31 March, 2013

North Korea: Risking the Nation to Preserve the Regime

Satellite picture displaying the Korean penins...
Satellite picture displaying the Korean peninsula at night. (Photo credit: Wikipedia)
It seems our friends from North Korea are at it again.  Only this time the threats are noticeably more shrill, the propaganda noticeably more clumsy, the moves noticeably more blatant, the insanity - if such a thing is possible - more insane.  What's going on here?

Let's start with McIntosh's three rules for understanding foreign policy.  They don't cover everything.  They are too vague, in and of themselves, to make strong predictions.  They are probabilistic.  Yet I'd argue that all of those "bugs" are in fact "features": they provide a structure for analysis without creating a false sense of certainty.  What are they, and how do they apply?

RULE ONE: WHAT PEOPLE DO IS DETERMINIMED BY WHAT THEY PERCEIVE TO BE REAL.

This includes not only perceptions of the physical conditions, but perceptions of how others see themselves and how they see the world and how will react, and even perceptions of one's own identity and reactions to hypothetical circumstances.  Is nuclear deterrence a bluff?  I don't know, and neither do you, and we won't know if it's a failure until it fails.

How does this apply here?  North Korea, under the new kid, is trying to create a perception of itself as more powerful and less frightened than most people (myself included) beleive it to be.  At the same time, there are indications that the regime of Kim Jong Un is not firmly entrenched in power.  There are rumors of attempted coups.  There are mobilizations of not only the military, but the people, that go beyond the norm for this time of year.  The regime is locking down the people, even more than usual, and locking the military to their posts, and justifying it by ratcheting up the Fear.  Many of the threats to the West and South sound like little more than propaganda in praise of the Great Leader, the Military Genius, the Only Man Who Can Bring Us Out of the Hell, that he, himself, has done so much to promote.

RULE TWO: WHAT IS REAL DETERMINES WHAT WORKS.

Unfortunately, we only approach reality by testing it.  As a first approximation, we coud say Reality is what surprises us - for good or for ill.  Kim Jong Un is testing the reality of the tense standoff on the Korean peninsula.  There's some indication that what he wants (beyond the usual foreign aid) is recognition and the long-postponed peace treaty that ends the War, preferably on terms favorable to the North.  I doubt he thinks the South will surrender (my perception, remember), but he might think that a formal recognition of the border and the end to the war will serve to consolidate his hold on power.  He would have taken a risky move that would have delivered what his father and grandfather were never able to achieve.  But the only way to know if he can get it is to push.  And now, having pushed, he has no clear way to draw back.

If his position is as precarious as some observers believe, pulling back now could, unless it was was coupled with concessions to military and political elites that he can't afford to make, bring about his fall, and the fall of his family.  Gods aren't allowed to fail - at least not in ways that can't be spun into "victory" by the propagandists.

Meanwhile, the threats - not just the public statements but the doctored photos and the blackboards with strike plans hitting Texas - clearly don't match the technical capabilities.  North Korea can, and may, launch a skirmishing strike to establish its resolve, but it just doesn't have what it takes to fight a war with the US, or a South Korea with US backing.  The people at the top know this.  Either they've convinced themselves the US wouldn't support the South, or it's about the domestic agenda.

RULE THREE: LEADERS ACT TO KEEP AND EXPAND POWER.

Again, there are some exceptions, on some dimensions.  But they are damn few.  And when leaders do seem to be leaving their formal position, they do everything they can to maintain their policies, put their hand-picked successors in the job, and maintain a secure "retirement."  One the great things about a republic is it formalizes the transition, regularizes it, and allows departing leaders the confidence they won't be prosecuted for their crimes.  (And yes, this includes the US, and it factors into how Obama refused to prosecute Bush officials and assumes he can get away with his own policies.  Obama is to Bush as Ford is to Nixon.)  North Korea has nothing like that.  Kim Jong Un can lose everything, and he knows it.  Thus the gamble, and thus the trap.  His weakness makes him belligerent.  His failure makes it worse.

And what if he does fail?  Best case, in the short run, might be a palace coup.  The Great Leader dies is a tragic accident, and another member of the family fills in as figurehead while the elites bargain over the spoils.  A middle case could be civil war, and a failed state.  A failed nuclear North Korea is something mobody wants to think about, and everyone has to.  A worst case could be war, triggered bu accident, or miscalulation, or madness.  Or maybe he'll find a way to back down without looking like he's backing down.  The the US and South Korea are scheduled to end their exercises soon.  A big party is scheduled for the departed Kim Il Sung in the middle next month. The Great Leader of today declares victory, telling everyone how he drove away the Americans.  Most don't know any better, and those who do get enough of a payoff from the status quo to be happy to return to it.  It looks like Kim Jong Un is risking his nation in order to consolidate his personal power.  The interests of the State are not the same as the interests of the people, and the interests of the Leader are not necessarily the interests of the State. As a result, the uncertainties are real, and dangerous.

Probabilities, anyone?

Other options?

North Korea: timeline of escalating threats - Telegraph
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14 March, 2013

"The Great Renewal"

Xi Jinping 习近平
Xi Jinping 习近平 (Photo credit: Wikipedia)
Recent statements out of China point to some changes in how the Chinese view themselves, their role in the world, and their future.  Party Congresses are a time to reveal changes in doctrine, and the most recent Congress falls into the pattern. According to Xinhua on 13 March "The Chinese Dream" is the hot topic, and
"China's new Communist Party leader Xi Jinping said during a museum tour last November the Chinese dream meant for him the 'great renewal of the Chinese nation.' He has pledged to pursue the shared Chinese dream of national rejuvenation."
Nightwatch does its typically fine job of evaluating the changes: 
"The Chinese dream" is being introduced on the margins of the National People's Congress (NPC) as the new strategic concept that replaces "China's peaceful rise."
In practice, this means the recognition of an inflection point in China's progress to the status of a global power, from "rising power" to national renewal.  Xi's speech of March 11th to the PLA delegation to the People's Congress was described as one that

National emblem of the People's Republic of China
... scientifically answers a series of important questions, that is,why to strengthen the military under the new situation,what to be the goal of military strengthening,how to take the path of military strengthening with Chinese characteristics."

It declares that "effecting civil-military integrated development is an important way of realizing the integration of enriching the nation and strengthening the military," and "to build a military force of the people that obeys the party's orders, is able to win in war, and keeps a good behavioral style; fully and clearly understand that obeying the party's orders is the soul, being able to win in war is the core, keeping a good style is the guarantee."  Nightwatch sums up the changes:

The circular makes the point that there is a new situation. Xi has scientifically evaluated it as requiring integration of economic and military strength in order to fulfill The Chinese Dream. In The Chinese Dream concept, Xi explicitly connects economic growth with military modernization and links them to Chinese renewal. 
His speech is called a programmatic document which means that it is not cheerleading, but guidance. An intense study period for the entire armed forces is prescribed in order to explain the purpose and direction of a more rapid development of national defense and military modernization. 
In the 1990s, indoctrination about "fighting wars under modern conditions" disrupted normal armed forces training and reshaped the training that followed the indoctrination period. 
The new situation requires military obedience to the Party; the ability to win wars; and good behavior. Obedience to party orders and behaving well are longstanding issues in the PLA. The new requirement is "to win in war," which replaces, "fighting wars under modern conditions." 
In the circular the PLA was instructed that the PLA is expected to provide the "strong power guarantee" for national rejuvenation. 
This appears to portend a more muscular and militarily assertive China during the next five years at least. China remains committed to peace, but not at the expense of its national interests and claims. The pace of military modernization will quicken.
Maritime claims in the South China Sea
Maritime claims in the South China Sea (Photo credit: Wikipedia)

That seems to me to be a fair reading.  I'd only add a couple of points of my own.  The requirement "to win in war" not only strongly suggests that there will be a sizable increase in resources to the armed forces.  It implies that the wars that China may fight are, in fact, ones they can win.  It does not say that China wants war, or even that it expects war.  It does say, however, that war is possible - including, presumably, great-power war - and if it happens China can, and should, be prepared to win.  Furthermore, backed by that kind of power - at least on a regional scale, and perhaps globally - one should expect a more assertive foreign policy.  The sort of claims we've seen in the South China Sea, for example, are a foretaste of things to come.  And if others (read the US) believe a "show of force" will be sufficient to assure retreat they may be surprised.  Rising power, hegemonic retrenchment, plenty of room for miserception of capabilities and will.  This is not a formula for stability.

us1.campaign-archive2.com/?u=817f179ff76c12de2a4e5ba20&id=2d7a6870c0&e=cad5c8ba2d
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04 March, 2013

Too Big for Bonuses

English: Wall Street sign on Wall Street
English: Wall Street sign on Wall Street (Photo credit: Wikipedia)
"Michael," of "Bankers Anonymous," does a very nice job of taking apart the argument in favor of large bonuses for Wall Street bankers.  As he points out, it makes perfect sense to have a system of bonuses regularly in excess of annual salaries in a business noted for risk, with a premium on rewarding the very best and brightest. Accept the assumptions, and the conclusions follow.

BUT..and you knew this was coming, didn't you?...when dealing with "Too Big to Fail" banks THE ASSUMPTIONS ARE NOT TRUE.  Risk is minimized and underwritten by the public underwriting of losses for megabanks.  Much as Freddie Mac and Sallie Mae were (are) ostensibly "private" institutions, set up by government, supported by government, guaranteed (formally or informally) by government, the superbanks have grown (with the regulatory and policy collusion of government) to the point that they are, in fact, not private in most important ways.

"Michael" puts it better than I:
...As long as you know the government’s got your back, you’re not really private. 
If you’re Too-Big-To-Fail, you’re Amtrak in my book.  None of you should get more than a few hundred thousand annually.  And that’s being generous. 
Now, before you accuse me of being a Communist, or a Wall Street hater, let me clarify. 
I love private enterprise. 
I applaud successful hedge fund managers, for example, and I do not begrudge their extraordinary compensation, provided they follow the rules and manage capital for willing investors. 
One of the keys to my applause, however, is my belief that any of those hedge funds could disappear tomorrow, as a result of a bad bet, misplaced customer funds, or a faulty computer algorithm, and no government entity will step up to save their bacon. 
I long for the day when the employees of Wall Street banks can reap legitimate profits, if they deserve it, or similarly disappear without a whimper, if they deserve it. 
If the Too-Big-To-Fail banks managed to break themselves into systemically irrelevant parts, I would have no problem with their executives paying themselves massive bonuses in good years.  They’d have earned it. 
But until that day, when they’re finally Too-Small-For-Bailouts, please don’t pretend that they’re anything more than a big NASA – a bunch of smart people in a big room full of flat screens, filling an important government-subsidized mission – working on the taxpayer’s dime.
Logically, you can't have it both ways. If the banks (or any other entity) are so important they function as a public utility--and that's essentially the justification for the bailout--they need to be regulated as a public utility, and their jobs need to be compensated in a way and to a degree similar to those of any other public utility.

Are Banker Bonuses Fair? - Business Insider