Winter is Coming

by | Jul 1, 2020 | Blog Articles, Election 2020

“Winter is Coming” is a widely recognized phrase from the popular TV show Game of Thrones.  It is also the title of an important, if polemical and somewhat finger-wagging, book by Garry Kasperov on Putin’s rise to power and the West’s ongoing complacency in the face of what Francis Fukayama called our “greatest foreign policy challenge.”

Winter is Coming should now also be a catalyst for America as we head into our national election season alongside a resurgence of the pandemic in our cities and economic hubs, unprecedented unemployment, widespread social unrest, and a host of fundamental and largely ignored foreign threats.

If America did not have external enemies, then there would be nothing more important for our citizens and our government to focus on than fighting our two most pressing domestic enemies: COVID-19 and its economic fallout, and systemic racism, the bitter fruit of what has been rightly described as our nation’s original sin.

However, the United States is one nation among many, and not all wish us well.  There are nation-states around the world that want to take advantage of our current civil discord by further dividing our society and distracting our government from its many threats abroad, much as the Soviet Union did during the Civil Rights Movement of the 1950s and 60s. Then and today, the Russians didn’t start the fire, we created it ourselves.  But they and other governments, including the Iranian and Chinese, are pouring fuel on it.  Michael Hayden, the former head of both the NSA and CIA, put it succinctly: “Covert influence campaigns don’t create divisions on the ground, they amplify divisions on the ground.”  Much ink has been spilled on the influence of foreign state actors in the 2016 presidential election, and it is no longer a question of fact.  We again, today, are experiencing substantial foreign influence in the protests and 2020 campaign, and appear not to know how to stop it.

We have had ample warning, yet as a society seem unaware that we are in a new kind of cold war. This one will be played out through biological, cyber-security, financial and infrastructure attacks long before it ever boils over into outright conventional war.  The Trump Administration does not appear to have any coherent national security strategy, but other nations do, and the United States now faces a range of imminent and serious dangers.

The Biological Threat

The power of pathological agents to bring our country to its knees has been warned about for years by experts, and largely ignored by government and society – until now.  I am not going to wade into a minefield of speculation of whether government actors created or intentionally spread SARS-CoV-2 for nefarious purpose.  But it cannot be denied that governments, including the United States, hid or minimized critical information about the emergence and spread of the virus and in so doing made the pandemic worse, and even may have (unwittingly, perhaps) served national strategic interests counter to those of the United States.  It should now be plain to all of us that we are vulnerable, and in real eventual danger of an intentional, coordinated, and even more deadly biological attack. There is a material risk that COVID-19 will prove to be but a trailer to a full-length horror movie yet to come.

The Financial System Threat

Like the plumbing behind the walls of our homes, we often lose sight of the importance of the basic infrastructure that enables our global economy to work.  The U.S. is in imminent danger of being undermined in global financial markets through loss of control of the basic infrastructure of global funds flow.  The Russians and Chinese are working together, along with at least India, Iran and Turkey, to create an alternative for SWIFT, the international money transfer network over which secure messages related to more than half of high-value cross-border transactions occur.  SWIFT has become a sore spot for our national competitors, as the U.S. government routinely monitors transactions over the network and has used SWIFT as a tool for threatening and enforcing sanctions against Russia, Iran and others by cutting off their banks from the network, imperiling their import and export markets. Most U.S. dollar transactions utilizing SWIFT are routed through U.S. banks, which enables our government to seize payments even between banks and parties completely outside of the U.S.  Finding an alternative is a top priority for the participating governments, and the risk is not being taken seriously enough by the United States.

Whoever controls the flow of traffic, whether on rivers, sea lanes, telecom towers, over the internet, or through financial networks, has the power to exclude an individual, a group, a company or a nation, or at least hold them up for ransom.  The Chinese, Iranians, and the Russians understand this full well from over a century of dealing with the British empire. As Philip Zelikow recently put it, “they seem to appreciate how the empire’s power did not rely solely on soldiers or warships; it came, rather, from the empire’s control of ports, canals, railroads, mines, shipping routes, telegraph cables, commercial standards, and financial exchanges.”  The U.S. wields this power today, but it is slipping away through both our own neglect and the active measures of others.

The Critical Infrastructure Threat

The pandemic has revealed that our food and medical supply chains are inherently fragile. Decades of progress in the efficiencies and cost savings of just-in-time inventory have left us vulnerable to both foreign powers and to the vagaries of nature.  Global famine, a scourge from what seems like the ancient past, may again become a real threat as climate change and extreme weather patterns become more severe.  This is not even on the radar of most policymakers as a serious threat, and like the recent pandemic we are woefully unprepared should it occur.

Further, the past four months have made clear that we are deeply dependent on our high-speed internet and mobile communications networks to function remotely. Our government and private sector servers and network infrastructure – including those that control our energy, water, power and telecoms utilities – are particularly vulnerable to systemic attack.  There have been dozens of confirmed significant cyber-attacks against key U.S. resources and its allies by state actors in recent months, a shocking pattern largely ignored by mainstream media.

The Third Little Pig Had It Right

Every child is taught that there are wolves in the woods, but preparation can keep them at bay.  Today, national preparation looks like creating redundancies, diversity and flexibility in our supply chains, ensuring food security and healthcare continuity, replenishing both strategic national and household reserves, and strengthening critical infrastructure such as telecommunications and energy resources.  Preparation looks like deleveraging the balance sheets of our municipalities, corporations and households, and increasing loss-absorbing capital buffers for our financial institutions. Preparation looks like fixing some of the flaws in the U.S.-influenced global financial infrastructure, making these systems less unfavorable to other countries so that switching costs become prohibitive. Preparation also means finding common ground to unite as Americans, which must include addressing the very valid grievances of racial injustice and treatment of the poor, rather than letting our enemies exploit them as a means to weaken the fabric of our society and the country itself.

Our season of blissful ignorance is over. But, it’s not too late to wake up, shake off our inertia, and better prepare for, and hopefully prevent, the parade of horrible potentialities outlined above.  Winter may be coming, but there is still time for a spring-like renewal for the United States.

 Originally Published on Jackson Hole Economics.

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