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BLACKWATER USA | DAILY BRIEF


COVID-19

  • Lloyd’s of London estimates that coronavirus will cost the insurance industry (excluding life insurance) its largest loss on record: up to $203 billion, if lockdowns continue. Lloyd’s points out that the pandemic is a particularly dire event for insurers because it’s global, systemic, and long term—as opposed to a storms, which affect only one region and quickly dissipate.

  • The International Energy Agency reduced its projected drop in oil demand for 2020 by 690,000 bpd (to a fall of 8.6 million bpd) because an easing of lockdown restrictions is leading to greater demand now than in April [Reuters says 2.8 billion people will be living under some sort of lockdown at the end of May, vs. 4 billion at the end of April]. However, the IEA still projects a record decline in demand for 2020.

  • The U.S. and Canada are likely to extend their mutual ban on non-essential travel to the other until June 21st—but it’s a little less mutual now: U.S. cases continue to climb, while Canada’s have leveled off.

  • Stock markets tanked yesterday after Fed chairman Jerome Powell warned that the U.S. economy might need still more government support to avoid a permanent deterioration.

China

  • The Post had a good article about a new book critiquing U.S. military policy against China’s strategy. One highlight: “China’s military isn’t focused on projecting power, as ours is, but instead on preventing U.S. domination. Rather than match our fleets of carriers and squadrons of jets around the world, Beijing developed precision weapons to prevent the United States from mobilizing these forces." Full article pasted below.

Afghanistan

  • While the Taliban still insists it wasn’t responsible for this week’s maternity ward bombing that killed 24, it took offense at Pres. Ghani’s blame for the attack and tried to retaliate by bombing a military compound in Paktia. The explosives detonated before reaching their target, and killed five civilians instead. (The Taliban also killed five police during clashes in Kunduz and Laghman.)

  • The maternity ward massacre is proving to be a galvanizing event: its particular brutality is leading to a new wave of protests for better security.

Venezuela

  • Venezuela requested an emergency UNSC session to formally accuse Colombia and the U.S. of leading last week’s botched invasion.

  • Pres. Maduro claimed Pres. Guaido met with the plot’s alleged ringleader, Jordan Goudreau, during Guaido’s February visit to the White House, “at the order of Donald Trump.” Pres. Trump denied the U.S. had anything to do with the plan, and it seems highly unlikely that he’d host such a conversation—or Goudreau.

  • Separately, the U.S. is investigating five Mexican and European companies—Libre Abordo, Schlager Business Group, Grupo Jomadi Logistics and Cargo, Elemento Ltd, and Swissoil Trading SA—for allegedly trading with sanctioned Venezuelan entities (but an official noted that the U.S. wouldn’t act against the companies if they stopped working with Venezuela).

  • Tracking firm Refinitiv Eikon says the Iran-flagged medium tanker Clavel is on its way to deliver Iranian fuel to Venezuela. Four similar-sized boats with more Iranian fuel are following the same route through the Suez, but haven’t yet declared their destination. Venezuela has a desperate shortage of gas, but as an opposition lawmaker there points out: “the gasoline problem in Venezuela is structural, not temporary”—Iranian shipments aren’t going to solve it.

Russia

  • German Chancellor Angela Merkel said Russia staged an “outrageous” cyber attack against the German Parliament, hacking even her email. Germany has mostly played nice with Russia so far, but signs like this suggest its patience is running out.

Sahel

  • The Nigerien army says its regional force killed around 75 Boko Haram insurgents on Monday: approximately 25 south of Diffa in Niger, and about 50 on the Nigerian side of Lake Chad.

Other News

  • Typhoon Vongfong / Ambo made landfall in the Philippines, with maximum sustained winds of 120 mph (195 kmph).

  • Norway’s $1 trillion sovereign wealth fund banned investment in some top commodities firms like Glencore and RWE over their use and production of coal.

Think we have military primacy over China? Think again. (WaPo)

Here’s a fact that ought to startle every American who assumes that because we spend nearly $1 trillion each year on defense, we have primacy over our emerging rival, China.

“Over the past decade, in U.S. war games against China, the United States has a nearly perfect record: We have lost almost every single time.”

That’s a quote from a new book called “The Kill Chain: Defending America in the Future of High-Tech Warfare,” the most provocative critique of U.S. defense policy I’ve read in years. It’s written by Christian Brose, former staff director of the Senate Armed Services Committee and a close adviser to late senator John McCain (R-Ariz.). The book isn’t just a wake-up call, it’s a fire alarm in the night.

Brose explains a terrible truth about war with China: Our spy and communications satellites would immediately be disabled; our forward bases in Guam and Japan would be “inundated” by precise missiles; our aircraft carriers would have to sail away from China to escape attack; our F-35 fighter jets couldn’t reach their targets because the refueling tankers they need would be shot down.

“Many U.S. forces would be rendered deaf, dumb and blind,” writes Brose. We have become so vulnerable, he argues because we’ve lost sight of the essential requirement of military power — the “kill chain” of his title — which means seeing threats and taking quick, decisive action to stop them.

How did this happen? It wasn’t an intelligence failure, or a malign Pentagon and Congress, or lack of money, or insufficient technological prowess. No, it was simply bureaucratic inertia compounded by entrenched interests. The Pentagon is good at doing what it did yesterday, and Congress insists on precisely that. We have been so busy buffing our legacy systems that, as Brose writes, “the United States got ambushed by the future.”

We should reflect on America’s vulnerability now, when the world is on lockdown and we have a chance to reassess. A new world will emerge after the global coronavirus pandemic, one in which China is clearly determined to challenge the United States as a global power. The propaganda wars over the origin of the novel virus that causes covid-19 are just a warm-up for the tests that are ahead.

China’s military isn’t focused on projecting power, as ours is, but instead on preventing U.S. domination. Rather than match our fleets of carriers and squadrons of jets around the world, Beijing developed precision weapons to prevent the United States from mobilizing these forces. An example is the DF-21, the world’s first ballistic anti-ship missile, which Brose says is known as “the carrier killer.”

The Pentagon wants to confront the Chinese challenge, but it insists on keeping the same vulnerable, wildly expensive platforms at the center of the United States’ military power. And Congress demands adherence to this status quo. When then-Defense Secretary Jim Mattis and then-Navy Secretary Richard Spencer tried to retire an aircraft carrier in 2019, Congress refused. Expensive fighter jets have a lobby, too. As Brose notes: “There is a reason why parts of the F-35 are built in every state in America. . . . It is political expediency.”

When the Pentagon tries to innovate, it’s too hidebound to maneuver and adapt. A classic example is the Army’s $18 billion misadventure known as “Future Combat Systems,” which was supposed to coordinate modern weapons but turned out to be less agile than a Sony PlayStation.

Brose argues that it’s time for a radical rethink. Rather than building weapons for an outmoded strategy of projecting power, we should instead be arming ourselves in an effort to “deny China military dominance.” That means many cheap, autonomous weapons at the edge of the perimeter, rather than a few exquisite ones that are vulnerable to attack.

These smart systems exist: The Air Force’s unmanned XQ-58A, known as the “Valkyrie,” is nearly as capable as a fighter but costs about 45 times less than an F-35; the Navy’s Extra-Large Unmanned Underwater Vehicle, known as the “Orca,” is 300 times less costly than a $3.2 billion Virginia-class attack submarine. But these robots don’t have a lobby to rival the giant defense contractors.

Brose envisions a military version of the “Internet of things” — smart systems at the outer edges of our defenses which can blunt China’s dominance without breaking the budget or risking all-or-nothing confrontations. “We have the money, the technological base, and the human talent,” he writes. What we lack is the will to change.

The question for Americans to ponder, in Brose’s simple formulation, is “how the future can win.” We have a window of time now, thanks to our enforced lockdown, to do some creative thinking about defense. It would be foolish to enter a new, post-pandemic world with the same old hardware.

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