Friday, June 17, 2022

17: Ukraine, Russia

Tens of thousands of civilians are now largely stranded in the middle of one of the war’s deadliest battles. People in one city key city are now largely on their own. Those who have escaped describe harrowing scenes. ......... All of the bridges connecting the twin Ukrainian cities of Lysychansk and Sievierodonetsk are destroyed and street-by-street fighting is raging, leaving thousands of civilians largely trapped inside one of the deadliest battles of the war so far. ......... Russia has targeted the area since its full-scale invasion began in February, but as it has narrowed its offensive to the resource-rich eastern Donbas region, Russian commanders have steadily redirected more forces to the small pocket of land in and around Sievierodonetsk. ........ The Ukrainian government said this week that any large-scale evacuation of the city is now impossible. Russia has promised to create a humanitarian corridor, but previous claims have failed to materialize and Russian forces have directed their fire in locations where civilians were gathering to flee. .......... On the front line as Russian artillery pounds the city of Lysychansk,

“one hour feels like an entire day,” one soldier said.

........... the shelling was now so intense that “people can no longer stand it in the shelters — their psychological state is on the edge.” ........ Russia does not control the city, he said, and pitched battles are being fought from house to house. At the same time, Russian forces continue to lay waste to the villages around the city



5 great books for the summer
Three cheers for the dull, factually correct middle




Another bruising day on Wall Street The S&P 500 plunged 3.2%, and the Dow industrials declined 2.4%, to end the day below 30,000 points for the first time since January 2021. The Nasdaq plummeted 4.1%, driven by big declines from tech companies. ........ investors have grown increasingly worried that the Fed's more aggressive approach to inflation might spark a recession. The Fed expects economic growth to slow to 1.7% this year as borrowing becomes more expensive, and for unemployment to reach 3.7% by the end of this year and 4.1% through 2024.



European heads meet Zelenskyy in Kyiv The visiting leaders said they backed Ukraine joining the European Union; Zelenskyy said his country urgently needed more heavy weapons. Germany is asking its citizens to conserve energy after Russia reduced flows of natural gas to the country. ...... President Joe Biden said the U.S. will send another $1 billion worth of military aid to Ukraine, including extra artillery, ammunition and anti-ship missiles. ....... With a brutal summer of fighting ahead, the risk is the balance starts to shift from punishing Putin to halting the war even at the price of pressing Ukraine into territorial concessions.



A new nuclear era With his threats to use the bomb, Russia’s president has overturned the nuclear order .......... One hundred days ago Vladimir Putin launched his invasion of Ukraine by warning of a nuclear strike. Having exalted Russia’s atomic arsenal and promised Ukraine’s subjugation, he threatened countries tempted to interfere with consequences “such as you have never seen in your entire history”. Russian tv has since tantalised viewers with chit-chat about Armageddon.......... Even if he never uses the bomb in Ukraine, Mr Putin has thus already upset the nuclear order. After his threats, nato limited the support it was prepared to offer, with two implications that are all the more worrying for having been drowned out by the drumbeat of Russia’s conventional campaign. One is that vulnerable states that see the world through Ukraine’s eyes will feel that the best defence against a nuclear-armed aggressor is to have weapons of their own. The other is that other nuclear-armed states will believe that they can gain by copying Mr Putin’s tactics. If so, someone somewhere will surely turn their threat into reality. That must not be this war’s devastating legacy........ The nuclear danger was growing before the invasion. North Korea has dozens of warheads. Iran, the un said this week, has enough enriched uranium for its first bomb. Although the New start treaty will limit Russia’s and America’s intercontinental ballistic missiles until 2026, it does not cover weapons such as nuclear torpedoes. Pakistan is rapidly adding to its arsenal. China is modernising its nuclear forces and, the Pentagon says, expanding them. ......... All this proliferation reflects the weakening of the moral revulsion that restrains the use of nuclear weapons. As memories of Hiroshima and Nagasaki fade, people fail to grasp how the detonation of a small battlefield weapon, of the sort Mr Putin might lob, could escalate into the tit-for-tat annihilation of entire cities. America and the Soviet Union only just coped with a two-sided nuclear stand-off.

There is insufficient alarm at the prospect of many nuclear powers struggling to keep the peace.

......... In 1994 Ukraine surrendered the ex-Soviet nuclear weapons on its territory in exchange for undertakings from Russia, America and Britain that it would not be attacked. By seizing Crimea and backing separatists in the Donbas regions in 2014, Russia flagrantly broke that promise. America and Britain, which pretty much stood aside, broke their promises, too. .......... If Iran tested a bomb, how would Saudi Arabia and Turkey respond? South Korea and Japan, which both have the know-how to arm themselves, will place less faith in Western commitments to protect them in a more dangerous world. ....... Putin is different because he is invoking atomic threats to help his invading forces win a conventional war. ........ Others in nato seem to think that Ukraine should settle with Russia, because inflicting a defeat on Mr Putin could back him into a corner, with dire consequences. ......... That logic sets a dangerous precedent. China could impose similar conditions if it attacked Taiwan, arguing that the island is already Chinese territory. More states may amass more battlefield weapons. That would flout the Nuclear Non-proliferation Treaty, under which they are pledged to work for disarmament. ......... The Treaty on the Prohibition of Nuclear Weapons, which came into force last year and is backed by 86 states, calls for their abolition. ........ Russia may be wary, but it is impoverished. Nukes cost money and it needs to rebuild its conventional forces. America could retire its land-based missiles without compromising its security in exchange for Russian cuts. Both sides could agree on technical measures, such as not to strike nuclear command, control and communications infrastructure in a conventional conflict. Ultimately, the aim should be to bring in China. ..........

countries such as China, India, Israel and Turkey with access to the Kremlin should be warning Mr Putin of their fury if, God forbid, he actually uses a nuclear weapon.

........ Sparing Ukraine from a nuclear attack is essential, but it is not enough. The world must also make certain that Mr Putin does not prosper from his aggression today, as he prospered in 2014. If, once again, he believes that his tactics worked, he will issue more nuclear threats in the future. If he concludes nato can be intimidated, persuading him that he must back down will be harder. Others will learn from his example. Ukraine therefore needs advanced weapons, economic aid and sanctions on Russia in order to force Mr Putin’s army into a retreat. ....... those arguing in the name of peace that Ukraine needs a truce with Russia right now, to avoid being bogged down in a war it cannot win with an enemy that has already lost its sting, could not be more wrong. If Mr Putin thought nato lacked resolve Russia would remain dangerous. If he were convinced that his nuclear threats had been the difference between defeat and a face-saving stalemate, Russia would be more dangerous than ever.

The tricky restructuring of global supply chains Why too much resilience is dangerous ........... just-in-time gave way to wait-and-see. No one knew if globalisation faced a blip or extinction. ......... as the pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism in boardrooms and governments. Everywhere you look, supply chains are being transformed, from the $9trn in inventories, stockpiled as insurance against shortages and inflation, to the fight for workers as global firms shift from China into Vietnam. This new kind of globalisation is about security, not efficiency: it prioritises doing business with people you can rely on, in countries your government is friendly with. It could descend into protectionism, big government and worsening inflation. Alternatively, if firms and politicians show restraint, it could change the world economy for the better, keeping the benefits of openness while improving resilience. .......... After the Berlin Wall fell in 1989, the lodestar of globalisation was efficiency. Companies located production where costs were lowest, while investors deployed capital where returns were highest. Governments aspired to treat firms equally, regardless of their nationality, and to strike trade deals with democracies and autocracies alike. Over two decades this gave rise to dazzlingly sophisticated value chains that account for half of all trade: your car and phone contain components that are better travelled than Phileas Fogg. All this kept prices low for consumers and helped lift 1bn people out of extreme poverty as the emerging world, including China, industrialised. ......... Volatile capital flows destabilised financial markets. Many blue-collar workers in rich countries lost out. ....... some lean supply chains are not as good value as they appear: mostly they keep costs low, but when they break, the bill can be crippling. Today’s bottlenecks have reduced global gdp by at least 1%. Shareholders have been hit as well as consumers: as chip shortages have stalled car production, carmakers’ cashflows have dropped by 80% year on year. Tim Cook, the supply-chain guru who runs Apple, reckons such snafus could reduce sales by up to $8bn, or 10%, this quarter.

Covid-19 was a shock, but wars, extreme weather or another virus could easily disrupt supply chains in the next decade.

............ Hopes that economic integration would lead to reform—what the Germans call “change through trade”—have been dashed: autocracies account for a third of world gdp. Vladimir Putin’s invasion of Ukraine has painfully exposed Europe’s reliance on Russian energy. This week McDonald’s in Moscow, which opened in 1990, restarted under local control. Big Macs are no longer on the menu. Meanwhile, President Xi Jinping’s ideological and unpredictable China has a trade footprint seven times as big as Russia’s—and the world relies on it for a variety of goods from active pharmaceutical ingredients to the processed lithium used in batteries.

As Bitcoin Busts, What’s the Future of Web3? And What Even Is Web3? Kara Swisher talks to Chris Dixon of Andreessen Horowitz about why Silicon Valley is doubling down on crypto despite its slide.

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