FRIDAY NEWS ROUNDUP — SEPTEMBER 18, 2020
TikTok Showdown; Details on Navalny’s Poisoning & Recovery; Iranian Threats to U.S. Diplomats; Air Force Leadership & Innovation; Capitalism for the Climate
Happy Friday from Washington, DC. Only 46 days remain until the presidential election. Conventional wisdom is that most voters do not pay much attention to the race until after Labor Day, which is an important counterpoint to those of us who live and breathe in politics. That conventional wisdom was formed in an era of lower partisanship, before the perma-campaigns that have become commonplace. Indeed, according to a poll released this week by The Economist and YouGov, more than 70% of respondents reported paying “some” or “a lot” of attention to the race already.
In addition to the annual tradition of celebrating the franchise, we at CSPC got to celebrate another annual milestone this week: the beginning of our Fellows Conference. Every year, we convene dozens of incredibly bright students from colleges and universities across the country and around the world to talk about how to be effective members of a free society and learn about the most pressing issues of the day from leaders in those fields. We are reworking the program slightly to try and make it as valuable for them as possible considering that we are not able to bring them together in Washington this fall. This is the 50th year of the program and we remain incredibly proud of these students.
This week, we also hosted a transpacific parliamentary dialogue between U.S. Members of Congress and parliamentarians from the Japanese Diet, as part of a symposium to better explore avenues for security, economic, and technology cooperation and partnership to strengthen the U.S.-Japan alliance. This symposium continues to inform our research into U.S. and allied technology and innovation leadership.
In the media this week, CSPC Senior Fellow James Kitfield profiled the heroic story of the most recent Medal of Honor recipient Sgt. Maj. Thomas Patrick Payne. In RealClearDefense, Ethan discussed how the needs of the warfighter on the ground should be considered as the Pentagon plans the high-tech battlefield. Joshua reviewed Blood and Oil, the latest work analyzing the rise of Crown Prince Mohammad Bin Salman. Finally, Dan broke down the three things keeping President Trump and Vice President Biden awake at night in the FarrCast podcast covering U.S. politics and financial markets.
In this week’s roundup, Dan covers the future of the popular social media app TikTok, and what it means for U.S.-China relations and technology leadership. Joshua covers the latest on the recovery of Russian opposition leader Alexi Navalny from Novichok poisoning, as well as the latest on Iran targeting the U.S. Ambassador to South Africa. Ethan looks at how the historic leadership transformation in the U.S. Air Force is taking place at the same time the service tries to reshape how it develops the aircraft of the future. Michael digs into a report from an advisory body to the Commodities Future Trading Commission and how, deep in the bureaucracy, it lays out the initial steps of a capitalist’s solution to climate change. As always, we wrap with news you may have missed. This week, please welcome the beginning of the contributions of our perspicacious fall interns: Allie, Eric, Oscar, and Tom!
TikTok-ing Closer to a Deal?
Dan Mahaffee
Of the many deadlines this month — from ballot applications to government shutdowns — a key one for those watching the world of Geotech has been the September 20th deadline for the hit social media app TikTok to address concerns about its ties to China or face a shut down in the United States. The initial outline of a solution is coming into focus with Oracle and Walmart taking minority stakes in the company, a U.S. IPO to follow, restrictions on users’ data moving overseas, and U.S. administration approval of the new entity’s board and security oversight head.
Still, there are significant questions that remain given the shifting details of the week, differing opinions within the administration on the deal, and, finally, the need for President Trump to sign off on any final deal. This alone focuses on the U.S. side, and doesn’t even begin to scratch the surface on China’s review of the deal — not only out of concerns regarding TikTok’s, and its parent ByteDance’s, intellectual property and data management, but also out of some sense of reciprocity given the U.S. process. It’s not wholly out of the realm of possibility that since President Trump himself is signing off on the deal that face would require that General Secretary Xi also give his thumbs up or down on this. All these complications make Sunday’s deadline loom ever closer — as the White House now promises to halt downloads of the app.
For those unburdened by the knowledge of the latest trends in social media, TikTok has taken off in popularity over the past year, especially with younger Americans. By creating short videos and using the app interface to edit, splice, and add music and effects, shared videos have gone viral not only within TikTok, but also across other social media networks. At the heart of TikTok, there is its underlying algorithm and source code, which ByteDance has indicated is not for sale. As a source close to ByteDance’s board reportedly said, “the car can be sold, but not the engine.” This reflects not only the importance of the underlying code to how TikTok analyzes users’ behavior and provides recommendations, but also China’s announcement that export control policies would include source codes and algorithms like those powering TikTok. It is the algorithm that has been key to TikTok’s success and promoting the virality of certain videos and ensuring that users are always returning for content they’ll like. The power of such an algorithm is what brought a range of suitors — like Microsoft, Walmart, and Oracle — to explore some role in acquiring or partnering with TikTok.
In terms of the U.S.-China competition, the resolution of the TikTok situation will set some important precedents. Some can say that there are rubicons being crossed in terms of U.S. government interference in the private sector — but that requires a thoughtful conversation about the U.S. and our partners apply free enterprise, the rule of law, and the powers of government to the challenges of the technology competition with competitors where the line between state power and corporate power is blurred if not non-existent. We already could see the initial outlines of this ranging from measures like forcing Chinese divestment from dating app Grindr over concerns about blackmail or the back-and-forth over firms like Huawei and ZTE. What the United States cannot do, as we have often said, is to try to “out-China, China,” yet we must be clear eyed about China’s tech competition.
Another key aspect of this is considerations for data management. In evaluating the shape of the ultimate deal, users’ data protection is paramount. After all, it was ostensibly the goal of the U.S. government to ensure that users would be protected. What remains to be seen is how the partnership between ByteDance, TikTok, and Oracle/Walmart manages the flow of data, locates user data from the U.S. and other allies, and what legal structures cover government access to user data. Prioritizing that will be key to countering any criticism that this deal is moving forward because of mutual affinity between Oracle and the Trump administration or that this deadline and “dealmaking” are election-year, high-tech “security theater”.
Finally, there is the broader discussion about our own approach to social media, data management, and how we consider the societal impact of these technologies. The free flow of information and communication facilitated by social media has had world-changing, transformative benefits. Yet, we also can acknowledge that social media and the data economy are unlocking vast amounts of information about ourselves, shaping what we see and how we think, and often doing so in ways that are addictive. Those are the broader societal questions, ones often without clear policy solutions or precedents, that we must consider, regardless of whether the data is being managed in Beijing or the Bay Area.
Navalny Emerges from a Coma & the Absence of Russian Irony
Joshua C. Huminski
Alexei Navalny, the Russian opposition figure, emerged from a coma and is no longer on a ventilator, having recovered from what is believed to be Novichok poisoning. While he remains in a hospital in Germany, doctors are confident of his long-term recovery. In a touch of dark humor, Navalny posted “I can still do almost nothing, but yesterday I could breathe the entire day by myself,” adding “I recommend it.”
His staff now believes he was poisoned via a water bottle at his hotel room prior to departing Tomsk for Moscow. In a video posted to Instagram, aides are seen gathering things from his hotel room for later investigation. According to thepost, “a German laboratory found traces of Novichok precisely on the bottle of water from the Tomsk hotel room.”
Navalny was in Tomsk to advocate for “smart voting” in the regional elections, which took place after his poisoning. President Vladimir Putin’s United Russia party won all 18 gubernatorial races, with 13 of the posts receiving over 70% of the votes cast. This raised concerns, likely not unfounded, of vote rigging or manipulation. That said, opposition candidates did not go entirely quiet into the night. In Tomsk, United Russia was expected to win just 11 seats out of the 37-seat city chamber, down from 21, and in Novosibirsk, the party’s 33 seats fell to 22 out of 50.
With no sense of irony, the head of Russia’s foreign intelligence service (SVR), Sergei Naryshkin told RIA Novosti that all stocks of Novichok had been destroyed in accordance with the protocols of the Organization for the Prohibition of Chemical Weapons (OPCW). It should be noted that Russia had attempted to hack the OPCW and other facilities in the Netherlands in response to the investigation into the poisoning of Sergei Skripal, who was also dosed with a Novichok variant.
Perhaps even more ironic, reports are circulating that Andrey Lugovoy, a Russian politician and businessman wanted for the poisoning of former FSB officer, Alexander Litvinenko, was appointed to the committee investigating the poisoning of Navalny. The United Kingdom has charged Logovoy with Litvinenko’s murder and has sought his extradition, which Moscow has rejected.
Iran Targeting U.S. Ambassador to South Africa
Joshua C. Huminski
This week, a report emerged that Iran was considering targeting the U.S. ambassador to South Africa, Lana Marks, in retaliation for the killing of Qassem Soleimani. In January, the United States assassinated Soleimani, the head of the Quds Force — the foreign operations arm of the Islamic Revolutionary Guard Corps (IRGC).
Unidentified U.S. officials said that the government was aware of the plot as early as this spring, but the reporting increased in recent weeks. Under the “duty to warn” the Intelligence Community is obligated to provide a potential victim if intelligence indicates that their life may be in jeopardy. According to Politico, the House and Senate intelligence committees had not yet been briefed on the intelligence, but it had circulated on the CIA World Intelligence Review (WIRe).
Immediately following the strike on Soleimani, Iran launched a series of ballistic missile strikes against U.S. targets in Iraq. Later, in a tragic mistake, Iranian air defense shot down Ukraine International Airlines Flight 752. Tehran blamed the downing on a “misaligned radar” after first denying any responsibility for the crash.
Since the Soleimani strike, Tehran has been notably quiet leaving many to speculate as to when, not if, the Iranian regime would retaliate against the United States. To be sure, rocket attacks continued against the U.S. embassy in Baghdad, but while these may have been enabled or supported by Tehran, that is unlikely to be the extent of their response.
The disclosure of the intelligence, beyond the “duty to warn” could have been a signal from the United States that it was aware of Iran’s efforts and an attempt to dissuade them from acting. The likelihood of this being successful is, however, slim. Iran’s history of extraterritorial activities is extensive. In 2011, Iranian agents plotted to assassinate the Ambassador to the United States from Saudi Arabia at his favorite restaurant in Washington D.C., Café Milano. The plot was overseen by the now deceased Soleimani.
New USAF Chief of Staff: Putting the “e” in ‘Speed’
Ethan Brown
A monumental and historical change occurred in the United States Air Force in recent weeks, when General David Goldfein stepped down as Chief of Staff of the Air Force for successor General Charles “CQ” Brown — the first African-American to ever hold the post of service chief or lead any of the service branches. The succession of Gen. Goldfein is significant for a variety of reasons — the first being that Goldfein presided over a prolific and successful transition for the Air Force, one that saw a departure from the computer-based training, checklists, and readiness training protocols that dominated the early years of my Air Force career, to the lethality based, global dominance mindset oriented against power competitors and rivals.
I had the distinct pleasure of meeting Gen. Goldfein soon after he took over the service in 2016. I was a rapidly grizzling Technical Sergeant attending a training course, when he came to Hurlburt Field, Florida to participate in the Special Tactics Air Commando memorial dedication. Soon after we had all completed memorial push-ups, I had the privilege of standing directly at his side as we all took a shot of Macallan 12 to commemorate fallen Air Commandos. In a classy display, Gen. Goldfein still sends a bottle of the single-malt to the surviving Pararescue team members who recovered a Lt. Col. David Goldfein from behind enemy lines in Serbia.
The point being, Gen. Goldfein is as genuine and legitimate of a leader as the Air Force could ever produce, and he has managed the most powerful force on earth in collaborative lockstep with Secretaries Heather Wilson, Barbara Barrett, and Chief Master Sergeant of the Air Force Kaleth Wright. He was certainly an upgrade at a time when morale was “pretty darn good” (spoiler, it wasn’t). His legacy cemented, the time for leadership turnover was inevitable, and an exciting new chapter in Air Force history has begun.
Soon after taking the reins, Gen. Brown has offered a simple message this week regarding the near term strategy, this new chapter, of his branch — “I want to go fast”. Not a man to mince words. While I never had the pleasure of crossing his path, his reputation and extensive career of combat leadership is well known, and his many pilot hours pointing his aircraft towards the ground (a Close Air Support moniker for aircrews) infers a stolid credibility for a joint-emphasized service.
A legacy of speed
“I want to go fast” indeed — sixth generation fighter fast. The current pole-position for fighter technology is the fifth-generation of aircraft: the coalition F-35, China’s J-31, and the Russian Su-57. This space has covered the challengesand certain limitations for some of these fifth-gen aircraft, under the premise that the capabilities of the Joint Strike Fighter and its derivatives haven’t been fully realized. It would appear that Gen. Brown and the Air Force are not waiting for the rest of us to wrap our heads around the fifth-gen inventory, having already moved to the sixth: the eT-7A “Redhawk”. Dr. Will Roper, the Air Force acquisitions Czar, broke the news this week in a Air Force Association Space & Cyber virtual conference, saying it was part of the Pentagons Next Generation Air Dominance program.
We’ve referred to speed as the early running head for Gen. Brown’s taking over the Air Force, and no verb may serve better. What many likely do not know about the 5th-generation aircraft in our inventory, is their procurement began in 1999, with the first operational model of the F-22 not rolling out until 2005. The development of the experimental stealth technology was a three-decade ordeal with roots in the F-117 program, before eventually maturing to its 5th-gen haunts. For additional reference and comparison, consider that the B-52 “buff” has now seen seven decades of service, and is eyeing an engine upgrade to remain in the fleet for continued strategic deterrence.
Of this new eT-7A Redhawk, the lifecycle from concept to prototype flight was reportedly 36 months, according to an official Air Force release. That is fast. As in, Tony Stark creates a new Iron Man-suit-within-the-movies-timeline kind of fast.
The ‘e’ isn’t actually for ‘speed’
Traditionally, the ‘E’ designator for defense department aircraft is utilized when identifying electronic warfare aircraft (EC-130, EA-18G)- those built for defeating signals activity, collection, or countering surface to air threats. These systems are equipped with special sensors and equipment that operate on the signals spectrum of warfighting. Despite my best efforts and concerted study of the field, I only sparingly employed these assets during my career as a SOF JTAC, and it is much more complicated than this space can explain. For the purposes of this article, the use of ‘E’ as an aircraft designation has caused some confusion with the naming of the eT-7A, explored in the following.
The new sixth-gen aircraft is revolutionary in its design and early testing, owing to the use of digital engineering to design, proof, and arrive at an operational test prototype. As succinctly as possible, digital engineering is the use of a virtual domain to craft the shape, physics, and characteristics of a system/body/platform against simulated environmentals like pressure, atmosphere, strain and external forces. The eT-7A was literally created in a virtual lab, vetted against known operational conditions, and once proven viable, the literal airplane was built around already-resolved physical problems.
The lower-case ‘e’ is intended to identify aircraft built under this digital engineering model, as “experimental” systems. Air Force Secretary Barbara Barrett emphasized the use of digital engineering as a means to “inspire companies to embrace the possibilities by digital engineering”, further adding “the e-plane [and e-sat] will join them (previous test aircraft models and systems) in making history, and ensuring airmen and space professionals have modern tools to protect our nation.” Contrasting traditional methods of aircraft development and testing, digital engineering allows the manufacturer — e.g. Lockheed-Martin or in this case, Boeing — to conduct its design in direct, unconstrained partnership with DoD engineers such as pilots, radar technicians, and weapons experts on a virtual domain. Inputs, trials, and change configuration is accomplished in the virtual domain, in real time, with immediate feedback for all stakeholders. Simply, this is Microsoft onenote© collaboration taken to the penultimate technical extreme.
The Air Force will continue to face some of the most extreme challenges in the era of great powers competition, and the uncertainty of new leadership is always a time of cautious interest among the ranks. But with the eT-7A announcement which unveiled these incredible and boundary-pushing modus operandi, things in the Air Force offer some promise for an even more exhilarating future.
#aimhigh
It Is Time to Leverage Finance to Combat Climate Change
Michael Stecher
We all learned in school that the Western Roman Empire fell in 476 CE. If you found yourself in Italy in the early sixth century, however, and asked people how that had affected their lives, they would look at you quizzically. They still spoke Latin, wore the same clothes as their grandparents, and considered themselves to be Romans. The idea of the “Fall of the Western Empire” was probably invented by the Emperor Justinian in the 530s and the lived experience of the people in the region did not change much until after the bubonic plague outbreak in the 540s.
All of this is to say that the historians among our progeny will determine when the “Anthropogenic Climate Change Era” started and they will probably decide that we have been living in it for decades. The Kyoto Protocol is already 28 years old and the problem predates the search for solutions. The implementations of those solutions thus far have been underwhelming and the work that still needs to be done to prevent catastrophic outcomes is daunting. A new report published earlier this month by the Commodities Futures Trading Commission — the primary regulator of financial derivatives in the United States — shows a valuable way forward for bringing the power of the financial markets to bear on the problem.
This document, “Managing Climate Risk in the U.S. Financial System,” is not an official report from the CFTC; it is, rather, a report from the Climate-Related Market Risk Subcommittee of CFTC’s Market Risk Advisory Committee. It will not change any policies that affect capital markets participants right now. You could be forgiven for thinking that this is another example of the climate-industrial complex producing a document that will only be of interest to future historians studying at the Undersea University of Thalassa-Harvard, but you would be wrong.
The commentary around why countries have failed to live up to their climate pledges have tended towards the logically circular. They “lack the political will,” we are often told. How do we know they lack the political will? Because they have not done it. If they had done it, they would have demonstrated that they do not lack the political will. If only countries wanted it hard enough, they could have the political will, and we would know it because they would accomplish things!
But countries are abstractions that do not have wants. They certainly are not endowed with magic rings that allow them to alter the fabric of the universe through the physical manifestation of their willpower (hat tip to Vox’s Matt Yglesias for his “Green Lantern Theory of Geopolitics”). Government policies reflect the interests of their stakeholders. Stakeholders who are interested in a particular outcome — for example minimizing the risk posed to our way of life by warmer temperatures that will cause flooding and other disasters, reduce crop yields, and drive human displacement — should identify the policy tools that will best allow them to affect that outcome. The tools that have the greatest positive effect with the least disruption, are the ones that should be targeted first.
That is where this report is valuable. The capital markets are jaw-droppingly enormous: according to Bloomberg, the total amount of green and sustainable debt sales totaled around $460 billion last year, but that is just a tiny fraction of the total potential size of the market. Getting the capital markets into the game would transform the fight against climate change, but, outside of a few cases, that has not really happened yet. Those niche cases are important, especially in wind and solar energy and battery storage, but there are many other areas where private investment can make a difference.
One of the biggest problems identified in this report is that the structure of the capital markets is indifferent to morals. Fund managers and advisors have a fiduciary duty to seek the maximum economic returns for investors without regard for other concerns. An advisor that cuts, for example, oil and gas exploration out of their portfolios may be violating their ethical duty to their clients, even as they fulfil their moral duty to advance the cause of humanity. So-called Environmental, Social, and Governance (ESG) funds avoid this dilemma by promising to invest according to a set of principles, but this has its own problems. Most institutional investors have the same fiduciary guidelines and any strategy that relies on the end-investor to opt-in will always be challenging. Removing these roadblocks has to be a top priority.
The report goes on at some length about ways to ease these roadblocks down: increasing transparency and comparability in reporting across firms; requiring firms to make public statements about their climate change risk management policies; and encouraging public or quasi-public organizations to set common standards that can be easily explained to investors. None of it will really be plausible, however, without an economy-wide effort to put a cost on carbon emissions. The capital markets can be indifferent to morals on the question of climate change because the cost of carbon emissions are born diffusely by everyone, rather than by the organizations that emit them.
Internalizing that externality remains the public policy goal that makes all of this possible. Without it, efforts to decarbonize, clean, or green the economy will be starved for resources and face built-in opposition from the risk- and change-averse. It is also, increasingly, an opinion shared by groups that have long been skeptical of government intervention on climate issues, like the Business Roundtable, the one of the largest trade organizations in Washington and a major lobbyer on behalf of pro-business causes.
Establishing a carbon price and setting up a means for emitters to pay it without creating excess compliance costs is a real challenge. Getting it right, however, will allow the full force of the capitalist system — the largest engine of human improvement in history — to come to bear on a problem of epochal proportions. Pulling the lever in November for people who are willing to implement such a plan is also pretty important.
News You May Have Missed
Israel to Impose Second National Lockdown Amidst COVID Surge
Eric Dai
A second national lockdown in Israel is set to begin on Friday and will last for at least three weeks, the first instance of a country imposing a second national lockdown during the COVID-19 pandemic. Israel is currently in the midst of a new COVID surge, with more than 3,000 cases being reported daily over the past two weeks. The new lockdown measures will prohibit gatherings of more than 20 people, close schools, and ban Israelis from traveling more than 500 meters from their homes, with the exception of going to work. The lockdown will extend over the Jewish New Year and several holy days, which are traditionally observed with family gatherings and prayer in synagogue.
Scientific American Endorses Biden, Backing a Presidential Candidate for First Time in 175-Year History
Eric Dai
The October issue of Scientific American magazine will contain a presidential endorsement for Joe Biden, the first time the magazine has backed a presidential candidate in its 175 year-history. In the endorsement — which is as much a denunciation of Trump as it is an endorsement for Biden — the magazine argues that President Trump “rejects evidence and science” and has “badly damaged the US and its people,” criticizing the Trump Administration’s handling of the COVID-19 pandemic, inaction in the face of climate change, and attempts to cut funding for various scientific agencies, such as the CDC and the NIH.
India Accuses China of Assembling Communications Network on Disputed Border
Thomas Triedman
Just days after Chinese and Indian officials announced a plan to defuse tensions after an armed standoff along their border, intelligence experts, having observed suspicious trenches running across the hilltops, accused China of laying down a network of fiber optic cables near the Spanggur Gap, where the recent firefight reportedly took place. These cables would enable Chinese troops to communicate securely, quickly, and extensively with their military bases, further entrenching the Chinese military in the Western Himalayas. The cables are only the latest additions to the decades-long build-up of military and other infrastructure around the Line of Actual Control.
NASA Is Looking for Moon Miners
Oscar Bellsolell
NASA has launched a call for private companies to submit proposals to go to the moon and collect dust and rocks from the lunar surface. Once a company is capable of retrieving lunar soil, the space agency will buy the samples to investigate technologies that will allow sustainable extended presence on both the moon and Mars. The mining project is part of the Artemis program, which will bring a crewed mission to the moon by 2024. As NASA Administrator Jim Bridenstine announced, the development of in-situ resources utilization (ISRU) techniques on the moon is a necessary step before undertaking the farther journey to Mars.
Mexican President Lopez Obrador Proposes Referendum on Prosecuting Ex-Presidents
Alexandra Hall
Mexican President Andres Manuel Lopez Obrador has recently proposed a referendum on whether to prosecute his unpopular predecessors. On Tuesday, September 15, he delivered this idea to the Senate, asking for this plebiscite to be held alongside midterm elections next June. This decision has arisen from decades of political corruption alongside increases in violence and concentration of wealth in Mexico. Lopez Obrador has a track record of passing over controversial decisions to the people, and long-held beliefs that there must be something done about the corrupt leaders of Mexico’s past.
Now Boarding at Gate B7 Flight 000 Non-Stop to Nowhere
Do you miss traveling? Me too. But be honest, is what you miss about travel really going to new places, encountering new cultures and ideas, and sampling new cuisines? Is it perhaps instead standing in long lines, being manhandled by security officers, and eating reheated chicken in a pressurized aluminum tube? If that sounds good to you, you are in luck (if you live in Singapore)! Singapore Airlines has announced that they are interested in launching flights to nowhere. Passengers would board a plane at the airport in Singapore, fly around for three hours, and land at the same airport in Singapore. The airline might offer packages that would allow these “tourists” to also book hotels and restaurants in the city-state where they already live. Coach-class tickets are expected to cost around $300, but business class is the real steal at $600! No word yet on checked luggage fees, in case you need to carry more than 50 pounds worth of stuff from your apartment back to your apartment.
The views of authors are their own and not that of CSPC.