Monday, September 30, 2019

Saudi Arabia - Military Expenditures and Arms Imports

In a recent publication, the Stockholm International Peace Research Institute or SIPRI has released a fact sheet that looks at military spending by four of the key nations in the Middle East.  Given that three of these nations are involved in conflicts in Syria, Yemen and Libya, and the fourth is the target of American-led sanctioning and threats resulting from its alleged involvement in recent attacks in Saudi Arabia and military operations in both Iraq and Syria, the research is particularly pertinent.  In the first part of this posting, I want to look at military spending and arms imports by Iran, Saudi Arabia, Qatar and the United Arab Emirates (UAE) and focus on Saudi Arabia and its massive military spending.  In the second part of this posting, I will focus on Iran and its military spending and imports.

Let's start by looking data which will help us set the stage for this posting.  Here is a graphic that shows the trend in international transfers of major weapons going back to 1979:


According to SIPRI, United States arms exports grew by 29 percent between 2009 - 2013 and 2014 - 2018 with its share of total global arms exports rising from 30 to 36 percent over the same time period.  

Now, let's look at what the SIPRI fact sheet says about arms spending by Saudi Arabia and its neighbours, Qatar, Iran and the UAE.  Here is a graphic which shows the military spending in constant 2017 U.S. dollars of all four nations going back to 1994:


Asa you can see, there have been rapid growth in military spending by the United Arab Emirates and Saudi Arabia while military spending both Qatar and Iran have remained relatively constant in terms of 2017 dollars.

Here is a graphic that looks at the volume of arms transfers (i.e. imports) by the four nations broken down into five year periods:


Over the period between 1994 and 2018, Saudi Arabia's imports of arms have grown very significantly and at a far higher level than its counterparts.  In contrast, Iranian imports of arms have declined significantly from the 1990s to the present.

Let's focus on Saudi Arabia.  In 2018, Saudi Arabia's spending on its military was projected to be an estimated $67.6 billion, the third largest in the world and by a wide margin the highest in the Persian Gulf region.  Saudi's military spending rose by 57 percent between 1996 and 1998, by 76 percent between 2003 and 2007 and by 63 percent between 2011 and 2015.  Spending on Saudi Arabia's military dropped in lockstep with declining oil prices after 2015, dropping 28 percent in 2016, rising by 11 percent in 2017 and falling again by 6.5 percent in 2018.

Saudi Arabia's spending on its military was 8.8 percent of GDP, the highest in the world as shown on this graphic from Statista:


In 2018, Saudi spending as a percentage of GDP was down from a peak of 13 percent of GDP in 2015.  On a per capita basis, Saudi spending on its military in 2018 was $2014, higher than all other nations in the world.

Now let's look at Saudi Arabia's arms imports.  Here is a graphic showing the source nations for arms supplied to Saudi Arabia and the relative volume of those imports:


Let's look at two aspects of Saudi arms imports:

1.) Volume of Saudi Arabia's arms imports: arms imports rose markedly after 2009, rising by 192 percent  between 2009 - 2013 and 2014 - 2018, making Saudi Arabia the world's largest arms importer.

2.) Source of Saudi Arabia's arms imports: the United States is, by a wide margin, Saudi Arabia's largest supplier of imported arms, a distinction that it has held since the 1990s.  The United Kingdom and France have also been significant providers of arms to Saudi Arabia over the past two and a half decades.

Saudi Arabia's massive inventory of arms is wide ranging; the United States started delivering the first of 154 F-15SA combat aircraft in 2016, the United Kingdom delivered 72 Typhoon combat aircraft over the years between 2009 and 2017, Spain delivered six tanker aircraft between 2011 and 205 and between 2014 and 2018, the United States delivered 23 Patriot PAC-3 air and missile defense systems.  In addition, over the period between 2014 and 2018, Austria, Canada, France, Georgia, South Africa and Turkey delivered over 4000 armoured vehicles and the United States delivers 338 tanks to bolster Saudi Arabia's ground forces.

Saudi Arabia's massive and ongoing investment in its military has resulted in the Saudi royal family having access to the largest inventory of technically advanced weaponry in the Middle East (excluding Israel since Saudi Arabia does not have access to an inventory of nuclear weapons).  One has to wonder how the sales of American arms has affected the balance of power in the Middle East, particularly when these arms are being sold to a nation with a poor human rights record as shown in this quote from the United States Department of State 2018 Human Rights Report on Saudi Arabia:

"Human rights issues included unlawful killings; executions for nonviolent offenses; forced renditions; forced disappearances; and torture of prisoners and detainees by government agents. There were also reports of arbitrary arrest and detention; political prisoners; arbitrary interference with privacy; criminalization of libel, censorship, and site blocking; restrictions on freedoms of peaceful assembly, association, and movement; severe restrictions of religious freedom; citizens’ lack of ability and legal means to choose their government through free and fair elections; trafficking in persons; violence and official discrimination against women, although new women’s rights initiatives were implemented; criminalization of consensual same-sex sexual activity; and prohibition of trade  unions."

In part two of this posting, I will look at military expenditures and arms transfer data for Iran, the world's current chief boogeyman.

Thursday, September 26, 2019

Joe Biden, Corruption in Ukraine and American Power Peddling

With the Ukraine controversy swirling around Donald Trump and the actions taken by the Democrats to impeach him, a look back at some relatively recent comments by the Democrat's top presidential candidate are in order.  Rather that focussing on the potential conflict of interest between Joe Biden, his son Hunter Biden and the justice system in Ukraine, I am going to take a different approach to recent events that play to a wider narrative, that of the use of political power  peddling on the international stage by Washington. 

Let's look at a bit of background first.   Thanks to a timeline created by Just Security, we can look back and see key events in Ukraine prior to the time that Joe Biden was visiting the nation.  In November 2013, Ukrainians began protests against their government in Kyiv's Maidan, against the government of President Yanukovych.  By February 2014, the pro-Russian Yanukovych government fell, President Barack Obama appointed Joe Biden as his point man on Ukraine and the ongoing war in the eastern Ukraine regions of Donestsk and Luhansk began in April 2014.  In April 2014, Joe Biden's youngest son, Hunter Biden, joined the board of Burisma Holdings, the largest private natural gas producing company in Ukraine.  Here is the announcement: 



At the time, there was a perception of a conflict of interest given Joe Biden's position in the Obama Administration and his appointment as the lead person for Ukraine.

In April 2014, the United Kingdom's Serious Fraud Office blocked all accounts of Burisma's majority shareholder, Mykola Zlochevskiy and then unblocked them on January 21, 2015 after the found that there is no evidence to suggest that the assets were unlawfully acquired during his term in public office.  It is this event that has created a kerfuffle since it is believed that Ukraine's Prosecutor General did not supply the U.K. with the documents needed for a complete investigation.

On September 24, 2015, United States Ambassador to Ukraine, Geoffrey Pyatt gave a speech at the Odesa Financial Forum, scolding Ukraines's Prosecutor General Viktor Shokin for not cooperating with the British investigation and even undermining it.  Here are some of his comments:

"That problem (corruption) threatens everything that the Rada, the Cabinet, the National Reform Council, and others are doing to push political and economic reforms forward and make life better for Ukrainians, and it flies in the face of what the Revolution of Dignity is trying to achieve. 

That obstacle is the failure of the institution of the Prosecutor General of Ukraine to successfully fight internal corruption. Rather than supporting Ukraine’s reforms and working to root out corruption, corrupt actors within the Prosecutor General’s office are making things worse by openly and aggressively undermining reform.

In defiance of Ukraine’s leaders, these bad actors regularly hinder efforts to investigate and prosecute corrupt officials within the prosecutor general’s office. They intimidate and obstruct the efforts of those working honestly on reform initiatives within that same office. 

The United States stands behind those who challenge these bad actors…. 

I encourage all of you to speak up in support of these brave investigators and prosecutors. Give them the resources and support to successfully prosecute these and future cases. 

We have learned that there have been times that the PGO (Prosecutor General’s Office) not only did not support investigations into corruption, but rather undermined prosecutors working on legitimate corruption cases.

For example, in the case of former Ecology Minister Mykola Zlochevsky, the U.K. authorities had seized 23 million dollars in illicit assets that belonged to the Ukrainian people. Officials at the PGO’s office were asked by the U.K to send documents supporting the seizure.

Instead they sent letters to Zlochevsky’s attorneys attesting that there was no case against him. As a result the money was freed by the U.K. court and shortly thereafter the money was moved to Cyprus.

The misconduct by the PGO officials who wrote those letters should be investigated, and those responsible for subverting the case by authorizing those letters should – at a minimum – be summarily terminated. " (my bolds)

On December 8, 2015, Joe Biden gave a speech to Ukraine's Rada (Ukraine's parliament) regarding what it needed to do with regards to battling corruption:

"As the Prime Minister and the President heard me often say, I never tell another man or another nation or another woman what’s in their interest.  But I can tell you, you cannot name me a single democracy in the world where the cancer of corruption is prevalent.  You cannot name me one.  They are thoroughly inconsistent.  And it’s not enough to set up a new anti-corruption bureau and establish a special prosecutor fighting corruption.  The Office of the General Prosecutor desperately needs reform.  The judiciary should be overhauled.  The energy sector needs to be competitive, ruled by market principles -- not sweetheart deals.  It’s not enough to push through laws to increase transparency with regard to official sources of income.  Senior elected officials have to remove all conflicts between their business interest and their government responsibilities.  Every other democracy in the world -- that system pertains. 

Oligarchs and non-oligarchs must play by the same rules.  They have to pay their taxes, settle their disputes in court -- not by bullying judges.  That's basic.  That's how nations succeed in the 21st century. 

Corruption siphons away resources from the people.  It blunts the economic growth, and it affronts the human dignity.  We know that.  You know that.  The Ukrainian people know that.  When Russia seeks to use corruption as a tool of coercion, reform isn’t just good governance, it’s self-preservation.  It’s in the national security interest of the nation.

Russia is trying to undermine the stability and sovereignty of Ukraine any way they can't, including squeezing Ukraine financially, trying to undermine your economy.  They view that as a cheaper way than sending tanks across the line of contact."

There's the key point - the Obama Administration is clearly blaming Russia for the corruption in Ukraine.

Now, let's move forward just over two years.  Back in January 2018, Joe Biden appeared at the Council on Foreign Relations, a highly influential non-profit think tank which has numerous former federal government politicians and prominent members of the American intelligence community among its members.  In a question and answer exchange with Richard Haas, the President of the Council on Foreign Relations, we find the following comments from the former Vice President on his relationship with Ukraine during his term in office between 2014 and 2016, keeping in mind that this followed a lengthy exchange on Russia and its relationship with Washington:

"Do I think they’re—I think the Donbas has potential to be able to be solved, but it takes two things. One of those things is missing now. And that is I’m desperately concerned about the backsliding on the part of Kiev in terms of corruption. They made—I mean, I’ll give you one concrete example. I was—not I, but it just happened to be that was the assignment I got. I got all the good ones. And so I got Ukraine. And I remember going over, convincing our team, our leaders to—convincing that we should be providing for loan guarantees. And I went over, I guess, the 12th, 13th time to Kiev. And I was supposed to announce that there was another billion-dollar loan guarantee. And I had gotten a commitment from Poroshenko and from Yatsenyuk that they would take action against the state prosecutor. And they didn’t.

So they said they had—they were walking out to a press conference. I said, nah, I’m not going to—or, we’re not going to give you the billion dollars. They said, you have no authority. You’re not the president. The president said—I said, call him. (Laughter.) I said, I’m telling you, you’re not getting the billion dollars. I said, you’re not getting the billion. I’m going to be leaving here in, I think it was about six hours. I looked at them and said: I’m leaving in six hours. If the prosecutor is not fired, you’re not getting the money. Well, son of a bitch. (Laughter.) He got fired. And they put in place someone who was solid at the time.

Well, there’s still—so they made some genuine substantial changes institutionally and with people. But one of the three institutions, there’s now some backsliding." (my bolds)

I'm certain that the "backsliding" that has taken place can somehow be blamed on Russia.

I realize that the story is extremely complicated and I have tried to simplify it as much as possible.  In my opinion, at the very least, we can take one thing from the aforementioned events in Ukraine and comments by key members of the Obama Administration; Washington is completely hypocritical when it comes to corruption in government and how Russia uses coercion and other means of control to get its own way in the domestic affairs of other nations and how it uses corruption as a means of warfare.  A great deal of energy has been spent blaming Russian and Vladimir Putin for the woes of the world when, in fact, much of the blame for various geopolitical issues around the globe can be laid at the feet of Washington, the driving force behind Ukraine's current situation.   

Wednesday, September 25, 2019

In-Q-Tel - How American Taxpayers Support Spying on Themselves

While you may or may not realize it, American taxpayers have and may well still be paying to spy on themselves and their social media interactions through a venture capital arm of the American intelligence network. 

Back in February 1999, before terrorism made a regular appearance on the news, a company by the name of In-Q-Tel was founded by Norman R. Augustine, a retired Chairman and CEO of Lockheed Martin and Under Secretary of the Army and Gilman Louie, a venture capitalist who became the first CEO of the company.  In-Q-Tel was chartered as a private, independent, non-profit corporation incorporated in Delaware

Here is Mr. Augustine's biography from the Bipartisan Policy Center:


Here is Mr. Louie's biography from the Alsop Louie Partners website:


What you may not be aware of is that In-Q-Tel was chartered by the CIA as a venture capital firm.  In-Q-Tel was envisaged as a platform through which the research and development efforts of the CIA could be expanded into the private sector with the following mission:

"To exploit and develop new and emerging information technologies and pursue R&D that produce innovative solutions to the most pressing problems facing the CIA and Intelligence Community."

Under the In-Q-Tel model, the CIA (aka American taxpayers since the funding is supplied by the federal government) provide investment capital to startup companies that are tasked with finding solutions to problems that the CIA faces in other words, a hybrid "technology accelerator" and a "strategic investment firm".  According to a 2013 study on In-Q-Tel by John T. Reinert in the Northwestern Journal of International Law and Business, the company receives annual funding of about $37 million as part of the CIA's budget for the Directorate of Science and Technology.  After annually assessing approximately 1000 companies out of a database of 100,000, In-Q-Tel makes twelve to fifteen investments annually and, when it finds a company that seems promising, it will invest between $500,000 and $3 million with 15 to 20 percent of that amount going towards an equity position in the company and the remainder being used to cover licensing agreements and contracts to develop the company's technology so that it best suits the needs of the CIA.  As well, given its investment in the company, In-Q-Tel assumes an advisory position on the portfolio company's board of directors in order to ensure that any changes to the company or its product are easily discovered.  When In-Q-Tel realizes a profit on its investments, the profits may then be re-allocated to a new project.

Here is the lead webpage for In-Q-Tel's website:


Here is the current management team and their "photos":


Here is the current Board of Trustees which reads like a who's who of the Deep State given that a number of them have passed through either the CIA or the United States military:


Since its founding, In-Q-Tel has had more than 1,500 venture capital co-investing relationships as shown on this rather meaningless "Investing Ecosystem" graphic:


In-Q-Tel states that it works "side-by-side" with other venture capitalists so that it isn't footing the entire bill to develop technology in key areas of interest including cybersecurity, biotechnology, novel materials, remote sensing and deep learning for data analytics.

As you can see on this screen capture, one of the obvious focuses of In-Q-Tel is national security:


It is this aspect that we will look at next, looking at one of In-Q-Tel's investments that is particularly interesting given the social media kerfuffle following the 2016 presidential election in the United States.  Back in 2009, In-Q-Tel made an investment in Visible Technologies, a software company that monitors social media as you can see on this press release from In-Q-Tel:


Visible Technologies was a private company located in Bellevue, Washington and operates Visible Intelligence, a "technology platform that focuses on social media monitoring, data analytic and insights".  While Visible Technologies works with clients like Microsoft and Xerox, helping them to "monitor, analyze and participate in social media conversations" related to the quality of their products etcetera.

Here's what Visible Technologies has to say about itself:

"Visible Technologies is the leader in social media monitoring, analytics, and services for enterprises globally.  Visible’s award-winning technology and expertise helps businesses analyze social media conversations to better understand consumer preferences, market dynamics, competitive strengths and weaknesses, and other information critical to a company’s reputation and brands. 

Visible is the solution of choice for many Forbes Global 2000 companies in a variety of industries including consumer products, retail, technology, financial services, pharmaceutical, entertainment and others.  In addition to our platform solution, Visible provides deep analytic, reporting and insight services to augment social listening efforts and works closely with client agencies to provide a complete solution.

According to Wired, in 2009, Visible Technologies had the capability to crawl over half a million Web 2.0 sites daily, scraping more than a million conversations and posts taking place on Twitter, YouTube etcetera and then scoring each posting, ranking them as negative, positive, mixed or neutral.  How does this work in the intelligence community?  In-Q-Tel wanted Visible Technologies to keep track of social media in foreign countries which provides the American intelligence community a heads-up on how various issues are playing in other nations.  Fortunately for the CIA, Visible Technologies had the ability to track social media in several foreign languages including Arabic.

The total amount invested by the CIA in Visible Technologies is unknown, however, the company was acquired by Cision and Vocus in 2014 as shown here:


While In-Q-Tel does provide a list of its current investment portfolio as you can see here:


...there is relatively little detail on exactly what each company is doing and, as you can see from this posting, it is quite possible that American taxpayers are still paying to develop technology that will improve the capabilities of their own intelligence community to monitor all of their social media interactions, providing yet another method that Big Brother can use to reduce what little remains of our privacy.

Tuesday, September 24, 2019

America's Technology Tyrants in the Post-Truth Era

A recent announcement on Facebook's Newsroom website provides us with yet another glimpse into how American technology tyrants are functioning in the post-Clinton 2016 loss era.  In this announcement, Facebook clearly outlines its narrative in the global post-truth reality.

Here is the announcement:



Notice this sentence:

"We’re constantly working to detect and stop this type of activity because we don’t want our services to be used to manipulate people."

We have no choice but to accept that Facebook is not manipulating us into believing that it has not deleted these pages solely on the basis of their content which is clearly not pro-Washington but rather on the basis that the people behind the accounts attempted to mislead readers about who they really were and their agenda (which is pretty clear).

Here are examples of the pages that didn't meet Facebook's exacting standards, noting the mention of NED or National Endowment for Democracy on the second screen capture which purports to tracking United States meddling in Thailand:




Facebook states that they removed 12 Facebook Accounts and 10 Facebook Pages for "engaging in coordinated inauthentic behaviour that originated in Thailand and focussed primarily on Thailand an the US."  They also claimed that, the people behind these accounts frequently shared "divisive narratives and comments" on a wide variety of topics including criticism of democracy activists in Thailand.  Although the people behind these "fake accounts" attempted to hide their identities, at least some of this activity was linked to an individual in Thailand who was associated with New Eastern Outlook, a Russian government-funded journal.  

Let's look at who Near Eastern Outlook is and what they represent.  Near Eastern Outlook, the target of at least some of these actions by Facebook says this about itself:

"Our journal is called the New Eastern Outlook, so we are primarily interested in processes taking place at the broad expanse that stretches from Japan and the remote coasts of Africa. However, we do not limit ourselves geographically. We also look at political events happening in other areas of the world as they relate to the Orient. We cover political and religious issues, economic and ideological trends, regional security topics and social problems.

We are committed to develop NEO into a notable international networking platform offering unbiased expert opinions and open dialogue among all thinking people worldwide regardless of their nationality, race or religion. NEO editorial staff appreciates viewpoints of any reader or contributor ready to share and defend his convictions and approaches, whether commonplace or unconventional.

Our priority is to promote understanding rather than ideology, strategic outlook rather than simple reporting on events and to reveal causes rather than its consequences. We are focused on creating a new culture of partnership where opinions influence decisions. We have launched NEO community spaces in Facebook and Twitter for you. Please do join in, invite your friends, write, comment, argue, send us your contributions, and share!"

NEO's head office is located in Moscow, a fact that is clearly presented to readers.  When you click on NEO's Facebook link as provided on their "About" page, this is what you now find:


This is what you find on their Twitter page since the purge:


Apparently, both Facebook and Twitter don't want us to read an alternative to their chosen narrative.  With that in mind, let's look at some recent stories from Near Eastern Outlook:

1.) Blackwashing Google - an article about how Google influences elections and other key issues:


2.) Will China Trigger the Next Financial Tsunami?: an article about China's economy, the Renminbi  and trade with the United States:


3.) DPRK's Fourth Short Range Missile Launch and the International Reaction: an article about North Korea's August 2019 missile launches at the responses of the United States and South Korea:


4.) Did the Fed Already Decide the 2020 US Election?: an article about the Federal Reserve, its recent actions and its impact on United States politics, particularly the upcoming 2020 US presidential election:


While these articles that are written by a number of different authors may not parallel the narrative that is promoted by America's technology giants, it is pretty hard to deny the factual basis of many of the articles which provide readers with an alternative viewpoint on key issues.

In the interest of balance, and since one of the issues that concerns Facebook is the criticism of Thailand's democracy movement, let's look at what Washington's National Endowment for Democracy or NED (which is funded by Congress) has done over the past year in Thailand:



It certainly appears that Washington has been very, very busy meddling in Thailand's democratic movement in 2018, doesn't it?  This flies right in the face of what Facebook would prefer that we believe about the democracy movement in Thailand and the involvement of the United States government.

Since Hillary Clinton, the favourite candidate of the technology sector, lost the election in 2016, the very concept of truthiness in America has changed, bringing us to a post-truth era in which consumers of news have to search for news that is not sourced from a politically polarized sector of America's economy that is promoting its own agenda.  By acting against news sources like the Near Eastern Outlook, both Facebook and Twitter have made it more difficult to find viewpoints that the leadership of these two companies don't share, eliminating any hope of balanced journalism and public education on key issues.  God forbid that we should see another side of any story.

Monday, September 23, 2019

The High Cost of the Trump Trade War

Donald Trump is proving to be one of the most virulent trade warrior that has occupied the White House in our lifetime.  This should come as no surprise to anyone given that Mr. Trump paid for this full-page advertisement about America's trade relationship with Japan which appeared in the New York Times, The Washington Post and The Boston Globe on September 2, 1987 when Japan (not China) was the world's most successful trading nation:


A recent analysis by Moody's Analytics shows that the current trade war between Donald Trump and China has entered a dangerous phase that could well impact the global economy.

The current Trump-China trade war began on April 6 and 7, 2017 when China's President Xi visited Trump's Mar-a-Lago estate in Florida.  At that meeting, the two nations agreed to set up a 100 Day Action Plan to resolve trade differences between the two nations.  As we now know, the differences between the two nations have worsened significantly over the past two and a half years.   Here is a graphic from the Peterson Institute for Economics (PIIE) showing what has happened to the average tariff rate on United States imports from China and the growing percentage of imports that will be covered under the new tariff regime:


Here is a graphic from PIIE showing how China has responded:


If you wish to read a complete timeline of the ongoing Trump-China trade war, this is an excellent and very complete analysis. You can also find another excellent summary by the Peterson Institute for International Economics here.

Now, let's look at Moody's analysis.  Let's look at two scenarios:

1.) Baseline Scenario - In its baseline scenario which has a 50 percent probability of occurring, the October and December tariff hikes will both take place.  By the end of the year, U.S. tariffs on $250 billion of Chinese imports will rise from 25 percent to 30 percent and tariffs of 15 percent will be placed on the remaining goods.  The economic impact of these (and other trade threats coming from Donald Trump) will prove costly to the economy as follows:

1.) Real U.S. GDP will be 1 percent lower by the end of 2020 than it would have been without tariffs on China.

2.) U.S. job growth slows to the point that unemployment begins to rise.   

3.) The Federal Reserve will lower rates by 50 basis points by the beginning of 2020 to support U.S. economic growth.

4.) Global real GDP outside of the United States is 0.5 percent smaller by the end of 2020 thanks to the trade war with China.

2.) Trade War Escalation Scenario - In in addition to the tariffs already proposed, non tariff barriers are also imposed by the Trump Administration.  Washington bans Chinese firms from participating in the technology sector and forbids exports of high-tech goods including microchips.   This raises the cost of critical inputs across Southeast's Asia which contributes to a global manufacturing slump. U.S. companies are banned from doing business with Chinese technology giants.  The Trump Administration also accuses China of predatory lending in its Belt and Road Initiative and announces actions against financial institutions that fund BRI projects.  In addition, in this scenario, Washington imposes a 25 percent tariff on vehicle imports beginning in 2020 and a divided Congress refuses to pass the new U.S.-Mexico-Canada Agreement.  The result will be as follows:

1.) The Federal Reserve will have to lower the fed funds rate to the zero lower bound and both major and developing economies adopt monetary stimulus packages.

2.) The U.S. dollar appreciates and emerging market currencies depreciate sharply.

3.) By the fourth quarter of 2021, in the United States, there will be 559,500 fewer non-farm jobs than there would have been under the baseline scenario.

4.) Real global GDP contracts by 0.3 percent from peak to trough with deep recessions in the United States, Europe and most emerging markets and China's economic growth falls to just short of recession as shown on this graphic:


As we can see, there is a high cost, particularly to Americans, to the Trump trade war, particularly if it escalates.  This is yet another prime example of an unintended consequence of an ill-conceived idea that has turned into a very high-stakes game of chicken or dare.

Friday, September 20, 2019

America's Biggest Health Problem

Thanks to the Centers for Disease Control (CDC) we have a complete picture of America's biggest (pardon the pun) health problem; obesity.  While the latest data is current to 2017, if past performance is an indicator, relatively little will have changed over the past two years.

Let's start with a definition of body mass index or BMI.  BMI is defined as the body mass (weight) divided by the square of the body height and is usually measured using mass in kilograms (2.2 pounds equals one kilogram) and height in metres (3.28 feet equals one metre).  According to the National Heart, Lung and Blood Institute, BMI scores can be categorized as follows:

Underweight - BMI below 18.5

Normal - BMI between 18.5 and 24.9

Overweight - BMI between 25.0 and 29.9

Obese - BMI above 30.0

Obesity Class 1 - BMI between 30.0 and 34.9

Obesity Class 2 - BMI between 35.0 and 39.9

Extreme Obesity - BMI above 40.0

The higher your BMI the higher your risk for heart disease, high blood pressure, type 2 diabetes, certain cancers and breathing difficulties.  The risk for disease relative to normal weight and height is also related to waist circumference.  Men with waists in excess of 40 inches and women with waists in excess of 35 inches have the following risks of disease; "increased" for overweight individuals, "high" for Obesity Class I individuals, "very high" for Obesity Class 2 individuals and "extremely high" for extremely obese individuals as shown on this table:


Let's now look at the data from the CDC showing the state-by-state percentage of adults aged 18 and older who were obese in 2017:


Note that the data does not include respondents who weighed less than 50 pounds or more than 650 pounds (not particularly an exceptional weight given the number of subjects in the "My 600 Pound Life" television series).

Here are the top ten most obese states:

West Virginia - 38.1 percent
Mississippi - 37.3 percent
Oklahoma - 36.5 percent
Iowa - 36.4 percent
Alabama - 36.3 percent
Louisiana - 36.2 percent
Arkansas - 35.0 percent
Kentucky - 34.3 percent
Alaska - 34.2 percent
South Carolina - 34.1 percent

Here are the top ten least obese states:

Colorado - 22.6 percent
District of Columbia - 23.0 percent
Hawaii - 23.8 percent
California - 25.1 percent
Utah - 25.3 percent
Montana - 25.3 percent
New York - 25.7 percent
Massachusetts - 25.9 percent
Nevada - 26.7 percent
Connecticut - 26.9 percent

It is interesting to see that nearly one in four Americans are obese in the states with the lowest percentage of obese individuals and that nearly four in ten Americans are obese in the states with the highest percentage of obese individuals.

Here is one of the most concerning factors; the percentage of adults between the ages of 18 and 24 that are obese:


Once a child or younger adult is significantly overweight, it is extremely difficult to reverse the trend.  According to the CDC, data from 2015 to 2016 shows that nearly one in five school age children are obese.  Here is a map showing the state-by-state statistics for the percentage of high school students that were obese in 2017:


While there is constant noise in Washington about the cost of health care including prescription drugs and hospital care, one of the simplest ways to reduce health care costs at an individual level is to reduce caloric intake and increase activity levels.  It is only through the reduction of American obesity rates that total health care costs will show meaningful reductions.

If you are interested, here is a link that you can use to calculate your own BMI using either metric or imperial measurements.