Inflection Points

Compounding Effects in a Rapidly Changed World

Last week, I discussed some symptoms of a sick state, specifically the declines since 1994 in the percentage of new companies in the economy, the number of people switching jobs, and the number of people moving interstate.

If you haven’t read that, I’d encourage you to take a moment and go back and read it first. It’s important for establishing a starting point in this conversation.

The world has changed dramatically in the past few years, and the rate of change seems to be accelerating.

It used to be that major—or “generational”—events happened rarely. That no longer seems to be the case. Since the fall of the Berlin Wall in 1989, major events have occurred with accelerating frequency. Since 2020, we’ve witnessed annually events that alone would be era-defining: the COVID-19 pandemic, the January 6 Riots, and Russia’s full-scale invasion of Ukraine. All of these have been further underscored by simmering tensions between another Eastern power (China) and the West.

Unprepared: A Global Pandemic

It is absolutely tragic that despite knowing that a global pandemic was coming, we remained ill-prepared to manage it and unable to protect our citizens.  President George W. Bush released a strategy in 2005 with the intent of “(1) stopping, slowing, or otherwise limiting the spread of a pandemic to the United States; (2) limiting the domestic spread of a pandemic, and mitigating disease, suffering, and death; and (3) sustaining infrastructure and mitigating impact to the economy and the functioning of society.”  Beginning that year, the federal government (including the military) planned for and conducted annual exercises to prepare to respond to just such a pandemic.  These planning efforts and exercises continued for years.  More recently, Dr. Anthony Fauci, then the Director of the National Institute of Allergy and Infectious Diseases, warned that there was “no doubt” that there would be a surprise pandemic.

And yet, more than one million Americans have died from the pandemic.  

A healthcare provider consoles another in a COVID-19 treatment area

Less than one year after the pandemic arrived in America, and as we were still laying to rest family members, friends, neighbors, and other citizens and residents that succumbed to the disease, we faced another national-level crisis. 

Discontented: A growing domestic divide

On January 6, 2021, attacks on the U.S. Capital exposed just how deeply divided our country has become.  

While the capital has previously known violence, the January 6th attack was substantively different. It was the first mass breach of the capital since the War of 1812, has resulted in the most deaths of any attack on it, and was motivated in significant part by a desire of citizens to overturn our fair election process.  Regardless of their motivation, it is clear that America has inflicted deep wounds on itself.  It is also clear that various malign actors have exploited, widened, and deepened otherwise natural and normal, ideological disagreements in our country.

Capital police struggle to prevent January 6th rioters from breaking down barriers and entering the capital

With America introspecting, adversaries of freedom, liberty, and the western way of life have moved quickly to inflict authoritarianism on others. 

Aggressive: A new assault on the West

Just shy of a year ago, Russia reopened its frozen conflict in Ukraine, trying to forcibly overthrow its legitimate government.  When that failed, Russia seized as much territory as possible, declared it Russian land and threatened broader war across Europe—including threats to use nuclear weapons.  Through all of this, Russia has framed this war as a war against the West, and the United States.  Yes, Russia is waging a war against the United States, NATO, Europe, and the western way of life.

Ukrainian soldiers survey damage from the Russian invasion

While unlikely, it is easy to understand fears that this war could serve as a flashpoint, triggering a broader world war.

Growing: A fear of a bellicose dragon

China is watching Russia’s activities in Ukraine—and our response to it—with great interest.  China has accelerated the modernization of its military, set to be complete by 2027.  Some observers have suggested this could mean China wants the ability to seize and annex Taiwan by that time.  Regardless, China seeks to build a modern military and to fuse its military with its commercial sector, which China sees as key to its attempts at global hegemony.  The ubiquity of some Chinese commercial enterprises (e.g., ByteDance’s TikTok) poses a significant and direct risk to Americans.  In fact, last week I mused on whether or not we may be in the opening campaign of a war as a virtual-first society.

Regardless, Chinese movements to expand its control and influence have triggered broader concerns of a new Cold War that—when coupled with the Russo-Ukrainian War—could further increase the odds of a global conflict.

People’s Liberation Army Air Force members salute as Chinese president Xi Jinping passes

Wake-Up Call

These events of the past few years have served as a wake-up call that for all of our efforts to build an international order that prizes peace, the world remains a dangerous place, and that we cannot take America’s security for granted.  Our security and our welfare require intentional investment and production.

Fortunately, builders and investors, policy makers and diplomats, and many others have recognized this reality. Next week, I’ll present a case for optimism, even in the face of these accelerating era-defining events and further discuss the shift in the Defense Technology sector.