in 2018 was in line with increased oil production, which averaged 10.9 million barrels per day last year, and was made possible by changes to the Louisiana Offshore Oil Port (LOOP) which allowed it to load VLCCs (Trent Note: Very Large Crude Carriers) .

The changes to LOOP and to the sheer volume of exports were not the only changes for the US crude oil industry. The destination of this oil shifted in 2018 as well, and even shifted within the year as the trade row between China and the United States took hold.

Overall, Canada remained the largest buyer of US oil in 2018, at 19% of all oil exports, according to EIA data. During the first half of 2018, the largest buyer of US crude oil was China, averaging 376,000 barrels per day. Due to the trade row, however, US oil exports to China fell to an average of just 83,000 barrels per day in the second half, after seeing zero exports to China in the months of August, September, and October.**

[**Please note above the nice thing about energy exports is how futile a energy user embargo is against it.  China’s economic embargo of US crude products only hurt itself.]

The impact of the Trump Administration’s energy export policies from those early days of his administration in terms of liquefied natural gas (LNG) export facilities are now impacting the American economy. A large part of the extra 0.7% GDP growth achieved over the 2.5% Wall Street forecasts in the first quarter of 2019 came from the Corpus Christ 1 and Sabine 5 LNG export facilities coming on-line in late 2018 and making their first full export capacity quarter in Jan – Mar 2019.  The Cameroon 1 and Elba Island 1-6 LNG export facilities were also scheduled to come on-line in Late Feb-Early March 2019, and were very likely large contributors to LNG export surge.

This is how CNBC described 2019’s 1st quarter:

Robust demand for Texas oil and gas in the first two months of 2019 pushed the state’s export activity into high gear, strongly outpacing the national rate and contrasting with a slight decline by California.

Texas represented nearly 20% of all U.S. exports in the January-February period while California accounted for roughly an 11% share.

California has seen its share of total U.S. exports fall in recent years while Texas has been growing its share due mainly to the new oil boom.

CNBC table of US Exports in the 1st Quarter of 2019 Source: https://www.cnbc.com/2019/04/25/texas-exports-boosted-by-oil-rise-3-times-faster-than-us-increase.html
CNBC table of US Exports in the 1st Quarter of 2019  Source: https://www.cnbc.com/2019/04/25/texas-exports-boosted-by-oil-rise-3-times-faster-than-us-increase.html

And this is only the beginning for the US economy in 2019. See the following text and LNG export facility graphic from a Dec 10, 2018 report by the US Federal government’s Energy Information Administration:

U.S. liquefied natural gas export capacity to more than double by the end of 2019

U.S. LNG exports continue to increase with the growing export capacity. EIA’s latest Short-Term Energy Outlook forecasts U.S. LNG exports to average 2.9 Bcf/d in 2018 and 5.2 Bcf/d in 2019 as the new liquefaction trains are gradually commissioned and ramp up LNG production to operate at full capacity. The latest information on the status of U.S. liquefaction facilities, including expected online dates and capacities, is available in EIA’s database of U.S. LNG export facilities.

EIA projection of Liquefied Natural Gas Export Capacity from 2016 - 2021. Date of projection Dec 2018
EIA projection of U.S. Liquefied Natural Gas Export Capacity from 2016 – 2021. Date of projection, Dec 2018.

Given the above information, barring a war or serious election year intervention to kill the economy by the Federal Reserve, the cascade of LNG export infrastructure coming on-line in the 2nd and 4th quarters of 2019  will mean something on the order of a full percentage increase in GDP growth (in a range of 4.0% to 4.5%) in Jan – Mar 2020 over Jan – Mar 2019.  That is what going from 3.6 billion cubic feet per day (Bcf/d) of natural gas export capacity to to 8.9  Bcf/d in Dec 2019 does for you.

This extra 1% GDP will be happening just in time for the Iowa caucuses and New Hampshire primary.

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President Trump’s ‘Xanatos Gambit’ Trade Policy

I’ve written previously in my column “President Trump’s ‘Xanatos Gambit’ Government Shutdown” of President Trump’s tendency for building political strategy trees were every possible outcome is to his advantage. (See the “Xanatos Gambit” strategy tree example in the figure below)

 

https://static.tvtropes.org/pmwiki/pub/images/XanatosGambitDiagram_7509.jpg

This is a decision diagram example of a “Xanatos Gambit. Source: https://tvtropes.org/pmwiki/pmwiki.php/Main/XanatosGambit

It very much looks like President Trump has done the same thing with the Democrats and “China lobby” GOP Senators with the post-NAFTA US-Canada-Mexico (USMCA AKA “You Smack-A”) trade agreement and the US economy.

THE US ECONOMY, NAFTA & USMACA

The key thing you need to understand regards NAFTA and American manufacturing is that NAFTA was geared to allow the “China lobby” of multinational corporations to use Canada and Mexico as an “international arbitrage opportunity” for Chinese slave labor wage manufactured goods to be assembled at Canadian and Mexican production facilities and avoid American tariffs.

Multinational corporations exploiting this “international arbitrage opportunity” was “The Great Sucking Sound” that Ross Perot talked about which killed the US domestic refined metals industry and hollowed out middle class manufacturing jobs in the American economy.

President Trump’s USMCA removes that “international arbitrage opportunity” via original 75% North American manufacturing content requirements for metals and intermediate manufacturing goods as well as a Mexican minimum wage rules on the order of $15 an hour for automotive parts assembly.

In response the “China lobby” has been paying large campaign contributions to both House Democrats and “free trade” GOP Senators to try and keep NAFTA, as well running info-war spots everywhere in the corporate media and “movement conservative” publications/media outlets about the benefits of “free trade.”  This has resulted in public statements by Speaker Pelosi that the House does not intend to vote for USMCA.

This is where Pres. Trump’s ‘Xanatos Gambit’ strategy tree kicks in via a macroeconomic and trade policy manipulation of the very simple economic equation of gross domestic product:

GDP = US ECONOMIC ACTIVITY + EXPORTS + FOREIGN INVESTMENT – IMPORTS – EXTERNAL INVESTMENT

The American economy just grew 3.2% in the 1st quarter of 2019.  It would have grown another 0.3% but for the 30-odd day federal government shut down.  The “markets” were expecting 2.5% GDP growth.  The huge half-percent GDP “miss” boiled down to:

1. The USA exported more.

2. The USA imported less and

3. There was more external foreign investment than expected.

All three were the result of a combination of Trump administration policies on oil/LNG fracking, tax & regulatory cuts and trade/tariffs.

First point, the USA will be a net energy exporter — of oil, natural gas & coal combined — in 2020 if it isn’t one already.

Some rough numbers:  In 2012 US oil production was ~8 million barrels a day, all for domestic consumption, and in 2019 it is 12.6 million with some exports.  Today’s US oil consumption is 20 million barrels a day.  That increase in oil production that has reduced imports of oil by a net of 4.6 million barrels a day has also been accompanied by the displacement of coal and oil in both electrical production and manufacturing by cheaper natural gas, thus freeing both the coal and oil not used to be exported. This combined economic change since 2012 alone is worth a 1% increase in GDP growth a year compared to 2012.

Second, the Trump administration’s systematic and sustained attack on Obama era federal regulatory growth is reducing business compliance costs particularly in the energy sector for new infrastructure projects.  These are the “anti-green” actions the Democrats accuse the Trump administration of.

Third, the Trump administration/GOP tax bill, in addition to increasing spending power for the middle class, has had a huge -YUGE- reduction in capital gains taxes and a one-time break in repatriating overseas capital holdings. This has made America a much more attractive place to hold and invest money.  Particularly for energy companies like Exxon, which are dropping this foreign capital inflow into the Permian basin for oil and natural gas fracking and energy export infrastructure from the Permian to the Gulf Coast.

Finally, in terms of trade and tariffs, President Trump’s tariffs on Chinese steel and aluminum combined with the business implications of USMCA rules have made further investment in Canadian automotive plants a net loss position.  American metal content is now economically competitive for energy sector infrastructure and automobile parts such that US Steel among others are reopening US metal plants.

Taken together every part of the GDP equation has been directly affected by the Trump administration macroeconomic policies to get that 3.2% GDP number.

This is where the Xanatos Gambit for USMCA arrives.

Things will be worse for the China lobby without a vote on USMCA than with one.

Short form:

NAFTA is dead regardless of any action or inaction by the House.  All the House and Senate can do is not vote on USMCA.  The legislative branch cannot revive a NAFTA trade agreement the federal executive has withdrawn from.

This means without a signed USMCA trade deal Pres.Trump can — and will — lay on even more tariffs on the multinational corporations playing price arbitrage in Mexico and Canada between Chinese and American manufacturing.

While such trade sanctions can reduce the American economy like a tax increase, when we are likely at close to 4% economic growth in late 2019 to early 2020 from the accumulated investment in energy projects bringing defacto energy independence, a 3.5% economic growth rate with tariffs is still pretty good.

And when the House refuses to vote in USMCA, NAFTA still dies.

Pres. Trump can and will lay on new massive new anti-Chinese tariffs on Canadian and Mexican front companies for China without USMCA rules.  This will be massively popular in the Midwest in an election year and will hurt the income streams of the multi-nationals supporting the Pelosi Dems and McConnell RINOs.

From Trump’s point of view, What’s not to like about America’s manufacturing base employing the Midwestern white working class growing while the “international arbitrage opportunity” of China’s slave labor economy contracts?