Listen Now

What can the Beatles documentary teach us about how people think?  This edition will focus on some background of the Beatles and examine the stories around them with references to global politics.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends.  ~ Kevin The Beatles are the greatest band in music.  No other group has a song collection comparable to Yesterday, Hide Your Love Away, Day Tripper, Help!, and In My Life.  They also had a uniform and yet dynamic sound.  There are also endless rumors around the band. These rumors all predate communication mediums (such as social media) that are often associated with causing contemporary events.  These range from the ludicrous speculation that McCartney was dead (and the message was “proven” by listening to the album backward) to the more innocuous curiosity around the opening chord in Hard Day’s Night.   However, no narrative has persisted as consistently and dramatically, without grounding, then the causes of the Beatles’ break up.  It is almost as if for the devoted fan a direct answer would be unsatisfactory.  Many people’s brains want a grand story to explain a great end to the greatest band.  This is where narratives fit into the process.  We may seek a story that satisfies us more than one that fits reality. The primary argument was that John Lennon’s close girlfriend, Yoko Ono, was the cause of the demise of the band.  Part of this is scapegoating an outsider.  It is also because people assume a change in one area (a girlfriend) is the source of other changes (the end of the Beatles) when in fact the dynamics within the band were the main issue.  In fact, the main change was the continuous development of George Harrison as a writer who didn’t fit into the arrangement of the early Beatles. There are plenty of rumors about the role Ono played in the demise.  However, as we know, rumors don’t have to be bound to facts.  Now we have hours of documentary footage that show the creative process from the Beatles in the recording studio.  It shows the brilliance of how they developed the ideas and continuous humor in the studio.  There was little drama although signs of creative differences were apparent. (see the discussion about Harrison).  The constantly argued idea that Ono dominated the recording process is shown clearly to be a fallacy.  She is present and listening but is not involved in the creation or recording process. What is your favorite Beatles song?  Please let me know in your comments. International Affairs We see a much more insidious dynamic around Russia’s President Putin and his narratives.  For decades he has focused a domestic grievance around Russia’s decline in power and shifted it on to Ukraine.  Putin not only sees the demise of the Soviet Union as a catastrophe he judges all Russian leaders based on whether they expanded or contracted Russian territory.  This hyper sense of nationalism generally transcends Russia’s two most recent economic systems in favor of planning.  His brand of planning involves the coexistence of a powerful country and a powerful leader.  He even wrote about planning in his dissertation which we will explore in an upcoming briefing.  You can learn more, at a briefing of the Russian invasion of Ukraine at the Bowling Green, KY Knicely Center on March 24th at 3PM.   All folks interested are welcome. Note: Thank you for subscribing and reading this newsletter.  After taking a break from writing I am ready to restart after learning some new recipes, starting a new job, and getting a new home.  I finally have a home in my hometown!  The writing plan is to post about every few weeks to a month.  I would really value any feedback you have or questions on global affairs, economics, or politics. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

Although few people are talking about it, the market for bonds issued by Chinese firms is one of the most interesting and potentially consequential stories.  This topic allows us to explore some background and to dig into some current dynamics. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends.  ~ Kevin In much of contemporary China, there is a mix of state party decision-making and responses to market incentives in the country’s bond market. For decades this mix has led commentators to assume the inconsistencies of overlaying these systems are unsustainable.  No doubt there are deep tensions between the two, both politically and economically.  This has led some to conclude the politics is driven by the Communist party while the economy is driven by market forces.  However, in practice, things do not always separate that easily.  At either the firm or individual level the state is influenced by profit and firms are influenced by political direction. A few months ago, we explored the dynamics of the dual circulation economy that China is increasingly talking about, which emphasizes both domestic consumption and exports.  Anytime we look at multiple systems, there are many pieces to consider.  In this issue, we will focus on our understandings of firms, debt, and the Chinese Communist Party. This context comes into play when looking at the number of Chinese firms that are state-owned enterprises (SOE).  Most businesses in China receive direction from, and are managed by, Chinese Communist Party officials. Frequently, the country is also an owner of these firms.  At the same time, many party officials profit from these layered relationships.  This leads to interesting questions involving what is known as capture in economics.  Capture is when an entity is designed to oversee another entity but becomes subject to the influence of the one they watch. This relationship is relevant in regulatory decisions, and possibly even the relationship folks have with a pet.  In this case, I would argue it is like a double capture.  The firm limits the party's options, and in turn, the party limits the firm's options. No one doubts the supremacy of the party in China, but that does not mean that capture does not happen.  When thinking about the complex layers, it is further fascinating to see China's robust economic growth in recent decades.  Perhaps in practice, China’s leaders think contradictions are not as problematic (or even causal) as they claim.  These dynamics have been less difficult in recent years in China, in part because robust economic growth has a way of clouding inherent tensions.  However, China has not been immune to slower economic growth as a result of COVID – 19.  This is particularly the case in its export sector.  As a result, some state-owned enterprises are experiencing unexpected losses even though they are assessed to be low-risk operations.  This risk assessment has less to do with the nature of the good or service and their customers, but more to do with China's ownership share.  This presence of state ownership shifts the perception of risk of failure or default, but I would argue that perception does not supersede the balance sheet for long. This has led to a distinct problem for China, a problem with a long list of possible consequences.  Currently, it seems that some firms are in trouble, but the scope of that trouble is unclear.  Accounting practices and explicit state support hinder an accurate picture.  But the dual capture dynamics make choices more difficult for Chinese political and economic leaders.  For internal stability, they do not want to see a contagion of doubt about these firms spread among bondholders. China also does not want to disentangle the existing power relationship or shift to an alternative.  This will mean that much of the debt issued by state-owned enterprises will be underpriced for risk, though some investor concerns will influence these assessments.  In recent weeks, Xi and party leaders have been emphasizing a Marxist legal system in the Chinese context. For many decades some commentators have argued that Chinese debt was not sustainable at its current levels.  While there is no doubt that China is a major political and economic power, it also faces challenges ahead.  A principal challenge is how it will adjust to slower economic growth rates and how slower growth will ripple through its economy.  Keeping an eye on the debt from these firms gives an important indicator.  For example, China's most volatile debt has been in the energy sector, which has experienced lower demand due to less manufacturing output this year. Some questions I think about: 1. Debt crises and runs are not a perfect indicator of a country’s conditions.  Is it that the West has so little insight into China that the potential of these cycles is over magnified? 2. If the potential is over magnified,  what is the appropriate observation we should be making? 3. Is the dual capture argument an accurate description when, in fact, interaction is defused with a clear party hierarchy? 4. Is this dual capture relationship help explain the preeminence in Xi’s speeches to direct both simultaneously? News: I look forward to continuing to explore China over the coming months. I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

Political language can have a significant impact on how we understand one another and on how we react to other countries.  I think this week is an opportunity to take time to focus on political language.  We will take an abstract view of its use and influence in our social world.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends.  ~ Kevin One of my favorite country songwriting teams is Eric Church, Jeff Hyde, and Luke Dick.   A few years ago, they came out with a song called “Kill a Word”.  It is very clever and well written.  It explores the role language plays in our social world and argues for killing words like “hate”.  I have described it to friends as a mix of ideas with a spin on outlaw country killing.  It is interesting to think about.  The influence of language is something I go back and forth on and, to be honest, I have not resolved everything in my mind, though I enjoy thinking about it.  Nothing sparked my interest in this area more than my time at FIU, which is home to the study of language in international politics.  For example, Nicholas Onuf emphasizes the role of language in social interaction, including establishing rule and rules.  The rules are simply the laws and social norms and the rule is the power that reinforces or forms the rules. We are distinct individuals who interact with each other in various ways and a major part of that interaction is through language.  We relate, convey important things, joke, signal, direct, accept, and a whole range of things through the language we use.  Sometimes it takes just one word.  However, we know what we say is heard by others who may, but likely may not, hear or think the same way as the person speaking.  This can lead to regular misperception and misunderstanding that can be magnified when one of the parties wants to be misunderstood.  However, suspending intent, understanding is challenging.  Take for example the meaning of the word “literal”.  Depending on the context, and sometimes the age of the speaker, it can mean something specific or general. Possibly because it is frequently used in sarcasm, the meaning of literal has evolved to mean the opposite of what it used to mean.  The point of this illustration is that language is dynamic, and the meaning of words can change in many ways.  However, contrary to what I think my Constructivist friends would like to hear, it does not change as frequently as we notice and assume.  We see language in politics as both a medium of interaction and a way to influence other interaction.  Interestingly we pay attention to some forms of speech in different ways.  The medium of interaction in speeches and committee hearings is consequential in the formulation of policy.  We can call that the legal rule area. However, we focus considerable energy on the interaction from the way others influence and use language.  This is what we can call the norm rule area.  This involves protesting and constant bickering online.  As a society, we focus a lot more attention on the norm rule, bickering form of language. I suspect this is because some language elicits more of an emotional response. I think this is another area where our emotions, and those who stoke them, can distract us from one form of rules. I expect that more people fall asleep while watching C-SPAN congressional hearings than seeing a debate on cable news. In fact, there are norms in both areas that have little temperament for one type of behavior in another area. Who wants to hear a committee report read to them at a political rally? Regarding international political speech, one of the areas I am most interested in is how countries define each other and the degree of threat perception. Some of this is related to capabilities and history but there is also an important role of perception that is heard, interpreted, and shared through language. These definitions both mobilize and constrain relations among countries. For example, in pockets of the U.S., the perception of Russia distinctively shifted over the last four years, in ways that had not existed for over two decades. Will that perception of Russia significantly constrain the Biden administration in its policy choices in balancing against a rising China? I do not know the answer to that question but, perhaps with time, that perception may change. In fact, it may occur in parallel to the negotiations updating the New START Treaty. To me, this question illustrates how perceptions formed by language can be both static and dynamic. When looking at the constant social and political interactions of language there are plenty of opportunities to be confused and frustrated. I have collected a few thoughts that may help navigate the subject. Hopefully, this can provide an opportunity to help reflect on language and its unique role in our relationships and politics. Some general observations on language: Language reflects individuals and groups; it also influences them Those who speak things you agree or disagree with have about as much causal influence as others Expect higher standards for rule makers and what they say, but be more patient with others around you “It is not enough to show how clever we are by showing how obscure everything is." ― J.L. Austin “Language disguises thought.”― Ludwig Wittgenstein "Always remember that it is impossible to speak in such a way that you cannot be misunderstood: there will always be some who misunderstand you."— Karl Popper You can’t kill a word News: I look forward to exploring language in politics in more detail and, as situations arise, the opportunity to apply these ideas. I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

These are some of my closing thoughts about the election. If necessary, I will do a midweek update. I think this presents an opportunity to reflect on how change impacts our lives. Equally important is the role of circumstances that rarely or never change. Both types of experiences influence our lives even when we are not in an election cycle. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin To be honest I am getting a little burned out thinking about and talking about the 2020 U.S. election. Part of the weariness is the time spent thinking about it over prior months, but also burnout from hearing people speculate about things that have weak causal relationships. Perhaps it’s my old age speaking, but I have grown tired of speculations that are not grounded in causal relationships or plausibility. In this cycle, everyone has enjoyed picking and choosing their favorite polls as well as inferring possible results from turnout trackers presented by the respective political parties. Picking and choosing polls is grounded in confirmation bias and turnout trackers are notoriously poor predictors of election outcomes. Instead, these are my closing thoughts, which I will seek to sync up with a general discussion that may be useful over the coming weeks. When looking at individual states that are most consequential for the electoral college, I regularly return to my discussion about variance in statistics. I argue simply that some state polls have less variation than others. This is shown to be particularly the case with Wisconsin, Pennsylvania, and Michigan. So while it is fascinating to look at North Carolina, Arizona, Georgia, Florida, Iowa, and Ohio, the lack of variation in polling for the first group of states mentioned may be more definitive in the electoral outcome than all the variations that we follow in the closely watched states. This is because of the significant edge Biden has going into the election with existing electoral votes. It’s not insurmountable for Trump, but it is challenging. In Wisconsin, Pennsylvania, and Michigan Trump's numbers have had little variation. Biden’s numbers have also shown little variation in these three states, and this is a net positive for Biden because of his favorable spread in these areas. One important difference between this election and the previous election is how few voters say they are undecided in this cycle. Therefore, the margins the undecideds contribute to the outcome are far smaller than the difference between Biden and Trump. For a helpful tracker for the electoral college, please follow the Cook political reports reference sheet and if you enjoy gaming out multiple scenarios for the election, I encourage you to go to 538’s election map that simulates outcomes. These sites also have helpful information about House and Senate races and what to follow in these closing days. The pool of competitive races has increased significantly since the beginning of this year. Afterthought: This point is related to the election, but it is also a broader observation. As a society, we like to focus on change. But if we look at the election trends, the most consequential factors of the election have been about less change or nonchange.No doubt day after day there are news stories about the election and without a doubt, Trump has a way of capitalizing on numerous media cycles. This can lead us to the conclusion that change is always happening. However, it could also be argued that there has been relatively little change in the polls. Many of the polling averages in these core states I am talking about have changed very little over recent months, even under the interesting and unique circumstances we have experienced. So in short, for all of the variation that’s regularly discussed, there seems to be less variation in the impressions left among members of the public. The impressions seemed to be more ingrained as negative and positive for each of the respective candidates as the election has rolled on. But this is not unique. There are a whole range of things in our lives that we make conclusions about. I focus on this because there are only so many things we can think about in a day and it’s also because we are satisfied with a lot of the conclusions that we reach. So, while we favor habits and patterns that engrain continuity, our minds are much more actively aware of change. While I think we have a bias towards noticing change and its influence in our lives, it does make sense that we notice it. However, I do think it is a flawed approach to only look at the influence of change in our lives and not to consider the elements of continuity as well. So the elements of continuity may be daily routines, specialties skills, traditions, relationships, and a lot of the things that people will sometimes say that they take for granted. Those can be continuous factors. A lot of times change has associated negative repercussions, so it is logical that we sometimes focus on change instead of the things that remain more stable. In our social interactions, also, we sometimes emphasize change more than things that are continuous. An example of this interaction of change and nonchange around the globe is an illustration involving the number of great powers in the world. While countries are constantly interacting with each other and engaging in dialogue about change, the frequency of change of power status occurs much less often. In fact, in my lifetime there are about two examples of major change from this frame of reference. At the same time, a plethora of interactions, conflicts, dialogue, and trade have continued to transpire. These are all examples of change and continuity in our lives. News: twitter.com/lisaabramowicz1/status/1323206645661470720 twitter.com/BBCNewsAsia/status/1322339729686306818 I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

This week we are going to continue focusing on some questions regarding the global, political, and economic environment and we will specifically look at some global trends regarding China and the Middle East.  Spoiler alert:  While I have some thoughts, I do not claim to have all the answers to these questions. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin As I mentioned last week I enjoy sitting down and making predictions about what will happen in the world.  I believe it is an excellent test of critical thinking skills that hones my desire to learn more and my sense of realism about how power operates in the world. This practice also provides a good dose of humility when I am forced to admit that I am far from perfect at predicting the future.  There are many good lessons we can learn from the many tests regularly provided by world events.  This week our focus is on global dynamics. This is because I see several interesting trends that are worth exploring and providing an avenue for deeper discussion.  Please feel free to comment below about questions that are on your mind right now. Looking from the perspective of each country, how deep and strong are the tensions between the United States and China?  I believe this is a very important question because of the implications and because of what I sense is a distinct change in relations.  Politicians mold the public’s perceptions of how the world operates, but the public molds and conditions many of the choices available to politicians.  This is the case in the present relations between China and the United States.  Many polls show a considerable increase in the number of Americans who now distrust China. That number has gone from roughly half of the population a year ago to nearly three-quarters at present.  I do not sense that will change soon and may even increase as the effects of Covid-19 continue to permeate our lives.  These tensions are not limited to the United States. Many parts of Europe are also distinctively changing relations with China. This can frequently be seen in that region’s policies, no doubt related to public sentiment, toward Chinese telecommunications companies.  Recently there was a robust political debate about tik-tok, which is owned by a Chinese technology firm. I believe this single example illustrates a deepening emotional and cultural divide between the U.S. and China.  However, it also shows how existing relationships continued to mold outcomes.  In other words, its likely in the future that the two sides will maintain robust economic activity as political divisions continue. How much is China’s emphasis on the dual circulation economy about transitioning away from the Belt and Road initiative? I believe that China’s approach of emphasizing domestic consumption and global exports can provide insight into the thinking of China’s leadership about its place in the world and, equally important, what the world will look like.  I think this dual circulation approach allows for a full range of scenarios to materialize over the coming decade.  We may see China capitalize on investment opportunities in its region or we could see them choose to minimize that focus, as generally outlined in the Belt and Road Initiative that financed regional development projects.  Not all of these initiatives had the same bang for the buck China and others would have expected.  It’s also likely that, due to the cost of Covid-19 throughout the developing world, there will be strains on the budgets for numerous countries throughout Asia and Africa.  This makes many projects riskier for China to initiate.  At the same time, it may be a risk for China to put too much emphasis on domestic consumption with the expectation that the demand will automatically meet the supply.  Given these two challenges, it’s not surprising that China is opting for an approach that incorporates a mix of these components. How will the quad relationship evolve? Some of the answers to this question relate to what transpires with the above issues. Specifically, the quad relationship is the informal phrase used to denote the relations between the U.S., India, Japan, and Australia.  For the U.S., two of these three countries are allies with security guarantees.  Since the George W. Bush administration, India has been increasing ties to the United States.  The increased frequency of these talks are no doubt influenced by the continued rise of China in the region and India’s desire to play a counter roll.  There have been increased talks about coordination engagement that are more extensive. However, these discussions are not fully committed, nor are they anything in line with a change from existing security guarantee alliances.  I expect that regardless of domestic political considerations there will continue to be advancements in these relationships.  It will be important to see how these partnerships incorporate other regional actors in Asia and how those actors respond to China.  No doubt there is broad consensus in Congress for increased military cooperation amongst these countries.  However, I expect relations to continuously evolve among these nations as they seek to determine the degree of commitment, will, capabilities, and perception of the threat posed by China. What does the future of relations look like between Israel and its Sunni neighbors? Recently Sudan, in part of its negotiations with changing relations with the United States, announced that they would also have diplomatic relations with Israel.  This makes for a distinct shift in relations in the Middle East.  I would argue that this is not a peace agreement as such, but it provides a foundation to hopefully lessen factors that contribute to tension, which may over time evolve toward an agreement. It’s a much more incremental approach that does seem to reflect the regional environment. While the future is never easy to predict, it’s clear the tensions between the Sunni and Shia worlds in the Middle East will continue and that form of regional balancing will characterize the region.  These changes in relations between Israel and its Sunni neighbors reflect these perceptions. News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

This week we are going to focus on some questions I have regarding the global, political, and economic environment over these coming months.  Spoiler alert:  While I have some thoughts, I do not claim to have all the answers to these questions. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin One of my favorite activities in my late teens and early 20s was to practice analyzing issues and then writing down predictions on what I thought would happen next.  This challenges a person to think more thoroughly about issues.  For me, it was the equivalent of a young person shooting free throws in the backyard trying to improve their precision.  It was a challenge to my thinking, which allowed me to be more real with myself and how I analyze situations. Those practices carry on to today, but I have to be honest: sometimes I have more questions than I can fully analyze.  So, while I have a few thoughts, I think it’s important to parse out the knowns from the unknowns.  Below are the unknowns that I think will be critical in the months ahead. I believe that organizing these thoughts can help us to come up with sufficient answers and to better understand important puzzles in our world. What is the influence of seasonality on outbreaks of Covid-19? Recently a friend of mine asked me this question and, while I am not an epidemiologist, I am increasingly convinced that there is a seasonal component to Covid-19.  Part of this conclusion comes from reading existing research of like viruses that have seasonal profiles to them.  Also, in regions that have had spikes in cold weather -- whether that be the upper Midwest, United Kingdom, or parts of northern continental Europe-- all have seen distinct increases in Covid-19 outbreaks.  My rudimentary frame of reference has been noticing temperatures in the 50s and spikes of cases 2 to 3 weeks later, but that is an imprecise rule of thumb.  If this pattern persists, we will likely see cases of Covid-19 feed into the further spread.  Simply put, cases come from previous cases. So even in periods of slightly warmer weather, you will see exponential growth of cases.  While treatments have advanced, it will be interesting to see which states pursue various policies to address this issue.  If a vaccine starts rolling out early next year, it will not forestall any of the build-up from the previous months of cases.  The gains from the vaccine will come as more and more people are vaccinated.  How these variables intersect is another puzzle. How will this seasonality of Covid-19 influence markets and the broader economy? I expect that the economies will be adversely affected by continuous waves of the virus.  The cost will be most pronounced among those entities affected now.  Those firms will have to deal with compounding periods of losses that will likely stretch for over 12 months.  I also think that shifting consumer attitudes could be one of the greater risks for these firms. Fear and decreased buying activity, outside core necessities, could have a significant impact on many companies. Of course, this will vary somewhat due to individual behaviors. But in the aggregate, this trend will be costly for many types of firms, especially those that directly interact with customers in confined spaces.  This connects to another question. What can we expect US unemployment to be in the coming months?  Outside of a few sectors that have seen robust growth, I think that these closing months of the year going into early next year will see fewer gains from people being reemployed. I’m thinking here specifically about workers who were let go during the closures.  Interestingly we did see a significant number of workers get rehired, beginning in the middle of the year.  That was largely due to individuals being rehired by firms who had temporarily let them go.  Often in labor markets, it is harder for both employer and employee to match up quickly but in these conditions, depending on the state of the specific business, it was easier to match. What is the likelihood that society will learn only a few things from the Covid-19 experience? On this front, I have a mixed response.  Societies sometimes learn the wrong things from crises.  However, that habit of wearing a mask and distancing will be ingrained in many societies for at least a few decades.  That can buy valuable months for effective responses and treatments.  Furthermore, an important lesson has been the application and testing of existing treatments to determine their effectiveness. This has helped us learn about the efficacy of existing, lower-cost steroid type injections for Covid-19 patients.  This may prove to be a more effective research method than starting from scratch.  On the flip side, we will also be affected by lessons that have flawed conclusions. Many of those are the result of depending on confirmation bias instead of testing. Is the four bedroom home the biggest selling commodity around? Between an increase in individuals working from home for an existing employer and those working from home for a new business startup, I expect that we will see increased demand for living space. This is incentivized through tax policy where small business expenses can be deducted from home work. There is also the real likelihood of an increase in household size due to more people being confined. All this seems to point to a demand for an additional bedroom in many households. Next week we will continue the discussion about existing questions, and we will focus on the implications of change as we look at specific international relations.  What questions do you think about?  News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

In this issue, we take a look at the reunification of Germany while simultaneously discussing International Relations theory.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Most of us can probably recall seeing the images of the graffiti-covered Berlin Wall coming down in 1989.  This month marks the thirtieth anniversary of the reunification of Germany, a very important event in European history as well as in global political relations. A unified Germany and a broken Soviet Union, and its allied Warsaw Pact countries, created an environment of economic growth and the continued influence of the West. And that environment has continued throughout the following decades. In fact, at a scaled-down ceremony last week, Germany’s president declared, that the present is “the best Germany there has ever been.” But what had unified Germany earlier in its history?  Many point to the acts of Prussia’s leader, Bismarck, and his role in the Franco-Prussian war, which Prussia won.  In that process, he consolidated an order of seemingly disparate German states.  As the U.S. State Department history says, “The third and final act of German unification was the Franco-Prussian War of 1870-71, orchestrated by Bismarck to draw the western German states into an alliance with the North German Confederation. With the French defeat, the German Empire was proclaimed in January 1871 in the Palace at Versailles, France.”   What reunified Germany?   As we know Germany was divided by the East and West during the Cold War.  There continues to be a debate on the sources of the unraveling of Eastern Block countries as well as the Soviet Union.  Some suggest it was the decline of the Communist system. Others, in a related matter, suggest these decades of decline undermined the system from within and it imploded. Still others suggest it was part of the tension drawn from the conflictual relations with the U.S. that led to poor choices, or that Gorbachev’s efforts to open up the country politically set up a condition for unraveling. Some say the unraveling of the Soviet Union was due to their fighting in Afghanistan.  I put very little weight in the last point, but I do see a case for it being a confluence of the other factors.  It is important to remember that while there was an internal decline in the U.S.S.R., the Eastern European countries were behaving more autonomously, and they did not suffer all the negative repercussions that they experienced from the Soviet Union decades before.  Perhaps the most memorable element of this unraveling was the fall of the symbol of division, the Berlin Wall. However, when the wall fell there was a robust debate on how the political arrangement should be handled. Many Europeans were uneasy with the prospect of a unified Germany, in light of the painful memories of World War I and World War II.  While others, including President Bush, were strong proponents of reunification.  It might be helpful to visit some theoretical ideas that feed into this debate. The purpose of this account is to look at how much has transpired in the period, as well as how consequential specific factors are.  A lot of us look at the relations in politics (including those that are international) and focus on the traits and perspectives of individuals interacting with other individuals and producing specific outcomes.  As Kenneth Waltz said under this perspective, “the locus of the important causes of war is found in the nature and behavior of man. Wars result from selfishness, from misdirected aggressive impulses, from stupidity.” However, the reality (as Waltz would argue) is much more complicated. We can look at a country’s behavior based on their traits or consider that they operate in a global system where they influence and are influenced by other countries.  The influences range from diplomacy and commerce to culture and war.  These forces are specifically guided by the relative power of other countries.  To distill this in a different way, we can look at individuals and how their minds work to explain their behavior, or we can look at the society they operate within.  Both are interesting and helpful perspectives and I think that external frame provides a lot of insight into the relations between countries. With this in mind, we can see this system of relations among countries and things look somewhat different. The reunification of Germany and the fall of the Soviet Union take on added importance.  Although today we take the matter for granted, at the time many realized how important it could be. The world shifted from having two great powers (the U.S. and the Soviet Union) to a situation in which, for decades, the United States has been the only great power.  Today we see a clear transition to multiple levels of differing power where it most prominently features the United States and China.  However, German and European unification is a significant economic force, although nearly all the members are in alliance with the U.S. in NATO.  Nevertheless, there are at least three main units in economic power.  Russia, of course, adds to the complexity through its nuclear arsenal.  This perspective may not help us predict the motives of individual leaders, but it does help create a framework to understand the environment they operate within.  We will continue to talk about global politics in the months ahead in this context. Hopefully, that can help discourage us from thinking myopically about our complex world. Quote: “Some students of international politics believe that realism is obsolete. They argue that, although realism’s concepts of anarchy, self-help, and power balancing may have been appropriate to a bygone era, they have been displaced by changed conditions and eclipsed by better ideas. New times call for new thinking. Changing conditions require revised theories or entirely different ones. True, if the conditions that a theory contemplated have changed, the theory no longer applies. But what sorts of changes would alter the international political system so profoundly that old ways of thinking would no longer be relevant? Changes of the system would do it; changes in the system would not.” ~ Kenneth N. Waltz News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

In this issue, I dig into another discussion of variance where we apply the concept to examine COVID-19 response and prevention.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin A few weeks ago we talked about polling numbers and the issue of variance. We discussed the fact that there was more variance between in the results of several national polls as compared to several smaller state polls. The concepts we discussed a few weeks ago have many applications and might provide an informative way for us to look at Covid-19. Learning how to cook one dish can sometimes help us learn how to prepare another. P.S. When I was in Miami I enjoyed eating a famous Venezuelan beef dish and this weekend I made an attempt that you can view below.  I miss Amaize! Specifically, I discussed the idea of variance, which points to the degree things deviate from the average.  High variance changes a lot and low variance changes little.  For example, I would characterize the daily temperature every October as high variance from the average.   In contrast, the number of average laughs I get from jokes is a low average and low variance.  On the campaign front, before the events of what felt like a long weekend, Florida maintained a higher variance for Trump's polling numbers. But there was a low variance for Biden and Trump in Pennsylvania and North Carolina.  Good old Ohio deserves to be in the mix for future analysis. How does the topic of variance relate to learning more about Covid-19? Analysts, including Dr. Tufekci, have recently argued for approaches that consider both the average infection rate (R0) of Covid-19 as well as the variance.  Several studies indicate that the average person who gets Covid-19 will infect about 3 other people.  I believe it is worth asking, how average is average?  We are now learning that it is not uncommon for one or even zero to be infected from a single COVID patient.  So what is pushing the average to 3?  Super spreaders.  As we know, these are folks who may be knowingly or unknowingly spreading the disease.  While there may not be a drastic number of super spreaders, every day there are a few who have a dramatic effect.  At this point, it is not clear what characteristics super spreaders have, other than the fact that they interact with a lot of people.  In fact, that may be the only pattern of their behavior we are able to identify.  However, this factor can be kept in mind as practices and policies are established.  As a society, we should not hear this and become discouraged or defeatist.  Even though there are a few super spreaders, there are effective approaches that can help to counter their impact. Perhaps the most important approach in the U.S. this year was the rapid canceling of large events. Curbing large gatherings indoors is also extremely important to lessen the impact of the super spreader.  Part of the risk with large gatherings indoors relates to the size of the group. But such events also raise concerns because it is believed the virus stays airborne longer due to ventilation and air conditioning. Also, Dr. Tufekci makes a strong policy argument for backward contact tracing. This would more accurately help locate some potential super spreader cases.  Backward tracing would look at a patient who recently was diagnosed and find out whom they came in contact within the days before they were known to be sick.  This is not to determine whom they infected (which is important) but rather to determine who infected them.  Probabilistically, this approach can help identify potential super spreaders and quickly trace their interactions to break transmission chains.  My non epidemiological mind looks at it like a tree.  The forward tracing is like the branches of recent interactions by the patient, whereas the backward tracing looks at the root sources for how the patient contracted COVID-19.  With robust testing and contact tracing infrastructure in place these approaches can help further reduce spread. We are witnessing the confluence of this practice, potential seasonal increases in COVID-19 cases, and the likely distribution of a vaccine in the year ahead.  Hopefully, the vaccine comes soon. But regardless of when an effective vaccine is widely available, we will benefit by considering the role of variance, super spreaders, and effective ways to minimize spread across social clusters. At the end of the year, I plan on diving into lessons learned from 2020.  Two parts come to mind including humility when developing expectations in our lives.  Another lesson is considering the effect of the seemingly small thing like the rare super spreader can have in molding our world.  I think society can regularly conflate the important events and assume large groups or forces are behind them.  This perception is further challenged because those who may have major effects in one circumstance can have negligible influence in another.  This year we have had countless examples of the effects of a small virus, small sparks, small errors, small actions, and small thinking.  The only thing that seems large is the number of words trying to explain these small things… with little success. News: Thought: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin The Real Deal: My attempt: This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

In this issue, I dig into my unanswered puzzle of the Russia Investigation. As mentioned in the previous newsletter, the behavior of the U.S. source in Russia, and their life after being extracted to the U.S., are confusing. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Quote: “Don't give it to them all at once, make them work for it. Confuse them with detail, leave things out, go back on your tracks. Be testy, be cussed, be difficult. Drink like a fish; don't give way on the ideology, they won't trust that. They want to deal with a man they've bought; they want the clash of opposites, Alec, not some half-cock convert.”  ~ John le Carré, The Spy Who Came In from the Cold Last week we started the discussion of my number one puzzle from the investigation into Russia’s intrusion in the 2016 election. I closed the last issue asking: What would you do if you had crossed Putin? I have asked myself that question many times regarding this story.  It seems to me the logical conclusion is that you would hide. I expect that many would have run far and would have made it a point to be hard to find. The more distant the better, like witness protection, designed so that the source could not be located. Even though many movies have exciting plots to the contrary, the overwhelming share of people in witness protection are rarely, if ever, in danger. It is difficult to understand why the source who allegedly betrayed Putin did not choose such a route. Please join me in taking another look at some unresolved questions linked to this story. I will conclude with some observations about confirmation bias and its impact, as well. If the source decided to hide, what message would that send, especially to Putin and Russian intelligence?  It would say that they had been double-crossed.  As mentioned earlier, there are examples of Russians being killed for crossing Putin and this would be considered a major betrayal.  Therefore, hiding is uniquely dangerous, and doing something different might be a preferred path. Just like the rabbit I wrote about in a previous newsletter, who nests in the open, being in plain sight may be a preferred alternative.  Being in the open is dangerous, but it might also make it more dangerous for those who seek to harm the rabbit. (in this case, the source).  However, I expect in this case, it is not outside the realm of Putin’s options to do fatal harm to someone he considers a traitor, possibly even someone living on U.S. soil.  Crossing such a threshold is considered an international political taboo, but it is one I think Putin would cross under these circumstances.  Of course, the source who was relocated to the U.S. knows all of this and chose this path anyway. Therefore, while it seems counter-intuitive from what many would rationally choose to do, it seems being vulnerable might be a path to security.  At least that appears to be the situation in this case.  Perhaps Russian Intelligence may be more trusting of the U.S. source the more vulnerable that source seems to be.  However, revealing details about Russia that they consider important would still seem to be a dangerous approach. The source was considered very important and guarded.  This is where other elements of the investigation come into play. I believe the much-dramatized document, the Steele Dossier, served the purpose of junk intel to provide cover for this source.  It seems plausible and one might speculate that intelligence services trade in gossip as a means to muddy the counterintelligence efforts of enemies and to protect sources.   Over time this material got pulled into the investigation, but the author and his sources have been routinely discounted by the CIA. So why use them for years?  They used them for information, knowing it was false, so if the Russians caught wind of activity they would assume (though this is all sloppy) the junk material was the source.  This could seemingly provide cover to a real source.  This might keep a source going longer, although this is certainly no justification for knowingly including this material in a FISA application. There are some plausible paths I consider when looking at this that range from the U.S. source being a double agent to providing false information they did not know was false.  First, Russia interfered in the U.S. election through various means, but it seems like this source informed U.S. intelligence, who took notice on the policy front.  Like many effective lies, it seems plausible that some elements were true and some were not true.  But this source, as far as Russia is concerned, did a great service for them by focusing the U.S. political system inwards instead of thinking about geopolitics. It also seems possible that the location of this source was listed but they were not living at that location. This approach might have been used as a way to draw out potential threats, but that strategy seems a little obvious. Perhaps there is an in-between space of deceit that maintains the status quo.  U.S. intelligence realizes they were partially duped and Putin figures keeping the facade up is useful.  Or from the other side, if this person was slightly untrustworthy from Putin’s perspective, he got rid of someone and gained politically at the same time. Some Questions: How did a media figure get information about a source that was so important that it was left out of the President’s Daily Intelligence Brief?   Who at this time knew of this figure existing?  How much danger was the source put in by being revealed…. and was it intentional?  Why did the story die as quickly as it started? In short, there are many parts of this matter that feed other questions that hopefully we will learn more about. This is important for the record. It is also significant to see how rivals are manipulative and react, to help serve as a lesson for future actions.  One lesson is how Russia managed to concoct a plot that got Americans to be more distrusting of each other than of their old Cold War enemy.  How this played out exposed a deep vulnerability, driven by confirmation bias, that senior officials and the public are swayed by. Sometimes we are too quick to believe something, not because it is factual, but because it is in line with opinions we already hold. What worries me most is how unaware we are as individuals of confirmation bias and how it drives so much of our behavior.  We share that, like many other things, with each other. Quote: “To the hard-liners of East and West the Second World War was a distraction. Now it was over, they could get on with the real war that had started with the Bolshevik Revolution in 1917, and had been running under different flags and disguises ever since.” ~  John le Carré, The Spy Who Came in from the Cold News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

Unlike many other writers this week, I am not going to add to the discussion on the Supreme Court. Obviously, it is consequential, and we will be hearing about that controversy for months. Instead, I will focus on an aspect of the Russian interference investigation that has received very little attention. This is the one-year anniversary of a puzzle related to Russia that deserves more thought.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Quote: “We have to live without sympathy, don't we? That's impossible of course. We act it to one another, all this hardness; but we aren't like that really, I mean...one can't be out in the cold all the time; one has to come in from the cold...d'you see what I mean?” ~ John le Carré, The Spy Who Came In from the Cold No doubt the legacy of the investigation into Russia’s Interference in the 2016 Election has received robust attention in recent years.  But interestingly the attention continues.  The point of this newsletter is not to rehash the existing debates, but to point to a factor that has received scant attention.  I believe it is important to focus on this because without a few key individuals this event would have transpired very differently.  Specifically, these figures are not the ones we know from cable TV or the impeachment hearings and trial.  In other words, I am saying all of this to encourage readers to focus on a specific element and to try to momentarily suspend political biases and how they reinforce confirmation biases.  Because of the details, I am going to cover this subject in two issues. Why is it one of the people who should be most fearful of Russia’s President Vladimir Putin after the events of 2016 lived in the Washington DC area and never even changed their name?  It was only a year ago that some key elements of the story broke. The BBC reported, “According to the New York Times, the source was instrumental in the conclusion by US intelligence agencies in 2016 that Mr. Putin had personally orchestrated Russia's interference in the US presidential election.  The source's information was so sensitive that then-CIA director John Brennan prepared special sealed files for President Obama, rather than include it in the president's ordinary briefing, the Times report said.” Shortly thereafter a Washington news affiliate was able to locate the source and said the individual was living in the Washington Metro area and had kept their name.  They were unable to speak with the source and were asked to leave by federal officials who arrived on the scene.  DC is a town full of officials in various stages of trepidation regarding Putin.  But only this individual’s behavior is hard to comprehend. (At least to me.) In other words, almost everyone else involved in this narrative could easily be understood and explained as an extrapolation of Machiavelli made for TV and twitter. Let's use an alternative analysis of the uproar in Washington.  What if we push all of the regular daily talk about the case to the background and just focus on this one piece of information and examine human behavior. When looking through that lens, the actions of the US source in Moscow who was close to Putin was most peculiar.      If you had been an associate of Putin’s and had apparently double-crossed him, would you live in DC without changing your name?  Some would understandably consider that a risky thing to do. USA Today has published reports that include other examples of targeted killings by Russia including Litvinenko. “A Russian defector and former intelligence officer who specialized in blowing the whistle on organized crime in Moscow, Litvinenko fell mortally ill after meeting with several Russian intelligence contacts.” This person provided intel for nearly a decade and, when the CIA was worried about the person getting exposed, the source refused offers for extraction and stayed in Russia.  When the person finally left, they were extracted to the US where they moved to the DC area and lived under their own name.   They were even able to be tracked down by a reporter. (pretty easily it seems) Strip away everything else – how you feel about people and what they say – If you were this person who allegedly double-crossed and spied on Putin would you live in Washington and be easy to find?   In this whole situation, this is the only act I have found puzzling. I am not saying that everything involved in the Russia investigation no is disappointing or a reason for us to be angry. This is different. This act is puzzling. I think understanding this behavior will illuminate the puzzle better than what anyone has said over these years.  This is why – everyone is risking what they say versus what others say.  In other words, with very low risk.  It could be argued that politicians advanced many of their respective social positions through their statements on the investigation of Russian interference.  Those that declined in status saw little loss in income or other key aspects of their lives.  I am not saying politics does not involve stress and risk – It is very serious. However, there is only one actor in this story who I can imagine is at personal risk.  Living out in the open is a very high personal risk considering Putin’s record of killing people who cross him.   Why did the person do this?  Why have they not been harmed? This is where analysis intervenes with readings of spy books like those written by John le Carré and Littell.  But speculation continues and it is worth unpacking information so we might gain better insight into what actually happened.  While we explore possible explanations for this behavior in the next issue, I just want to close with one question:   What would you do if you crossed Putin? News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

This issue looks at the Indo-Pacific region and specifically relationships among countries and the influence of China.  We will focus on the India and Japan relationship as a way to examine regional dynamics as they play out in many ways in the short and medium-term.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin The Japan Times recently reported that, “Japan and India have signed a military pact enabling them to exchange supplies and logistical support.”  The report continues by pointing out that these increased military ties are, “part of efforts to step up security cooperation in the face of China’s growing assertiveness.” The most frequently noticed element of Japanese – Indian military relations are the increased scope of military exercises.  As Rej recently noticed in The Diplomat, “Since 2015, Japan has participated in the U.S.-India Malabar naval exercises, which have grown considerably more sophisticated over the years.” The engagement also includes efforts to incorporate regional partners including Vietnam, Indonesia, and Australia.  People observing this activity may be interested in the meaning of this pattern of relations. First, let's turn to some general theoretical ideas to look at these relations. There is a concept in the Realist school of thought called “ offshore balancing” where a great power will seek to contain the rise of another great power through direct and indirect assistance for other regional powers.  The assistance can come in the form of supporting economies or institutions deemed critical, as well as the procurement of military systems and training.  The more direct approaches come in the form of alliances and mutually coordinating when engaging in conflict with an adversarial power.  This offshore balancing concept is most directly articulated in a Foreign Affairs article by Mearsheimer and Walt that, “Instead of policing the world, the United States would encourage other countries to take the lead in checking rising powers, intervening itself only when necessary.”  As we know, the U.S. does not have a formal mutual security treaty with India like the one shared between the U.S. and Japan.  There is no talk of modifying that dynamic. But instead, some significant steps to strengthen regional partners are taking place. However, there are numerous practical and conceptual challenges we may observe in these regional partnerships.  There is a conceptual tension, not unlike in other collective human endeavors, and it centers around commitment.  A great power may want its regional partners to be proactive in protecting their territory and overall security.  On the other hand, the regional partners want to know to what degree there is a commitment from the great power.  The great power can run into the challenges of over committing and inducing a free-rider situation of having the regional powers become too dependent. Conversely, the regional powers could be partners in name only who would be untrusting of the backing of the great power.  They could operate in the spectrum of these scenarios where different ones are to the benefit of one of the major powers.  It is also possible that the hypothetical median point of the two extremes could be even less desirable to some of the actors. In short, this can be a complex needle to thread. This practical problem intersects with another conceptual challenge in that these countries are fundamentally seeking to deter the rise of China in their space.  Deterrence is a core objective of a country as it tries to dissuade a threat.  However, it is not always easy to know if your policies are working. Sometimes it is easier to tell when a policy has failed than when it has succeeded. Therefore, regional powers may take on a mixed approach to achieve multiple ends, including addressing their relations with great powers. These two conceptual challenges of deterrence (as directed primarily toward China but conveyed to partners) and commitment (coordinated with partners but conveyed to China) will be part of these discussions in the decades to come.  There are various levels of engagement in Washington involved in strengthening the relations with Japan and India, including at the State Department and Defense Department.  It is worth noting that the National Defense Authorization Act for fiscal year 2021 has differing focuses in the House and Senate versions.  However, there is a strong consensus on allocating direct funds to the Indo-Pacific Command for direct assistance to its military counterparts in its region.  We may be surprised that there are layers of overlap in politics whether that be in Tokyo, New Delhi, or Washington, DC.  Politics, as they say, create interesting bedfellows. But the most predictable, to me, are those that meet because they agree on a perceived threat. While this seems to be the consensus view, the approach does not prevent or even dissuade interactions that would improve U.S. and China relations. However, this approach would provide options if relations between the U.S. and China further deteriorate.  The deterrence and commitment challenges are at play in the U.S. – Taiwan relationship, as well.  Although they are not security allies, the U.S. sells equipment to Taiwan with the intent of helping them resist an invasion.  Taiwan's political engagements and acquisition are efforts to improve a commitment dimension in its relationship with the U.S.  This was considered a bridge too far for the U.S., who for decades instead conveyed to China its satisfaction with the status quo. This approach was particularly effective in the earlier eras in the relationship, but is now challenged by China’s increased capabilities in precision munitions. As Greer points out there are a multitude of changes that evolved in the relationship and, specifically, Taiwan’s capability to sufficiently deter a sustained offensive from China.  He argues the military (especially the reserve component necessary for repelling an invasion) is poorly trained and ill-prepared for a sustained conflict.  Greer’s point may emphasize some of the challenges of prolonged off-shore balancing (it can rightfully be argued that the early relations were not part of a regional balancing effort that is in play today).  Again, these challenges of commitment and deterrence may make other challenges or crises difficult to address, like two gears that grind into each other continuously.  Challenges can arise without sufficient lubricant or when small external objects slow the gears down. How the U.S. deftly handles these dynamics, and equally important how the regional actors respond, will play a significant role in the politics and economics in the region over these coming decades.  It is also an important place to watch for potential flashpoints. It is a geographic space most likely to be the site of a disagreement between two great powers. Some of these concepts are discussed in an article I wrote with Drs. Chand and Garcia on regional efforts to address China’s rise.  For a more thorough discussion of the regional relations, you can access this 2019 article from The Air Force Journal of Indo-Pacific Affairs. News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

As promised, we are continuing the look at the 2020 election.  This newsletter digs into the election polling and a quirk I noticed when looking at state polling and national polling. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Something I have noticed, but have not seen discussed elsewhere, is a trend that I was curious about during the primary season. This trend may be an indication that national polling and state polling have some differing results which are interesting. First, this is a post that is not a diatribe about polls.  Some firms do a better or a worse job per generally accepted methods. However, there is a nuance of the art of polling that many have debates over, but they still have difficulty in substantiating.  Let’s put all that drama in a box and revisit it later. I must make a brief tangent into statistics to put us all in the same headspace.  Let us focus on two concepts in statistics: average and variance.  The calculation of average is commonly used in our conversation in a multitude of areas.  We know the average height of a high school basketball team, we know the average grades of a school class, we know the average speed on the road, and we know if someone has an average fashion sense.  The average is a reference point, but it does not tell us everything.  This is where variance can be useful because it tells us how much a measure deviates from the average.  To begin let's suppose the average height of a male high school basketball player is six feet three inches. If we had a team with players ranging in height from six feet two inches to six feet four inches, then our average would be near six feet three inches.  However, we could also have a team with a player six feet nine inches tall and another player who is five feet nine inches tall.  An analyst would show that, on average, both teams are six feet three inches, but anyone who saw the teams play each other would notice the distinct differences in the teams and whatever advantages and disadvantages that would entail.  The point is that the average measure would be unhelpful in detecting this difference.  It is not incorrect, but another measure would help more.  We would see that the team where the player heights are closer to the average have lower variance, while the team where the heights were farther from the average have greater variance.  This is a quantitative statement and not qualitative.  If we were to apply this way of thinking to the returns in a retirement portfolio, a fund that holds U.S. Treasury bonds generally has lower variance than a fund that holds stocks. Something I have been curious about when looking at election polling this year is that the variance in polling for the presidential race has been higher in national polls than in state-level polls.  Hypothetically, I can think of better explanations for the opposite being the case (that national polls have lower variance than state polls). More analysis is warranted in this puzzle, but these are my current findings as culminated from the Real Clear Politics collection of polls.  I focus on the variance of Trump's numbers first under the assumption that an incumbent makes a general impression on voters.  I draw out the national data and key swing states WI, AZ, NC, PA, and FL.  These states have been followed for months.  Also, I am including polls taken after June 5, once Biden had secured the delegates to claim the Democrat nomination to polls analyzed on September 6th.  Inferences from Variance: If I were the leading candidate and I could not be in a blowout, I would want my average to be at or above 50% with low variance.  I would read the variance as how voters move around slightly in different conditions.  If they stick with you, that is a good place to be. If I were the trailing candidate, I would be disappointed with the lower average vote share. However, I might take solace in the fact that there is more variation for my support, because there might be approaches that could help stoke that support.  However, this variance is not consistent across the board.  Trump has much greater variance in Florida than Pennsylvania.  Among the states in this group, the state with the lowest variation for both candidates is North Carolina.  This may be an indicator of fewer swing voters in the Tar Heel State. Returning to my earlier puzzle on possible explanations behind the pattern, it may just be the result of the state's swing status and the low variance.  However, I could expect low variance in non-swing states whether they be Kentucky or New York.  It may be that a few states have movement in their polls that contribute to the national picture that is not seen in these individual states.  However, these states encompass a pretty broad demographic share of the country. To me, this puzzle is even more difficult to grasp because the state polls are generally not held in as high esteem as national polls.  The state polls also have a lower sample size which, by method alone, would lead us to expect greater variance.  It is also possible the results may be a coincidence or a matter of selecting a few states.  However, regardless of the comparison, it is important to note that there is less variation in preferences for these candidates.  One example of a higher relative variance would be Trump’s numbers in Florida.  This may be due to the disproportionate senior population in Florida and reactions to COVID-19.  Census data estimates that 20.5% of the population are seniors in Florida, while seniors account for 16.3% of the population in North Carolina.  Seniors represent 18.2% of the population in Pennsylvania, 17% in Wisconsin, and 17.5% in Arizona. As I have mentioned before, I am very interested in the sentiments of high propensity voting seniors in these swing states. https://www.census.gov/library/visualizations/2020/comm/map-popest-65-and-older.html Before analyzing election dynamics in the coming months I thought it would be helpful to explore this puzzle and consider how variance can reveal trends we may not recognize when looking at polling averages.  Like all other metrics, it is a mistake to over-focus on one measure. But we get a fuller picture by considering these factors along with other observations. News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

Last week, the Federal Reserve announced changes in how it will target inflation. We will provide some context to this change in policy as well as consider some challenges ahead in policymaking.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin When some folks see these words, “Average Inflation Targeting” together their eyes get heavy.  However, often the consequential things in our lives are not necessarily the things we get excited about.  (Sorry that sounds like something a parent would say.) Once you read all the way through this newsletter you will be rewarded with a joke.  Economists know people follow incentives. Average Inflation Targeting is an important concept both in practice and in what it says about monetary theory.  First, we will take a look at economic theory, recent decades of practice, and then how this may play out.  Like most other aspects of our social world, there remain many unknowns and puzzles.  Among the unknowns are subjects we thought we understood, but over time we realize there are still more unknowns.  This is the case with how monetary policy affects inflation.  The general idea is that inflation follows when there is more money circulating in the economy than what is in line with the demand for purchased goods and services. The Federal Reserve’s statutory mandate is to manage inflation and secure full employment.  These guidelines from Congress are transformed into the Federal Reserve’s policy objectives.  For decades these objectives were sought through broad policy practices, namely trading government treasuries to hit a target short term interest rate.  Over time the Federal Reserve has adopted additional tools but, in practice and effect, the newer tools resemble the earlier ones.  These tools have been key during times of crisis like in 2008 and 2009, as well as today.  The general assumption is that low-interest rates stimulate economic activity as well as inflation.  While there is robust support for this argument, I will assert that the inflation puzzle is not as complete as we had assumed. There may be parts of the puzzle we do not quite grasp, and we might not know what pieces are missing.  However, that does not mean that interest rates are inconsequential.  No one is arguing that.  Monetary policy, including interest rates, is a vital variable in explaining inflation. Imagine you were working for the Federal Reserve and your goal was to hit a target for inflation of 2%.  Over the years you and your team should be pretty pleased because you have wound up close…at about 1.5%.  However, over time you get curious and ask why the result usually comes in under the target. George Mason University economist David Beckworth effectively illustrated this trend a few years ago through a target graphic, which reflects that academia and the Federal Reserve have been discussing this puzzle for about half a decade. The proposed solution is to slightly adjust the targeting approach.  In other words, if we were looking at a target and routinely undershot the bullseye, we would adjust the sights.  In fact, if we were uncertain about precision we might aim slightly above the bullseye, assuming that on average we would get close to the target. This is why the Federal Reserve statement says it, “seeks to achieve inflation that averages 2 percent over time.” To achieve this objective, “following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” James Bullard, president of the St. Louis Federal Reserve defended the revised approach.  “There was a perception both in markets, and perhaps in the policy making community as well, that 2% inflation was some kind of a ceiling,” he said. “Inflation expectations should be moved up a little bit now in markets in response to this.”  What Bullard (who is not alone) is introducing into this puzzle is the role that expectations have on inflation.  In other words, the behavior of consumers and businesses is impacted by a general assumption of inflation that is informed by their past.  As human beings, we incorporate expectations into a whole range of decisions.  Economists started incorporating this back into economic theory, as argued by Muth, in the 1960s.  While we can think of this expectation as a factor, it is not always easy to measure.  Thus, the reliance on the original monetary tool of interest rates. This average inflation targeting approach is expected to be debated. But what is most likely to happen is that, over this decade, the Federal Reserve will be comfortable with inflation slightly above 2% (meaning brief periods of 2-3%) and will slowly raise rates to tamp down inflation.   In practice this could mean that the Federal Reserve delays for a few quarters what would have been assumed under the previous practices to be the proper time to raise rates to get closer to the 2% target on average. A few newsletters back I discussed some of the future challenges the U.S. faces with constrained monetary and fiscal tools as a result of the national debt. Some choices exist on paper but in practice are limited by the impact of the debt. This is a similar problem to the challenge policymakers faced this year when thinking about economic stimulus to support the economy while not simultaneously stimulating social activity that would spread a virus.  There were a range of policy choices that had to be fundamentally reconsidered.  I expect similar effects will be seen in the future with this constraint on monetary and fiscal policymaking, even assuming the figures and institutions reach an agreement. Promised Joke: News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

In the last week, there has been an increase in the discussions about China’s economic plans and what they might mean. This week we are focusing on the importance of flexibility in state planning and the current emphasis on China’s economic concepts and the domestic and international political environment they are developing within.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Quote: “The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another. Avarice over-rates the difference between poverty and riches: ambition, that between a private and a public station: vain-glory, that between obscurity and extensive reputation. The person under the influence of any of those extravagant passions, is not only miserable in his actual situation, but is often disposed to disturb the peace of society, in order to arrive at that which he so foolishly admires.”  ~ Adam Smith, The Theory of Moral Sentiments A phrase we heard during the US election in 1992 was “It’s the Economy … Stupid”.  As we are aware, this catchphrase knows no geographic bounds.  News out of China shows an increased emphasis on the economy and a state-led revival of economic development concepts.  This is likely due to several factors, as we will examine. That shift in emphasis on the economy may also suggest some things about the national outlook in China. Dual Circulation Theory is an idea being advanced by the leaders of the Chinese Communist Party that emphasizes two forms of growth.  Economic growth occurs through the country’s domestic consumption market as well as through exports.  No doubt many following China could rightfully point out that this concept is similar to the existing economic engines for China.  For China, like most countries, this is a typical approach.  It is not unlike a company saying it will turn a profit by providing products and services.  Both types of claims are sufficiently broad to be useful to operate within.   I think the purpose of this framework in discussing the economy is to create an environment where the broad concept can be employed to explain a whole range of scenarios. Why is this descriptive approach employed?  China needs both robust exports and domestic consumption.  It is assumed that if exports were to decline due to trade competition and manufacturing shifting away from China, the country does not have an adequate domestic market, at least in the short term, to create sufficient demand to meet its supported production. Therefore, I read this language as a sign that China may be preparing for a transition.  As always conditions remain influx. Who would have thought 12 months ago that the US and China would have reached a point where their strained relations could affect trade?  The enmity on both sides is shared by politicians and the public, and this can be expected to be a serious conditioning force for some years.  In response to the epidemic, China shut down numerous cities and production for months, and initially offered targeted relief to specific population hubs.  It has recovered somewhat, but China is still projected to have its lowest annual GDP in decades.  This dual approach gives China flexibility to modify and promote efficiency or to start emphasizing either domestic consumption or exports.  Bill Bishop anticipates this concept will be featured prominently in the roll-out of the Chinese Communist Party’s 14th  Five Year Plan.  Just as in the USSR these Five-Year Plans outline a prearranged national focus on production, technology, and development.  Under the Plan, the proponents aspire to maintain the advancement of a system of socialism with Chinese characteristics.  We may see an increased emphasis on domestic consumption that will occur, either from Say’s Law (“the mere circumstance of creation of one product immediately opens a vent for other products”)  or the Chinese Communist Party will say to consume certain goods. The two terms “socialism” and “Chinese characteristics” allow for flexibility in implementation, where China emphasizes each concept as needed. So, too, will the Dual Circulation Theory.  Others seem to disagree with this argument of flexibility and suggest this is more about China emphasizing domestic consumption.  I think this is a possibility but also under this approach, it would allow for trying to emphasize domestic consumption. In the event it fails, then the approach can be modified. A helpful indicator on this front will be how China frames this approach relative to its Belt and Road Initiative, and what commitments are made under each.  From an international perspective that maybe China responding to the regional investment challenges it was facing, even before the outbreak of Covid-19.  Whether it be the dual circulation approach, Trump’s tactical use of tariffs on steel and aluminum, or the UK restricting technology, we see some economic self-sufficiency winds blowing.  It is unclear how strong the winds are and, as I have argued before, the present is not always a very helpful leading indicator of the future. **Regular China news and analysis, I subscribe to Bishop’s Sinocism on Substack** Speaking of the weather, while folks obsess over trivial debates, China has been hit by an extraordinarily severe rainy season. Huge rains have severely taxed China’s elaborate dam system on the Yangtze river basin, and are responsible for the deaths of hundreds and evacuations in the hundreds of thousands.  Chinese authorities have had to continue to reassure the public the largest dam on earth, the Three Gorges Dam, will be able to handle this uncharacteristically heavy rain season. I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

We are focusing on the announced change in relations between Israel and the United Arab Emirates along with the conditions involved.  Also, we will focus on some helpful peace concepts.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Quotes: “Rapprochement is more about practice than institutions.”  ~ Charles Kupchan “Inclined to peace by his temper and situation, it was easy for him to discover that Rome, in her present exalted situation, had much less to hope than to fear from the chance of arms; and that, in the prosecution of remote wars, the undertaking became every day more difficult, the event more doubtful, and the possession more precarious, and less beneficial.” ~ Edward Gibbon Last week the Trump Administration announced a shift in relations between Israel and the United Arab Emirates.  This involves the normalization of relations between the two countries that for decades have not recognized each other diplomatically.  We are going to examine the arrangement, the factors surrounding it, and contextualize it within the research study of peace. With a few exceptions, there seems to be growing support in Congress for this diplomatic effort.  From a consensus standpoint within US domestic politics that is useful.  It may also be important because the agreement may involve solidifying support, which often entails funds from the US.  Palestinian groups have been critical, as well as Turkey and Iran.  Speaking of Iran, many analysts argue that the differences Israel and the U.A.E. each has with Iran have helped to encourage their improving relations with one another. However, these are long-standing divisions and the enmity exists. The balance of power dynamics in the region involves many factors (domestic politics, energy, history of relations, and outside powers) but what seems to align and concern countries in the region most is the sectarian divisions.  (though some disagree)  Much of the suffering and standoff in Syria and Yemen is related to the proxy fighting between groups aligned with either Shia or Sunni. Frequently the efforts are less about achieving aims than about seeking to deny the aims of their sectarian rival.  This has also played a role in the politics in Iraq, Bahrain, and Lebanon, where sectarian divisions have been embedded in politics.  With Iran’s continued efforts to enrich nuclear capabilities, we see Saudi Arabia, with China’s assistance, also enter into this domain, probably as a reaction to the threat of Iran’s nuclear developments.  While there is robust disagreement among Sunni countries and Israel they all agree that their principal concern is Iran.  Plans for peace are laudable objectives.  But like most laudable things it is very difficult to attain.  No doubt this is the case, whether the focus is on Israel and its neighbors or the entire Middle East. That is why steps like those taken last week are important. When studying peace, we can look at work from Galtung, who characterized two types of peace: positive and negative.  This is not a normative characterization but rather is a description of what is actually done. When considering the meaning of positive peace, it is often described as occurring through a series of actions. Within these actions, there is an objective of moving toward peace, which is fostered through norms, laws, and habits. Meanwhile, negative peace is the result of the absence of war and is not the result of specific actions that facilitate the outcome, most notably at the normative level. The recent development between Israel and the United Arab Emirates is also an agreement (like most agreements) that involves the existence of leverage for each side to influence relations.  This may not include harmony or other types of idealized relationships, but it is also far from a conflictual relationship.  If one party does not meet the terms then the other can withdraw. It is also rumored that other Gulf states may join in similar arrangements, which intentionally hints at the possibility that normalization between Saudi Arabia and Israel may happen.  This is particularly plausible given the frequent interaction, although done informally, between these countries on regional affairs. That informal interaction is one of the many widely shared “secrets” in international affairs. In recent decades there have been many failed attempts to reach grand positive peace agreements in the region. Perhaps the lesson we should learn is that the alternative approach of building a foundation is the path to having a negative peace arrangement, and that approach is preferable to numerous alternatives.  Just as war does not last forever, neither does either type of peace.  It's important to recognize that the most desirable form of peace may not be within reach. In this case, it would be hard to assert that positive peace efforts have succeeded. But perhaps more incremental steps are attainable.  These measured positive peace moves like normalization help create a greater environment where negative peace is the dominant state in the western Middle East.  The parties involved seem to acknowledge this.  No doubt the amount of regional balancing and opportunities taken by leaders can influence this, but we could eventually see a series of incremental steps toward peace, which could prove to be very important. What do you expect to happen next in the Middle East? I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

We have been investigating the science concepts behind the approaches to fight COVID-19.  The purpose of this series is to better understand some of the current responses to the virus and think about how to proceed.  This week we will examine how the human body responds to the virus. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Quote: “In fact, biology is chaos. Biological systems are the product not of logic but of evolution, an inelegant process. Life does not choose the logically best design to meet a new situation. It adapts what already exists...The result, unlike the clean straight lines of logic, is often irregular, messy.” ~ John M. Barry, The Great Influenza Flashback: First, as I often say this year, I am not a medical doctor and this analysis is based on readings and attempts to explain a subject to myself as much to others.  With that in mind, all these points should be conditioned with the understanding that there is a lot that is still not known about COVID-19.  But decisions (good and bad) are regularly made under uncertainty.   Just as the virus spreads exponentially within a population it often spreads rapidly within the human body.  This is the case with viruses but there are elements of COVID-19 that makes this particularly the case.  Now of course there are examples where there are people, especially the young, where this does not apply and some of this information may help point to why. Just as a virus spreads rapidly in our body our system has tools to detect the invasion of an unwanted virus.  Once detected it sends a signal to the body to respond.  COVID-19 has many diabolical elements.  These include the possibility that people are contagious before it makes them sick enough to force them to be confined.  Another element researchers are learning is that it seems to interfere with the tools the body produces to detect viruses.  So, in the early stages as it advances in some cases it is less detected.  Konno, Kimura et al explain that COVID-19 is unique at, “suppressing the induction of type I interferon more efficiently than its SARS-CoV” gene sequence. Thus, just like with the other challenge COVID-19 poses is that it gets additional time to spread before our body responds.  To me, only one word describes this: diabolical. But our bodies are generally not going to be passive, as Drs. Iwasaki and Medzhitov explain our body produces T-cells that respond to the virus.  They say, “T cells detect and kill those infected cells.”  It is the job of antibodies to clear out the virus from a system, but the T-cells are the aggressive fighters.  In fact, the fight can sometimes cause damage depending on the circumstances. The challenge is that just as the body becomes more fragile it also generally produces fewer cells that detect viruses and fewer T-cells that are programmed to respond.  This is directly why as a national policy those with certain medical conditions and weak immune systems and/or senior citizens are so vulnerable.  Again, this is why new treatments like steroid injections and Remdesivir are important.  They help the individual recover.  They also generally accelerate the timeline for recovery which is good for the patient and their family but also good for the health care system.  This is because it can help shorten the time of the hospital stay making some beds more quickly available.  Again, because a virus spreads exponentially responses that allow for more hospital capacity can mean the difference in some hospital systems experiencing crisis or catastrophe.  Plasma treatments can also be helpful in this regard to dampen the worse aspects of an overwhelmed healthcare system.  As we wait for a vaccine of which many are designed to address these deficits in our immune system While the healthcare community is taking this seriously there are numerous things society can continue to do to dampen the exponential growth of the virus.  These include distancing, washing hands, and when we must socially interact wear a mask. There are amusing memes online suggesting everyone claims to be an expert at immunology.  This is a fair point.  This is particularly the case when folks seek out information to confirm their existing beliefs. (a common critique of mine) My modest observation is, with a few exceptions, the communities that have fared best, are those that culturally know how to respond to epidemic conditions.  This often is the result of recently dealing with a respiratory virus. They know to quickly responded by changing their behavior.  I fear that is what has slowly happened in the US as each region has had to learn the hard way through considerable suffering, the lesson of mitigation.  Further background read The Atlantic. News: Yesterday was National Book Day… I read I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

In upcoming weeks we will look into science concepts behind the approaches to fight COVID-19.  The purpose of this series is to better understand some of the current practices, to consider how the increase in the positivity rate of new cases can significantly complicate efforts, and to think about how to proceed. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Please listen to this podcast as I revisit an earlier issue on exponential growth. This issue will tie into the following newsletter to see how treatments and concepts help deflect the rapid growth of a virus. You can read the original text here. I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

In upcoming weeks we will look into science concepts behind the approaches to fight COVID-19.  The purpose of this series is to better understand some of the current practices, to consider how the increase in the positivity rate of new cases can significantly complicate efforts, and to think about how to proceed.  Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin Quote: "The most beautiful experience we can have is the mysterious. It is the fundamental emotion that stands at the cradle of true art and true science."  ~ Albert Einstein Does anyone remember Mr. Wizard’s World?  It was a science show that I enjoyed in the 1980s  and in recent years I still think about that TV program.  I have wondered how Mr. Wizard would explain some of the important concepts behind understanding COVID-19 and our human response.  While I am not a scientist in the areas most often discussed as ways to combat COVID-19 (though cognitive and social behavior is way underappreciated right now), numerous tools and approaches cross disciplines.  My effort here will be to illustrate these concepts to enhance the discussion of ways to deal with COVID-19.  This week we will focus on testing. Testing: In recent months countries, including the US, have employed group testing. By this, I am not saying that individuals are tested together in a group. Rather the tests are run by grouping individual samples.  Grouping individual samples help expedite the testing process. This is especially the case with determining which individuals are negative for carrying COVID-19 antibodies. I believe this approach can best be illustrated in a way that Mr. Wizard might have approached it. Imagine having nine billiard balls and a scale.  The scale would be like the one Justice holds in the statues we see around courtrooms.  The billiard balls all look similar except someone tells us one detail, that one of the balls is heavier than the other eight.  How would you go about determining which ball is slightly heavier and finding it most efficiently?  As you may tell this question is as much about efficiency as it is about accuracy.  You could organize each of the billiard balls and weigh them one at a time against each other.  But outside of the few times you are lucky and find the heavy ball right away, over time it would be very inefficient.  However, just like with the samples for COVID testing, you could group the billiard balls.  For example, you can place three on one side of the scale and another three on the other side of the scale.  If you find that one side is heavier you immediately narrowed down your pool of prospective billiard balls from 9 to 3.  You could even determine this if the results from the scale were even because it would point to the group of three billiard balls that were not yet weighed.  Now you will simply have three balls that you can weigh to determine at random you can pick one ball for each side and be able to logically determine which billiard ball the heavy one is.  This approach allows one to process the nine balls in just two steps.instead of needing many more steps to test them individually.  Given the high demand for COVID 19 testing and the social need for it, this is an effective way to get test results.  There is an excellent article from Nature that explains this in more detail.  It explains how this approach was applied in other pandemics to useful effect. Another challenge with testing is the desire to fix individual pieces of the process (this is not arguing against the efficacy of doing so).  Two cognitive blind spots are at play and some could argue that those spots are in tension with each other.  One is the assumption that incremental progress is effective. Others claim whole change is effective.  Both have clear downsides but, in this issue, when looking at testing it is important to consider the possibility that fixes create problems.  For example, the serious problem of testing capacity may resemble the congestion we see in a city’s transportation flow.  This can be addressed sometimes by fixing some specific points.  However, that act of relieving congestion will reveal other sources of congestion that were less noticed before. Wholesale changes while we are building the plane we are flying in are completely unrealistic. It is also important to see the downsides to tweaks and unexpected effects.  We should at least entertain the possibility that these effects will occur and how to respond to them in the present, while other problems are fixed. There is a big vulnerability to these approaches.  Returning to the illustration with the billiard balls, imagine instead that you were told that the group of nine billiard balls has two or three balls that are a little heavier and it is your job to identify them.  Grouping them is still better than checking them individually, but it does take longer than in situations where fewer billiard balls are heavy.  Of course, my analogy carries over if you have more positive cases of COVID-19 in your pooled sample. It then takes more time to isolate and determine all of the positive cases.  This is bound to happen in any pooled sample. But if it occurs frequently, it causes delays in getting results, like we are hearing about now.  This relates to one of the core arguments of my newsletters this year, related to the compounding side effects of responding to a virus that grows exponentially.  Most systems can be vulnerable to this problem of compounding numbers of COVID cases.  Many systems that would face considerable strain have benefited from robust mitigation practices.  Another lesson from this experience is that having success for a while does not cause you to succeed in the future.  We will talk about all of this in more detail in the coming weeks. News: Humor: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

This week we look at working online, including those who could have worked at home for some months this year.  There are many interesting questions related to productivity, effectiveness, and knowledge gleaned from this online work experience.  These questions feed into some of the broader questions facing society. Thank you for subscribing, and if you enjoy reading this, please forward the newsletter to your friends. ~ Kevin P.S. What game makes you think? “There is no known way to sell a share of stock-even a share you do not possess-except to somebody who buys it.  And no way to buy except from somebody who sells.  The people who refer to a selling wave mean something; but it is occasionally necessary to remind ourselves there can be no “wave” of selling unless there is equivalent buying, whether we call it “wave” or not.” ~ Thomas Schelling Working Online and Lessons from Chess Tournaments “I'm so much cooler online,” is the funny tag from a Brad Paisley song, but really how cool is it to be online?  This year a high percentage of employees who can have transitioned some of their work to online.  This, of course, is in response to mitigation practices against COVID-19.  With outbreaks occurring across several parts of the United States, there are a range of scenarios regarding how the workplace will adapt to these conditions.  While examining these scenarios, it is important to consider the existing insight we have on how the mind works during online activities versus how it works in person.  While online work and activity is undoubtedly unique, it is not clear how distinct the effect is, given how adaptive humans and communities are.  The differences could be seen as modest across various workplace conditions, but how disruptive we expect things to be may also have an impact.  However, there is also continuity in many of society’s spending habits, relations, and preferences.  As I often point out, it is important to consider the influence of unchanged conditions.  In this newsletter, we will focus on how the mind operates in different environments. A recent article, “Cognitive Performance in the Home Office - Evidence from Professional Chess” by Künn, Seel, and Zegners, compares the performance of top chess players in an online tournament organized by chess champion Magnus Carlsen to the performance at an in-person tournament.  Like other forms of research, the approach seeks to control for variables like player strength, prizes, and the time it takes to play a game.  As a result, the researchers aim to determine the influence of online activity.  They also point to existing cognitive and behavioral findings that are not conclusive regarding the differences between those working online from home and those who perform their duties at an established workplace. The different tasks we perform throughout a day may also be a factor. The literature they cover suggests that some work, like data entry, may be more productive in an office, while other tasks involving creativity may be better from home.  But what about chess? “The analysis is based on comparing the performance of elite professional chess players competing in a recently organized online tournament to their performance during recent offline tournaments,” the authors point out.  Their approach looks at all of the moves within games.  It then measures the errors within each move through a top chess program.  This approach is applied to examining those games played in person and those online.  They find that playing games online, “increases the error size by 16.8% which corresponds to a loss of 219 points of ELO rating.” In the chess world, this is a considerable number. This is insightful, but how many of us engage in the same amount of mental strain (on or offline) as chess games?  I have played chess tournaments and know the intensity of thought is generally higher than most work or classroom experiences.  If that is true, would errors like those identified in this study be more or less prevalent when applying these lessons to the workplace?   In chess, the accumulation of mistakes works significantly against a player.  Most of the errors are very small and may or may not play out similarly in the workplace.  For example, some workplaces would have consequences for ending a sentence with a preposition.  Other errors may be less consequential, if they are noticed at all.  With chess, what makes the errors consequential is that the opponent notices them and capitalizes on the vulnerability.  At the same time, a small business owner who makes a series of small mistakes may also face repercussions.  It may help to look deeper at the type of errors involved in all of these tasks.  I am also concerned about an assumption in the analysis in the article.  First, they excluded the moves from the opening of the game.  At top level play, these moves are universally well known but are also less likely to produce the same variation in errors.  By excluding the opening moves, it seems they magnify the number of errors.  This approach is like emphasizing all the errors we first make when learning how to ride a bike instead of looking at a lifetime of riding. I am also not certain about the way the researchers estimate the loss in rating.  While the errors happen, they are occurring for both players online. When sorting through the outcomes, there will be the same number of winners and losers as if they had been playing in person, so the effect is not the same on the rating estimate.  This point is similar to the Schelling quote at the beginning of the article. Overall, this work is fascinating for what it shows about the errors that occur in top-level thinking during online chess games. At the same time, this should be read in the context of other tasks.  In turn, this complicates the applications when employers consider the overall performance of the firm's workforce.  With existing information being inconclusive about working from home, it is hard to see this paper shifting any argument about working online. Rather, it can further our discussion on types of thinking involved and what errors may differ depending on the environment.  Again, I think this should lead us to focus on understanding the complexity of the mind and how it works, rather than assuming other variables, like where the worker is located, forever alter the mind’s performance. If you want to hear the funny Brad Paisley song: News: I am enjoying the chance to share these newsletters with you in the form of the new podcasts and appreciate your continued feedback. You can reply to this email or leave your comments below.  I sincerely enjoy chatting and learning what folks think. Thank you ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com

What are you Reading? In recent months the Covid-19 has restricted many of our usual activities, and many of us have used some extra time by turning to “beach reads.” Considering the circumstances, I would say beach reads are the books that you can enjoy, even if you have no beach to rest your toes in.  You can always have something engaging to read. (P.S. I am not really a big beach reader) This week I talk about an assortment of books I have enjoyed over the years.  Please leave a comment about some books you have enjoyed this year. We can have a fun conversation about books. ~ Kevin Quote: “Thanks to my reading, I have never been caught flat-footed by any situation, never at a loss for how any problem has been addressed (successfully or unsuccessfully) before. It doesn’t give me all the answers, but it lights what is often a dark path ahead.” ~ James Mattis A friend of mine pointed out that Call Sign Chaos by Mattis (and Bing West) includes the former Secretary of Defense’s recommended reading list.  This newsletter is the beginning of an ongoing collection of readings that I would suggest. In some future titles, I will do a more thorough dive on some additional readings, but this week we explore themes of failure and being quiet. The Up Side of Down: Why Failing Well Is the Key to Success by Megan McArdle is a wonderful book that, as the title explains, shows that making a mistake is not always bad. The real mistake is failing to learn from the experience. McArdle's editorials often look at current economic events in a way that dissects the issues insightfully. In the same way, this book looks at everything from bankruptcy, business cycles, failed movies, criminal probation, and hospital diagnosis, to poor reporting. She makes a point that the US bankruptcy system compliments the social stigma of bankruptcy by a code that is less punitive than it is in some other countries. This, she believes, encourages risk-taking and entrepreneurship. She also cleverly points to past relationships and compares them to the GM bailout. Her underlying argument is that, in both cases, individuals were too guided by past achievements to understand changes around them. As McArdle points out, “A resilient society lets you fail, and even lets the failure sting, but only for a moment. Then it helps you get back on track, and everyone reaps the benefit.” Her insights are both honest and well-reasoned. Much like writers such as Gladwell and Taleb, she is willing to question conventional thinking in an insightful and approachable manner that is tangible. Admirably, she does not distance her own life from examples of personal and professional mistakes, and what she learned encourages all to look within themselves to help explain our world. These qualities make for an excellent read, and I look forward to diving into her next work. Quiet: The Power of Introverts in a World That Can't Stop Talking by Susan Cain is a very well written and insightful book on the qualities of those who are quiet.  I certainly can relate to many of the traits described by Cain.  We live in an extroverted world that rarely relents from its cacophonous sounds.  She does not dispute that human beings engage in social activity, but that quiet expression can have a deeper meaning.  This can take the form of talking in a small group or taking time for quiet reflection. She does not, “think of introversion as something that needs to be cured.” Cain argues that society can often overvalue the contributions of extroverts while the work of introverts is less noticed.  The increased volume and charisma of extroverts can lead the public and managers to be drawn to these figures.  However, she states that individuals who are seen as charismatic are not necessarily more effective at professional tasks.  She claims that this social preference is a mistake because introverts can be more perceptive of certain social conditions.  They can also be creative and develop new ideas during moments of solitude.  I enjoyed many aspects of this book, including the illustrations and insights. I also have to credit Cain for my interest in further exploring this topic with readings on solitude and creativity.  My dissertation writing practices were an attempt at understanding this relationship. “If there's a book that you want to read, but it hasn't been written yet, then you must write it.” ~ Toni Morrison News: How math helps with COVID-19 testing: Nature TikTok and the response to possible restrictions in the US: Axios India back in lockdown:  Axios ….. I hope Caro finds out….. I wanted to pause and recognize the value of time spent reading.  Please feel free to share what books you have enjoyed lately in the comments.  As always, thank you for reading this newsletter.  It is fun to write, and I always appreciate the feedback please forward to friends. ~ Kevin This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit modlinglobal.substack.com