Saturday, April 30, 2022

Featured Post: Four-year College Degrees No Longer Highly Favored in IT Hiring

YouTube: https://youtu.be/BFtJA8JYxRI

For years, the IT industry has been beset by chronic talent shortages. According to some estimates, there are currently over 450,000 open cybersecurity jobs.

This has been worsened by the widening gap between available vacancies and individuals looking for new jobs. In February, there were 11.27 million job vacancies versus 6.27 million unemployed people.

As a result, according to recent Harvard Business Review research, a rising number of organizations, including many in the technology sector, are eliminating the requirement for a bachelor's degree.

This reverses a long-standing trend in which degree requirements were added to job descriptions when not really required to perform the tasks of the position, otherwise known as degree inflation.

In fact, now to broaden the talent pool, many organizations are focusing on skills-based hiring rather than four-year degree requirements.

For example, only 26% of Accenture's job advertisements for a software quality-assurance engineer required a bachelor's degree. Only 29% at IBM did.

In fact, currently, only half of IBM's job postings in the United States require a four-year degree.

The trend is becoming widespread. The White House declared in January 2021 that its hiring for IT positions no longer will be heavily based on four-year degrees as employment qualifications.

The majority of Bank of America's entry-level employment no longer requires a college diploma, according to the corporation.

Accenture started an apprenticeship program in 2016 and has since hired 1,200 people, with 80 percent of them having no college diploma.

To get access to a larger talent pool, Okta, a firm that provides secure access solutions to corporate applications, eliminated the requirement for a college degree for a many of its sales positions focusing instead on motivation, talent, and experience.

Finally, in order to get the talent it requires, Dell Technologies last year broadened its definition of university recruitment and created a community college hiring program.

 

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Friday, April 29, 2022

Featured Post: China's Lockdowns Snagging Supply Chains Through US Holiday Season

YouTube: https://youtu.be/znijUWdfK58

Global supply chains already reeling from war and pandemic now suffer another setback as the most recent Covid-19 lockdowns in China now threaten supply chain resiliency through the US holiday season.

The US disproportionately relies on China as a source of imported goods and despite recent efforts to onshore production, Chinese imports still comprise approximately 35% of all electronics and 25% of all goods sold in America.

Business analysts indicate the lockdowns will affect a wide range of products ranging from high-end electronics to household staples including furniture, clothing, and goods manufactured from plastic. They also fear manufacturing and production levels in China may not return to recent levels until sometime mid-year.

Additionally, even if, or when, Chinese production and manufacturing reach their previous levels, bottlenecks at both US and Chinese ports will continue to impair supply chain functions. Shipping delays exacerbate the problem with finished goods that previously took 46 days for transport now taking approximately 111 days.

Producers of automobiles and electronic goods are among those being most hard hit. For example, over one-half of all Tesla's sold in 2021 were made in China. Production in China slumped 10% in the first three weeks alone of China's lockdowns.

Tesla and other auto manufacturers attempt to limit the effect of lockdowns by requiring workers stay on premise, including sleeping onsite. However, this does not address delivery delays of the parts and components required to produce an automobile.

Apple faces similar problems with nearly 100 of its top 200 input suppliers affected by the Covid lockdowns. Apple reports significant delays in obtaining even the most basic product inputs, such as cardboard boxes, as well as truck drivers to transport its goods.

And what does this mean for US consumers? Supply shortages and price hikes contributing to an already escalating rate of inflation. Indeed, the inflation rate for all goods and services in March 2022 was 8.5%, with the rate of inflation for services reaching 4.4%. Accordingly, some economists predict, and recommend, consuming 'experiences' rather than goods during the upcoming holiday season.

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Thursday, April 28, 2022

Featured Post: As US Recession Fears Rise, Economists Predict Which One It May Resemble

YouTube: https://youtu.be/GsWqimCynF8

As many fear a US recession looms on the horizon, economists search the past and previous downturns for guidance on the economy's performance going forward and whether such recession actually will occur.

Some economists foresee a future like that following the 2008 financial crisis with depressed demand and falling prices that required the Federal Reserve lower interest rates to near zero. Others predict an outcome like that which occurred in the 1970's when supply-shocks and inflation resulted in a period of both lower growth and higher prices – 'stagflation.'

However, for some economists, a 1993 Federal Reserve paper analyzing the recession of the early 1990's provides the most meaningful prediction. The paper notes three primary factors contributing to the 1990's recession which appear today, in slightly different form – consumer pessimism, spiking oil prices resulting from the invasion of Kuwait by Iraq, and the Federal Reserve's attempt to curtail inflation by raising interest rates.

Pessimistic consumers. Declining consumer sentiment contributed to declining product demand which helped usher in the 1990's downturn. Today, consumer sentiment, measured by a longstanding index monitored by the University of Michigan, shows the economic mood of consumers the lowest since 2011.

Rising energy prices. The invasion of Kuwait by Iraq in 1990 upended oil-market equilibrium with higher oil prices having widespread economic effect. Shipping and transportation costs rose with subsequent product price increases diminishing consumer demand. Consumers travelled less and reduced expenditures also with a dampening economic effect. And oil-dependent manufacturing processes began to slump. These together helped hasten a recession. Today, Russia's Ukraine invasion similarly roils energy markets though prices for some products have eased from their mid-March high.

Federal Reserve Policy. From 1988 to 1989 the Federal Reserve substantially increased interest rates attempting to curtail inflation which was reaching levels only seen in the 1970's. Increasing interest rates raised costs of both investment and consumption which decreased as a result. This weakened the economy and, with factors above, helped set the stage for a recession. Today, as inflation reaches levels not seen since the early 1980's, the Federal Reserve signals a similar intent to aggressively raise interest rates. Some fear overly aggressive action may halt economic growth which already shows signs of weakening.

Despite these parallels, some economists note the 1990's economy generally was weaker than today's. Job openings still outpace available workers and wage growth correspondingly is strong. Accordingly, Jerome Powell, the chair of the Federal Reserve, in a recent statement indicated he believes restrictive monetary policy and rising interest rates will not impair the economy's ability to flourish.

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Wednesday, April 27, 2022

Featured Post: Arms Race Continues with Military Spending at Historical High

YouTube: https://youtu.be/9-4CGaKF18c

The Stockholm International Peace Research Institute (SIPRI) recently released a new report detailing worldwide military expenditures. Military expenditures now reach an all-time high with total global expenditures in 2021 exceeding $2.1 trillion after seven consecutive years of continuing growth.

Global military expenditures were approximately 1% greater than in 2020, and 12% greater than ten years ago. SIPRI notes that 2021 expenditures in nominal terms, that is, today's dollars rather than inflation adjusted dollars, increased by 6.1%.

These expenditures account for 2.2% of worldwide gross domestic product (GDP). SIPRI also notes the increase in 2021 expenditures may have been moderated by the economic consequence of the global pandemic, which, nevertheless, did not limit overall expenditures.

The five largest military spenders in 2021 were the United States, China, India, the United Kingdom, and Russia, comprising 62% of total military expenditures. Over half of all expenditures – 52% - were made by China and the US alone, with US expenditures at roughly $800 billion, and Chinese expenditures at roughly $300 billion – rising for the 27th year in a row.

While US military expenditures vastly exceeds that of any other country in 2021, its overall expenditures in 2021 was lower than in previous years. SIPRI cites US pullback from investments in research and development, though noted the US keenly remains focused on developing and deploying newer, next-generation technology.

Russia's military expenditures have been increasing for three years now, funded, in part, by higher export prices, particularly fuel exports. Their 2021 military expenditures were $65.9 billion, rising 2.9% from the previous year and comprising 4.1% of its annual GDP.

Since Russia's annexation of Crimea in 2014, Ukraine's military spending has increased 72%. In 2021 Ukraine's military expenditures were $5.9 billion, or 3.2% of their GDP.

Other levels of expenditures are as follows:

Europe. $418 billion, 3% greater than 2021, 10% greater than 10 years ago.

India. The third greatest level of military expenditures in the world, increasing approximately 1% from 2020 levels to reach $76.6 billion per year, a 33% increase from 10 years ago.

Japan. $54.1 billion, 7.3% greater than 2021.

Germany. $46 billion, 1.3% of GDP, third greatest level of European expenditures after the UK and France.

Australia. $31.8 billion, increasing by 4% relative to 2021.

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Tuesday, April 26, 2022

Featured Post: Bitcoin Now Allowed in Employer Sponsored Retirement Accounts

YouTube: https://youtu.be/oye985FCbPM

Many US workers save for retirement using tax-deferred retirement plans offered by their employers ('401(k) plans'). Employees using these plans have retirement contributions directly deducted from their paychecks and deposited into a 401(k) account which they have established with an investment firm. Many employers also match employee contributions up to a certain contribution limit, either a defined amount or percentage.

Until now the investment funds to which employees could contribute to in their 401(k) plans were limited to traditional investment products such as mutual funds. Now, however, according to recent reports in the financial press, employees will be able to invest in a new asset class in their retirement accounts - Bitcoin.

Specifically, Fidelity Investments, one of the largest US retirement plan providers, announced it now will allow workers to use their retirement accounts to invest in Bitcoin. Fidelity's plan is subject to certain limitations. First, employers must allow this form of investment. Second, Fidelity will limit Bitcoin investment to 20% of an employee's overall portfolio, with employer's allowed to establish a lower limit.

Fidelity in 2020 managed approximately $2.4 trillion of assets in 401(k) plans. This accounts for upwards of 1/3 of the overall market for 401(k) retirement plans. Accordingly, Fidelity's plan to allow Bitcoin investment would give the asset class a significant boost and could help further establish its legitimacy.

The US Labor Department, the regulator that oversees company-sponsored retirement plans, expresses skepticism and concern. It released in early March guidance indicating substantial concerns about plans such as Fidelity’s which would allow investment in cryptocurrencies. According to the Labor Department, the extreme volatility of cryptocurrencies exposes retirement savers to significant risk and could devastate the retirement plans of workers, especially those nearing retirement age. The Labor Department also raised concerns regarding properly valuing Bitcoin, appropriately establishing custody, and concerns related to proper record keeping.

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Monday, April 25, 2022

Featured Post: US CEO Salaries Skyrocket While Blaming Labor for Inflation

YouTube: https://youtu.be/hAMVReDG02Y

Many corporate chief executive officers ('CEOs') on record cite increasing labor costs as justification for recent price increases and inflation. However, a recent report examined data such as increases in prices, increases in CEO salary, increases in labor compensation and the gap between CEO salary and employee wages. The findings? CEO salary and the CEO/worker pay gap (the ratio of CEO salary to employee wage rate) exorbitantly increased, with some companies even cutting workers' wages. This leads many to question the root of inflation and wondering if individual and corporate greed - not labor costs - largely help explain today's runaway rate of inflation. Here is a small sampling of some results of the analysis.

Amazon. Amazon's CEO's compensation increased 600%, the net worth of Amazon's founder increased 77% to $210 billion, and the CEO wage gap increased 11,000%. Now, Amazon's CEO earns as much as approximately 6,500 employees. At the same time, Amazon increased both prices and the cost of its Amazon prime membership.

Apple. Apple's CEO's compensation increased 568% to $98.7 million per year. The CEO pay gap increased by 464% and Apple's CEO now makes $1,447 dollars for every $1 an Apple worker makes. At the same time, Apple increased the prices of newer iPhone models citing increasing costs of labor.

Verizon. Verizon's CEO pay gap now is 166-1, a 48% increase. At the same time, the annual salary of a Verizon worker now is $48,000, a reduction of 28% relative to previous levels. Verizon communicated to investors concerns over rising labor rates and the need to pass through such in prices.

McDonald's. McDonald's profit rose to $7.55 billion last year, a 59% increase. McDonald's used $4.7 billion of that to reward shareholders through stock buybacks. McDonald's CEO salary exceeded $20 million, 2,251 times more than that of a middle salary worker whose salary fell last year. McDonald's will continue to increase prices indicating this will not harm profitability as they pass these costs on to consumers.

Starbucks. Starbuck's CEO's pay increased to $20.4 million, a 39% increase and now 1,579 times more than the median employee. Starbucks raised prices last year and saw profits increase 352%. At the same time, Starbucks fights employee unionization efforts.

Domino's. Domino's CEO salary increased to $7.1 million last year, 400 times more than the average worker, whose pay fell to $17,782 per year from $22,076 per year.

PepsiCo. PepsiCo's CEO salary increased to $25.5 million, up $4 million. Its profits rose nearly $500 million to $7.6 billion a year, which it distributed to shareholders through dividends and stock buybacks. PepsiCo indicates it will continue raising prices through 2022, and its CEO now makes 488 times more than its median employee.

Kraft Heinz. Kraft Heinz's CEO received a 40% increase in salary, to $8.6 million. At the same time, the company increased product prices citing supply-chain and labor constraints. The company's profit rose $183 million to over $1 billion, and its CEO makes nearly 200 times more than the median employee.

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Sunday, April 24, 2022

Featured Post: Some Reasons Why Middle East Support for Ukraine Wavers

YouTube: https://youtu.be/jwASi4nNeRU

Many Middle Eastern countries still are undecided concerning support for Ukraine during Russia's invasion. Initially, for example, Middle Eastern protesters demonstrated support for Ukraine, and some even considered fighting on its behalf. Now, however, initial support seems to yield to hesitancy.

The reasons are varied. Some in Syria note Russia continues to support the dictatorial leadership of Assad, while the west largely remains silent. Others note more pressing and overriding concerns such as unemployment, poverty, inflation, corruption, and political stability.

Additionally, Middle East press and media note what appears to them as uneven worldwide treatment and standards. They note ongoing conflicts in many Middle Eastern countries that receive little to no western media attention. They also cite the lack of response and reaction to various human rights tragedies in Syria that receive substantially less western attention.

Furthermore, some compare Putin's invasion of Ukraine to the US invasion of Iraq under the presidency of George Bush, Jr. and find a certain hypocrisy in the United States' current outrage.

One Moroccan publication concluded the lack of expressed outrage over Russia's Ukraine invasion may have more to do with anti-American sentiment than support for Russia. They reached this conclusion after tracking and monitoring the social media commentary of the Arabic-speaking public. Many viewed the battle in Ukraine as the result of a new geopolitical competition between America, Europe, and Russia that the west now chooses to play in Ukraine's territory – with the besieged Ukrainian people appearing to them as collateral damage.

Generally, many view Russian Middle Eastern foreign policy more favorably than US foreign policy. A continuing and ongoing survey among 28,000 people in 13 Arab countries found 58% of respondents negatively viewed US-Arab country foreign policy, while only 41% viewed Russian foreign policy in the same way.

Economic reasons also help explain why some Middle Eastern countries are reluctant to openly express support for Ukraine. Russia has an expanding business and economic presence in the region which helps foster development. And Russia's investment comes with no expectations regarding free market economics, norms of democracy, or human rights achievements.

Finally, some countries simply are trying to navigate an emerging new world order which is much more multipolar than unilateral than in the past. With Russia seen as a new emerging player among the United States, the United Kingdom, China, and the European Union, a best strategy may be neutrality.

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Saturday, April 23, 2022

US Examining Lifting China Trade Sanctions to Combat Inflation

YouTube: https://youtu.be/GjiOssj-h14

US Treasury Secretary Janet Yellen recently indicated the Biden administration carefully is re-examining its China trade strategy, including tariffs, especially considering today's seemingly run-away inflation that hovers near 8.5%

The tariffs resulted from a 2020 trade war that eventually eased as a 'phase one' trade deal was signed between the US and China. The deal required China significantly increase its purchase of US exports. However, a recent analysis showed China's additional purchase of US goods only insignificantly increased.

Yellen's remarks are the latest signal President Biden’s administration may eventually remove at least some of the tariffs left over from that trade war. Her statement follows that of another White House official who similarly indicated the potential to lift tariffs as a way to address rising inflation.

Lifting US tariffs, however, requires navigating a complicated political playfield.

As US-China relations continue to worsen, both major US political parties see China under current leadership as a threat to US power and global stability. Lawmakers such as these support continuing trade restrictions seeing them as a means to forcefully support domestic manufacturing and production and a tool that must be applied considering restrictions China places on access to its markets. Accordingly, Biden may be wary of opening himself to criticism that he is soft on China.

Alternatively, other lawmakers pressure the Biden administration clearly indicating support for lifting at least some tariffs. They have made clear that they want to see at least some of the tariffs lifted. Assorted business groups join this call to lift tariffs on Chinese goods.

Additionally complicating the matter is the upcoming 2022 midterm elections. While Biden currently does not face reelection, every congressperson is up for re-election in November, as well as 1/3 of the US Senate.

And, of course, these members pay attention to polling numbers. A recently published poll shows many surveyed favor the continued application of Chinese trade restrictions and similar actions to counter China's rising economic power.

 

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Friday, April 22, 2022

Featured Post: Three Benefits and Three Costs of NATO Membership

YouTube: https://youtu.be/6UECOKNaEc4

The North Atlantic Treaty Organization's policies (NATO) allow enlarging the alliance with the aim of increasing both worldwide security and stability. Russia's Ukraine invasion now causes Sweden and Finland to consider membership in NATO.

While some believe NATO membership only confers benefit and advantages, others note membership potentially comes at some cost to joining nations.

Benefits cited include increased security and defense, increased dialogue and collaboration, and helping foster worldwide democracy.

Costs cited include increased tensions with non-allied nations, undue US influence in political affairs due to US funding supremacy, and increased likelihood of involvement in conflict.

Increased Security and Defense. NATO consists of 30 allied countries spanning North America and Europe. NATO adopts as a foundational principle 'collective defense' and NATO considers an attack against one ally as an attack against all allies ('Article 5'). NATO does not sponsor its own army. Instead, each country controls its own armed forces and contributes to four multinational battlegroups in countries bordering Russia and Belarus. These battlegroups, which soon may expand to eight, demonstrate the ability and determination to defend allies' peoples and borders.

Increased Dialogue and Collaboration. NATO members participate in the North Atlantic Council that aims to promote member dialogue and cooperation and provide a peaceful forum for dispute resolution. All Council actions, including for example, admitting new members, are based on unanimous consent.

Fostering Democracy. Member nations must satisfy various criteria including having a functioning political system based on democracy and a market economy. Some experts argue this criterion helps spread and encourage democracy as it becomes a more dominant and accepted philosophy. Others disagree.

Increased Tension with Non-allies. Putin repeatedly warns Russia will resist NATO expansion and Russia recently characterized NATO as a tool geared towards confrontation. Additionally, Putin now indicates there could no longer be a nuclear-free Baltic region if Finland and Sweden join NATO.

Undue US Influence. NATO members must spend a minimum of 2 percent of their gross domestic product (GDP) on defense, however, few members reach that target. Alternatively, the US spends more than double the amount on defense as all other allies and US expenditures account for approximately 2/3 of NATO's defense expenditures. Critics argue this makes allies overly reliant on the US for defense, which consequently confers undue US influence in internal political affairs

Increased Likelihood of Conflict. Critics argue NATO's collective defense principle means some members may somewhat unwillingly be drawn into conflict. For example, Article 5 was invoked by NATO for the first time in history after the US September 11, 2001, terrorist attacks. Additionally, some experts believe the likelihood of any ally or member being involved in a conflict commensurately increases as the number of members increases.

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Thursday, April 21, 2022

Featured Post: Energetics Make Weapons Work - And the US Industrial Base is Dangerously Thin

YouTube: https://youtu.be/NmCXGpstjZM

With Ukraine’s military using arms as quickly as the US supplies them, there are growing questions about when the US will start running low. Especially concerning is the US supply of "energetic materials" and its ability to produce more.

Energetic materials are the materials that help determine the range, size, and explosive power of munitions like missiles, rockets, and artillery, which are keys to controlling the battlefield. Energetics come in three main forms: explosives, propellants, and pyrotechnics. And better energetics offer major advantages.

For example, they increase the range of missiles so adversaries may be targeted from safer distances. They also improve effectiveness, increasing the likelihood of destroying on a first attempt a target. Additionally, improved energetics allow building smaller munitions as effective as larger ones.

Unfortunately, the United States has not significantly invested in energetics since the Cold War ended, and its supply chain for a broad range of energetics is in a state of disrepair.

First, China is the sole or primary supplier for a number of critical energetic materials. Additionally, the US munitions supply chain suffers from a fearfully high number of single points of failure: 98% of suppliers in the production chain rely on a single or sole source. Finally, when the US produces energetics, it often does so in older government facilities using old, 20th century equipment and technology.

Experts also fear the United States has fallen behind deploying advanced energetics. Russia and China currently employ the most recent and powerful non-nuclear explosive in the world; CL-20, a nitroamine explosive. Alternatively, the US still relies on many of the same materials it used during World War II. The US also is badly behind in energetics research. For example, over the past five years, Chinese scientists have published nearly seven times as many papers discussing energetic materials as have US scientists.

Based on the above, experts recommend a number of steps. First, they recommend national security leaders recognize the importance of energetics and clearly signal a demand for new energetic compounds. Second, they recommend the US rebuild its domestic capacity to produce energetics and develop supply chains that do not rely on foreign nations or upon a few outdated facilities. Finally, they suggest Congress increase funding for the research and development of energetics making new breakthroughs using artificial intelligence and machine learning.

 

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Wednesday, April 20, 2022

Featured Post: Is Wall Street Hoarding Climate Data?

YouTube: https://youtu.be/0xRMBXYfTdA

Climate change isn't just a safety and environmental issue; it's also a financial one, since a rise in storms, floods, tornadoes, droughts, and wildfires will inevitably have a financial impact.

As a result, financial corporations and Wall Street are paying more attention to climate intelligence.

Unfortunately, as larger corporations obtain exclusive access to climate intelligence, regular residents will have less access to knowledge about the risks they face in their communities.

Experts are concerned about this. They are concerned that the consolidation of climate intelligence may result in asymmetry, or unequal access to information.

If you're a wealthy investor or a huge real estate company, you may pay to learn which companies or places will be the most resilient to climate change and make informed investment decisions.

Ordinary homeowners, on the other hand, may be left with fewer no-cost or low-cost options for learning more about their growing risk exposure.

The concerns of experts are not imaginary. Companies specializing in predicting physical climate hazards are being scooped up by big rating agencies like Moody's and S&P Global, as well as other financial institutions.

The Climate Service, a climate risk consultancy service, recently was purchased by S&P marking the latest consolidation in the climate intelligence industry.

Physical climate risks, such as severe temperatures, coastal flooding, and water stress, are analyzed by the Climate Service, as are so-called transition risks, such as changing legislative and market conditions.

This has various advantages. Climate risk analysis including any systemic threats to the financial system due to climate change is being incorporated into the ratings of corporations, sovereign funds, and more by major Wall Street organizations like Moody's and S&P.

Consumer activists, on the other hand, are concerned. They believe that knowledge about the financial risks posed by climate change should be freely accessible, not just to Wall Street insiders.

Unfortunately, they see the opposite, with people with a lot of money getting all the latest climate data analytics so that they can make the best decisions first. Asymmetrical, or unequal, access to data, they say, should not exist.

Some have responded by forming companies that supply consumers with property specific climate change related flood and wildfire risk information. Their hope is equal access for all to important information.

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Tuesday, April 19, 2022

Featured Post: Concerns as US Weapons Stockpiles Deplete

YouTube: https://youtu.be/N4rPnGxAGL0

Since the beginning of Russia's invasion of Ukraine, the United States has contributed $2.6 billion in security aid to Ukrainian forces, the majority of which has come from US military stockpiles. The seventh such drawdown package, worth $800 million, was unveiled last week.

According to the Department of Defense, more than 1,400 Stinger anti-aircraft systems, 5,500 Javelin anti-armor systems, 700 Switchblade tactical unmanned aerial systems, 7,000 small arms, 50 million rounds of ammunition, 18 155mm Howitzers with 40,000 155mm artillery rounds, 16 Mi-17 helicopters, hundreds of armored Humvees, and 200 M113 Armored Personnel Carriers have been delivered as of April 14. According to one estimate, the US military has given around one-third of its Javelin anti-tank missiles to Ukraine, leaving 20,000 to 25,000 remaining.

As a result, questions about the military readiness of the United States have arisen. While the Pentagon claims that none of the military's stocks are critically low enough to jeopardize readiness, they did organize a conference with officials from eight major defense companies to explore industry recommendations to speed up manufacturing of existing systems. The focus of the meeting was on addressing US needs as well as measures to increase production capacity for weapons and equipment that can be exported quickly, deployed with minimal training, and proven successful on the battlefield.

Regrettably, industry representatives claim that their budgets, allocations, needs, and procurement systems are all locked in peacetime mode. They also expect to confront challenges with starting up production lines, labor, supply chain issues, parts and machine tool obsolescence, time restrictions for certifying new suppliers and technical approaches, as well as time waiting for budgets and contractual issues. Even in good times, the defense industrial base in the United States takes 18 month to 3 years to prepare for conflicts. And, unfortunately, according to the National Defense Industrial Association's "Vital Signs" survey of defense firms, the US defense industrial base and its ability to surge production capacity receives a failing grade.

As a result, unless the President invokes the Defense Production Act to prioritize component deliveries to arms manufacturers, ramping up from the US military's current buy of 1,000 Javelin anti-armor systems per year to maximum capacity of about 6,480 per year would take a year, and thoroughly replenishing US stocks would take 32 months.

Meanwhile, as the arms industry weighs investments in its production lines, the Pentagon has yet to release detailed and long-term spending plans for FY23. The industry is wary of the government’s ability to finalize those plans in a timely way noting the Department of Defense has a history of leaving the industry holding the bag when the money doesn’t show up from Congressional appropriators.

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Monday, April 18, 2022

Featured Post: Sweden and Finland NATO Membership - A Security Dilemma?

YouTube: https://youtu.be/FSr-TmvpYHk

As a result of Russia's invasion of Ukraine, Sweden and Finland have both shown an interest in joining NATO. In a few weeks, Finland, which shares an 800-mile border with Russia, will decide whether to join.

The decision to join NATO involves risks for both countries, and the two Scandinavian countries joining NATO may create more of a security dilemma than a solution.

When a weaker state attempts to strengthen its power in order to balance a stronger one, as the Scandinavians intend to do by joining NATO, a security dilemma arises. This is viewed as a threat by the stronger state, which responds in kind.

This helps to explain the Kremlin's reaction. Russia has officially said that a nuclear-free status for the Baltic region is no longer possible. Furthermore, Russia has described NATO as an instrument designed to provoke conflict.

As a result, Russia now may pursue two strategic options for balancing power against an expanding NATO. It may strive to strengthen its own power through an arms race, or it may seek to reduce the threat of an enhanced NATO by launching a preemptive strike on NATO with its military.

In fact, Russia's invasion of Ukraine may be viewed as a similar attempt to balance power given Ukraine's interest in NATO membership and a perceived security dilemma. First, Russia was not able to balance power through a conventional arms race. Second, Russia was not able to forge an alternative alliance that could help restore balance. Accordingly, Russia invaded Ukraine. And Russia's Ukraine invasion may be a horrific first step. Given the time and money involved in trying to match NATO’s superiority in non-nuclear forces, and given the perceived extra threat of a significantly enlarged NATO on his doorstep, Putin may consider a pre-emptive nuclear strike his only option.

Putin has made it clear that if faced with a threat he cannot address through other means, he will resort to nuclear weapons. In this regard, Russia's recent development of hypersonic cruise missiles could be a game-changer. Experts believe NATO has yet to build a system capable of reliably detecting hypersonic cruise missile trajectories and speeds. This could lead Putin to assume that a preemptive strike on Western command and control systems is achievable before they can respond. As a result, Russia may believe it has a higher chance of surviving a nuclear war than the west.

As a result, the debate over Finland and Sweden joining NATO may need to go beyond the obvious necessity to respond to a perceived Russian threat and expand to consider the long-term consequences of the security dilemma it may create, including the prospect of nuclear weapons.

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Sunday, April 17, 2022

Featured Post: Which Global Company Profits the Most from War?

YouTube: https://youtu.be/gJTBe3zasp8

Many of the world's armed conflicts occur in countries that lack the capability to manufacture advanced weaponry. The vast majority of these are in Africa and the Middle East. Conflicts in Nigeria and Ethiopia, as well as massive conflicts involving government change, are examples.

There are also countries that believe they need to be protected from such a battle, and several of them spend hundreds of millions of dollars on weapons each year. Saudi Arabia and Turkey are excellent examples. Several European countries, as well as Russia, provide some of these weapons, but the United States by far supplies the most.

Arms sales increased even as the COVID-19 outbreak devastated the world economy. According to the Stockholm International Peace Research Institute ('SIPRI'), the top 100 military contractors in the world sold $531 billion in weaponry and military services in 2020, up 1.3% from 2019.

Often companies, not the government, design and construct these weapons in several of these weapon-producing countries. Several of these businesses have grown to be among the world's largest, and several are publicly traded and have stock that trades on major stock exchanges.

A recent analysis examined SIPRI data from the year 2020 to see which corporation made the most money through war. SIPRI's research into arms and military services sales in 2020 was used to rank companies.

SIPRI provided data on arms and military services sales. Financial reports and business news releases provided revenue figures for the most recent fiscal year.

Lockheed Martin Corporation has remained at the top of the list of firms that profit the most from conflict, a position it has held since 2009. The following are the specifics. Total sales for the most recent fiscal year: $65.4 billion. Sales of arms and military services: $58.2 billion. Arms sales as percent of overall sales: 89%. From 2019 to 2020, Lockheed Martin's arms sales climbed 7.7%.

The company did experience a high-profile disaster in 2021 when the Air Force confirmed that the stealth fighter jets Lockheed Martin had spent over two decades developing did not fulfill criteria. The U.S. military had intended to replace its outdated F-16s, but Lockheed's attempts to develop new planes were continually delayed, and when they were ultimately built, they failed to reach the military's capability rating criterion.

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Saturday, April 16, 2022

Featured Post: How the Taliban’s Poppy Ban Will Change the Use and Flow of Illicit Drugs

YouTube: https://youtu.be/wWN2RAtUq8Q

The Taliban recently imposed an official ban on poppy farming, as well as the production, distribution, and use of other illicit substances. Many interpret the action as an attempt to improve the Taliban's international image.

The Taliban's latest restriction is likely to have far-reaching political, economic, and social consequences. Concerns have been raised regarding the economic impact on Afghan's economy, as well as on the vast supply chain for illegal drugs. Indeed, Afghanistan's heroin industry is expected to generate $1.8 billion to $2.7 billion in revenue for Afghanistan in 2021, according to the United Nations.

Some farmers are likely to continue to raise the plant. Despite the Taliban's prohibition, opium remains one of the only solid sources of income in a country plagued by wars spanning decades, and accounting for as much as 32% of the country's gross domestic product at one point.

Aside from the potentially disastrous domestic consequences, the collapse of Afghanistan's heroin trade could herald in a new era of drug trafficking in Europe and the United Kingdom, where most Afghan heroin is consumed.

So far, European countries have mostly avoided the destruction caused by the spread of fentanyl and other synthetic narcotics experienced in the United States and no one is quite sure why.

Some argue that the plentiful supply of high-purity heroin from Afghanistan has lessened the need to adulterate it with potent synthetic opioids. Others believe more conservative use of prescription pain medicines in Europe and the United Kingdom limits the spread of opioids. Many fear, however, outlawing heroin manufacture in Afghanistan, for whatever reason, will result in the influx of synthetic opioids that officials in Europe and the United Kingdom have long dreaded.

Alternatively, drug trafficking organizations from other heroin-producing countries, such as Colombia, Mexico, or Myanmar, could step in to fill the hole left by Afghan heroin's decrease.

While either of these scenarios is plausible, fentanyl's particular properties may lead to it becoming the drug of choice. It's easier to create, conceal, and use than other alternatives. To put it another way, fentanyl is perfectly adapted to destabilize and replace the heroin market in Europe and the United Kingdom.

Accordingly, given how dangerous fentanyl can be, experts believe it's critical that officials in Europe and the United Kingdom act quickly to identify the emergence of fentanyl in the drug supply and act quickly to mitigate its effects. Early detection systems such as analyzing municipal wastewater and improving forensic toxicology should be employed according to these experts. Additionally, they recommend education, enforcement, and treatment as part of the campaign to reduce the spread of fentanyl. And, of course, dialogue between European and UK officials and their American colleagues is encouraged, as, unfortunately, the United States has vast experience with synthetic opioids and can offer many painful lessons learned.

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Friday, April 15, 2022

US Arms Nigeria, Continuing its Global Weapons Flow

YouTube: https://youtu.be/CYFYKJ7rXHc

Despite worries about Nigeria's human rights record, the Biden administration has approved the purchase of modern attack helicopters worth roughly $1 billion as the country fights threats from criminal gangs and extremists in the north.

The sale of 24 Bell AH-1Z Viper helicopters and related equipment to Nigeria was recently approved by the US State Department. Guidance, night vision, and targeting systems, as well as engines and training support, are all included in the arms sale.

Following Secretary of State Blinken's November visit to Nigeria, the sale was completed. Blinken expressed concern about Nigeria's human rights record during the visit. However, at the time, Blinken made it clear that the US saw Nigeria as a partner in the fight against terrorism and Islamic extremism in West Africa and the Sahara Desert region of North Africa. Blinken stated that the US wants to expand its cooperation with Nigeria in those areas.

The State Department told Congress that the arms transfer will help the US achieve its foreign policy and national security goals by enhancing the security of a vital partner in Sub-Saharan Africa.

Officials in the United States believe that the agreement will better equip Nigeria to contribute to shared security goals, support regional stability, and improve interoperability with the United States and other Western allies.

Nevertheless, Nigeria's security services have long been accused of violating human rights in their operations, with those responsible frequently evading accountability.

For example, in October 2020, the Nigerian army opened fire on a crowd of hundreds protesting police brutality in the country's economic core, killing 11 people, and injuring many more. During his visit, Blinken stated that the US was eager to see the entire conclusions of an inquiry into the incident, and that the decision on arms sales to Nigeria would be based in part on the findings and whether those involved were held accountable.

Nigeria is under attack from armed gangs and extreme rebels who are collaborating in the country's unstable northwest, threatening to destabilize an already volatile region. Nigeria, Africa's most populous country with 206 million people, has been fighting unrest in the north, and many feel that a coalition between the two groups might exacerbate the issue.

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Thursday, April 14, 2022

Featured Post: US Adjusts Ukraine Arms Shipments for New Battlefield Topography

YouTube: https://youtu.be/J_WxXW6KjsI

The US, in a first since Russia's Ukraine invasion, will now give Ukraine high-power arms and ballistic capabilities that could result in a danger of escalation some previously had deemed too high.

The recently announced $800 million armament supply responds to direct requests from Ukraine, as well as in preparation for a new form of battle on the vast plains of southeast Ukraine. The territory borders Russia and, accordingly, provides Russia with natural military advantages.

The new arms shipment is the clearest indicator yet that the war in Ukraine is turning – and it includes the weapons Ukraine will need to stop a regrouped and resupplied Russian military after Russia's early losses and failures in the initial stages of the conflict.

In addition to radar equipment capable of tracking incoming fire and pinpointing its origin, the new armaments package includes 11 Mi-17 helicopters, 18 155 mm Howitzer cannons, and 300 additional Switchblade drones. Ukrainians will need extra training to be able to fully utilize these weapons and technologies.

This shipment differs from prior security aid in that it contains more sophisticated and heavy-duty armament than earlier shipments.

The weaponry supplies are geared to the type of warfare that is likely to occur in the Donbas region - fighting in open terrain instead of close combat as seen in the areas surrounding Ukraine's major cities. The terrain of the area is like that of Kansas, according to the US Pentagon - flatter and more open than other areas. Accordingly, the Pentagon expects Russian to achieve some of its wartime goals with tanks, long-range mortars, artillery, and rocket fire before sending ground forces.

Many of the weapons now being directed to Ukraine are heavier than in past shipments, making transportation across the nation more challenging. To date, Ukraine has gathered the weapons it has received so far from the United States and other nations near its western border before distributing them to forces across the country.

As a result, and in preparation, the Pentagon also recently hosted the CEOs of the military's eight top prime contractors to discuss how to arm Ukraine faster and continue to provide Ukraine with a continuing supply of armaments while maintaining US forces' readiness and their ability to support allies' defense.

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Wednesday, April 13, 2022

Featured Post: Don't Like Government or Taxes? Blame a Cereal!

YouTube: https://youtu.be/uNp-nhXGQlM

 According to a recent study, humanity's cultivation of cereal crops such as corn and wheat is what put the planet on the course to thousands of years of governance and taxation.

 According to the study, the rise of cereal harvests allowed crops to be more easily weighed and valued, with an elite group appropriating a portion of the surplus to create early forms of government.

 After a decade of investigation, this revelation calls into question prior beliefs that the general transition from hunter-gathering to farming was the trigger for the evolution of complex society.

 Alternatively, according to the new research, higher agricultural productivity isn't the only factor contributing to society's rise. Instead, grain and cereal crops were a major component in the establishment of taxes and ruling classes.

 The researchers used a variety of data sets, including how complex a society's level of hierarchy, how relatives of domesticated plans became geographically distributed, and whether land was suitable for cultivating crops. This allowed them to determine why, despite thousands of years of successful farming, well-functioning states did not emerge in some regions, while states that could tax and protect lives and property did emerge elsewhere.

 Cereals, which could be counted as they were produced and stored, were found to be easier to tax than fruit and vegetables, according to the study. Using empirical evidence taken from different data sets spanning millennia, the researchers also proved a causal association between cereal cultivation and the rise of hierarchical civilizations. Additionally, researchers found a surplus in other fruits and vegetables, such as roots and tubers, did not contribute to the formation of taxes and a government. Simply put, hierarchy was likely to arise only where the climate and topography encouraged the production and storage of cereals and grains.

 According to a key researcher, this new analysis shows the weaknesses in existing common wisdom and theory tying general improvements in land productivity and surplus to the establishment of hierarchy, both conceptually and empirically.

 Instead, hierarchical societies arose because of the shift from foraging to grain cultivation. The states in which this occurred enjoyed economic development by providing security, law and order, and by allowing for industrialization and the rise of social welfare.

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Tuesday, April 12, 2022

Featured Post: Russia Soars as Energy Prices Rise

YouTube: https://youtu.be/uRxtZinSd6M

Russia has posted its greatest current account surplus in nearly three decades, thanks to a jump in earnings from oil and gas exports. The increase in oil and gas exports coincided with a drop in imports because of sweeping sanctions over its Ukraine invasion.

The current account keeps track of a country's goods and service imports and exports, as well as payments to foreign investors and transfers like foreign aid. When the value of exports exceeds the value of imports, a country has a current account surplus.

In the first quarter of this year, Russia's current account surplus was $58.2 billion. This was more than double the $22.5 billion it brought in over the same period the previous year.

Russia's role as an energy producer accounts for the surplus. Despite sanctions and boycotts, Russia's energy exports will bring in approximately $321 million in 2022, up 36% from 2021. This is because oil prices have reached 14-year highs this year.

The European Union (EU), a major Russian energy customer, has not fully cut off Russia's energy exports. The EU agreed on an embargo on Russian coal last week. The EU is also considering an oil embargo, although natural gas has not been mentioned.

Since Russia invaded Ukraine, the EU has already paid $38 billion for Russian energy. This has contributed to a modest increase in Russia's foreign-exchange reserves.

High oil and gas prices have also aided the Kremlin in bolstering its emergency government reserves, with 273.4 billion rubles ($3.2 billion) from oil and gas sales.

Russia's bank accounts look to be holding intact despite broad Western sanctions. To fight new sanctions, Russia, as above, says it will add $3.2 billion in oil and gas earnings to its emergency reserves. Nevertheless, Russia's GDP is set to collapse by 11.2% in 2022, and the country's oil and gas revenues in March were 38% lower than the finance ministry had predicted.

 

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Sunday, April 10, 2022

Featured Post: Putin's Ukraine War Stresses and Harms US Farmers

YouTube: https://youtu.be/HBBCupdcKSc

For many farmers, the spring planting season has begun, and while agricultural prices are higher than they've been in years, the crisis in Ukraine is rapidly increasing costs here in the United States. Farmers are facing price increases across the board, including in gasoline and equipment, but especially in fertilizer.

In a regular year, Russia is the world's second largest producer of many important crop nutrients, and since the war has disrupted access to key ports, some American growers are having difficulty acquiring what the fertilizer they require. When they do manage to locate fertilizer, the costs are excessive.

Buying fertilizer is a major source of concern for corn and wheat farmers, as it accounts for more than a third of their operational expenditures.

According to one farmer and commissioner on the North Dakota Wheat Commission, average-sized farms in his state would spend $137,000 more on fertilizer this spring than they did last year. Furthermore, farmers are unlikely to benefit from higher commodity prices because they have little to sell following two years of severe drought.

Fertilizer costs had already tripled by 2021 due to a combination of pandemic-related variables, but they soared by more than 40% in the month following the start of hostilities in Ukraine, setting new highs.

Farmers' confidence in the agricultural industry has dropped to levels not seen since the early days of the epidemic since Russia invaded in late February.

Farmers are very concerned about the war's influence on their production expenses, according to researchers who questioned over 400 U.S. farmers every month for over six years. Farmers believe they will be worse off this year than they were in 2021; more than 90% believe their operational costs will increase by 20% or more this year, and that increased crop prices will not be enough to cushion the blow to their bottom line.

Many farmers are attempting to mitigate risk by moving some of their wheat acres to less fertilizer-intensive crops such as soybeans or peas.

Alternatively, one fifth-generation winter wheat farmer in Kansas bought fertilizer right after Russia's Ukraine invasion, thinking that prices would rise. While the farmer wishes for peace, he is concerned that the price of wheat may plummet before he gets an opportunity to sell his crops, which are now more expensive to raise.

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Saturday, April 9, 2022

Featured Post: How Putin and Russia's War Survive an Oil Embargo

YouTube: https://youtu.be/wFE70ofLOcM

If Russia stops supplying energy to Europe, some economists predict the country's economy will contract, but not crash. Sanction-free reserves, increasing oil prices, and a functioning propaganda machine, according to these economists, will cushion the hit to Russia's economy. According to these economists, Putin's threats to cut off gas supplies to the European Union become increasingly credible. They also predict that if Europe does impose a ban on Russian oil shipments, then Russia's inhumane war likely will continue for some time.

An energy embargo, whether imposed by Russia or imposed on Putin by Europe, appears to be a death blow for the country's economy on the surface. Due to Western sanctions, Russia's GDP is expected to collapse by as much as 15% this year.

However, Putin's budget and economy may be more durable. Last year, oil and gas brought in almost $9 trillion rubles ($125 billion) in government revenue. Europe accounted for almost 40% of exports in terms of value, meaning a loss of up to $50 billion in earnings for Moscow, or 15% of the previous year's number (the budget surplus was $7 billion at the time).

Higher energy prices will mitigate the negative consequences of such an oil embargo. While rerouting gas is difficult due to a lack of pipelines, oil can be moved elsewhere. And crude oil and oil products account for three-quarters of the value of Russia's energy exports. Last year, the average oil price was around $71 per barrel; today, it is around $108. As a result, Russia could reduce oil exports by around a third without losing income. After an embargo, prices are expected to climb even more, offsetting any discount Moscow would have to offer customers.

Of course, this year's predicted 15% drop in GDP would decimate tax revenues and increase Russia's budget deficit. However, Putin's propaganda operations will help, preparing the public for difficult times. This will allow Russia to cut domestic spending, such as the $20 billion spent on healthcare last year, while maintaining its $49 billion defense budget. Putin may even allow Russia's currency to depreciate much further. This would lower the cost of purchasing the country's exports, increasing the revenue generated by them — assuming, of course, a market remains.

Finally, Putin has approximately $160 billion in reserves that are not affected by Western sanctions, excluding approximately $140 billion in gold that Washington is attempting to prevent from being converted to currency. Using those and roughly $50 billion in a previously accumulated budget surplus would buy time until oil could be transferred to others, such as India or China, for example.

As a result, these analysts believe that an energy embargo would affect Russia's economy, but not significantly impair Putin's war efforts. Accordingly, the Kremlin's threat to shut off gas supplies to the West must be taken seriously. Alternatively, if Europe does impose a ban on Russian oil shipments, then Russia's inhumane war may certainly continue for some time.

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