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“Solving” North Korea

Never mind the legalities of the situation. Never mind morality either. Just answer the pragmatic question: Is it ever a good idea to start a nuclear war? Because that’s the notion that Donald Trump is actually playing with.

He didn’t say exactly that, of course. He said that “If China is not going to solve (the nuclear threat from) North Korea, we will. That is all I am telling you.” But in the context of that interview with the Financial Times, it was clear what he meant.

Trump was saying that if China did not use the tools at its disposal (political influence, trade sanctions, withholding financial aid) to make North Korea give up its nuclear weapons and long-range rockets, then the United States would use the tools at its disposal (the world’s most powerful armed forces) to accomplish the same goal.

This does not necessarily mean that the United States would launch a large nuclear attack against North Korea. If you are really serious about carrying out a “disarming strike” that destroys all of North Korea’s nukes, you probably should do exactly that. (You never get a second chance to go first.) But maybe the US Air Force would promise that “precision” non-nuclear weapons could accomplish that goal, and maybe some gullible people would believe it.

It would still turn into a nuclear war in the end, unless American “surgical strikes” miraculously eliminated every last one of North Korea’s nukes at the same time. Kim Jong-un’s regime would find itself in the position known in nuclear strategy as “use them or lose them”, and it is hard to believe that it would not launch whatever it had left.

The targets would be in South Korea, of course, but probably also American bases in Japan. Maybe even Japanese cities, if North Korea had enough weapons left. The regime would know it was going under – the United States would not take this huge risk and then leave it in power – so it would take as many of its enemies as possible down with it.

North America would probably not be hit, because Western intelligence services do not believe that Pyongyang has ballistic missiles that can reach that far yet. (But “intelligence” is not the same as knowing for sure, and they could be wrong.) At worst, the victims would be one or two cities in the Pacific north-west of the United States.

This would be a very bad outcome for people living in Seattle or Portland, but it would not actually be a “nuclear holocaust”. The kind of war that the super-powers would have fought at the height of the Cold War, with thousands of nuclear weapons used by each side, would have killed hundreds of millions, and might even have triggered a “nuclear winter”.

A nuclear war over Korea would be a much smaller catastrophe, perhaps involving a few million deaths – unless China got drawn in. Unfortunately, that is not inconceivable, because China, much as it dislikes and mistrusts the North Korean regime, is determined not to see it destroyed.

Many people are uncomfortable with this kind of analysis, especially when it draws comparisons between “bad” and “less bad” nuclear wars. Herman Kahn, the dean of nuclear strategists in the 1960s and 70s, was frequently the target of this kind of criticism: how could he talk about potential mass death in such a cold-blooded way?

His response was always the same: “Would you prefer a nice, warm mistake?” “Thinking About the Unthinkable”, as he put it in one of his books, is absolutely necessary if the Unthinkable is not happen. In this case, that means taking the possibility that China might be drawn into the conflict seriously.

The destruction of the North Korean regime would bring American military power right to China’s own border. You might reasonably ask: So what? This is the 21st century, and what matters strategically is the big, lethal long-range weapons (like nukes), not the whereabouts of a few American infantry battalions. Quite right in theory. Not necessarily right in practice.

During the Korean War, when American troops were operating very close to the Chinese frontier in late 1950, the Chinese regime sent troops in to save the North Korean regime – and succeeded. The scenario this time, with nuclear weapons already being used on both sides of the North Korea-South Korea frontier, would be different, but it could be even more dangerous. China has lots of nuclear weapons, and delivery vehicles too.

Donald Trump is the fourth American president to be faced with the challenge of North Korean nuclear weapons, and none of them has found a safe and effective way of dealing with it. But all the others avoided making open threats of violence, because that would probably just make matters worse.

Of course, Trump may just be bluffing. In fact, he almost certainly is. But if your bluff is called, you have to go through with your threat or accept being humiliated. The Donald doesn’t do humiliation.
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To shrten to 725 words, omit paragraphs10 and 11. (“Many…seriously”)

Coal is Dead

“My administration is putting an end to the war on coal,” said Donald Trump, surrounded by the usual gaggle of officials and (in this case) coal-miners, as he put his super-size signature on the Energy Independence Executive Order. But coal is dying as a major energy source in the United States for reasons far beyond the reach of executive orders.

“The miners are coming back,” Trump boasted at a rally in Kentucky last week, but no less an authority than Robert Murray, founder and CEO of Murray Energy, the biggest US coal company, promptly rained on his parade. “I suggested that (Trump) temper his expectations,” he said. “He can’t bring them back.”

Trump’s latest executive order is not just about coal, of course. It’s a frontal assault on all the Obama-era regulations that aimed at curbing climate change. But while it will slow the decline in US greenhouse gas emissions, it will not have a major impact on global emissions.

That is partly because US accounts for only 16 percent of global emissions. Compared to China’s 29 percent, it doesn’t matter all that much, and China remains committed to big cuts.

In January China scrapped plans for 104 new coal-fired power plants, and it intends to invest $361 billion (equal to half the US defence budget) in renewable energy between now and 2020. The Chinese government is spending that kind of money because it is rightly terrified about what global warming will do to China’s economy and above all to its food supply.

Like the Indians, the Europeans, and pretty much everybody else, the Chinese remain committed to the climate goals agreed at Paris in December 2015 even though the United States has defected. Their own futures depend on meeting those goals – and they know that the American defection does not destroy all hope of success. Globally speaking, it’s not that big a deal.

It would seem like a much bigger deal, however, if they were not confident that American greenhouse gas emissions will continue to decline under Trump, though not as fast as they would under a less ignorant and less compromised administration. Coal provides an excellent example of why.

In 2009, when Barack Obama entered the White House, coal provided 52 percent of US electricity. In only eight years it has fallen to 33 percent, and the decline has little to do with Obama’s Clean Power Plan. First cheap gas from fracking undercut the coal price, and then even solar power got cheaper than coal – so 411 coal-fired plants closed down, and more than fifty coal-mining companies went bankrupt.

Half the 765 remaining big coal-fired plants in the United States were built before 1972. Since the average age when American coal-fired plants are scrapped is 58 years, half of them will soon be gone no matter what Trump does, and even he cannot make it economically attractive to build new ones. (Only 9 percent of American coal-fired plants were built in the past quarter-century.)

Coal is by far the most polluting of the fossil fuels, producing twice as much carbon dioxide as gas does for the same amount of energy, but that alone wasn’t enough to turn the energy industry against it. It’s the cost per per kilowatt-hour of electricity that matters, and coal has simply been overtaken by cheaper forms of energy.

Even in India, the most heavily coal-dependent of the big economies and a country with vast amounts of coal, solar energy prices are now on a par with coal. Sheer inertia means that India will go on expanding coal-fired generation for a few more years, but its National Electricity Plan projects no further increase in coal-based capacity after 2022. King Coal truly is dead.

You don’t need good intentions to do the right thing for climate safety any more; just common sense. From fuel efficiency in automobiles to replacing coal-fired plants with natural gas or solar arrays, saving money goes hand-in-hand with cutting emissions. The economy is not your enemy; it’s your ally. So Trump won’t do nearly as much harm as people feared.

President Obama promised last year to cut US greenhouse gas emissions by about 26 per cent from the 2005 level by 2025. About half of that 26 percent cut would have come in Trump’s first and maybe only term (2017-20), so say 13 percent. The US accounts for 16 percent of global emissions, so do the math: 13 percent of 16 percent equals about 2 percent of global emissions.

That’s what would be at stake over the next four years if Trump’s presidency stopped all the anticipated reductions in greenhouse emissions that Obama based his promise on – but it won’t. A lot of those emission cuts are going to happen anyway, because they just make economic sense. At a guess, around half of them.

So how much damage can Trump do to the global fight against climate change over the next four years? He can keep global emissions about one percent higher than they would have been if the United States had kept its promise to the Paris conference. And that’s all.
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To shorten to 725 words, omit paragraphs 10 and 11. (“Coal…dead”)

Making China Great Again

“Passing the TPP (Trans-Pacific Partnership) is as important to me as another aircraft carrier,” said former US defence secretary Ashton Carter two years ago, as the negotiations on the huge new free trade organisation were nearing completion.

Given that the United States already has twice as many aircraft carriers as all the rest of the world put together, that comment could be taken several ways, but Carter actually did mean that the TPP was strategically important in his eyes. As it was for ex-president Barack Obama, who saw the TPP as America’s main tool for containing China’s growing influence in Asia.

China, deliberately excluded from the 12-member club, saw it that way too. The official Hsinhua news agency regularly referred to the TPP as “the economic arm of the Obama administration’s geopolitical strategy to make sure that Washington rules supreme in the region.”

But the Obama administration is gone, and Donald Trump has just cut off that arm. “A great thing for the American worker, we just did,” Trump said after signing a document withdrawing US support for the TPP on Tuesday.

In fact, quitting the TPP is unlikely to do American workers much good economically, but it may not do them much harm either. Most analyses have concluded that the deal wouldn’t have had much effect either way on US wages and jobs – but leaving the TPP will certainly have a big impact on US power and influence in the world.

Xinhua was right: for Obama, the TPP was always more about the strategic rivalry with China than it was about economics. It still is, but Donald Trump’s electoral strategy has obliged him to declare war on free trade.

The voters that Trump targeted most heavily were working-class Americans who felt betrayed and abandoned as the well-paying jobs in manufacturing disappeared. However, there was no point in telling them that automation was destroying their jobs (which it is), because he could not plausibly promise to stop automation.

But if he claimed that the real problem was free trade, which allowed the Chinese and Mexicans and other sneaky foreigners to steal American jobs…well, he could certainly promise to stop that. He would build walls, cancel free-trade deals, even launch trade wars. It all sounded pretty credible, if you didn’t know that the vast majority of the lost jobs were really being stolen by robots.

So once he was in office, Trump was obliged to “unsign” the TPP deal, even though its main purpose, from Washington’s point of view, had been to perpetuate American economic and strategic dominance in Asia and freeze China out. In the eyes of Trump’s supporters (and maybe even in his own), he was slaying a dragon.

It looks different through the eyes of America’s erstwhile partners. As Singapore’s Prime Minister Lee Hsien Loong said in August, eleven other countries had to make big and politically painful concessions in return for access to the huge US market. “If at the end, waiting at the altar, the bride doesn’t arrive, I think that people are going to be very hurt.” And hurt feelings do matter, even in diplomatic circles.

The biggest cost to the United States is the fact that America’s defection from the TPP doesn’t automatically kill the notion of an Asian free-trade bloc. Australia is already talking about keeping the TPP going without the United States, but the likelier outcome is that the Asian members start trying to link up with China, Indonesia and even India in China’s proposed Regional Comprehensive Economic Partnership.

In that case, the United States could end up excluded from a free-trading bloc that includes half of the world economy. The dominant economy in that bloc would be China’s, so the main practical effect of Trump’s action would be to give a major boost to China’s power and influence in the world.

This pattern is likely to be duplicated in other areas where Trump is pledged to abandon long-standing US diplomatic commitments. It is already happening in the domain of climate change, where Trump’s decision to “unsign” the 2015 Paris treaty to curb global warming has opened the door to a leadership role for China instead.

At the World Economic Forum’s annual meeting in Davos earlier this month, China’s President Xi Jinping said that “all signatories must stick to” the Paris deal: “walking away” from the pact would endanger future generations. And while Trump is slashing US spending on climate change, Xi has pledged to invest $360 billion in renewable energy in the next four years to reduce China’s greenhouse gas emissions.

It’s easy to look good in the eyes of the rest of the world when the standard of comparison is Donald Trump’s administration. He is making China great again, even if that is not quite what he intended.
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To shorten to 725 words, omit paragraph 10. (“It looks…circles”)

Davos: The Rich Are Worried

“I can’t wait to see how the incoming administration deals with AI (artificial intelligence),” said US Secretary of State John Kerry, in a less-than-gracious reference to the fact that the Trump team hasn’t got a clue about the real driving force in the changing world economy.

What was striking was that Kerry didn’t have to clarify his remark for the 2,000 “global leaders” – politicians, bureaucrats, business representatives and public intellectuals – who are in the Swiss alpine town of Davos for the annual World Economic Forum (WEF). They all know what he’s talking about.

This year’s Davos gathering is actually focused on the rise of populism and simple-minded attacks on globalisation (Donald Trump, Brexit et al.). That’s only to be expected, since the world’s ultra-rich are potentially threatened by that sort of thing. But they didn’t get rich by being stupid, and they have a fairly sophisticated analysis of what’s causing it.

The headline event on the first day of Davos was an hour-long speech by China’s President Xi Jinping in which he laid claim to the leadership role on free trade, globalisation and the struggle to contain climate change that is being abandoned by the United States under Trump. His main concern was to fight the rise of protectionism: “No one will emerge as a winner in a trade war,” he said.

But Xi didn’t go into the sources of the anger that fuels the populist revolt (for China is not a democratic country, and it hasn’t happened there yet). John Kerry did get into it, and he went well beyond the usual platitudes about rising unemployment and under-employment, stagnating wages, and the widening gulf between the rich and the rest. “Trade is not to blame for job losses,” he said. Automation is.

Quite a few American manufacturing jobs did go abroad in the early stages of globalisation, in the 1980s and 1990s, but that’s old news. Eighty-five percent of the almost 6 million American manufacturing jobs that disappeared between 2000 and 2010 did not go anywhere; they just evaporated. The workers were replaced by tireless, uncomplaining machines that could do their jobs more cheaply.

Although Kerry did not mention it, the same thing is now happening in China: relatively cheap Chinese labour is still more expensive than the automation that replaces it. Even in India, where wages are lower still, there is now talk of “premature deindustrialisation”.

It’s a misleading phrase, because it suggests that India will never become fully industrialised. It probably will – but perhaps without ever creating a huge industrial working class with reasonably good and steady wages. Further industrial growth is likely to come mainly through automation, and employment in manufacturing may be peaking right now.

So Donald Trump is barking up the wrong tree, as are the other populists emerging all across Europe, and their emulators who are beginning to appear in the developing world. Why do they all persist in blaming free trade and globalisation instead of automation? Because you can’t do anything about automation.

It’s like the old story about the man looking for his car-keys under the street-light. “Where did you lose them?” “Over there.” “Then why are you looking for them here?” “The light’s better here.”

If you are a politician, then it’s better to blame globalisation because you can do something about that. You can build walls, impose tariffs, make all sorts of impressive gestures to stop the free trade that is allegedly destroying the good jobs. Or more precisely, you can win political power by claiming that you will do those things and thereby solve the problem.

Whereas nobody will believe you if you say that automation is what is really changing the economy, and so you are going to stop the automation. That’s Luddism, and everybody (or at least, everybody at Davos) knows that that doesn’t work. So the rich and the powerful are way out ahead of the pack in accepting that growing automation really is going to destroy large numbers of jobs.

A recent Citibank research note forecasts that automation will eliminate 57 percent of all existing jobs in the developed countries within the next 20 years. In China, 77 percent of manufacturing jobs are at risk over the same period. And the notion that the economy will create other, better jobs to replace them is just a comforting myth. Most of the new jobs that are being created are MacJobs.

If more than half the workforce ends up unemployed – and therefore humiliated and broke – then their anger will be so great that it could sweep away the comfortable world of the ultra-rich. Which is why there are sessions at Davos this year considering radical ideas like a “Universal Basic Income”.

To stop the populism, first you have to deal with the anger.
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To shorten to 725 words, omit paragraphs 8 and 10. (“It’s…now”; and “It’s…here”)