POSSIBILE THINGS TO COME IN 2024 - UPDATED

A friend of mine (who reads TAFM) had a career in the upper levels of the Imperial Bureaucracy (if I wanted to name-drop you’d know him, but we’re not doing that). He has mentioned the concept of “high-trust” vs “high-fear” relations among states. It’s pretty simple: when there is trust between and among nations, that can create looseness in international relations that can lead to unexpected positive developments, and the more trust is there, the deeper and farther those positive developments can go can go. New programs, new alliances and agreements are possible, leading to mutual improvement.

Obviously, a high-fear environment has opposite results, with international relations blocked or slowed while everyone follows policies of self-protection, primed to lash out at any threat or provocation. The result is no international collaboration as all parties pursue a zero-sum game of “If I win, you have to lose.”

Both conditions reinforce themselves, with the result in “high feat” that the condition is perpetuated and grows worse.

It doesn’t take a genius to see that 2023 has been a perfect example of a “high fear” international situation. What has developed is an increasing confrontation between states that operate through democracy and those that embrace anti-democratic authoritarianism.

Unexpected, unknown and unforeseable events can develop, with major consequences.

This is most clearly so in the results of the Hamas attack on October 7.

Internationally, progress toward some form of overall settlement between Israel and the Arab states is now on indefinite hold. Relations are moving in reverse as the battle in Gaza continues. Domestically, the struggle between Left and Right in Israel has been excerbated. A significant minority, if not an actual majority, of Israelis do not believe the man leading the fight is the best one to do so, that his intransigence about changing the terms of the battle is more related to his desperate desire to retain personal political power than to any thoughts of what the ultimate good is for the nation he’s responsible for and too.

The Gaza battle is playing out in the country at the center of the global order - the United States. The conflict and division of the Gaza War has placed the Democratic coalition here under immense stress, precisely at the time when every bit of unity that can be mustered is needed to face the greatest threat to democracy and the constitutional democratic republic since 1860. The conflict in Gaza has put Democracy on the ropes, struggling to stay on its feet, here.

There is not only political crisis, but there are economic crises developing that have the potential for enormous political effect on the presidential campaign this year.

Following the attacks by Houthi rebels in Yemen against shipping transiting the Red Sea to use the shortcut of the Suez canal, at present 299 ships with a combined capacity of 4.3 million containers have now changed course or plan to, taking the Cape of Good Hope route around Africa to get to Europe and the United States. Those 299 container ships are approximately 18% of global capacity. The journey around Africa can add 25% longer shipping time than using the Suez Canal.

Most importantly, those trips cost more, and the inevitable result will be higher prices for consumers on everything from sneakers to food to oil as long as this diversion persists.

American consumers already see the higher prices for things they need - regardless of the fact that inflation has been conquered in recent months - and personally disagree with the good economic news of the recovery from the pandemic years, with the result that Trump - whose economic “leadership” was a failure during his four years in office - is increasingly seen as better able to handle the economy in the future, at the political expense of Joe Biden and the Democrats.

Democrats have countered the bad news by saying consumer views lag economic reality by 6-7 months, meaning that by summer people will realize the economic policies of the Biden Administration are working for their benefit.

But what happens if the Red Sea crisis continues into summer, and the increased prices due to shipping changes are what consumers are dealing with in June and July? Even if this crisis is resolved within the next 2-3 months, those high prices will be a political factor for long enough there may not be 6-7 months for consumers to experience good economic news in their personal lives, and credit it to Biden and the Democrats.

This is an Unexpected Unknown that cannot be resolved in domestic politics and about which the Biden Administration has little influence and no control over internationally. In fact, Iran - the main supporter of the Houthis - has political reasons to see the crisis extended with the possible result being a return of Trump to the White House that will result in the United States being withdrawn from the international chessboard at the worst possible moment for Team Democracy and the best possible time for the Russians, Chinese and Iranians.

High prices from this crisis will not only affect the United States, but also Europe - where there are important elections being held this year that could easily be changed from their expected results by consumer upset over inflated prices.

There’s another Unexpected Unknown with the potential to create difficulty in Asia. That is the increased financial instability in China. Nearly 90% of the foreign money that was invested in the Chinese stock market in 2023 is now gone; the departures have spurred mounting doubt regarding Chinese willingness to take serious action to boost flagging growth. According to calculations by the Financial Times based on data from Hong Kong’s Stock Connect trading scheme, foreign investment in China peaked at $33 billion in August, and has since dropped 87%. International investors have become persistent net sellers since August, when developer Country Garden’s missed bond payments revealed the severity of the liquidity crisis in the property sector. This has affected consumer confidence, business confidence and investor confidence - both foreign and domestic. Chinese stock shares have continued to underperform their global peers in recent weeks despite a run of positive economic data, signs of a thaw in US-China relations and moves to give the financial system a stronger buffer against slowing growth by cutting the rates most lenders charge on loans.

It is not outside the realm of possibility that Emperor Xi might decide an international adventure could distract domestic politics from the financial crisis. It was not widely reported at the time, but when Xi and President Biden met privately in San Francisco this past fall, Xi matter of factly informed Biden that the “reunification of China” (i.e., the return of Taiwan to mainland control) would take place. If the Middle East remains in turmoil, if the war in Ukraine continues to divide political opinion in both Europe and the United States, and if the Red Sea events lead to renewed inflation and domestic discontent in the West, Xi could see this as the opportune moment to move on Taiwan. There are near-daily Chinese military actions and provocations happening around Taiwan, any one of which could easily turn into the opening move of an invasion, faster than the United States and Asian allies could respond.

Domestically, while the “deaths of despair” mortality rate from alcohol, drugs and suicide was 20% higher in red counties than blue ones in recent years, “deaths of despair” are now equally prevalent in both parts of the country. With the Fentanyl crisis metastasizing, Trump’s authoritarian call for “execution of drug dealers” could be seen by people desperate about the situation in their community as an increasingly-viable option. Put that in with international discord involving China, and Trump’s demagoguery has a ready-made Major Issue.

None of these things are necessarily going to evolve as I have written. If more than one happens simultaneously, the ultimate result could be even stranger and have greater effect. That’s why all of these are Unexpected Unknowns, to which President Biden can only react when they happen, if they happen. But the fact we are in a “high fear” situation both domestically and internationally does not bode well.

For concerned citizens here, the only thing that can be done is to continue to work as hard as possible - harder even! - toward the goal of defeating Authoritarianism domestically and preserving our constitutional democratic republic. Taking such action doesn’t assure success, but not taking action assures the worst possible outcome.

Sorry to be a downer on the last day of the year, but 2024 is already a dark and foreboding place. Bringing light to the darkness will be harder than anything any of us have ever done politically.

UPDATE:

Xi Jinping’s New Year’s Day speech specifically mentions military confrontation over Taiwan.

As reported in the Axios newsletter this evening:

In an ominous start to 2024, Chinese President Xi Jinping said in his New Year's address that "reunification" with Taiwan is inevitable — a stronger tone than he used last year.

Why it matters: Beijing claims the self-governing island and its recent military exercises and build-up have raised alarms over a potential invasion. With President Biden vowing to defend Taiwan, that scenario could lead to a superpower confrontation.

What he's saying: "The reunification of the motherland is a historical inevitability," Xi said.

• The official English translation used a simpler phrase: "China will surely be reunified."

Between the lines: Xi has repeatedly insisted that unification is inevitable, by force if necessary.

• His latest comments come with Taiwan in the middle of a presidential election campaign that's been dominated by the issue of Taiwan-China relations.

The other side: Outgoing President Tsai Ing-wen, who has strengthened ties with Washington and at times enraged Beijing, warned against interference in the election in her own New Year's address.

• A win by Lai Ching-te of the ruling DPP would further solidify the U.S.-Taiwan relationship but enrage the Chinese government, Axios' Bethany Allen-Ebrahimian writes.

• While Lai leads in the polls, Hou Yu-ih of the opposition KMT — which advocates dialogue with Beijing — has narrowed the gap ahead of the Jan. 13 vote, per the Economist's poll tracker.

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