China

A Chainsaw Is the Woefully Wrong Tool for Government Reform

February 21, 2025 by Llewellyn King Leave a Comment

At the recent “Future of the Blue Economy” conference in Newport, Rhode Island, entrepreneurs and their investors were talking about breakthroughs, but the term they used — replacing “Sputnik moment” — was “SpaceX moment.”

That was a salute to the extraordinary precision engineering that enables the booster stage of Elon Musk’s SpaceX rocket to reposition itself on the launch pad after firing. It is inspiring to watch, but there must have been untold preparation, thought and planning to bring about that seemingly miraculous engineering feat.

All hail Elon Musk, boss of SpaceX!

Sadly, none of that precision preparation, thinking and planning has gone into Musk’s latest venture, the Department of Government Efficiency.

It has raged across the government, leaving a trail of havoc, shattered careers, broken departments, endangered missions: techno-barbarians running wild inside the government.

In the history of social engineering, nothing as vast and self-defeating has been attempted since Chairman Mao’s Cultural Revolution set China back decades.

Prepare for a similar dividend from the President Trump-Musk efficiency team. If they had approached launching a rocket the same way they have sought to make the government more efficient under the mantra “waste, fraud and abuse,” they would have piled a jerry-built rocket atop a pile of explosives and lit a match. Result: a catastrophic failure.

There are things here which are beyond explanation. Trump has run businesses. He knows if you fire half the front desk staff in a hotel, things aren’t going to go smoothly. If you berate the staff and accuse them of waste, fraud and abuse, essentially stealing, morale will plunge.

In the Soviet Union there was an adage: They pretend to pay us, and we pretend to work. An awful lot of government workers who haven’t lost their jobs but are disconsolate will be pretending to work for the rest of the Trump administration. Efficiency? Hardly. Many will efficiently do nothing.

Everything about the unleashing of the DOGE suggests that it had little preparation and little planning. Particularly, Musk and his crew knew nothing about the departments they were savaging. Hence, the embarrassment with the nuclear workers at the Department of Energy. Or the folly of shutting the window through which most of the world saw America’s goodness, the U.S. Agency for International Development.

We have as a society a tendency to believe that those who are good at one thing must be good at everything, something which might be called “success syndrome.”

This was on display during the energy crisis which erupted in the fall of 1973 with the Arab oil embargo and lasted through the Iranian revolution of 1979 and beyond, toppling governments and driving inflation. Many thought that proven inventors, like Edwin Link, the creator of the first flight simulator for pilot training, and Edwin Land, creator of the Polaroid camera, were expected to be able to invent us out of the oil shortage. They didn’t.

Good, patient science, regulatory reform and entrepreneurial courage did that.

Another myth is that if only you put a tough businessperson in the White House, someone who will apply their foot to the rear end of the bureaucracy, wondrous things will happen.

We have a businessperson and a brilliant inventor at the controls in Washington, and so far, the kicking of the bureaucracy with the aid of high-tech tools has produced chaos in the government workplace and devastating consequences globally.

Taken together the evidence that you can’t run a government as a private company and great inventors —even one so remarkable that he has made the greatest fortune ever — can’t reinvent government without some coherent planning.

Musk was given a chainsaw as a symbol at the CPAC meeting in Washington. They are useful but dangerous tools, as any emergency-room physician who has had to sew up an over-exuberant operator can tell you. Trump and Elon Musk appear to be attempting what should be delicate surgery with one.

A restraining of the bureaucracy may be overdue, but the bloodbath is going to weaken the patients, rendering them unfit for duty at a critical time.

A chainsaw moment is not a SpaceX moment.

Fact-Checking Has Always Been an Elemental Part of Journalism

January 17, 2025 by Llewellyn King Leave a Comment

A whole new area of endeavor is opening up for the entrepreneurial. Name it after the ancient Greek philosopher Diogenes of Sinope. He allegedly hunted for an honest man and was possibly the founder of Cynicism.

Verification will become a vital business as the flood of misinformation engulfs us. What can be trusted? What source is reliable? What image is actual? Is the voice or image authentic, or has it been created with artificial intelligence?

Rather than fact-checking becoming outdated, as at Facebook, it will be essential. The source of news will be as important as the news. Publications with a reputation for accuracy, or their equivalent in this digital free-for-all information age, will be revered.

As — whether we like it or not — we all get our current information through journalism, journalism becomes more critical, not less so.

Elon Musk, who owns X, has declared that we are all journalists now. No, we are not.

You don’t have to spend four years in a university to become a journalist, but some reverence for the craft and some on-the-job training is necessary. Skill with the language, a knowledge of history, curiosity, and a desire to find out what is going on and tell people are all needed.

So is the hardest part of the qualification to define: news judgment. This is knowing what news is and seeing it immediately. You also need to be serious about facts and fact-checking.

Fact-checking, which Mark Zuckerberg, the boss of Facebook, has equated to being incompatible with free speech, is at the heart of journalism. The individual journalist is haunted by a permanent fear (“the inner core of panic,” as my late first wife, Doreen, who was a superb journalist, described it) of, “Did I get it right? Is it Steven or Stephen or did the speaker say millions or a billions?”

Any news story has many facts and judgments, most executed under pressure and in real-time. If it is essential, it needs to be gotten out.

After World War II, and mainly because of excellent reporting from London during the Blitz, the BBC developed a reputation worldwide as trustworthy in getting it right. In much of the world, that reputation still stands. But in Britain, the BBC is reviled for being left-leaning and woke-thinking.

The once great news service, United Press International, had a reputation among editors for being unreliable. I never found anyone who could prove that it was less dependable than its competitors, the Associated Press, Reuters and the English version of Agence France-Presse, but the myth was oft-repeated and stuck.

Similarly, The New York Times is regarded worldwide as exemplifying the gold standard for reliability. However, in the United States, many regard it as left-leaning and, therefore, less believable.

That doesn’t mean there are no mistakes, indeed egregious errors; we all make them and suffer the shame that goes with it. The agony of getting facts wrong is real and profound and known to every journalist.

Factual inaccuracy is a self-inflicted wound on a publication. If one fact is wrong, the veracity of the entire outlet is called into question in the reader’s mind.

Ownership is not as important as the integrity of the individual operation. The Wall Street Journal is regarded as being accurate, but the New York Post is thought of as having dubious accuracy, and Fox News is seen as incontrovertibly political, yet all three have the same ownership.

In the news business, fact-checking has to be part of the process. It can’t be glommed on after the event.

Journalism and its army of reporters can only help with facts in some measure.

When it comes to the industrial-scale disinformation pouring out of governments and political parties everywhere — and especially now out of Russia and China — technology needs to be mobilized to fight the technology-generated lies: fake images, sounds and news situations.

The best hope is that technology will be able to fight its own evil; to be able to tag the fake or at least to identify the real with watermarks — where the information came from and how it was created.

The world needs a fact-checking ethic, something that has existed quietly in journalism for a long time but which is threatened to be overwhelmed in the asymmetry where journalism is a small part of the dishonesty spewing out of social media, such as Facebook, X and Truth Social, and from Russia and other mischief-bent regimes.

Meanwhile Diogenes’ cynicism may be the first line of defense, along with the journalism of old. Verify before you trust.

Trump, Who Thinks He Bought the Nation, Now Eyes the World

December 28, 2024 by Llewellyn King Leave a Comment

When Donald Trump began his first term as president in 2017, I wrote that he came to office not as a politician who had won an election, but rather as a businessman who had won a takeover battle and was ready to hire, fire, sell-off, and generally to reshape the property he had bought.

On Christmas Day, Trump – with a series of posts on social media — revealed himself as a businessman who believes not that he has won the nation in a takeover battle, but rather that he has won the whole world and that he is ready to hire, fire and sell-off.

Also, like a canny takeover artist, he didn’t reveal his hand during the takeover struggle. During the election, there was no hint that Canada should become the U.S. 51^st state, that Panama was overcharging U.S. shipping nor that ownership of Greenland was essential over and above the key role it already plays with a vital U.S. base, happily provided for by treaty with Denmark.

Like a businessman, Trump offered to buy Greenland during his first presidential term. His offer was soundly and summarily rejected. Now he is back and the answer hasn’t changed.

Canada, Trump believes, takes unfair advantage of the United States in trade, although the regime of the flourishing cross-border trading is the selfsame one: the United States-Mexico-Canada Agreement, signed in July 2020 by Trump himself as a vast improvement over its predecessor, the North American Free Trade Agreement, although in substance and spirit it is very similar.

When it comes to Panama, Trump has a double accusation. Beyond the belief that Panama is ripping us off, this kind of national business paranoia is part of the Trump manual of expectations in foreign policy: All foreign governments are scalawags bent on cheating America.

It is part of a kind of permanent, low-grade C-Suite paranoia that is present in many companies: Who is stealing an advantage, who is going to concede to the unions, who is angling for more shelf space, etc. You might call it corporate situational awareness paranoia.

Statesmanship is learned; good instincts help, but it isn’t intuitive for most leaders. It is learned through studying history, meeting, talking, traveling, and moving in foreign policy circles. It is learned best on the job, if the job is in the House or the Senate.

Trump has learned not in that world, but in the world of New York real estate with its own jungle law — deals are done, undone, litigated, and political influence is brought to bear. Ultimately, there is victory for one side.

Trump correctly — and it could be said belatedly because he took no action during his first administration — has cast a penetrating light on China in the Americas. China, as Trump has said, doesn’t operate the Panama Canal. Panama does. A subsidiary of Hong Kong-based CK Hutchison Holdings manages two ports at the canal’s entrances, with Chinese firms providing more than $1 billion for the construction of a new bridge over the canal.

Panama’s revenues are up as a result of congestion charging, but fewer ships are transiting the canal due to drought. The vast Lake Gatun, which feeds the canal and keeps the lock system viable, is only partially full. The less water available, the fewer transits are possible. These dipped from 38 large ships to just 22 but rains have improved the situation and transits have risen.

Seizing canals is a fraught business, witness the disaster of France and Britain trying to seize the Suez Canal in 1956. Major damage to the Panama Canal would cost the United States for decades. It is a masterpiece of big, intricate engineering. I took a cruise through it for the purpose of understanding it better.

The British word “gobsmacked” is easily understood: smacked in the mouth. That is what happened to the commentariat — those who comment on national affairs. Trump’s Christmas Day declarations on Truth Social, his social media network, went almost unmentioned. The reporting was there, the networks and newspapers turned up the volume, but the commentators were silent,

That, in its way, is as notable as Trump’s implication that he has bought the world and plans to take possession. The enormity of the thing has been quieting. We, the opinion writers, have been struck dumb, you might say. That is news in itself.

Productivity To Surge with AI. Do the Politicians Know?

September 20, 2024 by Llewellyn King Leave a Comment

There is every chance that the world’s industrial economies may be about to enjoy an incredible surge in productivity, something like the arrival of steam power in the 18^th century.

The driver of this will be artificial intelligence. Gradually, it will seep into every aspect of our working and living, pushing up the amount produced by individual workers and leading to general economic growth.

The downside is that jobs will be eliminated, probably mostly, and historically for the first time, white-collar jobs. Put simply, office workers are going to find themselves seeking other work, maybe work that is much more physical, in everything from hospitality to healthcare to the trades.

I have canvassed many super-thinkers on AI, and they believe in unison that its impact will be seminal, game-changing, never to be switched back. Most are excited and see a better, healthier, more prosperous future, justifying the upheaval.

Omar Hatamleh, chief AI officer at the National Aeronautics and Space Administration, and author of two books on AI and a third in preparation, misses no opportunity to emphasize that thinking about AI needs to be exponential not linear. Sadly, linear thinking is what we human beings tend to do. To my mind, Hatamleh is in the vanguard of AI thinkers,

The United States is likely to be the major beneficiary of the early waves of AI adoption and its productivity surge if we don’t try to impede the technology’s evolution with premature regulation or controls.

Economies which are sclerotic, as is much of Europe, can look to AI to get them back into growth, especially the former big drivers of growth in Europe like Germany, France and Britain, all of which are scratching their heads as to how to boost their productivity, and, hence, their prosperity.

The danger in Europe is that they will try to regulate AI prematurely and that their trades unions will resist reform of their job markets. That would leave China and the United States to duke it out for dominance of AI technology and to benefit from its boost to efficiency and productivity, and, for example, to medical research, leading to breakthroughs in longevity.

Some of the early fear of Frankenstein science has abated as early AI is being seamlessly introduced in everything from weather forecasting to wildfire control and customer relations.

Salesforce, a leading software company that has traditionally focused on customer relations management, explains its role as connecting the dots by “layering in” AI. A visit to its website is enlightening. Salesforce has available or is developing “agents,” which are systems that operate on behalf of its customers.

If you want to know how your industry is likely to be affected, take a look at how much data it generates. If it generates scads of data — weather forecasting, electric utilities, healthcare, retailing and airlines — AI is either already making inroads or brace for its arrival.

PFor society, the big challenge of AI isn’t going to be just the reshuffling of the workforce, but what is truth? This is not a casual question, and it should be at the forefront of wondering how to develop ways of identifying the origin of AI-generated information — data, pictures and sounds.

One way is watermarking, and it deserves all the support it can get from those who are leading the AI revolution –the big tech giants and the small startups that feed into their technology. It begs for study in the government’s many centers of research, including the Defense Advanced Research Projects Agency and the great national laboratories.

Extraordinarily, as the election bears down on us, there is almost no recognition in the political parties, and the political class as a whole, that we are on the threshold of a revolution. AI is a disruptive technology that holds promise for fabulous medicine, great science and huge productivity gains.

A new epoch is at hand, and it has nothing to do with the political issues of the day.

Please Note: I will be hosting a virtual press briefing, which I have organized for the United States Energy Association, on the impact of AI in the electric utility industry on Wednesday, Oct. 2, at 11 a.m. EDT. It is open to the press and the public.

Here is the registration link:

https://us02web.zoom.us/webinar/register/WN_BbE_VO1bRo2PuiVl6g8IzQ#/registration

China’s Not-So-Secret Weapons — Rare Earths

August 4, 2017 by Llewellyn King 1 Comment

In October 1973, the world shuddered when the Arab members of the Organization of Petroleum Exporting Countries imposed an oil embargo on the United States and other nations that provided military aid to Israel in the Yom Kippur war. At the same time, they ramped up prices.

The United States realized it was dependent on imported oil — and much of that came from the Middle East, with Saudi Arabia the big swing producer. It shook the nation. How had a few foreign powers put a noose around the neck of the world’s largest economy?

Well, it could happen again and very soon. The commodity that could bring us to our knees isn’t oil, but rather a group of elements known as rare earths, falling between 21 and 71 on the periodic table. This time, just one country is holding the noose: China.

China controls the world’s production and distribution of rare earths. It produces more than 92 percent of them and holds the world in its hand when it comes to the future of almost anything in high technology.

Rare earths are great multipliers and the heaviest are the most valuable. They make the things we take for granted, from the small motors in automobiles to the wind turbines that are revolutionizing the production of electricity, many times more efficient. For example, rare earths increase a conventional magnet’s power by at least fivefold. They are the new oil.

Rare earths are also at work in cell phones and computers. Fighter jets and smart weapons, like cruise missiles, rely on them. In national defense, there is no substitute and no other supply source available.

Like so much else, the use of rare earths as an enhancer was a U.S. discovery: General Motors, in fact. In 1982, General Motors research scientist John Croat created the world’s strongest permanent magnet using rare earths. He formed a company, called Magnequench. In 1992, the company and Croat’s patents were sold to a Chinese company.

From that time on it became national policy for China to be not just the supplier of rare earths, but to control the whole supply chain. For example, it didn’t just want to supply the rare earths for wind turbines; it insisted that major suppliers, such as Siemens, move some of their manufacturing to China. Soon Chinese companies, fortified with international expertise, went into wind turbine manufacture themselves.

“Now China is the major manufacturer of wind turbines,” says Jim Kennedy, a St. Louis-based consultant who is devoted to raising the alarm over rare earths vulnerability. A new and important book, “Sellout” by Victoria Bruce, details the way the world handed control of its technological future to China and Kennedy’s struggle to alert the United States.

At present, the rare earths threat from China is serious but not critical. If President Donald Trump — apparently encouraged by his trade adviser Peter Navarro, and his policy adviser Steve Bannon — is contemplating a trade war with China, rare earths are China’s most potent weapon.

A trade war moves the rare earths threat from existential to immediate.

In a strange regulatory twist the United States, and most of the world, won’t be able to open rare earths mines without legislation and an international treaty modification. Rare earths are often found in conjunction with thorium, a mildly radioactive metal, which occurs in nature and doesn’t represent any kind of threat.

However, it’s a large regulatory problem. The Nuclear Regulatory Commission and the International Atomic Energy Agency have defined thorium as a nuclear “source material” that requires special disposition. Until these classifications, thorium was disposed of along with other mine tailings. Now it has to be separated and collected. Essentially until a new regime for thorium is found, including thorium-powered reactors, the mining of rare earths will be uneconomic in the United States and other nuclear non-proliferation treaty countries.

Congress needs to look into this urgently, ideally before Trump’s trade war gets going, according to several sources familiar with the crisis. A thorium reactor was developed in the 1960s at the Oak Ridge National Laboratory in Tennessee. While it’s regarded by many nuclear scientists as a superior technology, only Canada and China are pursuing it at present.

Meanwhile, future disruptions from China won’t necessarily be in the markets. It could be in the obscure but vital commodities known as rare earths: China’s not quite secret weapon.

Nuclear Booms in Asia as New Reactor Ideas Flourish in U.S.

June 16, 2017 by Llewellyn King 1 Comment

By Llewellyn King

The nuclear electric industry has sustained some mighty blows in the United States and Western Europe in recent years. It might be reeling, but it is not out and it is not going down for the count. Taken globally, things are good.

The need to curb carbon in the air, to service a growing world population and the surging cities are impelling nuclear forward. At the annual summit meeting of the U.S. Nuclear Infrastructure Council (NIC) in Washington, this future was laid out with passion: Nuclear power is experiencing a growth spurt but not in the United States and Western Europe, except for Britain.

Nuclear demand is high where air pollution is at its worst and where economic activity is fast and furious — in Asia generally, and in China and India in particular.

Vijay Sazawal, president of IAEC Consulting, told the NIC meeting that India would be adding two reactors a year to its nuclear fleet moving forward. China and India are building half of the 60 new reactors under construction worldwide, according to Andrew Paterson of Verdigris Capital Group, which studies nuclear.

Paterson predicted world electricity demand will double by 2050 and that most of the demand would come from the megacities of Asia, Africa and Latin America. He said, “By 2030, China will have 15 megacities (10 million or more people) and 150 cities with more than 1 million people.”

Wind and solar energy, the other carbon-free electricity sources, also will grow dramatically but will be constrained by their land needs. Big cities are ill-suited to roof-mounted solar, and windmills require large acreages of open land not found near megacities.

In the United States, the shadow of the Westinghouse bankruptcy is passing over the nuclear community. How could a once-proud and dominant company get its sums so wrong that it has been forced into bankruptcy? The collapse of the company — which was building two plants with four reactors in South Carolina and Georgia, four reactors in China, and was engaged in projects in the United Kingdom and India — will be studied in business schools for generations to come. Bad management, not bad nuclear, has brought Westinghouse and its parent Toshiba to its knees.

But nuclear believers are undaunted. Nuclear advocates have a kind of religious commitment to their technology, to their science and to the engineering that turns the science into power plants.

I have been writing about nuclear since 1970, and I have featured it on my television program, “White House Chronicle,” for more than 20 years. I can attest that there is something special in the passion of nuclear people for nuclear power. They have fervor wrapped in a passion for kind of energy utopia. They believe in the great gift that nuclear offers a populous world: a huge volume of electricity.

The kernel here, the core belief, the holy grail of nuclear is wrapped up in “energy density”: how a small amount of nuclear material can produce a giant amount of electricity in a plant that has few moving parts, aside from the conventional steam turbine. As designs have evolved and plants have become “passive” in their safety systems, the things that can go wrong have been largely eliminated.

To understand energy density think this way: The average wind turbine you see along the highway turns out 2 megawatts of electricity when there is wind, a trifling amount compared to the 1,600 megawatts a new nuclear plant produces continuously — and probably will produce for 100 years before it is retired.

Asia, choking on air pollution and with huge growth, needs nuclear. America is not gasping for new generation: demand is static and there is a natural gas glut. Also, there is land aplenty for solar and wind to be installed.

But U.S. nuclear creativity, even genius, will not rest. The United States is on the frontier, pioneering a generation of wholly new reactor concepts, mostly for small modular reactors and even big new reactors, which may first be built in China and India but, like so much else, will be “thought up in America.”

At nuclear conclaves like the NIC meeting, there is sadness that the U.S. market is stagnant. But there is incandescent hope for the future.

Trump’s Foreign Policy — Punish Friends, Reward Enemies

June 2, 2017 by Llewellyn King Leave a Comment

The Great Rift Valley extends from Syria down through east Africa to Mozambique. It is a huge depression with volcanic action, lakes and steep-sided gorges. Think of the Grand Canyon and start multiplying.

When contemplating President Donald Trump’s foreign policy, I think of the Great Rift Valley: the largest gash in the Earth’s surface.

The president, in the incoherence of his foreign policy, is creating great gashes between traditional allies that will leave scars down through history. He also appears to be set on empowering our putative enemies, Russia and China.

Many of us White House watchers think it is quite possible that some of those around the president had questionable relations with the Russians both during the campaign and after the election. Their motivation remains unclear. Also unclear is why Trump is so pro-Russian.

Russia’s motivation is known: It wants the United States to lift the sanctions imposed after Russia invaded Crimea and started a surrogate war in eastern Ukraine.

It is also clear that Russia has an interest in destabilizing Europe, whether it is by manipulating its energy supply or interfering in its elections, as it tried to do most recently in France. Russia has a policy and it is hostile to European and North American interests from the Arctic to the Balkan states.

Trump could end the whole Russian business very quickly by finding out — if he doesn’t already know — who in his immediate circle did what, why and when. He could tell us himself of his involvement.

China is another Trumpian riddle. He campaigned against China for job snatching, currency manipulation, the trade deficit and its incursions into the South China Sea.

In a classic East meets West scenario, Trump, the self-styled dealmaker, was going to sit opposite Chinese President Xi Jinping and negotiate. But when they met at the White House, all points of contention evaporated; even freedom-of-navigation operations by U.S. warships in international waters near contested reefs in the South China Sea were curtailed. Either there was no negotiation, or Trump folded.

There is a Potemkin village quality to Trump’s claims to have opened opportunities for U.S. firms in China. China has not abridged its local participation laws, so U.S. companies doing business there still have to have a Chinese partner, which must have equity control. It is a system the Chinese use to steal U.S. expertise and technology. As to Trump’s claim of Chinese currency manipulation, it has disappeared — maybe it was a dubious issue all along.

If all of this is in the hope that China might stop North Korea building nuclear weapons and delivery systems for them. Well, that has been a vain hope of other presidents. China has no interest in curbing Kim Jong-un for its own reasons and because of the leverage, paradoxically, it gives China with the United States.

But what history might judge as the more egregious Trumpian folly in Asia is his abandonment of the Trans-Pacific Partnership, a carefully crafted deal to keep the economies of United States and 11 other Pacific nations growing without China, which would not have been a partner. Now the gap left by the United States is being filled by China, as are other gaps. Europe, deeply disturbed by U.S. softness to Russia, climate change policies, protectionist rhetoric, and vitiation of past practices and agreements, is looking reluctantly to China for stability in a crumbling world order.

The goals of Trump’s foreign policy are obtuse, subject to stimuli known only to him — examples include his unexplained enthusiasm for Saudi Arabia, and his complete hostility to everything done by President Barack Obama, including the Cuba opening. The results, though, are not in doubt: gladness in Moscow and Beijing and sadness and confusion in London, Paris, Berlin and among our friends worldwide.

So far Trump’s exploits are not only capricious, but also very dangerous, slamming those countries that share U.S. values and encouraging those who oppose our interests. These rifts will not heal quickly. Once a nation is labeled untrustworthy, it is distrusted long after the creator of the distrust has left the field. The rifts remain, great gashes in global confidence.

Crime, War and Mischief Are the Internet Norms

May 14, 2016 by Llewellyn King Leave a Comment

By Llewellyn King

The big news coming out of the G7 meeting in Japan will not be about establishing international norms for cybersecurity. That will only get an honorable mention at best. But maybe it should get greater attention: the threat is real and growing.

Consider just these four events of the recent past:

The electric grid in Ukraine was brought down last Dec. 23 by, it is believed, the Russians. Because of its older design, operators were able to restore power with manual overrides of the computer-controlled system.

The Hollywood Presbyterian Medical Center in Los Angeles was ransomed. This crime takes place when a hacker encrypts your data and demands a ransom, often in untraceable bitcoin, to unlock it. The hospital paid $17,000 rather than risk patients and its ability to operate.

While these ransom attacks are fairly common, this is the first one believed to have been launched against a hospital. Previously hospitals had thought patient records and payment details were what hackers would want, not control of the operating systems. Some of the ransoms are as low as $3,000, with the criminals clearly betting that the victims would lose much more by not settling immediately, as did the medical center. The extortionists first asked for $3.6 million.

In a blockbuster heist on the Internet, the Bangladesh central bank was robbed of $81 million. The crooks were able to authorize the Federal Reserve of New York to release the money held in an account there. They would have got away with another $860 million, if it were not for a typing mistake. In this case, the money was wired to fraudulent accounts in the Philippines and Sri Lanka.

Target, the giant retailer, lost millions of customer records, including credit card details, to an attack in February 2014. Since then, these attacks on retailers to get data have become common. Hackers sell credit card details on what is known as the “black web” to other criminals for big money.

Often the finger is pointed at China, which will not be at the G7. While it may be a perpetrator, it also has victim concerns. There is no reason to think that Chinese commerce is not as vulnerable as that in the West.

China, with the help of the Red Army, is blamed in many attacks, particularly on U.S. government departments. But little is known of attacks Chinese institutions sustain.

Governments want to police the Internet and protect their commerce and citizens, but they are also interested in using it in cyberwar. Additionally, they freely use it in the collection of intelligence and as a tool of war or persuasion. Witness U.S. attempts to impede the operation of the centrifuges in Iran and its acknowledged attacks on the computers of ISIS.

As the Net’s guerilla war intensifies, the U.S. electric utility industry, and those of other countries, is a major source of concern, especially since the Ukraine attack. Scott Aaronson, who heads up the cybersecurity efforts of the Edison Electric Institute, the trade group for private utilities, says the government’s role is essential, and the electric companies work closely with the government in bracing their own cyber defenses.

Still, opinions differ dramatically about the vulnerability of the electric grid.

These contrasting opinions were on view at a meeting in Boston last month, when two of the top experts on cybersecurity took opposing views of utility vulnerability. Juliette Kayyem, a former assistant secretary for intergovernmental affairs at the Department of Homeland Security who now teaches emergency management at Harvard’s Kennedy School of Government, said she believed the threat to the electric grid was not severe. But Mourad Debbabi, a professor at Concordia University in Montreal, who also has had a career in private industry, thinks the grid is vulnerable — and that vulnerability goes all the way down to new “smart meters.”

The fact is that the grid is the battleground for what Aaronson calls “asymmetrical war” where the enemy is varied in skill, purpose and location, while the victims are the equivalent of a standing army, vigilant and vulnerable. No amount of government collaboration will stop criminals and rogue non-state players from hacking out of greed, or malice, or just plain hacker adventurism.

Governments have double standards, exempting themselves when it suits from the norms they are trying to institutionalize. Cyber mischief and defending against it are both big businesses, and the existential threat is always there. — For InsideSources

The Collision Course in the South China Sea

November 7, 2015 by Llewellyn King Leave a Comment

By Llewellyn King

When I was learning to fly, one of the lessons was that if you see an object on the horizon that is seemingly stationary but getting larger, watch out. It is probably an aircraft closing with you.

Trouble with China in the South China Sea is on the horizon of U.S. strategic concerns and getting larger. A major confrontation may be at hand.

China claims sovereignty over the Spratly and Paracel islands in the South China Sea. Its claims have been disputed by Brunei, Malaysia, the Philippines,Taiwan and Vietnam.

Ignoring these neighbors’ territorial claims, China has built artificial islands on otherwise submerged reefs in the Spratly archipelago. They have built runways, capable of landing military jets, on Fiery Cross and Subi reefs, and are building one on Mischief Reef.

Vietnam and the Philippines have also built up reefs, but on a smaller scale, and mostly to help their fishing fleets.

Offshore islands, real or summoned from the deep, are trouble. Argentina and Chile nearly went to war over the Beagle Channel Islands, off the inhospitable tip of South America, until Pope John Paul II brokered a peace deal in 1984.

Britain and Argentina most certainly did go to war in 1982 over the Falkland Islands, which Argentina claimed then and still claims.

Nations use territorial disputes not only to divert attention from domestic problems, but also to heal the real or imagined wounds of history.

China feels, reasonably, that it was kicked around in history. Britain occupied parts of it, most notably Hong Kong, and then acted as a drug lord in the 19th-century Opium Wars. In the 20th century, China was invaded by Japan.

Now, as the world’s second-largest economy and most populous nation, China is feeling assertive.

But all of Asia, and by extension the rest of the world, is invested in this dispute: one third of the world’s shipping passes through the South China Sea, and its rich fishing grounds are a vital food source for the region.

The Chinese bolster their claims with a 1947 map showing what is known as the “nine-dash line,” or the cow’s tongue because of its shape, in the South China Sea. This line extends around the sea and encloses 90 percent of the area; by historical standards this is a whopper of a claim for territory, and one which threatens U.S. allies in the region as well as our shipping.

The Chinese claims appear to be in total violation of international law, particularly the United Nations Convention on the Law of the Sea, which the United States has not ratified, and which China ratified in 1996.

The dispute with claims and counterclaims is laid out in a new, dispassionate report by the Boston Global Forum, a Harvard professor-heavy think tank.

The United States responded to the China’s claim of territorial integrity for its artificial islands after a long delay, testing the right to navigate by sending the USS Lassen, a guided missile destroyer, through the 12-nautical-mile zone off Subi Reef on Oct. 27. China has reacted angrily with aerial exercises.

The USS Lassen’s transit of the reef appears to have divided the White House. At one point, Defense Secretary Ashton Carter would not acknowledge in public that it had actually happened, or that U.S. aircraft might test the Chinese claim to territorial air rights.

These actions are known as freedom of navigation operations, or FONOPS. It is a term we will hear more of if the United States and China cannot divert from their brinkmanship in the South China Sea.

The United States does not favor any nation’s claim to islands, or even rocks, in that sea. It does, though, have a vital interest in checking Chinese expansion and the interests of its Asian allies who expect a robust U.S. response to China’s island grab — and claim to a whole ocean. — For InsideSources.com

The Rare Earths Problem: A U.S. Solution

March 30, 2015 by Llewellyn King Leave a Comment

Rare earth elements – there are 17 of them – have the world’s manufacturing by the throat. They are, as John Kutsch, director of the Thorium Energy Alliance, says, “the great multipliers.” They make metals stronger, generators more efficient, cell phones smaller, television sets sharper, and laptops lighter. They are, in their way, as important to modern manufacturing as energy.

At one time, the United States was a major supplier of rare earths — with supplemental supplies coming from countries around the world, including Australia and Brazil. Today, 90 percent of the rare earths the world uses come from China.

The use of rare earths is as important in lasers and jet engines as it is in aiming cruise missiles, which means the United States, and the rest of the world, has a huge vulnerability: China controls the supply of new war-fighting material. All U.S. defense manufacturers – including giants Boeing, General Electric and Lockheed Martin — are dependent on China. Now China is demanding that U.S. companies do more of their manufacturing there: China wants to control the whole chain.

Yet, as the rare earth elements industry is quick to assert, rare earths are not rare; they are scattered generously throughout the world. So why China’s dominance?

China has three main advantages. The first is that in 1984, leader Deng Xiaoping adopted a major initiative, the so called 863 Program, to move China from being a simple supplier of raw materials and products, enhanced by cheap labor, to being an industrial powerhouse and scientific giant. Rare earths were one of the areas singled out in the program.

The second advantage is that the Chinese ignored – and, to a large extent, still do — the environmental costs of rare earths’ extraction. The environmental damage is described by those who have been to one of two major Chinese sites, which have a combined population of 17 million, as catastrophic, with mountains bathed in acid to remove the sought-after rare earths, resulting in lakes of acid.

China’s third advantage is a natural one: It has a lot of ionic clay, which contains rare earths without the associated uranium and thorium.

About the time China was ramping up its plans to dominate the world rare earths market, the United States, in conjunction with the International Atomic Energy Agency in Vienna, began to regulate so called source materials. These are materials which, at least in theory, could be fashioned into weapons. In reality, those associated with rare earths are not in sufficient quantity to interest potential proliferators.

But the regulations are there. Many in the rare earths elements industry believe that it was these regulations — particularly as affecting thorium — that crippled production around the world and essentially closed down the U.S. industry, just as demand was escalating.

There is a commercial market for uranium. While hardly any thorium is used nowadays, it was once used in some scientific instruments and mantles for lighting. Thorium is akin to uranium in atomic weight, and it is a fertile nuclear material. That means that it can be used in a nuclear reactor, but it has to be ignited by a fissile material, such as enriched uranium or plutonium.

Thorium is radioactive, but mildly so. It is an alpha emitter, which means it can be shielded with tissue paper and will not penetrate the skin. However, it has a half-life of 1.5 billion years.

The answer, according to James Kennedy, a science consultant and rare earths expert, is to develop a reactor using thorium instead of uranium. This reactor, called a molten salt reactor, is inherently safe, say its passionate advocates, and would be a better all-around nuclear future. The technology was pioneered by one of the giants of the early nuclear age, Alvin Weinberg, at the Oak Ridge National Laboratory, but abandoned under pressure from enthusiasts for light water reactors, the kind we have today.

The Thorium Energy Alliance believes that the United States and other countries should develop a cooperative to source rare earths from the existing mining of phosphates and metals and store the thorium until it becomes a useful fuel. A bill to do this is making its way through Congress, but its chances are slim. Short of putting a value on thorium and isolating it, the chances of a rare earth elements industry reawakening in the United States, or elsewhere, is rare. — For the Hearst-New York Times Syndicate