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Authored by Charles Hugh Smith via OfTwoMinds blog,

You see the irony here: the more successful the old solutions were, the greater our compulsion to cling to them even as they fail.

Humans use inductive reasoning to solve problems. If a solution fixed a problem in the past, we assume it will solve the problem again. This is a rational expectation based on prior experience.

But if conditions change, the solution won’t fix the problem. It might even make things worse.

The difficulty is what’s changed isn’t always visible or obvious. On the surface, things look the same. What’s changed is buried deep in the structural machinery grinding away beneath the superficial sense of continuity with the recent past.

This describes the current global system: conditions have changed but these structural changes are not visible. On the surface, the present looks like the recent past. Yes, technology changes, but this constant churn of new technology has long been part of the system.

Make America Great Again is an explicit call to return to the solutions that worked in the past, specifically The Reagan Revolution of the 1980s, which was characterized by these policies:

1. The federal government is the problem, not the solution. The solution is to reduce the influence and financial footprint of the federal government.

2. Deregulation of private industries, starting with finance. Loosen regulations to enable financial / market solutions, even if they’re disruptive.

3. Focus on growth. Grow the economy by loosening up credit, drill baby drill, reducing regulatory burdens and taxes, etc.

4. Pursue a muscular global policy of America First. No more wishy-washy playing nice: choose sides, but choose carefully because there will be consequences.

5. It’s morning in America. We can get back on track by unleashing America’s native optimism and vigor.

These solutions from the past are compelling because they delivered decades of growth. Of course reality is complicated, and it wasn’t just these policies by themselves that spawned decades of expansion. Demographics, the “peace dividend” and many other factors helped.

And there were spots of bother: deregulation enabled the Savings and Loan debacle in which a third of the nation’s S&L associations closed as $180 billion went up in smoke, losses that cost taxpayers $132 billion in bailouts.

Beneath the political rhetoric, these policies boil down to Keynesian stimulus which has been the de facto go-to policy “fix” for 60+ years: loosen credit, increase government borrowing and spending, encourage risk-taking and “animal spirits.”

As for regulations, the machine increases regulatory burden until it is restrained politically. Unproductive dead-weight regulations pile up along with the occasional regulation that serves the public interest. Sorting out the unproductive regs from the useful regs is tedious, and so private interests “help” by lobbying to get rid of whatever was inhibiting their expansion into malfeasance and fraud, and then we end up with the S&L debacle in the late 1980s and the Global Financial Meltdown of 2008.

Then the political machine rushes new regulations into law. The pendulum swings back and forth.

Political realities are glossed over to fuel optimism for “hope and change.” No politician ever wins re-election by reducing the federal budget. This is an abstraction we claim to care about but in the real world, we care more about decaying bridges where we live, the cost of medications, whether jobs or plentiful or scarce, etc., and so politicians win re-election by sluicing federal funding to repairing the bridge, reducing the cost of medications and funding the defense plant making weapons the Pentagon didn’t want but Congress loved because “defense spending” is viewed politically as a jobs program.

This process cannot be repealed. Congress controls the government’s purse strings, and when re-election comes around then slashing $2 trillion in federal spending will mean defeat and a loss of power. Not many politicians will fall on their sword, and for those who do, to what purpose? Whomever replaces the politician will pursue the same “guns and butter” free-spending budgets that the new leadership vowed to slash and burn.

Beneath the surface, things have changed structurally, and so the tried-and-true solutions won’t work as they did in the past. Our inductive reasoning will slip into magical thinking, and we’ll think that the reason the past solutions aren’t working as anticipated is that we’re not pursuing them vigorously enough, so we do more of what’s failing.

Magical thinking then slips into denial: the old solutions are working, we just have to do push harder. The problems that the solutions were supposed to fix get worse, and we refuse to change course because we don’t have any other solutions in the toolbox except the old solutions that no longer work.

You see the irony here: the more successful the old solutions were, the greater our compulsion to cling to them even as they fail. This clinging strikes us as completely rational: these solutions worked like magic, they will work again in the same way, it’s cause and effect. But conditions beneath the surface illusion of continuity with the past have changed, and so the effects are different.

While we’re focusing on the first-order effects, the second-order effects are melting the buffers we assumed were permanent and forever. Once the buffers are gone, we’re forced to admit the solutions we were confident would work didn’t work, and due to our confidence and unwillingness to admit they weren’t working, it’s too late to stave off collapse.

What if solutions that worked in the past no longer fix what’s broken? We’re too busy doing more of what’s failed to forge new tools that might fix what’s broken–but there’s no guarantee of that, either, if we misdiagnose the problem.

*  *  *

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Over the last 25 years, the number of privately-held companies has grown and the number of public companies has dropped. What’s been driving this shift?

In this graphic from Citizens Bank, Visual Capitalist’s Jenna Ross explores the rise of private equity (PE) and what this could mean for mid-sized companies.

The Rise of Privately-Held Companies

Back in 2000, public companies were much more common. However, by the end of 2023, the majority of companies were funded by private equity firms.

Year	Public	PE-backed
2000	6,917	2,042
2001	6,177	2,256
2002	5,685	2,524
2003	5,295	2,932
2004	5,226	3,385
2005	5,145	3,909
2006	5,133	4,573
2007	5,109	5,298
2008	4,666	5,880
2009	4,401	6,097
2010	4,279	6,421
2011	4,171	6,726
2012	4,102	7,121
2013	4,180	7,402
2014	4,369	7,721
2015	4,381	7,986
2016	4,331	8,268
2017	4,336	8,709
2018	4,397	9,135
2019	4,563	9,562
2020	5,153	10,049
2021	4,805	10,711
2022	4,763	11,143
2023	4,572	11,409
2024*	–	11,567

* As of June 30, 2024. Source: Pitchbook. Private-equity-backed companies exclude venture capital. Public companies are domestic U.S. firms listed on the NYSE and Nasdaq.

The growth of privately-held companies funded by PE has been driven by a number of factors:

• There are fewer regulatory requirements

• Companies are able to keep their financials private

• It is typically easier to access capital

• Investors are looking for higher returns

At the same time, the number of public companies has been declining. However, it’s important to keep in mind that this trend is significantly influenced by mergers and acquisitions. Research from Dartmouth demonstrates that when accounting for these mergers, the decline in U.S. public companies is much less pronounced. This suggests that many public companies are growing through acquisitions, which can often lead to synergies.

On top of this, the market value of public companies still dwarves that of privately-held companies. At the end of 2023, the net asset value of private equity funds was just 4.6% of the total value of U.S. public companies. This is largely due to the differences in company size, with the biggest public companies worth trillions of dollars. 

Takeaways for Mid-Sized Companies

The decline in public companies is not as dramatic as it may seem at first glance, and these companies still dominate in terms of market value. 

However, PE has grown as an attractive option for mid-sized companies that may be looking for easier access to capital or that want to avoid the requirements of being publicly listed. With another option available to them, companies can choose the ownership structure that best suits their needs.

Via SchiffGold.com,

The ongoing crisis in the Red Sea has thrust maritime security into the global spotlight, exposing vulnerabilities in our international shipping lanes and threatening the stability of global trade. Since November 2023, Houthi forces in Yemen have conducted over 100 attacks against commercial ships and warships, creating an unprecedented challenge for the maritime industry. This escalation has not only disrupted vital trade routes but also sent ripples through the global economy, affecting everything from shipping costs to consumer prices.

The scale of this crisis is significant. Transit through the Suez Canal, a critical chokepoint connecting the Red Sea to the Mediterranean Sea, has plummeted by over 50% compared to the previous year. This has caused the canal’s revenue to decrease by 60%, painting a stark picture of the crisis’s impact on global commerce.

The economic ramifications are equally severe. As ships are forced to reroute around the Cape of Good Hope, journey distances are increased, transit times are lengthened, and fuel consumption is boosted. Specifically, this detour adds approximately 4,000 miles to shipping journeys, resulting in 30% longer transit times and additional lead times of up to two weeks for shipments between Asia and Europe. The ripple effects are felt across industries, particularly those relying on just-in-time delivery systems.

While military intervention has been the go-to response for such crises, it’s time we considered a more sustainable, market-driven approach to maritime security. The private sector, with its capacity for innovation and efficiency, could offer solutions that are both more effective and economically viable in the long term.

One potential avenue is the expansion of Private Maritime Security Companies (PMSCs). These entities have already proven their worth in combating piracy, having been employed by numerous shipping companies. By creating a competitive market for maritime security services, we could drive innovation in threat detection and deterrence while potentially reducing costs through market efficiencies.

Insurance companies could play a pivotal role in this market-driven approach. By offering reduced premiums to vessels that implement enhanced security measures, they could create a financial incentive for ships to invest in their own protection. This approach aligns security interests with economic ones, hopefully leading to a more widespread adoption of security measures.

Technological innovation, spurred by market demand, could also revolutionize maritime security. The maritime security market, valued at $32.67 billion in 2023, is projected to grow to $49.49 billion by 2032. This growth potential could attract significant investment in developing advanced technologies for threat detection and response. The collaboration between BlackSky Technology and Spire Global to create a real-time marine tracking service capable of monitoring over 270,000 vessels worldwide is a perfect example of the potential for the private sector to find innovative solutions in maritime security.

Some critics have argued that a private sector solution to the Red Sea Crisis might lead to a fragmented approach to maritime security. However, this concern can be addressed through proper regulation and international cooperation. This approach is not about completely privatizing maritime security, but rather about using the strengths of both public and private sectors. Government oversight and international cooperation remain crucial, but it needs to be complemented by policies that encourage and facilitate private sector involvement in maritime security.

The challenges are significant, but so are the potential rewards. The fallout surrounding the Red Sea crisis has shown that a secure maritime domain is essential for global prosperity, and by harnessing the power of the market, we can work towards achieving this goal. It’s time for policymakers and industry leaders to come together and chart a new course for maritime security which embraces the private sector while maintaining the necessary oversight and coordination of governmental bodies.

The Red Sea crisis is a wake-up call. Let’s not just weather this storm, but use it as an opportunity to build a stronger, more secure maritime future for all.

Three weeks ago the diamond industry, one of the world’s most conservative and boring, was shocked by news that diamond giant De Beers (which accounts for 30% of global diamond production market share) was forced into a rare 10-15% price cut, taking wholesale diamond prices a stunning 40% lower in the past 2 years. That was the first major price cut since the start of the year and a “historically large reduction”, according to Bloomberg.

Unfortunately, it is going from bad to worse for the diamond price setter, which in an attempt to keep demand artificially high has throttled supply, and the FT reported that De Beers has amassed its largest diamond stockpile since the 2008 financial crisis.

The company, which dominates the $80 billion diamond jewelry industry, has seen inventory levels hover around $2 billion throughout 2024.

The slump in demand has been attributed to weak sales in China, growing competition from lab-grown alternatives, and the lingering impact of the Covid-19 pandemic, which disrupted global marriage rates.

“It’s been a bad year for rough diamond sales,” CEO Al Cook said.

To mitigate the downturn, De Beers has cut production by around 20% compared to last year and reduced prices at its most recent auction of rough diamonds. These auctions involve selling uncut stones to a select group of certified buyers, known as sightholders, who are pivotal players in the diamond trade.

Still, even after the steep cut in prices, the company’s stones are still more expensive than the going rate in the secondary market. The company also removed some of the flexibility it had offered at previous sales, according to Bloomberg.

Revenue for De Beers fell to $2.2 billion in the first half of 2024, down from $2.8 billion in the same period of 2023. The decline comes as De Beers prepares to be spun off by its parent company, Anglo American, which promised to divest the diamond producer following a thwarted takeover bid by BHP. Anglo American CEO Duncan Wanblad has warned that the weak market complicates potential sale or public offering plans.

In response to market pressures, primarily the result of explosive sales from cheap lab-grown diamonds, De Beers launched a marketing campaign in October highlighting the unique appeal of natural diamonds. Cook outlined plans for the company to invest in advertising and retail, expanding its network of global stores from 40 to 100.

Competition from lab-grown diamonds, which cost a fraction of natural stones, has intensified, particularly in the US, the world’s largest diamond market. However, Cook expressed optimism for a global recovery in 2024, citing recent credit card data showing increased US purchases of jewelry and watches in October and November.

Industry analyst Paul Zimnisky projected a 6% rise in global diamond jewelry sales to $84 billion in 2025, offering hope for an eventual market rebound.

Authored by Irina Slav via OilPrice.com,

• Oil prices in 2024 were heavily influenced by Chinese demand and Middle East tensions, while US shale producers consolidated and remained cautious about production growth.

• Natural gas demand surged due to increased electricity consumption, driven by Big Tech’s AI pursuits, leading to a more optimistic outlook for the gas market.

• Nuclear energy gained traction as a reliable and emissions-free source of electricity, with a focus on small modular reactors as a potential solution to lengthy construction times.

It has been an eventful year for world energy: oil supply jump scares in the Middle East, a surge in electricity demand, and a nuclear renaissance were all among the hallmarks of 2024, along with a pickup in natural gas demand. All of these trends appear set to continue into 2025, along with increasingly severe challenges on the path of the energy transition.

In oil, 2024 was an interesting year, with OPEC and the International Energy Agency vastly differing in their forecasts about demand for the commodity that underpins the global economy. Other analysts also disagreed, leaving traders stuck between actual fundamentals and predictions based on unproved assumptions, such as the adoption rate of electric cars, which has been weakening everywhere except in China.

Speaking of demand and China, the latter was the key driver of oil prices this year. Almost every report on oil price changes featured the phrase “concern about Chinese demand” in its lede—unless it featured the latest from the Middle East, the supply-side driver of oil prices for the year. Chinese demand growth this year apparently underwhelmed, disappointing traders who expected it to continue growing at double-digit percentage figures forever.

What’s more, several stimulus packages announced by the government in Beijing did not immediately lead to a surge in oil demand, which contributed to the oil price depression. Even the latest import figures, which suggested oil imports are picking up after several weak months, did not change market sentiment, as the full-year average rate of import is set to be lower than the average for 2023.

While traders watched China for red flags in demand, the war between Israel and Hamas expanded to the point where Israel and Iran exchanged direct strikes, temporarily reigniting fears of an oil supply disruption. However, both decided not to push it eventually, and those fears dissipated, to be replaced once again by “concern about Chinese demand,” even as some analysts warned that oil demand is being mispriced due to the work of trading algorithms and that a correction was looking over the oil market.

While traders worried about demand in China, the oil industry in the United States was busy consolidating. The merger and acquisition spree that began last year continued this year, with several billion-dollar deals in the shale patch, leading Enverus to suggest that 2024 could surpass 2023 in terms of total deal value. In the third quarter of the year, however, the pace of M&A dealmaking slowed down as buyers basically started running out of targets.

Speaking of the shale patch, it was a key talking point for oil price forecasters this year, as usual, but with a twist. Following Donald Trump’s landslide victory in the November elections, a lot of oil market forecasters expected the U.S. oil industry to double down on production growth. It did not take long for the industry itself to dispel the illusion. None other than Exxon’s CEO said there would be no “Drill, baby, drill” unless international oil prices justified such a strategy.

Exxon, along with Chevron, meanwhile, ventured into a new business segment: power generation. Another defining trend of 2024 is that demand for natural gas is soaring as the demand for electricity soars on the proliferation of data centers as Big Tech pursues its artificial intelligence ambitions. Indeed, earlier in the year, the surge in demand for electricity caught power utilities unaware—and that surge will intensify in the coming years. This is where natural gas suppliers come in, and this is why the prospects for natural gas for the medium term are a lot brighter than those for crude oil. This is also why there is talk about a nuclear renaissance.

Wind and solar, the twin pillars of the energy transition, have not been doing very well lately. New additions are slowing down because developers are struggling to absorb higher costs and lower subsidies, and they are also struggling with increasingly frequent negative electricity prices resulting from overproduction during periods of strong sunshine or wind.

Some governments, like the one in the UK, are stepping up their transition efforts with higher subsidies that will be passed on to consumers—a risky move for people who came into power promising to lower bills. Others are staying put because the subsidy money is running out. Yet ambitions for low-carbon electricity are very much alive, which is where nuclear comes in.

Offering the best of both worlds, namely baseload electricity and no emissions, nuclear is drawing well deserved attention. There is, however, a problem with it, and that problem is that it takes years to build a conventional nuclear power plant. This is why small modular nuclear reactors made headlines this year as a faster alternative to those conventional plants, and they will probably continue making headlines until they are proven a viable alternative of the large facilities. For now, however, it’s conventional nuclear on the table and plans are already being drawn for gigawatts of new capacity.

This graphic, via Visual Capitalist’s Marcus Lu, shows the top 20 countries according to average (mean) wealth and median wealth, using data sourced from the UBS Global Wealth Report 2024.

Comparing countries by these two different metrics reveals insights into wealth distribution and inequality.

Average vs. Median Wealth: What’s the Difference?

Average wealth is the total wealth of a country’s people divided by the size of its population. Also known as a mean average, this measurement can be skewed by extremely high values such as the presence of billionaires.

Median wealth represents the middle value of wealth, when everyone’s wealth is arranged in order. This measurement is less affected by massive outliers.

Data and Key Takeaways

The numbers we used to create this graphic are listed in the table below.

One outlier from this graphic is the U.S., which ranks highly in average wealth but much lower in terms of median wealth.

The country has an average wealth of $565,000 per person (4th highest), yet a median wealth of $112,000 per person (14th highest).

This suggests that a large amount of wealth is concentrated among a small group of individuals (who pull up the mean average), and that the majority of the population actually has much less.

Countries that rank highly in both metrics, such as Luxembourg or Denmark, likely have a more even wealth distribution.

If you enjoyed this post, check out this graphic showing how global wealth has changed since 2000.

Authored by Timofey Bordachev via vz.ru,

Only a few years ago, most of Western Europe seemed like a fortress of stability in international politics. With robust economies, solid social systems, and the grand edifice of “European integration,” it gave an impression of permanence, impervious even to major geopolitical upheavals.

Now, however, it has become an inexhaustible source of peculiar headlines and confusion.

We see endless talk of sending “European peacekeepers” to Ukraine, drawn-out dramas over forming a government in France, or pre-election storms in a teacup in Germany. There are attempts to meddle in the Middle East, and above all, a deluge of irresponsible, often meaningless statements from Western European politicians. For outsiders, these developments provoke a mix of bemusement and concern.

In Russia, the Western side of our shared continent’s apparent decline is met with suspicion but also a certain sadness. For centuries, Western Europe has been both an existential threat and a source of inspiration for Russia. Peter the Great famously reformed the country to borrow the best from European thoughts and culture. In the 20th century, the Soviet Union, despite great sacrifices, secured victory over Nazi Germany during World War II. And for many Russians, Western Europe has long been an “Eden,” offering respite from what were often harsh realities back home.

But a Western Europe that is economically unstable, politically chaotic, and intellectually stagnant is no longer the same as what once inspired reforms or envy. It’s no longer a place Russia can look to as a neighbor worth emulating or even fearing.

How the rest of the world sees ‘Europe’

For most of the world, Western Europe’s problems provoke only curiosity. Major powers like China and India are happy to trade with its various countries and benefit from its technology and investment. But if Western Europe were to disappear from the global stage tomorrow, it wouldn’t disrupt their plans for the future. These nations are vast civilizations in their own right, historically shaped far more by internal dynamics than by European influence.

Meanwhile, African and Arab nations still view Western Europe through the lens of colonialism. For them, its decline is of material interest but little emotional consequence. Türkiye sees European countries as prey, aging and weakened rivals. Even the United States, a supposed ally, approaches the continent’s crises with a businesslike detachment, focused solely on how to maximize its own interests at Europe’s expense.

Why is this happening to Europe?

It’s tempting to blame Western Europe’s odd behavior on the degeneration of its elites. After decades under US patronage, its leaders have lost the ability to think critically or strategically. The end of the Cold War allowed them to govern without serious competition, leading to complacency and mediocrity. Many of the brightest minds went into business, leaving politics to those less capable. As a result, Western European foreign policy departments now resemble provincial bureaucracies, out of touch with global realities.

The expansion of the EU in the early 2000s, which brought in several small former Eastern European nations, only exacerbated this problem. Their provincial outlook often dominates discussions, reducing complex issues to simplistic, parochial concerns. Today, Western Europe’s politicians are adept at convincing the world – and perhaps even themselves – of their own incompetence.

But the root of the problem runs deeper. Western Europe faces a growing contradiction: its political insignificance clashes with its still-considerable material wealth and intellectual legacy. For centuries, its countries have accumulated vast resources and developed unparalleled intellectual traditions. Yet its strategic irrelevance renders these assets useless. Even France’s nuclear arsenal, once a symbol of power, now garners little respect on the world stage.

Germany, the EU’s economic powerhouse, exemplifies this impotence. Despite its wealth, it has failed to translate economic strength into political influence, even over its own affairs. The destruction of the Nord Stream pipeline in 2022, allegedly at the hands of its American allies, symbolizes the bloc’s inability to defend its interests or hold its partners accountable.

The United Kingdom, often touted as Western Europe’s most active foreign policy player, plays this role largely under American patronage. Brexit, for all its drama, did little to change this dynamic.

A century of decline

More than 100 years after the First World War dismantled Europe’s empires, the continent finds itself with resources it can no longer wield. The EU’s most recent foreign policy “victory” — the difficult absorption of impoverished Moldova — highlights its limitations. Meanwhile, Georgia, with its defiant government, remains beyond Brussels’ grasp. Even in the Balkans, the EU’s influence is limited to countries subdued by NATO and completely encircled by the US-led geopolitical order.

Perhaps the most striking aspect of modern Western Europe is its lack of reflection. Even the continent’s intellectual elite seems to live behind a wall of denial, detached from reality. This attitude extends to domestic politics, where the rise of non-mainstream parties is dismissed as voters “choosing the wrong way.” In foreign policy, its leaders continue to act as though their opinions still shape global politics, despite clear evidence to the contrary.

The EU states march on, oblivious to their diminishing power and the shifting global environment. In theory, such persistence might seem admirable. But world politics is not a Glass Bead Game, as Hermann Hesse would have put it, and clinging to outdated behaviors will only hasten Western Europe’s decline. At some point, even its vast material and intellectual wealth will no longer be enough to sustain it.

What comes next?

For Russia, Western Europe’s intellectual and moral stagnation presents both challenges and questions. Historically, the EU was a neighbor that inspired reforms and shaped foreign policy strategies. But how does one engage with a declining power that refuses to acknowledge its own fall? And if the bloc is no longer a meaningful counterpart, who will become Russia’s new “unifying other”?

These are questions Russia must answer as it navigates a world where Western Europe’s influence continues to wane. Whatever the answer, it’s clear that its era of dominance is over. Its decline is undeniable – even if Western Europeans themselves refuse to see it.

*  *  *

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

“The youngest political party in British politics has just overtaken the oldest political party in the world.”

That is the shocking, but true, statement issued by Nigel Farage (on X) as a digital counter on the Reform website showed its membership tally before lunchtime on Boxing Day ticking past the 131,680 figure declared by the Tories during their leadership election earlier this year.

Farage went to describe this as a “historic moment”:

“Reform U.K. are now the real opposition.”

He also shared a video of him celebrating the news at a Boxing Day hunt yesterday morning.

This is an historic moment.

The youngest political party in British politics has just overtaken the oldest political party in the world.

Reform UK are now the real opposition. pic.twitter.com/t8SOHThxp3

— Nigel Farage MP (@Nigel_Farage) December 26, 2024

As The Daily Mail reports, the result comes off the back of a successful year for Reform with the party claiming five seats in the General Election in July, including Mr. Farage taking Clacton.

The party also finished in second place in a whopping 98 seats and played a key role in splitting the Conservative vote.

Responding to the surge in membership numbers, Party chairman Zia Yusuf said:

“History has been made today, as the centuries-long stranglehold on the centre-right of British politics by the Tories has finally been broken.

“Nigel Farage will be the next prime minister, and will return Britain to greatness.”

There were 131,680 Conservative members eligible to vote during the party’s leadership election to replace Rishi Sunak in autumn.

The figure, revealed as Kemi Badenoch was announced leader on November 2nd, was the lowest Tory level on record and a drop from the 2022 leadership contest when there were around 172,000 members.

Merry Christmas @KemiBadenoch. pic.twitter.com/XtuHgwhQ4W

— Nigel Farage MP (@Nigel_Farage) December 26, 2024

A Conservative Party spokesman said:

“Reform has delivered a Labour Government that has cruelly cut winter fuel winter payments for 10 million pensioners, put the future of family farming and food security at risk, and launched a devastating raid on jobs which will leave working people paying the price.

“A vote for Reform this coming May is a vote for a Labour council – only the Conservatives can stop this.”

Reform’s overtake of the Conservative Party’s membership numbers comes amid claims that Elon Musk is poised to donate $100 million to the party.

Mr Farage revealed that “money was discussed” in his meeting with Mr Musk, telling The Times: “We are in negotiations about whether he can help. He is fully behind this.”

 

Authored by Alexander Liao, Olivia Li and Sean Tseng via The Epoch Times,

The fall of the Bashar al-Assad government in Syria could destabilize the partnerships between China, Russia, and Iran – a loose coalition driven by shared opposition to Western powers.

For starters, the three countries have been key backers of the al-Assad regime. Their weakened support significantly contributed to Assad’s collapse of power.

Russia, where Assad is in exile, has been a major supporter, providing military aid and deploying mercenaries to bolster the regime.

Yet more than two years of war in Ukraine have strained Russian resources. Although Russia still held naval and air bases in Syria, its ability to assist Assad was limited.

Iran, too, has played a vital role by giving direct financial and military help. But Iran has been hit hard by sanctions and its proxies have been incapacitated by Israel, reducing its capacity to aid Syria.

Iranian proxies such as Hezbollah and Hamas have been impaired by Israel after Hamas launched a terrorist attack on Israel in October last year. In September, Israel’s alleged detonation of thousands of pagers and walkie-talkies used by Hezbollah in Lebanon severely impaired confidence in the group’s leadership.

China has backed Assad by vetoing United Nations resolutions against his regime and by offering investments and aid, and no direct military assistance has been reported. The Chinese Communist regime has historically been opportunistic in backing anti-Western regimes. When the strategic or economic costs became too high, Chinese support tended to shift.

The opposing forces in today’s world echo the arguments of the late Harvard Professor Samuel Huntington, who wrote “The Clash of Civilizations and the Remaking of World Order,” published in 1996.

The scholar predicted two major global blocs: one led by the United States and its Western allies and the other by China, supported by Russia and several Islamic countries. Although his description of post-Cold War conflicts seemed remotely possible when his book was published, today’s global geopolitical landscape resonates with his vision.

Syria’s future is still uncertain. Should it descend into a failed state, it could mirror a post-2001 Afghanistan or present-day Yemen characterized by lawlessness, internal conflict, and lack of central governance.

This scenario would disrupt the strategic interests of Russia, Iran, and China. For instance, Russia has already begun large-scale withdrawal from Syria. At the same time, Iran is seeing its land corridor to Lebanon compromised, a route crucial for the movement of military personnel, weapons, and resources to Hezbollah. Communist China sees a setback in its political influence in Syria, which joined Beijing’s Belt and Road Initiative, or global infrastructure investment program, in 2022—not a single project has been announced.

The international landscape could shift again after Donald Trump returns to the White House. His administration might quickly seek to end conflicts in the Middle East and Ukraine. Wrapping up the Russia–Ukraine war would also terminate the “no limits friendship” between China and Russia, drastically changing their relationship. A more hawkish U.S. administration might concentrate on confronting the Chinese regime, which it sees as a chief rival. Such a move would strike a heavy blow to the anti-Western bloc of China, Russia, and their Middle East allies.

*  *  *

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Authored by Bernard Hudson via The American Mind,

The radical racial ideology has infiltrated the Agency…

Under the best of circumstances, it is difficult for any intelligence service to collect, analyze, and produce actionable, predictive data for a nation’s leadership. This task is made considerably harder when lockstep adherence to a fringe political ideology is imposed upon the workforce tasked with carrying out this challenging mission.

Unfortunately, this is the situation the Central Intelligence Agency and other agencies of the U.S. Intelligence Community are in: to America’s detriment, their leadership enthusiastically imposed Diversity, Equity and Inclusion ideology upon their employees.

To underscore how deeply DEI has metastasized inside the host, in a recent enlightening and publicly available statement, the CIA’s Chief DEI officer said there are three criteria by which an intelligence officer can be promoted at America’s most important foreign intelligence service. Only one of them is related to mission impact.

The others are a rather vague “corporate mindset”—and DEI.

Of the three, adherence to the cant of DEI is the most important; those who do not vocally and unreservedly support it are denied promotions and meaningful assignments. Like rallies held by authoritarian regimes, you do not want to be the first to stop clapping at the approved, serial pronouncements.

It’s ironic that a CIA created to oppose the Soviet Union would embrace the ideological straitjacket that is DEI, an enterprise that uncomfortably mirrors the USSR’s political commissars. Guardians of the party’s orthodoxy, the commissars were coequal with the leadership inside the government agencies where they were assigned, holding considerable sway over who was promoted and who got what assignments. While they were successful for some time in keeping the ruling clique in power, their endless purity tests and unreviewable power helped breed endemic cynicism among the government workers who had to play along to keep their jobs. It accelerated the systemic, institutional incompetence that plagued the Soviet Union to the end of its unlamented run.

Since DEI, the uniquely American take on the USSR’s commissar system, has been imposed on the Intelligence Community, there has been sufficient time to evaluate its impact on its mission, which is the only metric by which any intelligence service’s value should be measured. Using that standard, there are three conclusions we can draw about the effect DEI has had—and none of them are positive.

First, DEI does not fill a gap in the law; it is a quota system masquerading as equal opportunity. It is important to recall that the DEI enterprise has been imposed upon a federal workforce that already operated under long-existing regulations which mandate fair treatment of all employees. The modern U.S. Intelligence Community had successfully built an environment where anyone could succeed, provided they were willing to work hard and make sacrifices, two concepts one almost never hears uttered by DEI’s most vocal proponents.

As it has come to be practiced, one of DEI’s major outputs has been to combine the outside consultant’s mania for numbers with the fervor of heresy-seeking.

At every administrative level, the modern IC seeks to know and document the race, sexual orientation, county of national origin, disability, and age of anyone seeking promotion or a new assignment. This information is apparently formally incorporated into every Human Resources panel, which has determinative power over the vast majority of assignments and promotions. Findings which do not match the vague and ever-changing standards are almost certainly identified as requiring remedy. (Of course, vague and unreviewable standards are the hallmark of how DEI is practiced within the federal government.) The remedy frequently imposed involves adjusting the recommendations of promotion and assignments panels to make them compliant with the current orthodoxy. This means that assignments, promotions, and opportunities will go to individuals less qualified than other candidates in order to serve the alleged greater good.

Second, as it is driven by a core belief that much within institutions is oppressive and unfair, DEI fuels an institutionally distracting grievance culture. Because it seeks to measure personnel outcomes based more on fringe identity politics than on mission impact, it provides a ready-made tool for anyone to challenge a strictly merit-based promotion and assignments system. Anyone who has served at a senior level in the federal government understands (even if they will not publicly speak of it) that there is a wide disparity between the top performers in their workforce and the bottom quintile.

Because DEI prioritizes identity, including self-identity, over mission impact, it has tended to encourage a culture where the least capable workers demand the most of the senior management’s time and attention. Rather than focus on supporting the top performing employees who drive outsized gains in every human institution (including federal agencies), senior managers must constantly navigate an ever-growing number of grievance claims—many of dubious validity and any of which, if mishandled, could harm or derail that senior official’s career.

This creates a peculiar work environment, where the senior-most managers are increasingly evaluated more through the lens of how their less capable and more aggrieved employees view them, rather than by the mission value those senior managers bring to the challenging task of understanding and clandestinely confronting America’s adversaries.

Finally, DEI is a thought-and-sentiment-monitoring mechanism, allowing a fraction of the IC’s non-operational and non-analytical workforce to reach into any level of an organization and assess the personnel and operations of that office against DEI’s blurry and ever-changing goals. Combined with the grievance-seeking culture which is always DEI’s fellow traveler, it creates an informant culture which seeks out alleged non-compliance at every level of an organization with a zeal that would impress the early Soviet Union’s counter-intelligence apparatus.

It is almost certainly less career threatening in the modern CIA to dispute findings related to the plans and intentions of America’s key foreign adversaries than it is to show anything less than full support for the DEI apparatus. No doubt or heresy will go unnoticed or unaddressed. It is not unreasonable to assume that, for senior managers, many types of mission failure would probably be more survivable than being assessed as unsupportive of DEI.

The tragedy is that the CIA, and the broader IC, have incredible capabilities, but none of those are enhanced by the dangerous, fringe orthodoxy that is the modern DEI machine. Abolishing that apparatus will improve the only metric that should matter when evaluating an intelligence service: how well it collects and produces foreign intelligence and how effectively it gives America’s enemies pause.