Modlin Global Analysis Newsletter

Welcome. Thank you for joining us for this edition of the Modlin Global Analysis Podcast. We regularly talk about international affairs as well as economics and politics, and it's always helpful to notice how much these themes often interact with each other. And we'll continue in that discussion throughout this year. And in all these episodes, but it is worth noting, specifically, we're going to go back in history and talk about Watergate and this interaction of international politics and the Watergate scandal that we're many of us are familiar with. I'm glad to be joined. In by Dan Modlin this week, we're going to twist the tables and I'll be asking and Dan questions. And it's particularly interesting because throughout his life he has been fascinated by the Watergate scandal. And as a student, he did extensive research on this question and his revisited—frequent times. So Dan, thank you for joining us on this. And our first question to you is although Watergate was generally considered to be a domestic story doesn't it have some international politics connections to it?

Dan

Yes, thank you, Kevin. It's something a lot of people don't realize that the roots of the whole Watergate scandal really go back to the Pentagon Papers incident in which a Rand analyst named Daniel Ellsberg was accused of leaking documents to the New York Times that became known as the. Pentagon Papers and these were internal documents from the Defense Department. Which had analyzed some of the mistakes made during the Kennedy and Johnson administrations in the war in Vietnam, Richard Nixon's name was not in the Pentagon Papers, but he was very concerned about the leaks. As it turns out, he and Henry Kissinger in that time were involved in some of the diplomacy that. Would later lead to. Opening some of the doors with China and they were very concerned that some of the information from the Pentagon Papers, even some of the documents that hadn't been released yet. Referred to some surveillance flights that the US had carried out over China and they were concerned that that could impede their progress in talking with Chinese leaders. So there was very definitely an international aspect to this. Another interesting side light of this was that Ellsberg, the person who's widely recognized as the person who leaked the Pentagon Papers, had actually had a mentor named Henry Kissinger in his past. Going to Garrett M Graff in his very interesting book, Watergate and New History, Kissinger was concerned that if that former student would continue to leak documents, that would reflect badly on him, and it would also obviously have an impact on some of their diplomacy. But according to graph. Kissinger then encouraged Nixon to take a hard stand on. Leaks and that hard stand was what led directly to some of the corruption and illegal activity that became known as the Watergate scandal.

Kevin

You know, this is fascinating because, well, you've spent a significant amount of time thinking about Watergate. I've been interested in the Cold War era of this same time period. And I've read biographies on Kissinger. And this was a very important mark both in the history of what we would know with Watergate, but also the relationship that Kissinger has throughout the administration. And this feeding of basically paranoia that comes from that and we see. The Nixon and Kissinger bond kind of strengthened through this paranoia, right? So they have a greater trust basically through developing distrust of others. And just as I mentioned earlier, you've had these interesting stories that you've shared with me throughout my life. Of being at the Watergate hearings, and in fact, you were there the day Attorney General John Mitchell. So I know all of us would enjoy hearing some of the macro pieces that you've heard, as well as what was it like being there?

Dan

It was a very interesting experience and to put it kind of in context, I don't know of anything that happens currently that had quite the attentional center. Watergate hearings had all three TV networks were devoting the entire day to carrying the testimony at those hearing. But I did have the opportunity. It's it's kind of a strange way I I got the. Chance but I. Did get to go to hear the first day, John Mitchell testified Attorney General John Mitchell. As it happened, I was a young agriculture reporter and my father worked for a TV affiliate in Indianapolis who had a Stringer. On the hill. And as it turned out, that Stringer wasn't going to be going to the hearing that day, so he loaned me his press pass. So I actually got to go in and sit through the entire day's hearings. And it was it was amazing. Author Norman Mailer was there. There were rumors that John Lennon was going to be there. I never saw him. But I would have.

Kevin

I'm sure I'm sure if he.

Dan

Was there when? You would know him.

Dan

I would. Have noticed him, but it was. It was an amazing activity and really that particular day, Mitchell. Was very effective at not answering questions, and there wasn't anything that earth shattering that that came out the particular day I was there, but it was it was an amazing experience to be able to witness all all of this going on in, in the caucus room there and and that the Senate was dealing with it was it was really. It was like watching history being made.

Kevin

And that caucus room? That meeting room is one that continuously they go to for major hearings because of the size and the media capacity they have for that room. So Garrett Graff, as you mentioned, has written a book that's garnered a lot of attention in recent years on Watergate, a new history. What are some of these key findings that you have from this both? In domestic politics, particularly, but maybe anything international.

Dan

As well, I think I think Graff did an excellent job of researching this story and a lot of the information that I found new was he went back and dug up the early abuses, the plans to bug offices. And again, a lot of this started with the idea of stopping leaks, but it it quickly. Grew to illegal activity and the graph lays that out and then points out that there was much more to the story than just the break in at the Democratic headquarters. He's also very quick to point out that a lot of the information that that came out through the Washington Post, again through reporters, Bob Woodward and Carl Bernstein. A lot of that information came from their source at the time. Was just known as. Deep-Throat, but that it was later revealed that that was Mark Felt and graph points out that a lot of the information that felt provided to those reporters was really pretty self-serving in that felt was hoping to take over the head position at the FBI after the death of J Edgar Hoover and so. Although in the movie all the president's men, we kind of get the in. To this interesting guy that meets reporters in the garage and he's trying to do something to help save the country from some kind of awful fate. In fact, he probably was giving them information that was helping him. At the same time, so that that was certainly one of the things and I think. Just in general Graff also was pretty tough on a couple of the key players in terms of how they work things around to try to make themselves look less culpable than they were. He was, I would say he was fairly tough on John Dean and Jeb Magruder. Both in terms of their role, their direct role in the cover up and their attempts to. Appear that they they really weren't as involved as they were.

Kevin

So it's interesting how self-interest came to play into these conversations. They're all by political actors that are thinking ahead about the environment they're in, seeking to move up in the world somehow created an institution that can internalize that and. Both see the challenges as well as some of the checks that can create throughout the Watergate committee proceedings, the White House tried to downplay investigations and call them a witch hunt. Did that strategy work?

Dan

Well, obviously in the end it did not work. For a while. It helped. Helped to keep the president in office, probably looking back on it, they were able to continually use this approach that the investigators were it was a witch hunt or that the American people didn't care about this investigation and that we needed to get back to the business of the country and that. Argument was used repeatedly during the last months of the Nixon administration, but eventually the what I believe what happened and looking back on it, some of the. Key and a mid level figures who were involved in the White House and in the campaign to reelect the president started to get plea deals and the information started to come out and it became more and more difficult to maintain that line that there really was nothing to the case. And then of course the revelation that there was a taping. System in the White House was a real game changer in terms of the evidence that the investigators could eventually locate.

Kevin

How were the investigators able to get into this inner circle of the White House?

Dan

I think that was really largely through the plea deals. I think these were a lot of these people were individuals who had certainly no criminal background, no criminal record. And as they began to feel more and more isolated as the conspiracy continued, some of those. Figures such as I mentioned John Dean and Jeb Magruder obtained plea arrangements to kind of absolve themselves of most of the charges against them in return for a relatively light sentence. And once those. Figures started to work with prosecutors. Really, the end was almost inevitable because of the information they provided implicated the higher ups, and so it was pretty much once the once the investigators were able to get people like Dean and Magruder to cooperate, I think it probably was just a. Matter of time.

Kevin

So one of the other things that I think is fascinating about this and it's something that you and I've talked about is how many individuals involved in this had no monetary gain from either their criminal activities or their advocacy or the support of. Of the break-ins, they didn't make money from this. They seemed to be either drawn to power or believing in something. I think it'd be interesting to think about how that dynamic intersects with these plea deals, right? So did these individuals who came to the plea deal. Was that some way they're accepting their role on this, but also maybe a shift in their optimism of what their purpose was.

Dan

Yeah, I think that's true. I I that's a good point. And as the plea deal started as we said, it's an interesting thing to note that. All the people who ended up with the plea deals, the people who did prison time for the Watergate break in with the exception of the people who actually broke into the building, most of them really did not do anything in terms of a physical act that would you would associate with the crime. Certainly, conspiracy cover up perjury, obstruction of justice or crimes. There's no doubt about that. But there really wasn't personal gain for most of them, as you said. Interestingly enough, Spiro Agnew, the vice president, who had to step down in 1973, was the only person really in that White House that lost his position because of corruption. In terms of making money on a kickback or a bribe, Agnew was, and Agnew really wasn't too involved in the Watergate. They didn't seem to include him in the discussions, but he he's the one that served time for or he's the one that gave up his had to lose his office. I should. For greed and corruption, the others were more. It was a belief that they were doing something to keep the president in office, or a belief that. They were helping. To protect national security, whatever, whatever their justification may have been at the time, it certainly the evidence mounted up and it was. Clear that they were doing illegal things.

Kevin

Yes, this is a fascinating topic and actually we have so much to cover on this we're going to do this as a two-part series. So we'll hear more about this in the following week. But again, Dan, thank you for talking about this with us. I've been fortunate throughout my life that to listen to somebody. He was fascinated by events, fascinated by people and fascinated by history that I get to hear these conversations and wanted to take this opportunity. Unity to highlight this with the broader audience and if you ever have questions, you're welcome to contact me e-mail at [email protected] and again, thank you for your time. Thank You, Dan.

Dan

Thank you very much I enjoyed it, Kevin.

Welcome. Thank you for joining us for this edition of the Modlin Global Analysis Podcast. This week we are focusing on inflation, what it means, and both inflation in the international sense, with a number of countries and regions we're going to focus on. As well as in the United States, again, we're going to be talking about this monetary phenomenon, what prices? Changing and what they mean for consumers and how we define that and we're not talking about inflated egos or the inflated value of my baseball cards. We're going to emphasize the consumer aspects and the costs that they experience through this, and this week, I'm glad to be joined again by Dan Modlin, who has a series of interesting questions on inflation.

Dan

Kevin, we hear a great deal of talk about inflation, obviously, and a lot of people when they're in the grocery store certainly feel they're seeing the effects of inflation, but. I wonder if it might be a good idea just to start with an actual definition of inflation.

Kevin

Great question. First off, I feel that sentiment as well. I'm one of those penny pinchers and I go through the grocery and I notice when butter and bread go up $0.10 and think about ways I can compensate for that. But inflation is about the increase in prices. And they're different people that have debates about what causes inflation. And everything, but it's first important to note that this is about the increase in price across the board. For consumers, so if. The price of gasoline, or the price of Wheaties increases dramatically. That is not inflation. That is a phenomena related to the supply and demand dynamics of those goods. This is an across-the-board phenomena where a large basket of goods. Have increased in price overtime and that it is noticing that. It's a distinct phenomena that has to do with the supply and demand for goods and services, but how this intersects with the quantity supplied of money and we know throughout history and we know throughout American history. Inflation is caused by a lot of extra money in the economy, so that individuals need to use more money to buy a similar amount of goods that they could buy a few months earlier.

Dan

Let's talk a little bit about that. We hear obviously the partisan politics a lot discussing this. Your legislation causes inflation and your legislation causes inflation and these kinds of accusations float around a lot. But let's talk about the basic causes of it. What do we see as primary causes of this trend?

Kevin

Yeah, that's a great question. And what's important with that also is, is that there's a rich debate about this. And so it's not just a debate among policy actors. There's a debate amongst the academic classes and what they think about that. One of the things is it relates to the conversation, the points that we just had is people will associate increases in prices and say that that is all inflation when in fact it can be changes in supply and demand. If producers decide to dramatically reduce the supply of oil or reduce the supply of Wheaties. We can expect the price to increase, and that is related to. And to the global market, having the demand for those products, that is a very different question than the global supply of money and specifically the supply of money within the United States and now which is circulating throughout the economy. So our both our policy actors. In the Federal Reserve. We'll try to regulate the supply of money in an effort to control inflation, and we'll have to have a very serious conversation to explain what went off the rails in the last few years. But it is true that certain policies can contribute to inflation. Both the two big effects are how much a country is spending and how much are they taxing. So how much is basically being put out there in the economy and circulating around? What are the trillions of dollars doing that and how much is being taken in through taxes that also regulate that, so that perspective? Is an argument of what we call fiscal policies, so that taxing and spending of the federal government. The other arm that has very significant influence, is what they call monetary policy, and that is interest rates that are put on savings and the amount that we borrow throughout our economy, so the interest rates are going to influence how much money is circulated. So if it's more expensive for me to buy a house or to buy a car and everything, this has a way of taming down the amount of activity and economy and therefore taming down the circulation. So it's both the quantity of money and the amount that is circulating that both these instruments that we call fiscal policy, which again is congressional and presidential action and then Federal Reserve regulating the supply of money.

Dan

OK, now we tend to focus on inflation domestically in a lot of our conversations with, as you say, when we go to the grocery store or buy Wheaties or whatever, we're buying. But what about the situation in Europe?

Kevin

So what's interesting in many regards is both the United States and the EU. We started to see an increase in inflation around the same time period, and we both continue to struggle with this problem. What's also fascinating is the policies chosen to address it have differed, and the policies around which may have contributed to it have differed. So it's very difficult to know all the causes of this, right. So if we really want to know what's going on. And not just what the arguments are, but to really unpack what's going on? It's more difficult. What we do know is that both areas, the European Union and the United States had as to the whole world experienced a pandemic, but many of those other regions don't seem to have had the same inflation effects, right? So that's a hard thing to control for, is it? The policies that both regions instituted during the pandemic that could be in place so. Particularly the amount of fiscal stimulus, meaning more government spending on a whole host of things. So we know that both in the healthcare sector, but especially providing relief for workers throughout the closure period and afterwards played a significant role in the federal balance sheet and maybe that is circulating a lot of money. It was kind of in excess to that. It meant a social need, but that didn't mean that it created extra money in the system, especially in a system where people were probably spending less money to begin with because they had fewer activities and social choices and opportunities to spend money. That is something that does mirror the European experience overall. That is a background, but Europe has had a much more difficult time taming inflation than even the United States had high single digit inflation. Throughout the last few years. Now it's tamping down to about 4%. Again, the goal is to have about 2%, so it is making some progress and the Federal Reserve came out and announced that they a few days ago that they were not going to raise interest rates, but in the announcement and another signals a lot of people anticipate at a quarter point increase will happen in the next time. So we're seeing the United States policy be incremental and measured and still, conveying a commitment to addressing inflation, whereas the European side has increased rates more slowly than the United States and they are being more cautious with this policy and they still have about 9% inflation across the board. Another challenge they have and they did raise rates recently as well is the experience that is going on in Germany or what's going on in Europe, or in Spain. All of these different countries are experiencing inflation differently. So you have one tool that has different effects throughout the European Union and this creates different pressure points that basically encourages incrementalism and increasing rates, which will likely sustain higher inflation, longer than maybe socially desired, and definitely not desired even by the policymakers. But again, this is really challenging to understand because I would argue that if you read the biographies of central bankers and you and academics. There was a sentiment that the economic class had figured out how inflation happened, so this was a complete surprise to all across the board in that regard. So it's both interesting to look at. Europe and the United States and compare the experiences and also notice how different their approach is, and I think Europe is going to have a much more difficult time climbing out of this inflation trap, whereas the US is slowly, maybe not as desired, but is getting to a place of maybe a more normal inflation rate.

Dan

So Kevin, if you could give us a summary here, what's going on economically in China?

Kevin

So just as it's important to know, the economic activity in the United States and in Europe. Other economic powerhouses are also not stagnant, and they're having effects on our global order, and there is increasing amount of reports. There was a story in the Wall Street Journal recently about expectations that economic slowdown is more persistent and maybe deeper than what some had anticipated for China. And there's talk of there being a greater fiscal stimulus program for China throughout. The system and this approach is expected to mirror what previous programs have instituted to try to boost up the economy. So a lot of this is going to involve borrowing, which is going to be problematic for the balance sheet throughout the Chinese system, both at the national level. And also importantly, at the provincial and the local. Levels how they will. Deal with this round of debt, but it's going to try to spur more employment and more spending through infrastructure projects and local initiatives like that. So it's kind of this confluence of many economists and. And China went to school in the United States, and they learned Canadian stimulus. But they're also adhering to the principles and the systems within China. What that will mean for China going forward is going to be really important again. China is this unique economic engine that seems to produce about 30% of the global products of the world. They're consuming a lot more of those that share and they are expected to consume more of that going forward through their dual circulation. But this slowdown is going to make it harder to hit those targets, hit those objectives going forward. So we're going to have to keep a close eye on. How that develops and we're going to have to keep a close eye on how these things affect policy going forward. I think everybody's going to ask more serious questions globally about what inflation looks like, because in fact, when I look at it, there were a number of mistakes made about what they expected. Inflation would be, maybe because it's confidence. And assuming what it looked like and what causes it, and we're going to have to revisit some of the ideas that academics that have had around this idea, they call fiscal dominance that even though we haven't a monetary arm, the Federal Reserve have some autonomy in decision making. It's always going to be subject to. What the federal government taxes and what they spend, it's the Federal Reserve always has to internalize. The choices and that's the idea of fiscal dominance. So we'll have to revisit those arguments as well as. Really try to see how that's going to affect policy. But I do think it's important to note just these distinct changes in each of these regions and how they're going to affect things going forward.

Dan

Very interesting subject to taking a look at inflation, not only domestically but also in a global perspective. Kevin, thank you very much for giving. Us that update.

Kevin

Thank you very much for your time and thank you all for your questions.

An analysis of the events in Russia from Dmitri Alperovitch.

Thank you for joining us for this edition of the Modlin Global Analysis Podcast. This week, we're going to be focusing on Vladimir Putin and the bomb. We're going to consider the national discussion and global discussion on the ramifications of Putin’s references to nuclear posture and what are perceived as nuclear threats and the war in Ukraine, and how we as a society grapple with that. But perhaps most importantly, how do we think through what Vladimir Putin as the singular actor may be considering these questions? I'm glad to be joined by Dan Modlin as always and some questions that he has on this important issue.

Dan

And obviously this is an issue that concerns a lot of people, not just in the United States but around the world, obviously one of the changes that some people have remarked on in Putin's approach to the discussion of nuclear weapons or possible use of nuclear weapons is that in the Cold War. Era. Both sides tended to take the position they didn't want to be the first to use a nuclear weapon. How has Putin's approach changed?

Kevin

Yeah, that's a great point. And that goes right into the weeds of this question. Both sides during the Cold War, after they both acquired weapons, realized that they were better off not first using them because of the retaliatory nature of the weapons, especially the threat of retaliation, was so undesirable that both sides decided not to escalate tensions and a lot of times it may have helped quell some fears throughout the Cold War. So in a sense, even though weapons are very damaging and of course, deadly to some people analyzing it, it created a degree of stability because both sides had a sense of what the other side would do and a retaliation part of that aspect was an understanding by both sides that they would not be the ones to start a war. They would not be the ones to escalate it and that helps also contribute to some semblance of stability. Again, it's kind of contrarian to think that stability comes from these terrible, destructive weapons, but many people came to that conclusion when gaming out in various scenarios. Part of that has been a position that both sides, after the end of the Cold War. Reduce their nuclear stockpiles and in fact. Even Putin was part of the range of treaties that reduced weapons, but there is an evolution in discussion on what that doctrine looks like, and there's two components on that. One is the suggestion that they may escalate by their own decisions and that they have a mindset or an argument, especially people in the US think tank community emphasizes this idea that Russia may escalate a situation in order to deescalate. So they may uilized nuclear weapons, tactical or strategic, with the goal of using that as a way to get out of a conflict. This is troubling to a lot of analysts and therefore they emphasize this aspect, but I think what's important in this is also to realize that both of those components emphasize the singular decision making of a president. So a policy that is retaliatory or says that they will not be the first one to use that actually puts less responsibility and decision. By that country, right? That would just mean that they would have to retaliate if they were attacked. So that puts less decision weight on that. But this change in policy puts greater emphasis for us to consider how Vladimir Putin thinks, and I think this is very important as it. As a conversation, as you mentioned, because I hear a lot of people ask questions about this. This is when the war started. This was what a lot of people were concerned about, and I hear people continue to be concerned. Whether it be my students or friends I run into, they ask about this question. So it's important for us to think about what Putin is thinking about. But it's also important for us to pause. And recognize all of the flawed analysis that has preceded this conversation. A lot of people have basically baked in their own assumptions of how Putin thinks. is he rational? Is he hypermasculine? Is he insecure? Is he risk averse? Well, many of these assumptions have been shown to not hold up much weight. So how can we instead of try to package information of how we see Putin? How can we instead pull back and provide some analysis, and recently Foreign Affairs came out with an article by Rose McDermott, Polly and Slovic on Putin in the psychology of nuclear brinksmanship. And what they help us see is a different way of examining this instead of us trying to. Package Putin as how we see him, they instead look at the psychology and rationales that people in general look at questions around nuclear brinksmanship. And then use that to then contextualize how Putin may be. Thinking so, this is a very engaging article. I think it will be very helpful for us to look into.

Dan

Maybe you can help to describe again what the significance of that article might be and what we should take away from the research by McDermott, Pauline slogan.

Kevin

First off, it's available on the Foreign Affairs website, so you can pull it up to read. It's available for free on their site. So First off they emphasize the fact that people have difficulty with making decisions, and this is a broad statement, but the individuals have difficulty with that. And of course they have difficulty weighing nuclear decision. And because of the complexities involved, they will seek to simplify choices, right? So then that starts to narrow that choice, and then they start to not only simplify choices, they start to prioritizing what's most important. So is that the survival of a state, Is it the survival of the Person, is the survival of an idea? These become aspects that are most acute that so I think it's important for us to recognize that and that plays a lot into the conflict that we're seeing right now. Has not been successful in this military operation. In fact, it's been a disaster. Recently, Secretary Blinken made the remark that the Russian military was rumored or discussed to be the second leading military in the world. And then it's cutting statement after that was is it is actually the second leading military in Ukraine, they have not performed as expected, but what's important in thinking about this is that if Russia has objectives, and specifically Putin has objectives and is not able to meet those objectives, what tools will he consider? What options will he consider? In this so regardless if the whatever the West’s posture is, if he doesn't achieve his objectives, what tool set will he consider when trying this? So it's this is very complicated for thinking about how the West may respond because. Even if he's defeating himself, that could still be escalatory. So this again, is it has presents some unique challenges in this situation.

Dan

It seems like it would always be difficult to get in someone's head and really understand exactly what they're thinking, but he's perhaps a more. Complicated figure then many other world leaders that people have tried to analyze in the past.

Kevin

He is complicated. It's also again worthwhile to note how many times our analysis of leaders is wrong. So our analysis of Putin is wrong. Our analysis of many leaders has been wrong, so it's probably good again to take this framework. That they apply with this and consider what they point to as the number of surveys done of the general public and of leaders and the trade-offs they're willing to. Take when considering nuclear actions and basically they find that individuals are. And be less willing to trade the lives of their own citizens. Versus others and the ratios in that death affected are pretty startling in these surveys. Now, are these sentiments held closer, are they not? But you have to consider that politicians would weigh the similar types of questions, and that would be just as startling what they would consider so. If a loss is too great for Russia. What would they consider it's also worth noting that Putin can always revisit what he defines his loss. He is in Exterritorial and is defending. In parts of what they occupy in Ukraine, is he going to claim that as a success and go forward with that with continuous fighting? On both sides. That's worth considering also. So again, it's really hard to know what's in that mental space of where he is, but it is worth noting. Because he is a centralized. Leader what unique role? That since plays in and of course his sense of Russian nationalism, and increasingly, when listening to Putin, the sense of victimhood he has when discussing these issues.

Dan

Again, the article that prompted today's discussion is in foreign affairs. It's titled Putin and the Psychology of Nuclear Brinkmanship, the war in Ukraine hinges on one man's thoughts and feeling by Rose McDermott, Reid Pauly and Paul Slovic. Kevin, in closing, any any comments you'd like to share?

Kevin

You know, there's two things that I think that are important. Again, building off of what the authors discuss here. And again, I encourage people to read the article is there is a growing perception in the West. This is a note of caution that because Putin has not escalated relative to NATO. Whenever the West provides assistance to Ukraine that the perception is because that has been not been seemingly escalatory, that each additional thing made is going to be less threatening or less problematic for them, when in fact it accumulates differently on Russia's side. So at one point it may actually be seen as unfeasible that it is threatening, so from different perspectives, how these incremental changes are weighed are very different and people are actually probably not looking at the lessons properly. Again, a few examples of one act should not be viewed as. Examples of how they will. Go forward the other thing that I think is really important when listening to Putin's speeches, whether it be around the annexation of territories or whenever he talks about the conflict, is both his rhetoric and how he portrays Ukrainians. That's very important but also the grievances that are expressed and how there is a mix of ideas that he is dealing with here and it is a hybrid approach of ideas that are this mix of nationalism. Even a mix of socialism and different ideas that are all coalesce around this Russian idea. But a lot of this is borrowed from Hagel. And Hegel talks about this link around these ideas if that it is moral for the survival of the state and in fact how history determines the superiority of a state or a race or people is how they survival, war and everything so that it may be that these spirits of destiny, if you will, with in Hegel’s framework, are being played out right now. As we watch this puts a lot on the line for Russia and in these mindsets, so I think this is again important for us to think seriously through the weight of this situation. And also consider the effects of this again it may be very escalatory, but I think the most important thing for us as citizens is to recognize things haven't escalate, but that doesn't mean that things won't escalate. Putin's own failings could be viewed as rationales for him to escalate when even others are not playing a direct role in that. At the same time, things haven't escalated significantly and both sides. Have the capabilities to discourage the other one from escalating the nuclear realm and discouraging those actions. So it is true that the concern about the nuclear environment is higher than it was. Two years ago, that doesn't mean that it is imminent that there is a nuclear threat. Risk is still close to 0, but it is not as close to 0 as it was before. So be cautious. Think through what this means and think about the psychology of Putin and also be cautious and our assumptions around.

Dan

Very important information about a very important subject, Kevin, thank you very much for giving us this update.

Kevin

Yes, thank you all for your time.

https://www.foreignaffairs.com/ukraine/putin-and-psychology-nuclear-brinkmanship

Welcome. Thank you for joining us for this edition of the Modlin Global Analysis. I'm glad to be joined by Dan Modlin, and we were talking recently about how it would be helpful to do a post-debt ceiling negotiation wrap-up and explore what has transpired the last few days. As well as the ramifications and the content of those policies, so we will dive in both into the content as well as the politics involved.

Dan

This Kevin has certainly been an interesting last few days and something that has been rather fascinating to watch. Several people who listened to last week's podcast on the debt crisis that we posted pointed out that you seem to be pretty much right on the money on several things that came about. So I think it might be good for us to talk a little bit about some of the things we discussed that we might see happen. That actually did come to pass.

Kevin

So part of this goes to the point that I tried to emphasize is in politics, sometimes listening to language is not a good leading indicator. Of how policies will develop. So it's common for political actors to have disdain or say, even inflammatory things about their rivals, and then other people in the echo chamber reinforce those points, or even, say, wackier things. These are not strong indicators of anything. In the policy-making process, it's better to see what are the must-pass pieces of legislation, and again, from a Washington standpoint, what is must pass is not necessarily the things that individuals or groups think are most important, but what is the state find most important. And for a state money making money, spending bills and related item are the issues that are always going to be top of the list, so whether this be appropriations bills or tax bills or these related items, that is always part of the function of a state and was necessary. And then you start looking at the components of the negotiations and you think what is palatable to all people? Not what is the preference or what is desired by all people, though probably everyone in the room wanted to raise the debt ceiling. All of the other components we're trying to fill a space out for what is palatable. So for example, we're sending money from COVID-19 funds. It's very common for Congress to rescind spending for money from crises or other major events that has not been spent. And there's a lot of reasons for that. One is they're reasserting their authority over the spending, but also because it's open money that hasn't been spent. It's like families, budget for travel that they didn't spend entirely in one area that they decided to use that money and some other space. So Congress has this same mindset, and this was used basically to quote unquote, reduce the deficit through that, so that was seen as a way of leveling down the numbers for this coming fiscal year.

Dan

Let's talk about some of the key provisions that are in the bill that passed. As you look at the bill, what were the major things people in the general public need to know that were in that bill?

Kevin

Right. So there's a lot of the policy components and again this has to do with each side feeling its space to reach a palatable compromise, given what was an impermissible for each side. But what was became permissible for them. So they're our work requirement. Changes for individuals that are seeking food stamps program from 50 to now 54, but there are also some adjustments on that that gave more flexibility. Individuals that are veterans or homeless or have a history of being in the child welfare system. It is also has a cap on spending for this year and a 1% increase from this coming fiscal year into the next. The year as well as a reduction in domestic spending, but a a slight increase in defense spending in line with what the President proposed in his budget. It also changes some permitting rules that are interesting that will allow more energy projects and to go forward, it seems, or at least have a somewhat more streamlined process for evaluating those environmental rules. And of course, it raises the debt ceiling through January of 2025, which seemed desirable for both sides.

DanNow in our discussions regarding the debt we try to avoid getting into the partisanship too much and just try to stick to the basic information and to understand what's going on. One of the more interesting aspects of this, I think, to some people was that in the House? There were actually more Democrats who voted for the bill than Republicans, even though it was largely seen as a victory for Speaker McCarthy to get that bill over the line.

Kevin

Right. So both parties have factions that are not pleased with the bill and they weighed their sentiments on that through their vote and as well as the symbolism. So Democrats had, when you listen to the speeches being made throughout the day. They were wholeheartedly very disappointed with the compromise, but they found the palatable to support and a lot of this is interesting. The committee vote in the Rules Committee one by 7 to 6, which is usually they have larger margins, carry the bill on Rules. The vote on whether or not to consider the measure also had a more narrow margin than what ended being the case for the final passage of the bill, so this may be a way for these members to signal both their displeasure and how they'll explain that displeasure to their constituencies, but how they were. Overall satisfied to move on from the debt ceiling so members of Congress sometimes cast votes where they are divided on aspects, but find some way to explain it on that. A lot of that has to do again with just where the regular factions are within the group and some of your or far right, and you're more far left. Members ended up voting against the bill this time.

Dan

OK, now for those of us watching all of this unfold again, it's been a rather interesting last few days, but what are some lessons maybe we can all learn from watching this develop?

Kevin

So one is again the value of parsing back the rhetoric and instead looking at what's going on. So sometimes rhetoric is not a helpful indicator. So whether that be how Biden is portrayed in the press or how McCarthy is portrayed in the press, that's not always going to tell us the direction of how things are going to go or even an analysis of individuals sometimes can be really problematic. So we know that McCarthy became Speaker through a very long series of ballots and considering the vote for speaker and a lot of people could reasonably assess that he didn't have much political capital in the House or anywhere else. But in fact he was able to get a lot of what he wanted in that package. So that is a kind of surprising outcome to a lot of people and reasonably so, but it again it helps for us to sometimes pause and instead think about the conditions in individuals are in, but also maybe not try to personalize politics too much. It's easy to personalize it because we are human and we are interested in politics at that level, but not to draw too many assumptions from that right. So just because I have an opinion of a political figure does not necessarily cause a certain outcome and political negotiations.

Dan

Kevin, in light of the experience of this debt crisis, vote and and all the political posturing that took place before it could be passed. How will all of this affect future debates? Will it have an effect on other things that are coming up?

Kevin

Yeah, there's some really important components to this. So because now the top line number for budget making has been agreed to, even if there is some grumbling about it, there's going to make the spending bills going forward this year a little easier for both. Needs to address I also think, especially with the deliberations that we saw in the Senate, that it's very likely that we will see a closer consensus being made around what the next defense spending bill comes out. There's expected to be a supplemental bill that provides funding for Ukraine, Taiwan, and frankly, there's basically a side deal being developed to include some other programs because the Senate Republicans are very unhappy with the caps. They agreed to in this package. So they're going to attach some things that they prefer and probably what this will mean is that a lot more individuals find various reasons to actually like this defense supplemental package that's developing that may have had some sticking points for your more radical members that didn't like the funding for Ukraine or wanted that to be slowed down, so that actually may create some accelerant. In this situation, we'll also see the Farm Bill on how that evolves. I think the politics of the farm bill have evolved to the point where there's the constituency that's more interested in the food stamp components, and then the others that thought that the farm components were most important and now that has created a tension. It used to be that they rode together and they created votes for each other, but now they are subtracting support from the other side. Now that this provision for the food stamps was added to the debt bill. It'll be very interesting to see how that feeds into the Farm Bill because normally those types of changes would be in there. So would people take another run at the FarmBill and add additional provisions related to what will they be? Satisfied with those changes? Or will this actually make the Farm Bill more difficult to solve? Highlight these divisions and that there's not an easy middle space to compromise on that that that's been taken off the table. I think it's also important to think about the political consequences of this. I think it probably has taken it's going to have an effect on inflation, probably a modest effect on inflation. But this coupled with Federal Reserve policy that looks like throughout the year is going to make some twenty-five point basis increases a few times this year and and probably a little bit next year. That coupled with this kind of flat budget provides a lot of predictability for markets and everybody else on where inflation is headed. That doesn't mean that inflation will return. Our recent experience before these last two years, so it's not probably going to be 2%, but it's somewhere between 3 and 4%. And I really think that that is going to be very beneficial to politicians and particularly to the Biden administration that's been taking a lot of the complaints on that front. If they're able to. Push that number down. That is a much more beneficial thing for them on the flip side, McCarthy benefits also from not having to deal with another debt ceiling vote. That's very divisive within his conference. It's very divisive among Democrats, so it's good for President Biden as well, said take this off the table and be able to address these going forward. Different pieces legislatively are affected by this, as well as political figures and what their outlook has now. At the same time, those outlooks are always subject to main change.

Dan

Well, Kevin, it's certainly been interesting to watch this all unfold and it's been. Nice to be able to use the model and global analysis podcasts to provide updated current information on this. So thank you very much for your input.

Kevin

Yeah. Thank you for your time and I enjoyed discussing this and always glad to have people's questions. You can e-mail me anytime at. [email protected]. Thank you.

Zenel Garcia and Kevin Modlin – Revisiting “Sino-Russian Relations and the War in Ukraine” Podcast with Conversations on Strategy

Thank you for joining us for this edition of the Modlin Global Analysis Podcast. I'm glad to be joined with Dan Modlin, who will be asking a series of questions. This week, he and I have been having a rich conversation that we wanted to bring you all in on China and some changes that were noted. Using about China and things that we think that are developing that are important to have a general conversation about, these are factors that particularly have economic ramifications, but I think these are important to consider.

Dan

Kevin, at your recent presentation at Lost River Cave, several people asked questions about the economic outlook for China. And it's kind of a mixed situation right now. Isn't it kind of a challenging situation for Chinese leaders?

Kevin

China does face a series of challenges. One of them was related to, of course, COVID and the policies that they had around closures. But even before COVID, there was a shift in policy outline where they call it a dual circulation economy, where they emphasize exports as much as they do on domestic consumption. When in previous time periods, they emphasized exports primarily. So when they speak of emphasizing 2 things, that is a way of elevating an emphasis on domestic consumption. And of course, that has been a component of their economy, but this is a new emphasis on where their consumers are headed with that, and we know from general economic studies that when countries start to emphasize their domestic consumption over export they will have generally slower economic growth compared to previous time periods. That does not mean that it is a recessionary condition or depression or anything close to that, but it is a slower growth model.

Dan

OK, so China may actually not be growing as we've expected it to in the past.

Kevin

The pandemic, of course, interceded within this framework, so these are the general goals that China had in the pandemic with the closures and everything intervened and caused even probably greater slowdown than they hadn't planned for. But we can't anticipate that over the coming decade that there will be less global output from China. As far as general. Here we are seeing a lot of reshoring of facilities as well as moving to companies and regions outside of China and general Asia.

Dan

On the subject of growth, just recently in May, an American economist named Bob Lucas, a macroeconomist passed away, and I understand a lot of his studies really dealt with growth itself.

Kevin

He was fascinated by economic growth and in a way his passing is a contrast to what we may be seeing going forward in China. Again, we saw China growing at 8 and 9% year over year, for the last few decades, and I think it's important for us to really consider what that outlook may look like. Does that mean it's 3 or 4% growth, which is still again significant. But it is a different way to look at what China's economy will be producing as well as what the security outlook and capabilities look like for China over this coming decade. So Lucas provides a kind of a starting point in trying to understand why states grow, and they're the impetus behind these instruments, and we know that focusing more on consumption does usually produce lower economic growth.

Dan

Lucas dealt with a concept called rational expectations. What does that mean and what does it mean to those of us who don't work in economics?

Kevin

So rational expectations is basically kind of a challenge to the models at the time that he was looking at that were based on Keynesian economics. He asserted that people were simplifying some things or not assuming human beings would think through choices and make the weight of their own choices seen so that they people just skipped over the ramifications and the choices of individuals. Whereas he brought in this micro emphasis here that individuals have a weight in their own decisions. And that has to be accounted for in economic choices, and this is particularly relevant in our conversation with inflation. And it shows how challenging it is for countries to deal with inflation. But it also creates these guardrails and what I mean by that is, is that expectations start to become a big factor in economic policy making and what society generates, but that also that governments have difficulties in. Gain expectations, especially if there is expectations, are not in line with actual conditions. So in government may be able to utilize a policy that encourages growth, but over time is really just inflationary. Over the producers and the economic decision makers will recognize that actually it's not growth, but it's inflation, and over time they. Will put that. Expectation into their models of what really is growth looks like. And therefore has this feedback effect of discouraging certain economic behavior. But it also puts a check on the flexibility that policymakers may think they have and discouraging actions. So this rational expectations actually has this feedback effect and discouraging behavior.

Dan

Kevin, we understand there are some relatively small or appearing to be small changes going on in China. Some of them relate to their approach to intelligence, some changes in that. Could those have significant economic impacts.

Kevin

So there's a lot of conversation right now in China and among Western businesses about this new intelligence law and the application of that law around the sharing of information that they're going to prohibit the sharing. Of general business information with Western businesses and what the effects of this may be. So it's speculating right now, but the terms of what is restricted is very broad and in an environment of tensions between both sides, some people are interpreting. This situation that almost any type of business information, so whether that be sales or general economic conditions or other pieces of information that is normally used in common. Others may be utilized as the Chinese Communist Party as a type of intelligence, and the individuals utilizing that information may be restricted or be punished for that. So that could have a real chilling effect on economic activity. Years ago, China started to reduce the amount of economic data available throughout the economy and this compounds this problem. So if individual businesses are unable to share information. And there is less information shared from these macro sources from the government is going to be less clear about what economic conditions look like in China. So if individual firms are seeking to invest or they're seeking to, say, sell more cars or sell more environment for more technology, it will be more difficult for them to start a conversation about this or to commit to this because. It'll be unclear what the information looks like, but also, the signal about possibly being charged or facing backlash against the party would all discourage economic activity, whereas of many other countries do not have these types of uncertainties. So in a lot of ways, this comes back. To the conversation we just had around rational expectations, will firms, knowing this imperfect information and knowing that a few firms have already been caught afoul by the Chinese Communist Party for related cities? Will they decide to exit China or will some reconsider or rebalance their exposure to China under these conditions? If it's unclear how things may look, it could be rational for them to reevaluate where their standing is within China.

Dan

Well, certainly an interesting situation and one that bears watching and through this series of podcasts, we certainly will do our best to come back and revisit several of these issues to help keep people informed. Thank you, Kevin.KevinThank you

WSJ reports on China’s general economic conditions and examples of U.S. manufacturers are reevaluating relations with China.

Thank you for joining us for this edition of the Modlin Global Analysis podcast. I'm glad to be joined by Dan Modlin for a series of questions. We're going to have this week where we normally focus on international affairs, but this week we're going to focus on the debt conversation that we see going on in Washington. So Dan, you had some questions and thoughts on that?

Dan

Yes, Kevin, there's obviously been a lot of partisan bakery from both. Slides about the negotiations that lead to this debt limit question, and I think it might be helpful if we step aside from the partisan discussion of this and just get down to the basics, talk a little bit about how this got started, what were the factors that put us in this situation with this debt limit crisis?

Kevin

That's a great question. First, the federal government approves three types of spending type issue related matters, so one has to do with the total spending that occurs through a fiscal year as you're what we call appropriations bills, then you also have the taxes that are occasionally approved by Congress that go on until an endpoint. And then you have the conversation around a debt limit, and these questions all converge in different time frames, but basically, your debt hits at a moment where your revenues are not meeting up with the spending and particularly in environments as we've seen. In recent years, with increased obligations for spending for entitlement programs that you have this wall and needing to address the debt.

Dan

Now you touched on this a bit, but maybe we could expand a little bit more and help us understand why leaders don't have a better idea of when the debt limit is going to be reached.

Kevin

So a lot of this has to do with the fact that while we have an idea of the total revenue that we will bring in year over year as a federal government and the idea of the total spend. At any given day, any given week, and month, it has variations to it. So we have an idea in the total, but month over month there's variation, and that's not unlike what we may expect with the weather. We don't know when it's going to rain, but we have a general idea of how much rain we will get each year. So because of that, we don't know when the limit will always be hit, but we have a general idea of when it will come about.

Dan

Now, one of the questions I think a lot of people have during these discussions is why it seems that leaders wait until the last minute frequently to resolve fiscal situations in Washington. You have quite a bit of experience working on Capitol Hill yourself. Help us understand that. Why is it that people can't sit down and get these things worked out in advance?

Kevin

Even though the specific date is uncertain, sometimes on when the debt limit may be met. The general timeline and when it's anticipated is understood by all sides and in Congress. They are not ignorant about timelines or when these develop, it has to do with what the expectation of what leverage they can get from certain time frames or when addressing certain. Questions and the general anticipation was that House Republicans were not benefiting from a prolonged standoff on this question that over time they would lose leverage in negotiating with time and the Senate side thought that they had more leverage over time and. So the anticipation was, is that these timelines would feed into that. Now what contributed also to this assessment was the expectation that House Republicans would have difficulty getting a measure approved and through the Chamber and they didn't expect that would happen. So both the expectations on where leverage was, but also the feasibility of a measure being passed or kind of merged together and perhaps conflated in some estimates. So what we're seeing now is now that House Republicans passed their measure and this has brought about a more robust debate among proponents of reducing some spending programs and those that are running more of what's called a clean debt limit increase. And I think it'd be interesting to explore the component parts of this. Those there's some proponents that want to have what's called a clean increase, which would be just increasing the debt limit to a certain time period. And then there are others that want to have certain reform policies within it. I think it's very unlikely that either side will get all of what they want, but actually some type of a compromise maybe developing throughout all of this, and one of the big pieces is that no side wants to continue deliberating over this very long, especially into next year, and this provides A rationale for both sides to reach some type of an agreement.

Dan

We've been living through a period of of inflation here in the last 18 months or so. How has that contributed to the debt crisis and also to the need to resolve it?

Kevin

So inflation both affects the amount of revenue that comes in. So theoretically you could have more revenue come in, but also you have more that goes out and your your set program since probably assumed that just because there's more expenditures then there is revenue that the inflation is also going to have more of an adverse effect. It also has an adverse effect because it has more debt that you need to be paying off and it makes it more difficult to do that. So that inflation rate is definitely not beneficial on the negotiations. On that level, but it also makes the overall deliberation more difficult because in a situation where you have high inflation, you're actually going to have a societal pushback from addressing programs that they would maybe reduce deficits. While at the same time you would have more reasons and more pressure on the budget to actually address those, so inflation only makes these issues a lot harder, but it could be argued that inflation is one of the reasons why this is hard to begin with, so not addressing it is also really problematic.

Dan

Now if we can, let's look at this from the perspective of the average American citizen. Why should they be concerned about this issue?

Kevin

Anytime Washington's talking about spending, I think the general public would benefit from paying attention to that. In fact, I think issues around spending are ones that don't always generate as much attention as hot button issues, but a lot of times hot button issues don't go anywhere in Congress, but spending questions frequently do in some form, some type of compromise. So I think that those are often less noticed, but I think they are usually very consequential. The debt ceiling specifically is important because if Congress does not address this, there's wild differences in what the effects could be. But I think overall the anticipation would be that the US would be less committed to paying down its debts and that this would contribute to higher interest rates overall. So this would ripple throughout the economy, because the basis of our overall interest rates. So what I pay on credit card or my mortgage is in reference to the overall national deficit numbers as well as. The ability to pay these things, and again, there's rich debate about that, but I think we could anticipate that interest rates would increase and that there would be doubts around that. So we'd probably also see a revision in our debt ratings.

Dan

In closing, if you might talk a little bit about lessons that maybe. Again, that average American citizen might learn from this what? These kinds of issues do come up over the years. What can we take from this experience maybe to help be better informed the next time this comes around?

Kevin

I think the public always benefits from again paying attention to the status of tax bills, spending bills and the occasional debt limit increase and spending less time watching cable news and things like that while following the financial news. And the goings on with these, because these have real kitchen table ramifications. So if i were to extrapolate and make an assessment of what this looks like going forward, I actually think that there is room for compromise between the Republicans and Democrats. Even though there are rhetorical differences, there are many components of this compromise that are actually pretty palatable to both sides. For example, we’re seeing funding from emergency COVID end spending and using that to pay down the deficit. That doesn't have a huge effect, but it is very popular on both sides. There's also discussion about changing permitting policy that would allow for certain energy projects to go forward more quickly. What I think is the big question right now is going back to this timeline that both sides want to not have to deal with the debt increase discussion next year. What the trade off will be for that. So if if the White House wants that to be addressed in 2025 then what will the formula look like for the budget freeze or for incremental increases year over year? I think as we're recording this, that's where the big standoff point is. I think that is the leverage points for each side talking and everything. So I I anticipate that there will be a 5 to 10 year budget window that there will be some type of a reduction in spending. Perhaps it will be a one year. Increase probably the big debate right now is what budget year will be the reference point. They will extrapolate from there, but they're going to be talking about big budget numbers and everything, but that will be the big puzzle piece, I think, going into this conversation and what the big stand-off point is. Whereas other pieces are going to be easier to resolve, but this is also resolvable.

Dan

It's a very complicated but important issue, and Kevin, thank you very much for taking a few minutes to kind of put this into terms that I think maybe a lot of us who don't follow this on a daily basis have a little better understanding of what's going on with the debt limit crisis.

Kevin

I enjoyed talking as always.

Welcome. Thank you for joining us for this edition of the Modlin Global Analysis podcast. I'm really glad to be joined by Dan Modlin, and we are continuing a conversation about Taiwan policy, U.S. policy with Taiwan, as well as Taiwan's. Relation to China and, of course, China's relationship with the United States. Dan, we had a lot of really interesting engaging questions that we had from people from that recent meeting and we organized those and into some thematic conversations that we're going to have. This week we're going to talk a lot about the goings on in China and how their policy directions are influencing this relationship. But first I thought it would be helpful for us to revisit the theme of the meeting around strategic ambiguity in some of the concepts and tenants that have evolved. And U.S. policy through that.

Dan Modlin

OK Kevin. How does strategic ambiguity relate to the Six Assurances?

Kevin Modlin

The United States, the Three Communiques that it has sent to China and was statements mutually agreeing on practices and recognizing each other diplomatically. These statements set a framework for the relationship between China and the United States. In those exchanges, there's no seat at the table for Taiwan in these conversations, and as the United States was drafting the third communicate, Taiwan had concerns about being left out of this situation. And made suggestions on how to improve. That relationship and want to improve standing and what was suggested was the United States could draft some assurances to Taiwan and make this publicly known of what the United States would do and would not do. And what's important to note from those assurances is the arguments within them as what is said. So it talks about no pressuring Taiwan and China into resolving the issue, not setting a definite date to end military hardware sales to Taiwan. Not pressuring Taiwan in a lot of ways, and it's interesting that these are framed as assurances because every article of the agreement or the statement is in the negative saying what the US would not do. See and the US would not pressure Taiwan in this regard or would not seek out China to resolve differences or would not consult China first on questions. These are taken as assurances, but it could actually be viewed in a slightly different way that the negative language using this means. I mean. The use of not what will not be done is a very different framework to argue and think through than a framework that is in a positive direction of what will be done. So if I have an agreement between two people and one is an outline of things that they will. Are obligated to do, say, in a contract relationship. These are types of things that people can really have some type of. Certainty that they will. Be fulfilled or have some type of an assurance. So I think it's very interesting and assurance is taken from a framework that is in the negative and I would argue that this is on purpose because it actually continues. This general ambiguity of the relationship.

Dan Modlin

And so for those who might not have joined us for the last podcast, there's actually a strategy involved here where it's it's to the benefit of some US negotiators to be ambiguous about what the policy is.

Kevin Modlin

So the US policy with Taiwan is a position that we call strategic ambiguity, and the ambiguity is around whether or not the United States would intervene and assist Taiwan if they were to face a threat or invasion from China. So by not stating that, it's argued that it doesn't escalate tensions with China, but it also doesn't encourage Taiwan to seek independence in that way, it maintains something of a status quo in the relationship and possibly reduces their risks around conflict.

Dan Modlin

OK, now let's talk a little bit about the Chinese leadership and where that leadership is coming from at this point. There are obviously a lot of economic challenges, some maybe some problems in unifying people in China right now. Where is Chinese leadership coming from right now, in your opinion?

Kevin Modlin

That's a great question and it's important to note that it's always challenging to get inside any person's head. We know this whenever we follow politics, it's a lot of times the most inaccurate information is when we speculate on what a person or leaders are thinking because there's a lot of incomplete information. Around this and the analysis frameworks that we have are problematic. I think it's more beneficial to pause and work backwards from the few things that we do know and let that fill in. Our assessments and our analysis of leaders, instead of doing the opposite, filling it in with speculation, so we know that any leader has just like any human being, is faced with a range of interests and emotions and sentiments. And of course, that the case in China we know for centuries it's been an important for stability of the state. But of course we can argue that nearly every political system upholds that framework for that idea. So we know that the Chinese Communist Party finds its central goal is to maintain stability in the system both for the parties interests as well as overall state, and we'll find that as a primary objective. For that, so whatever economic policy that is, that ends whatever social policy that is the ends, and we have to assume that that's the. Case also for the foreign policy. So how do we fit that broad concept within that behavior? It's not always easy, but I think that that is a more healthy starting point within there. And then we just take a look at the patterns of relations and current policies. So there is increased notice of how China's economy is slowing down. Some of this has to do with COVID. And the COVID policies around that, but also they're talking about a dual circulation economy that basically emphasizes exports as well as domestic consumption. So by their society consuming goods that they're manufacturing, they may actually play less of a role in the global marketplace over the coming decades. What may be accelerating that are the tensions that China and the US have on a host of issues that we're aware of, but increasingly, both sides are adopting restrictive policies on technology chips, financial flows. At some point, that will have a real chilling effect and I think we are already witnessing that. But at some point, many, many firms will find it less beneficial to engage in economic relations with China. And that will contribute to this different arc of China’s policy. So I don't have to know perfectly the sentiments of each individual and it's possible even knowing the sentiments can have a different outcome than that we can just watch the behavior. And extract a general pattern of relations.

Dan Modlin

Another interesting issue to watch is what impact the Russian problems in their invasion in Ukraine might have on the way Chinese leadership would view Taiwan. What's that situation?

Kevin Modlin

Yeah, that's a great point. I have a slightly different perspective from some folks. Some individuals look at the war in Ukraine. And assume that it is an encouraging development for China because maybe it inspires them to do the same, more that so and so responded to Russia a certain way and that will inspire China. I would say the poor execution and the. Dismal effects of the Russian invasion from the Russian perspective would have to give any country pause to reconsider any type of a major military operation. As we discussed in the previous episode about the challenges of naval operation, that's got to be at least 10 times more challenging than the operations that Russia is facing today. And again, I'm not convinced that is what China wants to face that, or if they have those capabilities in the present, that's the source of debate right now, and perhaps over time, they will improve those. It's far from certain, but I think actually the challenges that Russia. Facing would be a more realistic assessment of how many countries would face a challenge in a military operation at that scale and the challenges of mobilizing a population. The challenges of combined operations. And the possibility of not turning out as expected. I think any state would have to recognize the challenges on that front if they're being realistic.

Dan Modlin

So it seems that the Chinese leadership really has some pretty tough issues to address as they move to the future and try to accomplish these somewhat contradictory goals.

Kevin Modlin

Right, right. So it it's both a goal of continuing to grow and provide for the needs of its population and possibly a population that has increased expectations of what income and wealth, and well-being are. Then there were the expectations of a few decades ago, and that's going to possibly be in tention. These efforts to be more inward looking and have slower economic growth. I think that again they will emphasize party security, the preeminence of the Chinese Communist Party. But I also think that it will create some very real challenges and having fewer resources. This means you're not as able to solve some of those problems. So we'll have to see how China prioritizes this. It'll be very interesting to see if they prioritize, say, nuclear modernization in the same way, I think they'll still uphold that or what will they do with with their Navy and investments in that front. This will force harder choices. Going forward, so we'll have to watch that part carefully as well.

Dan Modlin

Kevin, if someone listening to this podcast has a question they would like to have addressed, what should they?

Kevin Modlin

Sure, there anyone's always welcome to e-mail me at [email protected] and I'm glad to have a conversation on these points. I think this conversation that we had at Lost River Cave recently is a great example of what comes out of these conversations. I was really interested in the number of people who had been to China. Or to Taiwan and had really great examples of personal stories and thought very seriously about these relationships. And I know this is a pattern globally, and I hope this podcast can be a platform where people can submit questions and we can think more deeply about these questions. Just as the people that we spoke with the other day did so feel free to e-mail me any time, and we'll continue talking about that in the next episode, I plan on talking about and more dynamics in China and specifically the small changes that may have really make effects in economic policy going forward, so I look forward to having that conversation with you, Dan, and we'll continue that.

Dan Modlin

Thank you very much again.

Kevin Modlin

thank you.

 Thank you for joining us for this edition of the Modlin Global Analysis Podcast. I'm glad to be joined by Dan Modlin who will be asking a series of questions. These questions are going to be highlighting a conversation that we recently had at Lost River Cave in Bowling Green, KY, where individuals engaged in a rich conversation. On US-China relations as well as Taiwan,-China relations. So Dan, what were some of those questions that we had that day?

Dan

So one of the first questions that came up at this presentation related to the alliance framework in light of treaties. What's the current alliance framework in this part of the world?

Kevin

Particularly in the Asia Pacific, responding to China’s rise, it's a really important question and unique for exploring the politics of this. So Asia has a unique culture and process around alliances. Some people think is very different from the NATO framework that we're familiar with Europe. But it's worth noting that every region of the world has unique characteristics of their alliance or nonalliance frameworks, and Asia's relationships largely through ASEAN and other organizations are very much involved with consultation of the rich relationship on the economic front as well as political at the same time, these are not deep alliance frameworks. So as far as committing countries to each other to help with security questions, these are not dominant. Dynamics within their respective countries within Asia at the same time, the United States has deep alliance relations throughout that region, and that contextualizes what the alliance frameworks. So whether that be with Japan or South Korea. In his history of relations with the Philippines and the history of relations with India and Vietnam and of course, with Australia and that alliance. These are all part of that framework, but it's worth noting that each of these respective countries have improved relations in different ways, as some are more complicated. It's kind of a mix of countries that have bilateral relationships that are close with the United States and more favorable relations with each other. But don't necessarily have an alliance with each other, so this serves their security needs, but it also for them it allows more autonomy in decision-making. In the 70s, there was rich talk of creating an alliance framework that the US would sponsor for countries in Asia. That resembled a NATO framework and that did not get off the ground very successfully. And some people argue that that is an inherent trait of the region. That is more focused on economic growth than this, but it is worth noting that even within that looser configuration that many of these countries are responding to China's rise and they are thinking about that in a security framework in ways that they haven't really thought of. For so many of them continue to trade with China, as most countries do they're also looking at the security questions because if if they do have a rising power in their neighbor in their region, of course that would have any consequences for them and their policies.

Dan

During the presentation, it was suggested by some of the questioners that China at some point might try to create a crisis situation. To help unify people in China in the approach to Taiwan, do you believe that is likely? And how might such a crisis be shaped, or what? What form might that take?

Kevin

So crises obviously happen within relations, and it's also worth noting that those are the things that we notice in the politics among States and the domestic politics or these types of crisis. I think it's also helpful when looking at countries and their behavior to notice what context they are developing, the relationship between countries, how are they defining it, how are they defining it specifically for their population, and how that will mold the perceptions. What I think is an important thing to look at in China and Taiwan relationship is how much is China talking about Taiwan and reunification and these types of arguments. I don't know if states invade each other out of crisis, and one of the reasons why I question that is because anyone looking back at a country's behavior can make an argument that they're going through a crisis. It seems that the news of every country, every day has some type of a problem of some type of internal discord and division that people could go back and point to and say that that is the source of a conflict. I certainly think it's possible, but I also think we need to look more at the dynamics, and one of the dynamics I think is most helpful is to look at these language patterns as well as just to unpack where the interests lie. So China’s military has expanded significantly in the region and especially just across the Strait with Taiwan. These are the types of patterns I would look at more towards the specific questions around crises.

Dan

In that region of the world, of course, naval forces would be very important should some kind of. Military action takes place if you would talk just a little bit about the difficulty of carrying out successful naval operations.

Kevin

As I mentioned in the meeting, one of the most difficult actions a military can take is the naval invasion of another country has a lot to do with how the defense is heavily favored in that situation, as well as how intricately. The operation has to be planned and executed for a landing, and it has to expect significant losses in the process so that the defensive side, in this case, Taiwan, be strongly favored to be able to repel an operation.  We're not aware of any capabilities or trainings or experiences that China has had with this to indicate that they are fully prepared for this. Now some states are willing to incur significant losses to have able to reach an objective. But I think at this point it's really important to notice how risky an effort that would look like likely involves many thousands dying on the Chinese side and the possibility of not achieving the objective at all or being delayed by many, many months. That has led me to consider the fact that if the state really is interested in Taiwan. It was possible that they could achieve some of those objectives. More subtle means and less risky, so throughout history, we notice the risks that countries take, and I think it's also worth noting the times that politicians are actually trying to avoid risks. Because I see the downside problems for that, and I think that at least that's a framework that needs to be thought through just as actively. As we think about the more aggressive and kinetic or conflictual options.

Dan

Well, Kevin, obviously, there are a lot of unknowns in this situation, but where do you think the situation with Taiwan and China is headed?

Kevin

A lot of people have this question. I think it's important to organize the question and the different frameworks that we look at this question use them to test against each other. So we can better understand the situation. So it's not as much about predicting what happens, but strengthening our thinking throughout our situation to help us prepare for understanding how different paths may diverge. I am not certain that a conflict is inevitable. I know there's a lot of rhetoric around that. But again, people can be very certain of things. That to me, is unclear. That is a scenario that has to be considered, but I'm not certain of that. We could say one option that China may consider would be this naval operation that we referenced a few minutes ago. Again, I think because of those risks. Has to be considered, but it also has to be considered, probably as a less favorable choice from the Chinese political objective. One of the reasons also for that is because I think that they have other options that may be more appealing to them. And this has more to do with less conflictual type options to them that may achieve similar objectives that they have. So, as we know, Taiwan's diplomatic standards throughout the globe is very different from what most other countries have in their relations among states. Only 12 countries recognize Taiwan, only 12 have formal diplomatic ties. Other countries, of course, trade with Taiwan and have interesting economic interactions on computer chips and services, and some agriculture and shipping. But the leverage that China has over Taiwan may be more around its diplomatic state, and I think something that has to be really considered is that China may decide to challenge Taiwan in that diplomatic realm in a way that Taiwan would have difficulty responding to so. Pursuing that option may not mean very much conflict. But if China develops a policy or a practice that makes it hard for Taiwan to address it, and maybe it's a practice that the global community outside of protest and it may not have much reason of supporting Taiwan. Then China would have found this middle sweet spot to achieve their objective, basically pointing out that the global community may not support Taiwan and this could create a political crisis that could create a lot of challenges for Taiwan in that scenario. So I think that that type of interaction is just as possible, if not more so. As the conflictual one and affect may proceed more of a conflict option in China's mind because again, it's a lower risk choice from their perspective. Another option that it's gaining more conversation among people is the possibility of some type of a naval blockade. And it's important when thinking through that type of scenario. But that would mean economically, of course, for China and Taiwan and globally, it would elicit a strong response and and outcry, but it would actually put the political impetus on other countries. To respond. Meaning who's going to break that blockade? Who is going to be seen as challenging that and I think many countries would be unlikely to do that, and there aren't many countries that have the Navy and the capabilities to challenge that. China can have huge political effects in Taiwan and may not even have to invade to achieve that, and maybe they will hold that option as the last one and go through a series like this and considering these scenarios, these are of course all hypothetical, and in fact I think that option to testing against all of this. Is the status quo option and our mindsets when we think about international politics or read our history. We think events are inevitable. We think that a crisis precedes a higher crisis and things continue to escalate up that rung. In fact, there are many cases. When we really dig into the relations among countries where things deescalate and there's less tension. So whether that be Taiwan and China, relations having an ebb and flow throughout and 70s and the 90s and today, they have continuously changed and there have been a number of periods of more positive relations. Right now there's more tension. But the tension doesn't always cause more. And that's a really difficult thing for us to get our heads around. But I think that that situation is something worth testing against that the status quo or improved relations are possible and to look at the causal mechanisms that we see within. Each of these arguments and see what may play out and prepare for all these scenarios? So in our conversation we also talked about how this may play out for domestic economies and there's a lot of interest in computer chips and how if more computer chips are made in the West and the United States and Europe. That that will mean that there is a more secure access to these materials and I think that that is true. At the same time, probably in any of these scenarios, Taiwan will be a significant player in the computer chip manufacturing sector for a long time. In any of these crisis points that I'm outlining will certainly cause a sharp increase in the price of computer chips. And so while there may be access to these chips, the costs themselves may be prohibitive, or at least very costly for individual firms. So this does not necessarily solve all of these problem points, they can still have big effects. This is not unlike the experience that everyone's having with gas prices. The United States supplies a significant share of its own oil. Nearly 90%, but it's still subject to the global demand chains and global market behavior ,and of course that has pushed the price for gas. Throughout this war with Russia's invasion of Ukraine it's not that different, I would argue, is what may transpire with computer chips.

Dan

Well, it's a huge issue and in our next podcast, we're going to be talking about the Six Assurances and also talking a little bit about the thinking of the Chinese leadership. Kevin, thank you very much for your input and your perspective on all these issues.

Kevin

Thank you, everyone, for your time. I really appreciate all the interest and conversations that people had throughout that meeting. I welcome people to submit questions to me here through e-mail. You can email [email protected] and you can subscribe to the newsletter at modlinglobal.substack.com. Thank you.

What Taylor Swift can teach us about logistics.

Kevin

Welcome. Thank you for joining us again for another edition of the Modlin Global Analysis newsletter. I'm pleased to be joined by Dan Modlin, who's going to offer a series of questions to kick off our continued dialogue on Taiwan. We are focusing on how Taiwan came into being and how this relates to U.S. policy. So thank you again Dan, for joining us.

Dan

Thank you, Kevin. I think this is a very interesting subject, and I can recall back in the 1970s, when Nixon went to China, it was considered a major development in foreign policy. Tell us about the background of how that all came about.

Kevin

Right. So we know from historic accounts that it actually took some time for the U.S. to perceive this as an opening for a relationship with China. China internally was expressing a lot of dissatisfaction in its relationship with Russia, the Soviet Union, and specifically, was growing more resentful and distrusting. This came out through border skirmishes, as well as lack of exchange and basically the tenants that we would see be shared for a partnership between the two. This was surprising to a lot of Americans because a lot assumed that just because they had a similar political system under the framework of Communism that, that automatically would be a shared sentiment and in fact, most communists assume that would be how that would transpire as well. But we see political party movements often also take on this weight to responsibility of the state and sometimes, the state itself brings in interests that override even party philosophies. That may be an agreement with each other. But over time, Nixon, as well as Kissinger, started to notice some opportunities that they thought they could improve relations with China. And there were two most important reasons. Why they were focused on that? One is they thought that maybe if China was more distant from Russia, that it may isolate Russia more than the Soviet Union specifically, and that that would contribute to a better way to contain the Soviet Union, and it would provide a path for China and the US to have a mechanism to resolve. The Vietnam War, fighting throughout that conflict, that by improving those relations, they thought they could withdraw from Vietnam more easily.

Dan

Kevin, as you mentioned, Kissinger played a key role of course in these developments with China during the Nixon administration. What role would he play in the development of the communique?

Kevin

So it's important to note that even though people really emphasize the role of Kissinger, how much in a broad framework, the national security advisor and the president had a general sense of opportunities as well as philosophy and how to implement these things. Nixon actually wrote about this potential even before Kissinger did. Kissinger implemented a lot of initiatives through this. So while Mao and Nixon were meeting the seconds were involved in this set out the framework for how this relationship would be again because they're navigating these important questions. But of course, when you have an opening of relations between states, you're going to expect some type of a formal understanding or mutual statement, between the two of what that relationship entails. So again, it's largely to address the issues in Vietnam and provide an opportunity to distance China from the Soviet Union. But China is expecting things in return for this and throughout the communique there are statements where both will acknowledge that others position on an issue without necessarily seeding the others position or necessarily agreeing to those points. And this includes on the issues around Taiwan. So after Chiang Kai-shek flees to Taiwan and asserts his position in that, and, by the way holds the Security Council permanent seat that this garners distrust.

Dan

So Kevin, my understanding is that the communique then kind of opened the door for a series of negotiations relating to the positions of the countries and also, how they view Taiwan?

Kevin

Yes, that's correct. So after you reached the agreement through the 1st Communique, you have a series of other communiques and importantly, those communique are adopted after each additional presidency. So under the Carter Presidency and then the Reagan presidency are both emphasizing the standards and basically fill out what we come to understand as strategic ambiguity, meaning that the United States encourages positive relations between both Taiwan and China, and that it will not provide formal recognition for Taiwan. Also, that it would not seek to further inflamed tensions while simultaneously saying that it would provide military assistance to Taiwan contingent upon its general relationship with China. So if relations between Taiwan and China are seen as improving, it's implicit that they would seek to reduce some aid. And if tensions increase that they would increase that aid. These are instruments of the communique. A big part of this ambiguity has to do with whether or not the United States would actually assist Taiwan in the event of a war, so it is not formally stated whether or not it would support Taiwan in the event of a war, and the rationale is that this provides a space for diplomacy, but also an uncertainty. So if the United States were to say it would support Taiwan perhaps that would be a rationale for China to attack Taiwan because they would view that as an attack on sovereignty. Also, the United States, by avoiding recognizing Taiwan and a possible assertion for independence also would not provide a rationale for China to attack Taiwan. So through this ambiguity, we've created something of a status quo in the relationship between the United States and China, United States and Taiwan, and, of course, Taiwan and China. So this has been basically the instrument for the 1970s going forward to today, we've seen more affirmative statements by our current President Biden. Were he expresses support for Taiwan, but at the same time, the State Department and National Security Council will make statements that backtrack or try to contextualize the meaning of those terms. So in a way, it's a different type of ambiguity and what that means. So maybe the President may have a different sentiment than his team does but by maintaining this ambiguity, it's argued that this helps maintain a sense of stability for the relationship and maybe can encourage improved relations.

Dan

It's a fascinating concept, and it's one I know you've presented a research paper on recently at a political science conference in Chicago. Part of the idea here then is that by not being too specific about policy it allows a little more wiggle room.

Kevin

So by not declaring a position, it doesn't provide a reason for either side to escalate tensions in the relationship, and therefore it's given the perception, especially in the U.S., that that ambiguity has actually contributed to stability in the region. Which is a general interest, but it has also been useful for U.S. purposes by maintaining a position of ambiguity. It's not increased the level of commitments that they've made globally, which may be desirable both by the United States standpoint as well as existing allies. So allies always think about their alliance structure, but the partners that they have with them, to what degree are they committed?

Dan

And so it's it's kind of interesting if we think in terms of our policy, sometimes seeming rather confusing. Maybe that's somewhat by design.

Kevin

It's completely by design, and again, it's with the intent of not trying to increase tensions on both sides. Now it's important to note that just because that's the design, that doesn't mean that tensions still won't exist. And we have seen an ebb and flow in that dynamic in the relationship. But it's always maintained a degree of overall stability. The big question is, is as China increases in its military capabilities how will that affect their relationship with Taiwan? Does that mean that they are more likely to at some point attack Taiwan? This contributes to a lot of speculation that is hard to answer again because it's largely speculation. But we do see heightened concerns all across the board about this possibility, and the question is, is how durable is strategic ambiguity in light of this situation? But we do see continued practices, especially in Washington, by establishment figures seeking to maintain ambiguity in large part because they've seen it as effective in the past. But again, maintaining ambiguity is difficult because anytime somebody explains a policy on US-Taiwan relations, it can actually not always sound ambiguous, and depending on how people interpret the components or potential misstatements, it actually may not always sound ambiguous. Among the challenges that the US faces is the security challenges. But it's also a language challenge. That's something I will go more into in our briefing and presentation on May 4th at the River Birch Room at Lost River Cave. We'll also spend a lot of time not just thinking about the language issue, but thinking about how the various scenarios that may play out between China and Taiwan may contribute to global challenges and for challenges here in the United States and possible responses but also general economic effects.

Dan

It's a very interesting subject, Kevin and I know we'll be talking about it more here on the podcast for the Modlin Global Analysis and in some upcoming segments. But as you say on May 4th at 7:00 PM in Bowling Green, KY, you will be giving a presentation that will be in the River Birch room of Lost River Cave.

Welcome. Thank you for joining us for this edition of the Modlin Global Analysis newsletter. I am pleased to be joined with Dan Modlin, who will be offering a series of questions on US-China relations, China-Taiwan relations, and US-Taiwan relations this week. We're going to be giving some background history on Taiwan relations and its origin story and how that traces back largely to China's history and its cycles of revolution, and how that contextualizes the politics that we see today. May 4th at 7 pm I will be hosting a conversation on Tawain and China at the River Birch Room at Lost River Cave in Bowling Green. 

Dan 

I think it's true that a lot of times we have a better understanding of the current situation if we can go back a little bit in history and kind of find out how we got here. Isn't it true it an awful lot of the current situation with Taiwan and China really relates to history in the 20th century. 

Kevin 

We need to look at the history of these relations, but also recognize throughout these periods that a number of decisions are made by those actors that influence us today, but also actors today have a range of choices. We know starting off that under the Qing dynasty was facing break up in the early 1900s by a series of challenges. These challenges included the effects of the war with Japan and then after that, the war that Japan had with Russia that further solidified gains that Japan had control over parts of what we call territorial China today. Also, that contributed to nationalist sentiments throughout China. That capitalized on the instability and weaknesses of the Qing dynasty and led to the overthrow of the dynastic system that we saw prevalent throughout most of China's history. That only really changed in the last 100 years or so, and that system rose to power and had gained strength largely through playing on these grievances as well as grievances that contributed from the colonial era that the Western powers gained access to Chinese ports largely through force. And to acquire goods and export those through the Opium War as well as the Open Door policy. 

Dan 

OK. And then as we move ahead, it's important to look at the origins of the Chinese nationalists. 

Kevin 

So that Chinese Nationalist Party, we often associate with Chiang Kai-shek. But he was not in charge of that movement to begin with. He comes later to the stage, but the Chinese nationalists also have difficulty facing external threats and internal challenges, including the rise of Mao Zedong. Through his Long March and other efforts lead a revolution throughout China that really challenges China at the worst time that they could imagine. So, they are facing an internal revolution as well as an external threat with Japan, and we see actually even the Russians intervene and assist sometimes the nationalists against Japan, other times they assist the Chinese Communists against Japan. But in all cases, they are playing against each other and particularly the Chinese Communists gain leverage and influence both by playing off the weaknesses of the Nationalist Party. But also, they had some victories against the Japanese, which garnered additional support. 

Dan 

OK. So then as you refer to the Chinese Nationalist Party ran into considerable trouble with the emergence of the Chinese Communist Party. 

Kevin 

Exactly. And Mao was very effective in garnering support. So, unlike other Communist movements that we saw before, this movement emphasized the agrarian culture and transformation and well-being for the agrarians. Whereas other communist movements look more towards the industrial workers. This agrarian angle has always been a point of distinction, but it also was a point of strength for Mao. He was able to draw supply and support from the rural parts of China, which is of course a considerable space, especially in that time period and always had a harbor there but also drew much of his political support from that region. 

Dan 

OK. And then as the military victories mounted up for the Chinese Communist Party, how did Taiwan become a more important location for the Chinese nationalists? 

Kevin 

So, the Chinese Nationalists again had to face both the threat of Japan and the communists simultaneously. And we do see this pattern come up that if communist elements or initiatives rise, they seem to do better in situations where you already have internal strife, especially the causes of an existing conflict. More so overtime, the Chinese communists gained power throughout China, and they are able to have victories largely because of the decline of the nationalists and the nationalists decide to flee. And the best choice they have, of course, is to go to Taiwan as we know today. 

Dan 

Kevin, isn't it true that Taiwan itself has a very interesting history? 

Kevin 

Taiwan was part of the Qing dynasty and number of Chinese would live and trade from Taiwan. Afterwards, the Portuguese gain control of that and colonial period, and during the Sino-Japanese War, the Japanese gained control of Taiwan, so Taiwan loses Japanese control. Of course, when Japan loses in World War II and 1945 and Chiang Kai-shek decides with the decline of his party's movement, to go into exile and occupy Taiwan. It should be noted that even though Chiang and his forces moved to Taiwan, they did not ever see claim of. I mean, the true government of China. So that is part of the complexities of the relationship to start right from the beginning. The Republic of China and the People's Republic of China claim to be the true government of the whole of China, and they mean the whole of China both what we call the mainland China as well as Taiwan. Even though there are rich differences as far as policies and distrust between the sides they both claim the same sovereign right over that territory. 

Dan 

And I believe it's true that a lot of conservative interests in the United States were very supportive of Chinese Government for many years. 

Kevin 

Right. So that's comes back to the US. So the US was not entirely super interested as a whole, especially its politics until the rise of communism in China, and found that as a threat in the same sense that it's all the revolution in Russia as a threat. And so any movement contrary to that they found sympathies with including Chiang Kai-shek. 

Dan 

OK. And so all of these elements working together play a role in what we're facing today. 

Kevin 

They do play a role in what we're facing today and we're going to talk through this series about that. It should be noted how the Long March and the Chinese Communist Revolution, as well as the government of Chiang Kai Shek and these competing claims continue to come up in the discourse that we see today between. China and Taiwan. So after Chinese party have their major meetings, they will go on a retreat and they will reference this Long March or they will reference other seminal events in their origin story for the Communist Party. In the same regard, the Chinese nationalists will remember the legacy of atrocities under communism as well as the hardships that they faced in these tension points. On both sides they have rationales and arguments that they referenced throughout these dialogues. In the past both determines where they are physically located. The animosities that they have, but there's also referenced continuously in trying to define who they are. 

Dan 

So we're getting kind of an overview here of the background of this very important issue. I know Kevin, you have a presentation coming up on May 4th at the River Birch Room at Lost River Cave in Bowling Green in which you will be talking about these issues and also some of the international relations strategy that perhaps is involved. 

Kevin 

Right, so I want to welcome people to come and join us on May 4th at the River Birch Room at 7:00 o'clock in Lost River Cave in Bowling Green, KY. I will be glad to take people's questions on these issues. Prior dynamics that we see in Taiwan, so we'll talk about both the points of division and why they continue to exist, but also why the US has this interesting policy that's called strategic ambiguity where its policy is actually not ever enunciated or it's intentionally. Ambiguous for both Taiwan's position as well as China's position. 

Dan 

Strategic ambiguity is an interesting term, and I know you gave a a paper on this at the political science conference in Chicago just a couple of weeks ago. So this will be a chance for people to kind of get an idea of some of the strategy that's going on behind the scenes when people discuss Taiwan and China. 

Kevin 

And what we're going to focus on is not just the ambiguity and how that is a concept and complicated, but also we're going to spend a lot of time thinking about the threats that Taiwan faces and how China may respond in the coming years, as well as what those could entail. And of course, how that may affect economic decision makers in the United States. This event is open to the public and free, and I've always found that the best part of these conversations are the question and answer. So we will have equal amounts of time for robust questions and I found we have excellent conversations to those angles. I know when I talk with people and throughout the community there is genuine interest in this question around Taiwan and I think just exploring these questions further will at least help us prepare and think more carefully about what's transpiring. 

Dan 

OK. And that's coming up May 4th at 7:00 PM at the River Birch Room lost River Cave in Bowling Green, KY and no admission. Charge and a very interesting presentation on the subject of strategic ambiguity and how that relates to China and Taiwan. 

Kevin 

Thank you very much. 

Dr. Garcia’s article on China and Latin American relations in Foreign Affairs Latin America (Spanish)

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