China's Growth Slowest in 25 Years

"Slow growth" for China is almost 7 percent annual GDP expansion. Would that we had such "slow growth."

Still, it's the downtrend that's key, considering all the buzz over the past decade or two about how China's supposedly about to overtake the U.S. as the world's dominant economy, blah, blah.

At WSJ, "China’s Economic Growth Slowest in 25 Years in 2015":

BEIJING—China recorded a pronounced deceleration in growth last year, affirming that a multiyear slowdown is biting the world’s second-largest economy harder and shows little sign of abating.

The growth rate, released by the government on Tuesday, moderated to 6.8% for the fourth quarter and 6.9% for 2015. The annual pace was the weakest in a quarter century, and the quarterly level undershot market expectations, posting its lowest reading since the financial crisis and signaling weakening economic momentum.

Tuesday’s figures put a grade on a tumultuous year that saw the slowdown’s impact spill over to global markets and batter the government’s reputation for competent economic management.

Chinese leaders held an economic policy meeting Monday with senior officials. While state media accounts projected a tone of determined optimism, President Xi Jinping also urged the officials “to stabilize short-term growth.” Premier Li Keqiang talked of “increasing downward pressure” on the economy, complicated by slack global demand.

“The real economy basically hasn’t picked up very well,” said Nomura Group economist Yang Zhao. “We’re going to have a choppier sea ahead of us.”

With growing debt and too much housing and factory capacity, economists—and even Chinese officials—project a tougher year ahead. The stock markets have stumbled into the new year, erasing gains from an unsteady recovery after a summertime crash. And, economists said, the tools the government has traditionally used to revive growth—infrastructure spending, easy credit and ramped-up exports—appear increasingly ineffective.

The 2015 growth rate reported by the government’s statistics bureau was down from the 7.3% gain reported in 2014. Doubts have been raised about the reliability of China’s economic data, though, and 2015’s reported rate sparked renewed concern that growth is slowing faster than the government is saying.

“China’s reported growth rate for 2015 raises many questions rather than providing full reassurance about the economy’s true growth momentum,” said Eswar Prasad, a professor of trade policy at Cornell University and the former head of the International Monetary Fund’s China division.

Fears over slowing momentum in China and Beijing’s handling of the economy have combined with concerns over plunging oil and commodity prices to pull down nervy global stock markets since the start of 2016...

Still more.

Russian Subs and Spy Ships Operating Near Vital Undersea Internet Cables, Raising U.S. Concerns

How do you say "Unexpectedly!" in Russian?

At the New York Times, "Russian Presence Near Undersea Cables Concerns U.S.":

WASHINGTON — Russian submarines and spy ships are aggressively operating near the vital undersea cables that carry almost all global Internet communications, raising concerns among some American military and intelligence officials that the Russians might be planning to attack those lines in times of conflict.

The issue goes beyond old Cold War worries that the Russians would tap into the cables — a task American intelligence agencies also mastered decades ago. The alarm today is deeper: In times of tension or conflict, the ultimate Russian hack on the United States could involve severing the fiber-optic cables at some of their hardest-to-access locations to halt the instant communications on which the West’s governments, economies and citizens have grown dependent.

Inside the Pentagon and the nation’s intelligence agencies, the assessments of Russia’s increasing activities are highly classified and not publicly discussed in detail. American officials are secretive about what they are doing to both monitor the activity and find ways to recover quickly if cables are cut. But more than half a dozen officials confirmed in broad terms that it had become the source of significant attention in the Pentagon.

“I’m worried every day about what the Russians may be doing,” said Rear Adm. Frederick J. Roegge, commander of the Navy’s submarine fleet in the Pacific, who would not answer questions about potential Russian plans for cutting the undersea cables.

Cmdr. William Marks, a Navy spokesman in Washington, said: “It would be a concern to hear any country was tampering with communication cables; however, due to the classified nature of submarine operations, we do not discuss specifics.”

In private, however, commanders and intelligence officials are far more direct. They report that from the North Sea to Northeast Asia and even in waters closer to American shores, they are monitoring significantly increased Russian activity along the known routes of the cables, which carry the lifeblood of global electronic communications and commerce.

Just last month, the Russian spy ship Yantar, equipped with two self-propelled deep-sea submersible craft, cruised slowly off the East Coast of the United States on its way to Cuba — where one major cable lands near the American naval station at Guantánamo Bay. It was monitored constantly by American spy satellites, ships and planes. Navy officials said the Yantar and the submersible vehicles it can drop off its decks have the capability to cut cables miles down in the sea...

Still more at that top link.

Air Force Flight Tests Unmanned Minuteman III Intercontinental Ballistic Missile from Vandenberg Air Force Base

There's video here, "Air Force Test-Launches Minuteman Missile from California."

And at Air Force Global Strike Command, "F.E. Warren tests Minuteman III missile with launch."

Also at Free Beacon, "Air Force Flight Tests Nuclear ICBM."

Plus, "U.S. Air Force Fact Sheet - 576th Flight Test Squadron."

U.S. and Japan Display Naval Forces in Show of Strength Off Tokyo Bay (VIDEO)

At USA Today, "U.S., Japanese naval forces stage show of strength."

And watch, via RT:



And, flashback from April, "U.S. and Japan Tighten Alliance in Face of Surging Threat from China."

American Dominance is Being Challenged

I've enjoyed reading the Economist less and less these past few years, as the formerly august news magazine has succumbed to collectivist progressivism.

But I'm amazingly pleased with this analysis. It's good.

See, "Great-power politics: The new game."

'The eight year experiment with the Obama administration will be a cautionary tale on multiple levels concerning America’s socialist elite and their palace guard stenographers...'

From Ed Driscoll, at Instapundit, "SO, THAT DIDN’T WORK OUT WELL..."

Meaning, the Obama-media's nearly 8-year fetish with collectivist leftism hasn't turned out too well. Sadly, it's going to take at least a decade of mainstream, if not conservative, government to unwind the catastrophic damage.

Focusing on Economic Growth Should Be at Top of Policy Agenda for U.S. Leaders

From David Petraeus and Michael O'Hanlon, at USA Today, "Recipe for American success":

As world leaders gathered and debated each other at the U.N. General Assembly meeting in New York, most of the attention seemed to be on hot spots.  Ukraine, Syria and Iraq, conflict zones in Africa and East Asia, and the latest news from Afghanistan got lots of discussion. In many respects, this was inevitable, and necessary. Indeed, our own careers have been largely shaped and dominated by such pressing issues.

In another respect, however, we need to remember that in a world of troubling headlines, less dramatic and more structural developments could determine the future of the global order even more than the latest crises. Many of these concern technology and economics.

While military might was a necessary ingredient in the West's victory in the Cold War, it was more like a moat than a battering ram — it provided time and protection for the inherent strengths of the Western democratic and economic systems to prevail. This is likely to be just as true in the future.

A few basic realities about the modern world need to be remembered. The post-World War II international order set up by U.S. and other key world leaders 70 years ago produced more economic growth in more places on earth, benefiting a far higher percentage of the human race, than had any previous global order in any period in history for which we have data.

As policymakers and leaders establish priorities for 2016 and beyond, attention to economic fundamentals should play as big a role in their thinking as crisis management and domestic political maneuvering.

Indeed, economics can even shape crisis management, if often with a lag effect. Economic sanctions established by Presidents George W. Bush, Barack Obama and many others brought Iran to the table over its nuclear weapons program (an accurate observation whether one likes the actual deal). Sanctions, together with the fall in global oil prices, might not have yet limited assertive (and illegal) Russian interventions, but they could well constrain President Vladimir Putin in the years ahead. China's policies in the East China Sea and South China Sea, even if sometimes more assertive than we would like, have exhibited at least some restraint that might reflect an awareness in Beijing that we could introduce sanctions against China if things got out of hand.

Meanwhile, the North American shale revolution and the North American economic revolution more generally have improved U.S. growth prospects and the fundamental strength of the U.S. economic foundation. They have also helped Mexico provide more jobs to its own workers, reducing demographic pressures and actually making the immigration problem easier to address (even if we have not yet managed to address it appropriately and comprehensively). 

More.

Our Wobbly Political-Economic Consensus

From Jay Cost, at the Weekly Standard, "What the Hell Is Going On? The fraying of the national political consensus."

And at the American Interest, "Study: Democrats Moving Left Faster Than Republicans Moving Right."

Fight Breaks Out as Japan's Parliament Approves Overseas Combat Role for Military (VIDEO)

At the New York Times, "Japan Approves Overseas Combat Role for Military":

TOKYO — In a middle-of-the night vote that capped a tumultuous struggle with opposition parties in Parliament, Prime Minister Shinzo Abe of Japan secured final passage of legislation on Saturday authorizing overseas combat missions for his country’s military, overturning a decades-old policy of reserving the use of force for self-defense.

The legislation had been expected to pass; Mr. Abe’s governing coalition controls a formidable majority in the legislature. But analysts said the grinding political battle and days of demonstrations that accompanied the effort could hurt his standing with a public already skeptical of his hawkish vision for Japan’s national security.

The debate often doubled as a forum for airing views about Japan’s most important ally, the United States. Many were hostile.

“If this legislation passes, we will absolutely be caught up in illegal American wars,” Taro Yamamoto, a leader of a small left-leaning opposition party, said in a committee debate on Thursday. The debate ended with lawmakers piled on top of one another in a melee for control of the chairman’s microphone.

On Friday, Mr. Yamamoto held up the voting by taking a slow-motion “cow walk” to the podium to cast his ballot. Other opposition groups entered symbolic censure motions against Mr. Abe and officials in his Liberal Democratic Party or made long, filibuster-like speeches, often repeating the conviction that a military with expanded powers would end up being dragged into an unjustified American war.

“We must not become accomplices to murder,” said Mizuho Fukushima of the Social Democratic Party. Similar sentiments have been echoed — usually in less provocative terms — by newspaper columnists, political scientists and members of the general public.

The opposition’s obstructionist tactics delayed Mr. Abe’s victory until after 2 a.m., but could not prevent it.

." Mr. Abe’s critics have a variety of grievances against the defense legislation. Not least is the question of its constitutionality: In multiple surveys of constitutional specialists, more than 90 percent have said they believe that it violates Japan’s basic law, laid down by the United States in the postwar occupation, which renounces the use of force to resolve international disputes.

But a less abstract fear of being “caught up in war” has been just as important in fueling opposition to the legislation, exposing a strain of public unease about the United States-Japan alliance that is usually kept out of view...

The war ended 70 years ago. I think Japan can change its constitution and join the status of normal countries who defend their own national security.

Still more.

PREVIOUSLY: "U.S. and Japan Tighten Alliance in Face of Surging Threat from China."

Is the American Century Over?

Harvard political scientist Joseph Nye published Bound to Lead: The Changing Nature of American Power back in 1991.

It was a something of a response to Paul Kennedy's immensely popular 1987 book, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000.

In the end it was Nye, not Kennedy, who turned out to be the more prescient analyst, although he probably didn't make as much money.

So now here comes Nye with a new book on America's enduring hegemony, Is the American Century Over? 


Take a look at some of the material at the sample pages at the link. Gideon Rachman has a review at the Financial Times, "‘Is the American Century Over?’, by Joseph Nye."

I need to pick up a copy as material for my World Politics course. Maybe next month. I just got a shipment of books in the mail yesterday, heh.

Joe Scarborough's Epic Pro-America Rant

Via Free Beacon, "BEASTMODE: Joe Scarborough Goes on Epic Pro-America Rant."

American Hegemony Is Here to Stay

Never heard of this Salvatore Babones dude, but this is great.

This is the "BIG ARTICLE" - please read, everyone - "American Hegemony Is Here to Stay" @thenatlinterest http://t.co/nQstPrdSvX

— Salvatore Babones (@sbabones) June 11, 2015

U.S. Navy Fleet at San Diego Pivots to South China Sea

At the San Diego Union-Tribune:

Freedom of passage threats in So. China Sea prompts bigger U.S. presence in the region: http://t.co/vqov5itYav pic.twitter.com/j78GKkZxAh

— The Union-Tribune (@sdut) June 6, 2015

U.S. Military Proposes Challenge to China Sea Claims

At WSJ, "Moves would send Navy planes, ships near artificial islands built by China in contested waters":

The U.S. military is considering using aircraft and Navy ships to directly contest Chinese territorial claims to a chain of rapidly expanding artificial islands, U.S. officials said, in a move that would raise the stakes in a regional showdown over who controls disputed waters in the South China Sea.

Defense Secretary Ash Carter has asked his staff to look at options that include flying Navy surveillance aircraft over the islands and sending U.S. naval ships to within 12 nautical miles of reefs that have been built up and claimed by the Chinese in an area known as the Spratly Islands.

Such moves, if approved by the White House, would be designed to send a message to Beijing that the U.S. won’t accede to Chinese territorial claims to the man-made islands in what the U.S. considers to be international waters and airspace.

The Pentagon’s calculation may be that the military planning, and any possible deployments, would increase pressure on the Chinese to make concessions over the artificial islands. But Beijing also could double down, expanding construction in defiance of the U.S. and potentially taking steps to further Chinese claims in the area.

The U.S. has said it doesn’t recognize the man-made islands as sovereign Chinese territory. Nonetheless, military officials said, the Navy has so far not sent military aircraft or ships within 12 nautical miles of the reclaimed reefs to avoid escalating tensions.

If the U.S. challenges China’s claims using ships or naval vessels and Beijing stands its ground, the result could escalate tensions in the region, with increasing pressure on both sides to flex military muscle in the disputed waters.

According to U.S. estimates, China has expanded the artificial islands in the Spratly chain to as much as 2,000 acres of land, up from 500 acres last year. Last month, satellite imagery from defense intelligence provider IHS Jane’s showed China has begun building an airstrip on one of the islands, which appears to be large enough to accommodate fighter jets and surveillance aircraft.

The U.S. has used its military to challenge other Chinese claims Washington considers unfounded. In November 2013, the U.S. flew a pair of B-52 bombers over disputed islands in the East China Sea to contest an air identification zone that Beijing had declared in the area.

Officials said there was now growing momentum within the Pentagon and the White House for taking concrete steps in order to send Beijing a signal that the recent buildup in the Spratlys went too far and needed to stop.

Chinese officials dismiss complaints about the island-building, saying Beijing is entitled to undertake construction projects within its own sovereign territory. They say the facilities will be used for military and civilian purposes.

“China has indisputable sovereignty over the Nansha Islands and their adjacent waters,” said embassy spokesman Zhu Haiquan, using the Chinese name for the Spratlys. “The relevant construction, which is reasonable, justified and lawful, is well within China’s sovereignty. It does not impact or target any country, and is thus beyond reproach.”

More.

Plus, "China Lashes Out Over U.S. Plan on South China Sea."

U.S. and Japan Tighten Alliance in Face of Surging Threat from China

This is fascinating, although Japan's not a political pygmy, and folks should stop treating the Japanese as such.

Japan's a powerful country that could deploy a nuclear arsenal at virtually a moment's notice. Time to cut the cord, if anything.

In any case, at LAT, "Japan's Shinzo Abe visits U.S. to discuss new threat: China":

When Japanese Prime Minister Shinzo Abe rises to address a joint session of Congress on Wednesday, it will represent a diplomatic sea change so great that it may seem incomprehensible to the lingering members of the "Greatest Generation."

To those who lived through World War II, Japan was once seen as such a menacing enemy that upon the emperor's surrender in 1945, America imposed a severely pacifist constitution to ensure that the Asian nation would never again become a world power.

Today, that world has turned upside down. And the U.S. and Japan are finding it necessary to draw even closer to confront a shared threat.

China, a battered and enfeebled American ally during the war, has become a juggernaut that increasingly asserts its economic and military power across Asia and beyond.

Consequently, Abe's unprecedented speech to Congress is expected to focus on the once-unimaginable idea of increasing Japan's military strength with an eye toward putting muscle behind the two countries' vision of an American-led order in Asia.

The 60-year-old prime minister will also urge support for a Pacific Rim free-trade deal led by the U.S. and Japan, the world's No. 1 and No. 3 economies, respectively. The 12-nation pact, which would bring together a number of China's large trading partners but not China, is seen as a form of economic containment aimed at the world's No. 2 economy.

Though the trade deal faces stiff resistance from America's trade unions and many Democratic lawmakers, the Republican-led Congress is moving to give President Obama greater power to resolve final sticking points with Japan. Administration officials said Friday that "substantial progress" has been made in negotiations, but that there won't be an agreement announced on the Trans-Pacific Partnership during Abe's visit.

At the center of the trip will be the first speech by a Japanese prime minister to a joint session of Congress. Abe's weeklong visit also includes a meeting with Obama and stops in San Francisco and Los Angeles, where Abe studied public policy at USC.

Timed to coincide with the 70th anniversary of the end of World War II, Abe's trip will no doubt rekindle painful memories for some Americans and key allies.

Abe is expected to address Japan's history of military aggressions, a particularly sensitive subject for Beijing and Seoul.

Chinese and South Koreans have repeatedly criticized Japan for what they see as a glossing-over of wartime atrocities in Japanese textbooks, the honoring of war criminals at Japanese military shrines and the failure to adequately compensate so-called comfort women from Korea, China and other Asian countries forced into sexual servitude for Japanese troops.

Foreshadowing what he might say on his visit, Abe expressed "feelings of deep remorse over the past war" at a conference in Bandung, Indonesia, last week.

Korean American civic groups and others that oppose the congressional invitation to Abe will want to hear much more than that, and are planning protests on both coasts. But eager to focus on the future alliance, U.S. officials are not expected to dwell on the issue.

"As long as he says something regarding the past that seems sincere and contrite, people will take that and say it's enough," said Jeffrey Kingston, a professor of Asian studies and history at Temple University's Japan Campus. "Chinese and Koreans will be scrutinizing every comma, dot and word. He knows no matter what he says, he can't satisfy them. What he wants to do is say enough to satisfy Washington. And the mood coming out of Washington is quite positive."

To understand why, it helps to consider another Asian leader's speech last week to a different foreign legislature.

Keep reading.

Britain is Experiencing Same Decline as Rome in 100 BC

At the Telegraph UK, "Dr Jim Penman believes Britons no longer have the genetic temperament that sparked the Industrial Revolution":

Britain is experiencing the same decline as Rome in 100BC, with the collapse of civilisation inevitable, a scientist has warned.

Dr Jim Penman, of the RMIT University in Melbourne, believes Britons no longer have the genetic temperament to advance because of decades of peace and a high standard of living.

He claims that the huge success of the Victorian era will not be repeated because people in the UK have lost the biological drive for innovation.

Instead, Britain is existing in a period similar to the decades before the fall of the Roman Republic where social tensions were rife, the gap between the rich and poor was increasing and extremism was growing.

And when added to a growing distaste for military action, which has seen huge cuts the armed forces, by the end of the century the UK will no longer have the power, or will, to protect itself against a serious invading force, he predicts.

“There are certainly parallels between 100BC in the Roman Republic where things are starting to get pretty dodgy,” he said.
“It was a time when democracy was moving towards despotism, and in Britain we now see that politics is becoming much more about individuals rather than political parties. It’s about personalities. The two party system has started to break down.

“We live in a golden age where there have been no major wars in Europe for three quarters of a century. But the economy is stagnating and we’re having fewer children.

“And once European countries can no longer defend themselves, the end of national independence cannot be long delayed.”

The U.S. can't be far behind.

RELATED: "The Complexity of American Power."

IMAGE CREDIT: Thomas Cole's "The Destruction of Empire."

As China Expands Its Navy, the U.S. Grows Wary

This is interesting.

We were just talking about China's naval build-up in my World Politics class yesterday.

At WSJ, "Washington is divided over whether Beijing should be viewed as naval partner or potential adversary":

China’s navy chief, Adm. Wu Shengli, strolled the Harvard University campus in a tweed blazer and slacks during a visit to the U.S. last fall, joking with students and quizzing school officials about enrolling some of his officers.

A few days earlier, he became the first Chinese navy chief to attend a 113-nation naval forum in Rhode Island, where he hailed U.S.-China military ties and discussed working together on global maritime challenges.

Shortly after his U.S. visit, Adm. Wu took another trip—this time to the Spratly Islands, an archipelago in the South China Sea where his country appears to be building a network of artificial island fortresses in contested waters. It was his first known visit to facilities U.S. officials fear could be used to enforce Chinese control of nearly all the South China Sea, one of the world’s busiest shipping routes.

As Adm. Wu seeks closer exchanges with the U.S. in his quest to build a modern global navy, Washington faces the dilemma of dealing with China as both a partner and a potential adversary challenging U.S. naval dominance in Asia. “I would say that he doesn’t want to build a navy that’s equivalent to the U.S.,” said Adm. Gary Roughead, the retired U.S. Chief of Naval Operations. “He wants to build a navy that surpasses the U.S.”

Adm. Wu, navy chief since 2006, is one of the architects of China’s maritime expansion, sending ships and submarines deep into the Indian and Pacific oceans, launching China’s first aircraft carrier and overseeing operations to assert control of waters claimed by Vietnam, the Philippines and other nations.

He also has become China’s point man for cinching closer U.S. military ties, a priority of Chinese President Xi Jinping. Adm. Wu met his counterpart, U.S. Chief of Naval Operations Adm. Jonathan Greenert, four times over the past two years, forging guidelines on how Chinese and U.S. vessels can safely interact.

Adm. Wu now wants deeper exchanges, including help developing aircraft carrier operations and improving education for his naval officers. He says such exchanges would allow China to better work alongside the U.S. to maintain global security, according to people who have spoken with him.

Adm. Greenert and other senior U.S. Navy officials also advocate closer engagement to encourage China to embrace international norms. Some in the Pentagon and Congress, however, worry Adm. Wu’s real mission is absorbing American know-how to advance territorial gains and boost China’s ability to thwart U.S. intervention.

Adm. Wu has been described by the U.S. Office of Naval Intelligence, or ONI, as the “most vocal and successful advocate for a greatly expanded mission” for the Chinese navy since Adm. Liu Huaqing, who first proposed turning China into a sea power in the 1980s.

He is also a so-called princeling, as offspring of senior Communist Party figures are known, and said by defense officials to have strong backing from President Xi—another princeling—who has put sea power at the core of his vision for China. That may explain why Adm. Wu, 69 years old, has kept his post so long. He said during his U.S. visit he expected to retain the job until 2017.

The conflicting views of Adm. Wu mirror a deeper debate over whether China and the U.S. can reconcile their competing strategic interests in Asia and forge a genuinely cooperative military relationship in the 21st Century...

Hmm... I think the U.S. oughta be careful about not giving away the store.

More.

RELATED: At War is Boring, "China’s Third Aircraft Carrier Could Be Nuclear."

Plunging Russian Ruble Puts Pressure on Putin

At WSJ, "Plunging Ruble Unsettles Russians, Poses Test for Putin: Russians Rush to Buy Big-Ticket Items and Foreign Currencies as Ruble Hits Record Low":

MOSCOW—As Russian President Vladimir Putin has ratcheted up the conflict with the West for most of the year, the economic fallout on ordinary Russians has been limited.

Suddenly, though, the plunging ruble is reawakening fears of rising prices and the kind of financial crisis Mr. Putin has sought to put behind his country. As the ruble hit a record low, falling as much as 20% against the dollar Tuesday, Moscow residents rushed to buy electronics and other big-ticket items and drained rubles from ATMs to swap them for dollars and euros—signaling a new feeling of vulnerability among Russians and a fresh challenge to their leader.

From St. Petersburg to Siberia, money changers ran out of foreign currency and were raising exchange rates. Sberbank , Russia’s state savings bank, and Alfa Bank, Russia’s largest private lender, said they were experiencing a rush for dollars and euros.

“The demand is enormous. People are bringing piles, huge piles of cash. It is madness,” said Kamila Asmalova, a manager at a Moscow branch of Sberbank. The branch ran out of foreign currency by 2 p.m., she said.

Lanta Bank, a midsize Moscow lender, said its foreign counterparts would be unable to send foreign currency Wednesday as aircraft that typically transport cash are full.

Apple Inc. said it halted online sales in the country because of the ruble’s volatility, and IKEA announced it would raise prices there.

The ruble’s continued fall despite the Russian central bank’s move to raise interest rates to 17% rippled across global markets Tuesday, fueling a selloff in emerging market currencies and stocks. In the U.S., the turbulence was more muted, as the Dow Jones Industrial Average closed down 0.7%. The yield on the 10-year Treasury, a traditional haven, fell to 2.07%, its lowest closing level since May 2013.

Abroad, Russia’s crumbling currency—driven by sanctions and eroding oil prices—raises the threat of a currency market contagion, particularly for emerging economies facing headwinds, such as Turkey and Indonesia.

At home, economists say the Russian central bank’s rate gambit is certain to push the country’s faltering economy into recession by raising borrowing costs. Even before the rate increase, the central bank estimated the economy could contract as much as 4.7% next year if oil remains around $60 a barrel. On Tuesday, Economy Minister Alexei Ulyukayev said that the government would introduce some “regulatory measures” on the foreign-exchange market, but that it wasn’t discussing any capital-control measures.

The big question is whether Russia’s economic troubles will turn into a real political challenge for Mr. Putin, whose approval ratings remain above 80% and who retains tight control over politics and the economy...

Continue reading.

The Other America

From VDH, at the O.C. Register (via Blazing Cat Fur):

Germany’s first chancellor, Otto von Bismarck, supposedly once said that there was “a special providence for drunkards, fools and the United States of America.”

Apparently, late 19th century observers could not quite explain how the U.S. thrived when, by logic, it should not. That paradox has never been more true than today.

The U.S. government now owes more than $18 trillion in long-term debt. Even after recent income tax hikes for the very wealthy and huge cuts in the defense budget, the Obama administration will still run an annual budget deficit of nearly $500 billion.

No government official dares to trim Social Security or Medicare. Everyone knows that both programs are fiscally unsustainable.

More than 11 million undocumented immigrants are residing in the U.S. as federal immigration law is reduced to a bothersome irritant. A record 92 million American citizens ages 16 and older are not working.

Red-state and blue-state animosities reveal a nation more divided than at any time since the 1960s – or perhaps the pre-Civil War 1850s.

The permanent bureaucracy is awash in serial scandals. The IRS, VA, GSA, NSA, ICE and Secret Service have all deservedly lost the public trust.

Congress suffers from overwhelming public disapproval. President Obama’s approval rating hovers just above 40 percent.

Our new foreign policy could be characterized as managed decline. Three defense secretaries have retired or resigned under Obama. Two of them, Robert Gates and Leon Panetta, wrote memoirs in which they blasted the administration. From Russia to the Pacific to the Middle East, the world seems to be descending into the law of the jungle as the U.S. withdraws from its role as a global overseer of the postwar order.

The Michael Brown shooting illustrates seeming racial divides not seen in 50 years. Al Sharpton once was seen as a social arsonist and tax delinquent. Now he appears to be the White House’s most influential adviser on racial matters.

Student-loan debt exceeds $1 trillion. Six years of college has become the new normal. More than a third of the students who enter college never graduate.

In such a depressing American landscape, why is the United States doing pretty well?

Put simply, millions of quiet, determined Americans get up every morning and tune out the incompetence of their government. Instead, these quiet Americans simply go to work, pursue their own talents, excel at what they do and seek to take care of their families.

The result of their singular expertise is that, even in America’s current illness, the nation soars above the global competition.
Only in America can you find the sort of innovation, talent, legal framework and can-do attitude needed to invent and refine hydraulic fracking and horizontal drilling. Just a few hundred thousand scientists, engineers, entrepreneurs, oil riggers and skilled craftsman have revived the once-ossified oil industry for 320 million Americans.

The United States is not running out of fuels – as was predicted over the past 20 years. It instead has become the largest gas-and-oil producer in the world.

The epitaph for Silicon Valley is written each year. Its tech industry is copied the world over. Yet, seemingly each year a new American technical innovation sweeps the world.

Neither drought, nor cumbersome regulations, nor unfair trade practices have stalled American agriculture. U.S. farms – where less than 2 percent of the population resides – have never turned out so much safe, nutritious and cheap food that is feeding the world and earning America hundreds of billions of dollars in foreign exchange.

The U.S. military – in which fewer than 1 in 100 Americans serves – is facing record cuts. The Navy will have fewer ships than the American fleet of World War I. The Air Force and the Marine Corps are shrinking. Yet superb American forces continue to ensure that the United States and its allies remain safe. Neither Vladimir Putin’s Russia, nor the communist Chinese hierarchy, nor the Iranian theocrats are quite ready to take on the U.S. military.

America is not saved by our elected officials, bureaucrats, celebrities and partisan activists. Instead, just a few million hardworking Americans in key areas – a natural meritocracy of all races, classes and backgrounds – ignore the daily hype and chaos, remain innovative and productive, and dazzle the world.

As Global Strategic Threats Intensify, U.S. Nuclear Arsenal at Risk of Becoming Anachronism

A lot of problems with the U.S. strategic nuclear force.

At LAT, "Major overhaul of nuclear force planned to improve security and morale."

And also, "As U.S. nuclear arsenal ages, other nations have modernized":

As Russian forces were drawing back from a swift and violent incursion into Ukraine this fall, Moscow was delivering another powerful military statement many miles to the north.

A new 40-foot Bulava intercontinental ballistic missile, capable of delivering an unparalleled 10 nuclear warheads, was launched by a Russian navy submarine on a test run over the icy White Sea. The weapon was a clear signal to the world that as Russia battles tightening economic sanctions intended to block Moscow's aggressive posturing on NATO's frontiers, President Vladimir Putin has another card to play.

"I want to remind you that Russia is one of the most powerful nuclear nations," Putin declared earlier this year at a state-sponsored youth camp. He reinforced the message last month, inviting the world to "remember what consequences discord between major nuclear powers could bring for strategic stability."

The debate over how to modernize America's aging nuclear forces has taken on increasing urgency with the emergence of a newly assertive Russia and a new generation of nuclear powers with increasing technological sophistication.

North Korea, Pakistan and India all are working quickly to improve their nuclear arsenals and delivery systems. By next year, China is expected to be capable of delivering a nuclear strike anywhere in the continental U.S. for the first time in its history — a threat that Russia has posed for decades.

While the nuclear confrontation between the United States and Russia cooled off after the 1991 fall of the Soviet Union, it has never ended. Indeed, the long-held hope for continual reductions in nuclear forces now seems unattainable, nuclear arms analysts say. For the first time in years, the U.S. and Russia each have increased the number of nuclear warheads deployed over the latest six-month monitoring period — the U.S. by 57 additional weapons and Russia by 131.

Russia is spending $560 billion on military modernization over the next six years with 25% allocated to aging nuclear forces, part of a program to replace all of its Soviet Union-era launchers. U.S. officials say it will take at least $355 billion over the coming decade to upgrade America's nuclear arsenal and keep up with the rearmament spree underway in the rest of the world.

"Our rival powers are investing billions of dollars to modernize and improve their nuclear systems," said Maj. Gen. Sandra Finan, Air Force Nuclear Weapons Center commander, warning that if the U.S. is "to remain credible," it must maintain nuclear preparedness as a priority.

But veterans of the Cold War also say tit-for-tat responses in nuclear confrontation carry grave risks, anchored to erroneous assumptions that a nuclear exchange would leave one side in better condition than the other.

"God help us if we ever need them," said Philip Coyle, a former nuclear weapons scientist, director of nuclear testing, senior Pentagon official and national security adviser.

The U.S. and Russia both continue to field land-based missiles that could be launched in a few minutes, submarine-based missiles able to deliver a devastating counterpunch to any surprise attack, and bombers that could loiter in threatening holding patterns above the Arctic.

A new strategic arms reduction treaty signed in 2010 limits deployed strategic warheads to 1,550 on each side, with a cap of 700 missiles and bombers by 2018. And over the last two decades, nuclear capabilities have been far from the U.S. military's top priority. Most of the attention has gone to high-tech conventional weapons that evolved after the first Gulf War. Two decades have gone by without developing a nuclear strategic weapon.

All the while, U.S. nuclear-capable bombers, submarines, intercontinental ballistic missiles and their launch-control bunkers have been allowed to become virtual Cold War museums.

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