Takeaways from the US-Iran Conflict

  

It has now been nearly two weeks since the Americans began bombing Iran to bring about its desired regime change. As this mid-East conflict continues and expands, the economic, trade and travel disruption continues and if prolonged threatens to slow economic growth substantially and restoke inflation.  While all of this is serious in its own right, there are several takeaways that spring to mind because of what has transpired.

1.        Despite the post-pandemic talk of building national resilience and hardening supply chains, the global economy is obviously still quite interdependent, and the crucial lubricant is oil.  Indeed, despite the development of green energy alternatives, it would appear it that the world still runs on oil. As late as 2023, fossil fuels still comprised over 80 percent of the world’s energy mix and 20 percent of global oil consumption and the LNG trade goes through the now precarious Strait of Hormuz.  The countries most dependent on this flow include Japan, India, South Korea and China.  China is the most dependent on Middle East oil and  imports about 40 percent of its oil through the strait.  This leads one to speculate that the American intervention in Iran is seeking to hit two birds with one stone so to speak – taking out Iran while also sticking it to China.  On the other hand, this assumes the United States went into this with a strategy.  See next point.

2.        The current American leadership can generate policy ideas but seldom seem to be capable of thinking things through before action. It appears it did not anticipate that after decapitating the Iranian leadership, they would continue fighting.  Iran is not Venezuela and it is apparent that the thinking was to launch a quick strike to decapitate the regime through shock and awe and that it would naturally be followed by a rising up of the people and a new regime allowing President Trump to declare victory and depart.  It has turned out to be more complicated than that.  Indeed, no lessons were learned from the Ukraine which when initially invaded by Russia was expected to collapse quickly under the Russian onslaught, but it turns out they did not.   In addition, the attack on Iran represents yet another direct attempt to take out a foreign leader by the United States and is setting precedents that no doubt might disturb other world leaders – foes and allies alike.  One wonders if other countries may be inspired to deal with certain issues in this revamped American style. This would represent an important deterioration in international rules of etiquette with the next step up being knocking off international leaders at state dinners a la Medici or Borgia or perhaps even like the Black Dinner of 1440.  While the principles of the post 1648 Westphalian System regarding exclusive territorial sovereignty have been in retreat for some time, going back to a more medieval approach does not seem like progress to me.  In any event, while the United States in its history has tried to bring about regime changes around the world, the Americans need to reflect on where exactly they are going with this specific approach to international relations because the long run cycle of history suggests that what goes around eventually comes around.

3.       Despite all the talk of the rise of China and the declines of the West and the United States, the United States, with its string of global bases and aircraft carrier groups, is still able to project its power around the world in a way that China and Russia are not capable of.  While China has now acquired its third aircraft carrier and reports are that the number of ships the Chinese Navy has exceeds that of the U.S. Navy, the tonnage of the U.S. Navy is still substantially larger than China’s and it has more long-range vessels.  Most of China’s ships are still short-range patrol and coastal vessels which may be useful if they wish to invade Taiwan but not so much so when it comes to dispatching task forces to the other side of the globe. The U.S. Navy has more destroyers and frigates and 11 aircraft carriers. Their action in the Persian Gulf is only using a fraction of the fleet. America still rules the waves.

4.     Despite its written and living Constitution and several centuries of history, the Americans do not have a system of checks and balances after all. While there has been a long-term increase in the power of the American Presidency since World War II, under Donald Trump, the Imperial Presidency has reached new unabashed heights.  In the case of trade, Trump’s tariffs were struck down by the Supreme Court, but the President has already said that he will find a new way to carry out his plan and bypass Congress. And, in the recent action against Iran which amounts to a declaration of war against Iran, well according to the Constitution of the United States and the observations of the U.S. Supreme Court, only Congress has the power to declare war.  If this was the Star Wars universe, one might say  that Chancellor Palpatine has essentially declared himself emperor and ended the Republic. This however is reality and therefore much more serious if indeed the case.

5.      Finally, we come to realize that Canada’s failure to put more pipeline infrastructure in place or improve its national defences is even more glaring considering what has happened to world energy markets.  Ramping up oil production and export pipelines now as a better late than never strategy may not be enough given the length of time it takes to put the infrastructure in place.  We have probably made the same mistake with respect to our ramping up of defence spending as the arrival of new ships, submarines and jet fighters is still years away even if decisions are made today.  Indeed, we have still yet to decide who will build our new submarines or our new jets.  Pandemic notwithstanding, we spent the last decade ramping up the federal footprint largely in areas of income and social transfers. We have been caught with our pants down in so many ways and despite Prime Minister Carney’s flurry of travel activity to move us foreword on trade and defence, we are still moving slowly when it comes to getting things done.  God help us all.

 

 

COVID-19: An International Overview

 

COVID-19 case counts, mortality rates vary widely across developed world

 

Livio Di Matteo

Appeared in the Epoch Times, May 26, 2021

 

Perhaps the most noteworthy feature of the pandemic is that there was no uniform pattern of impact across advanced countries. The pandemic unfolded differently in each developed country, and governments that spent more did not as a rule more successfully contain the virus or better maintain their economies.

From the first reports of a pneumonia of unknown origin in Wuhan, China, in December 2019, the COVID-19 pandemic grew and spread around the world, with massive impacts on health, mortality rates, economies, and government budgets. Currently, the global tally is nearly 165 million cases and 3.5 million deaths. With the spread of new variants and differential rates of vaccination around the world, the effects of the pandemic will continue to reverberate worldwide.

 

However, we can already learn from this pandemic to help shape responses to future outbreaks.

Many people, including policymakers, view the pandemic as unprecedented or surprising, but only because the technological and economic progress of the 21st century—and resulting high living standards—has caused many to lose historical perspective. Plague and pestilence have been part of the human experience since the start of recorded history. Pandemics have happened before and will happen again. Nevertheless, many countries were caught unprepared for COVID-19.

 

Moreover, the pandemic did not strike everyone simultaneously, and even with additional time, some advanced countries seemed unable to heed warning signs and act quickly to implement proactive measures. Despite our instantaneous 21st-century communication and information dissemination, many countries seemingly had to experience their own pandemic before taking the matter seriously—even countries that experienced past viral outbreaks such as SARS.

 

As such, the pandemic’s effects were surprisingly severe in developed countries. For example, the International Monetary Fund’s advanced economies, which comprise only 18 percent of all countries, in 2020 accounted for 40 percent of the 30 countries with the highest COVID-19 deaths per million (although the older populations of advanced countries were a key factor in initial death tolls).

 

In the absence of vaccines or effective treatments, the world’s first year of the pandemic response unfolded more like a medieval plague or the Spanish flu. Control efforts consisted largely of face-masking, quarantines, lockdowns, and physical distancing. In the end, unlike the Black Death, it was not the deaths from COVID-19 per se that devastated economies, but rather the restrictions and stringent measures imposed by government to reduce spread. Lockdowns, quarantines, and travel restrictions disrupted global supply chains and had severe economic impacts on the international travel industry, labour-intensive services, food and accommodation, tourism, and the arts and entertainment sectors. Indeed, a one unit increase in the Oxford Stringency Index, which tracks government policy responses to the pandemic based on data from more than 180 countries, was associated with an approximate percentage point drop in real GDP growth of 0.1 percent.

 

Moreover, as noted in a new study published by the Fraser Institute, prolonged levels of stringent government restrictions did not significantly reduce COVID-19 case counts or deaths per million. On the plus side, high rates of testing helped control mortality rates, with each additional 100,000 tests per million associated with 21 fewer COVID-19 deaths per million. And again, countries with larger elderly populations experienced higher COVID-19 mortality rates.

 

Crucially, the number of hospital beds played a key role. Internationally, each additional hospital bed (per 1,000 people) was associated with 31.5 fewer COVID-19 deaths per million. Even among advanced countries, there are substantial variations in bed numbers. In 2020, hospital beds per 1,000 ranged from highs of 13.1 in Japan, 12.2 in South Korea and 8.0 in Germany to lows of 2.5 in Canada and Denmark, 2.4 in Singapore and 2.2 in Sweden.

 

In the end, though all countries experienced the pandemic, its intensity and severity varied as did the economic impact, and there wasn’t always a direct linear relationship between the intensity of the disease and the economic and fiscal impact. Indeed, countries with governments that spent more did not necessarily experience a better outcome in either maintaining their economies or containing the virus.

Clearly, how each country chose to play the cards they were dealt was an important determinant of the health and economic impacts reported during the pandemic’s first year.

COVID-19: China Is Actually Not Hard Hit At All

The international statistics of the COVID-19 outbreak generally show the total number of cases by country and the source of the outbreak - China - has to date the largest total number of cases at 81,218 (as of 12 Noon today from the Worldmeters web site ).  Catching up is Italy with 69,176 cases and in third place is the United States at 59,966 followed by Spain at 47,610.  However, these numbers do not adjust for the vastly different population sizes of these countries which provides a more accurate assessment of the relative impact relative to population size. China after all has over 1 billion people whereas Luxembourg is under 1 million.

Figure 1 plots the top 30 countries in terms of total case numbers by total cases per 1 million population.  The most affected country in terms of cases per 1 million of population is actually Luxembourg at 2,129 cases per 1 million(M) people.  Next, comes Switzerland at 1,217 cases per 1M followed by Italy at 1,144 per 1M, then Spain at 1,018 and then Austria at 620.  The United States comes in 17th place in this ranking at 77 per 1M and Canada 22nd at 77 total cases per 1M.  Where is China? It currently is in 25th place at 56 cases per 1M people.

 

Figure 2 plots the top 30 countries in terms of total case numbers by total deaths per 1M population.  The most deaths per 1M population have occurred in Italy at 113 followed by Spain at 73 and then Iran at 25.  The United States currently stands at 2 deaths per 1M people while Canada comes in at 0.7 deaths per 1M.  As for China?  It ranks 15th virtually tied with the United States at 2 per 1M people.

 

The failure of the Chinese government to properly take initial steps to contain the spread of the virus enabled it to become a very successful export particularly to those countries with very open economies in terms of trade and travel.  That the Chinese government appears to have finally contained the virus within its border is reassuring but the corona virus cat so to speak is now out of the bag.  Europe has borne the brunt of the spread.  As for deaths, Italy and Spain have truly been outliers with very high death rates and why that is the case is indeed an important question as the rest of the world deals with this situation.

That's all for now.

Is the Russia-America Global CoDominium About to Begin?

Well, I had so much fun writing this and posting it on Worthwhile Canadian Initiative that I decided it was worth posting here too!


In the wake of the Putin-Trump Helsinki summit, there is much speculation about what was actually said between Putin and Trump behind closed doors and the uncertainty spread throughout the American government about whether agreements had been reached on issues such as Syria and the Ukraine.  The subsequent invitation to Putin to visit the White house in the fall – probably just before the November elections – has resulted in further uncertainty especially after Putin’s statement that he proposed to Trump holding a referendum to resolve the eastern Ukraine issue.  So, what is really going on here?
Quite frankly, we have all have been scratching our heads as the behaviour in some respects is reminiscent of 18^th and 19^th century monarchs gathering to decide the fate of wide swaths of the world in private meetings.  Putin is an autocrat and Trump is a business autocrat who admires political autocrats, so their personal level diplomacy may indeed be a series of moves designed to remake the world and return it to an age when Russian and American led blocs were the only game in town. Both the Russians and the Americans have seen their political influence decline in a multilateral world led by growing Asia-Pacific economies and both countries have been less than comfortable with the rise of China.
One has to wonder if this is an attempt by Trump to forge some type of private alliance with the Russians in an effort to coordinate their interests and deal with their ebbing international influence? The idea sounds like science fiction.  Indeed, the idea of these two countries getting together and establishing a CoDominium actually has substance in an alternate reality – the science fiction world of Larry Niven and Jerry Pournelle.  In their novel The Mote in God’s Eye, which was originally published in 1974, a series of treaties between the Russians and the Americans establishing the CoDominium in the 1990s sets the stage for a global government and the expansion of the human species out into the galaxy.  This of course would place Trump’s musings about setting up a Space Force into quite an entirely different light. Indeed, is Donald Trump drawing inspiration from a mythical civilization disrupting character known as a Crazy Eddie? 
Trump may be trying to engineer some broader type of Russian-American political alliance to counter their waning influence in the world driven by a nostalgia for the 1960s and 1970s.  After all, the rise of the Chinese economy and the growth of Chinese military influence is seen as a potential concern in some circles.  It does not matter how far-fetched the idea may seem given everything else that has been happening lately whenever Donald Trump takes the world stage.  Disrupting the world, wrecking the liberal economic order and creating chaos and then having America and Russia step in to fix things may seem crazy but does it make sense to foreign policy experts?  And, while Trump may be thinking along these lines what is Putin really thinking? I doubt he is a Niven and Pournelle fan.
Of course, one expects that greater formal cooperation between the Americans and the Russians will ultimately require Congress to sign-off especially if actual treaties are eventually negotiated. On the other hand, if it is all kept informal and behind closed doors, who knows what is eventually going to emerge?