At FreightWaves Greg Miller reports that container costs have reached their highest rates ever post-pandemic:

It’s now crystal clear that container ships will not return to the Red Sea anytime soon. Lengthy detours around the Cape of Good Hope have already pushed spot container rates far above pre-COVID levels, and rates continue to climb.

Yet another commercial ship was hit by Houthi rebels on Wednesday, the bulk carrier Genco Picardy, owned by New York-based Genco Shipping & Trading (NYSE: GNK). This was followed by another barrage of coalition airstrikes in Yemen, then more Houthi attacks on shipping on Thursday.

The Drewry World Container Index (WCI) Global Composite jumped to $3,777 per forty-foot equivalent unit for the week ended Thursday. It’s now up 173% year to date.

With the exception of the COVID boom period in December 2020 through October 2022, this week’s global spot-rate reading is the highest on record since the WCI debuted in June 2011.

And here’s what the trend looks like for shipping from Asia to the West Coast:

I think there are several things to consider about that graph. First, costs skyrocketed throughout 2021 but had returned to the previous trend just about a year ago. Second, those are Asia to West Coast costs. Any effects from depradations on Red Sea shipping are run-on effects.

But the real point I wanted to make is that the greatest effect on such volatile shipping costs will be on low cost low margin goods. iPhones are shipped by air not by sea. Effects on air transport would be run-on effects on run-on effects. When the world is stable and predictable shipping raw materials across the Pacific to import them back in the form of inexpensive goods makes a bizarre sort of sense as long as the cost of maintaining that stability and predictability are not passed along to importers or consumers.

I would have thought that the pandemic might have taught us that extremely long extremely fragile supply lines are risky but perhaps not.

U. S. forces have been asked to leave Iraq. Michael R. Gordon, David S. Cloud, and Elena Cherney report in the Wall Street Journal:

Iraq’s prime minister said the U.S.-led military coalition that has been helping his country fight Islamic State militants is no longer needed, though he still wants strong ties with Washington.

“We believe the justifications for the international coalition have ended,” Prime Minister Mohammed al-Sudani told The Wall Street Journal, as the war in Gaza frays Iraqi relations with Washington.

I have no way of knowing, of course, but I can’t help but suspect that U. S. forces attacking Houthi positions directly has brought the “fraying” of relations between the U. S. and Iraq to the tipping point.

Iran has the largest number of its citizens professing Shi’a Islam of any country in the world. In the Arab world the largest number are in Iraq and Shi’ite Muslims comprise a majority of the population there. After Iraq is Yemen.

The fracture between Sunni Islam and Shi’a Islam goes back almost to the very beginnings of the religion, i.e. it’s nearly 1,400 years old. Our disagreements with Iraq, followed by our support for the Saud family’s war against Yemen, and now our direct attacks on Houthis has inserted the United States into a more than millennia old religious conflict.

My own view is that it is imprudent of us to take a side in that conflict but we have done so willy-nilly. That decision may well have run-on effects and this may be one of them.

At Liberal Patriot John Halpin, observing that the President Biden’s re-election campaign is almost entirely negative at present, urges the president to adopt a more positive strategy:

Biden is an old school Catholic Democrat who is committed to the well-being of working people and middle-class family values—a clear strength in a party awash in elite cultural norms. He believes in using American economic and military power to stand with our allies like Ukraine and Israel while others tear him down for doing so. As president, he worked with the other side to help pass important bipartisan legislation to strengthen American manufacturing, build up our national infrastructure, and protect our interests against outside threats from China and Russia.

The recipe for winning a presidential campaign is not that complicated—it’s two parts character/personality and one part organizational might/message.

So make Biden’s patriotism, his “pro-worker, pro-family, pro-America” agenda, and his pragmatism the centerpiece of a pitch for a second term.

To do this: (1) Reject all leftist rhetorical nonsense and activist priorities that preoccupy a minority of the party; (2) Occupy the center on immigration, energy issues, and crime and let voters know about it; and (3) Focus exclusively on policies that stand up for American workers, American businesses, American families, and American interests.

I predict that his advice will fall on deaf ears. Mr. Biden’s 2020 campaign eked out a narrow victory. He can’t afford to write off the progressive wing of his party in the hope of attracting voters who voted against him the last time around.

There’s an old trial lawyer’s adage going back more than a century and possibly much more: when the law supports your case, argue the law; when the evidence supports your case, argue the evidence; and when neither the facts nor the law support your case, pound on the table. In politics the equivalent is that when your record supports your re-election, run on your record; when your values support your re-election, run on your values; and when neither your record nor your values support your re-election, run a negative campaign. I think we’re going to have a very negative campaign.

I was really fascinated by some of Srdja Trifkovic’s observations in this piece at Chronicle (side note: I was unware that there were enough paleocons left to have a journal). In the piece Dr. Trifkovic considers the tensions between China and Taiwan, the disruption of Red Sea shipping by the Houthis, and the situation in Ukraine and sees a “perfect storm” emerging. Here’s a sample:

The crisis in the Red Sea has demonstrated that U.S. naval resources are insufficient to maintain the strategy of full spectrum dominance. The Navy is simply not up to the self-assigned, Herculean task of controlling and securing all key sea lanes, and especially choke points such as Bab el-Mandeb. The Navy is well below the goal of 75 ships ready for war at any time. Lest we forget, then-Commander of Naval Surface Forces, Vice Adm. Roy Kitchener who retired last August, announced a year ago that the fleet would aim to have 75 mission-capable ships available at all times. They would be optimally maintained, armed, and equipped—with the full complement of trained crews, ready for combat on a moment’s notice. Over the past year, according to Kitchener’s successor Vice Adm. Brendan McLane, the fleet is “kind of hovering between 50 and 60 ships on any given day.”

With the crisis in the South China Sea now more or less permanent, the lack of mission-capable ships is the main reason why last December the Navy dedicated a remarkably small strike group to Operation Prosperity Guardian in the Red Sea, consisting of one aircraft carrier and three escorting destroyers.

with this being particularly telling:

The British provided one destroyer, while Denmark and Greece promised a frigate each. The Netherlands, Norway, and Australia are together sending two-dozen military personnel in all, but no vessels. Singapore’s navy is providing a center “to support information sharing and engagement outreach to the commercial shipping community.”

or, said another way, we’re basically on our own without the resources to back it up. Or consider this:

Over the past few weeks, it has become clear that, all over the greater Middle East, an insoluble dilemma exists for the Biden administration. While Washington is loath for the conflict in Gaza to escalate, the U.S. is continuing its total support for, and its comprehensive financial, military, and diplomatic assistance to Israel. Consequently, all key Arab countries in the region are rapidly diversifying their political and economic relations, most notably those with Russia and China. Even the United Arab Emirates, ostensibly a reliable U.S. friend, gave Russian President Vladimir Putin an ostentatiously warm welcome last month. At the same time, U.S. military bases in the region—notably in Bahrain, right across the Gulf from Iran—appear potentially more vulnerable than ever before.

Interesting times.

I don’t want to trouble you with all of the predictions made by Atlantic’s experts on what the world will be like in 10 years but I will share this one:

This year, for the first time, we posed a question that we hope to now ask on an annual basis as a means of tracking sentiment on the global outlook: “Generally speaking, do you think the world a decade from now will be better off or worse off than it is today?”

60% that is nearly 2/3s thought that the world will be worse off in ten years than it is today.

Honestly, that’s something I miss today: the optimism that tomorrow will be better than today and whatever problems are, they can be dealt with.

If you haven’t noticed I have less than no interest in the outcome of the Iowa caucuses. Their structure is so eccentric nothing reasonable can be deduced from them. So Trump won’t be competing with Ramaswamy for the nutcase vote any more. Surprise.

I don’t know if I’ve said it before but to my eye the worst case outcome is a rematch of 2020 with Trump’s supporters 100% angrier than in 2020.

I found this article at Nature by Mariana Lenharo interesting:

An artificial intelligence (AI) system trained to conduct medical interviews matched or even surpassed human doctors’ performance at conversing with simulated patients and listing possible diagnoses on the basis of the patients’ medical history1.

The chatbot, which is based on a large language model (LLM) developed by Google, was more accurate than board-certified primary-care physicians in diagnosing respiratory and cardiovascular conditions, among others. Compared with human doctors, it managed to acquire a similar amount of information during medical interviews and ranked higher on empathy.

“To our knowledge, this is the first time that a conversational AI system has ever been designed optimally for diagnostic dialogue and taking the clinical history,” says Alan Karthikesalingam, a clinical research scientist at Google Health in London and a co-author of the study1, which was published on 11 January in the arXiv preprint repository. It has not yet been peer reviewed.

I had several reactions. First, this is exactly what I have been saying for decades. If the skills required are rote memorization and using clinical findings to diagnose conditions, a properly designed algorithm will beat human physicians. But the finding that the the LLM chatbot had greater empathy is the key one.

Which leads to my second observation. I don’t know whether physicians will fight the encroachment of machines on their turf but they shouldn’t. The effect of AI on medicine will be to make human physicians more productive and accurate. But that’s not all.

AI in medicine will change how prospective physicians are selected. We won’t need rote memorization and using clinical findings to diagnose conditions as much anymore. Gone will be the days when you doctor is frozen to a computer screen. What will be needed is human physicians who can work in collaboration with these chatbots to achieve better outcomes more quickly than human physicians alone.

Among those skeptical about our ability to deter the Houthis is Dianne Pfundstein Chamberlain. She expresses her thoughts in a piece at The National Interest. Basically, she thinks we’re trying to deter the Houthis on the cheap. A sample

In the early hours of Friday, January 12, the United States and the United Kingdom launched strikes against the Houthi rebel group in Yemen. The first strikes were aimed at more than sixty targets across sixteen different sites and were focused on missile, radar, and drone facilities controlled by the Houthis. A second wave targeted twelve additional sites, while a follow-on attack in the early hours of Saturday, January 13, struck a Houthi radar site. Although the strikes damaged or destroyed ninety percent of their targets, the Houthis retained approximately three-quarters of their drone and missile capabilities.

At this point our strikes have had the opposite effect if any. She explains:

In my book, Cheap Threats: Why the United States Struggles to Coerce Weak States, I examine why the United States struggles to coerce weak states like Iraq, Afghanistan, and Libya. The argument draws on the logic of costly signaling, which asserts that signals must be costly for the sender in order to effectively signal high levels of commitment; by contrast, “cheap talk” cannot convince the receiver that the sender is highly resolved. In other words, signals that are cheap and easy to send do not convey any information about the sender’s underlying resolve or motivation.

While I agree with her conclusion I don’t agree with her reasoning. I don’t believe that the problem is that we’re not spending enough. The opposite, if anything. What we’re doing isn’t cost-effective. As I see it the problem is similar to the one we faced in Afghanistan. The Houthis have no centralized command and control. For an airpower strategy to be effective we’d need to strike a lot of worthless targets and kill a lot of people who don’t have much to do with the attacks on Red Sea shipping. Not only would an air-sea-land invasion of Yemen be horrendously expensive, we’d need to be prepared to occupy the entire country to eliminate the attacks on shipping.

And, as I’ve pointed out before, one of the effects of our attacks is to boost their repute which attracts money not just from Iran but from others in the Gulf who hate us and there’s no lack of those.

To use an analogy I’ve applied before in a different context, when a neighbor’s dog bites your kid, don’t talk to the dog. Talk to the neighbor.

At Project Syndicate Carla Norrlöf outlines what she refers to as the “requirements of global economy and security”. Here’s a sample:

As recent years have shown, geopolitics can profoundly affect the global economy, reshaping trade, investment flows, and policies sometimes almost overnight. Aside from their devastating human toll, wars like the Russian invasion of Ukraine and Israel’s campaign in Gaza often reverberate far beyond the immediate theater of conflict.

For example, Western-led sanctions on Russia, and the disruption of Ukrainian grain exports through the Black Sea, caused energy and food prices to soar, resulting in supply insecurity and inflation on a global scale. Moreover, China has deepened its economic relationship with Russia following the mass exodus of Western firms in 2022 and 2023.

concluding:

All governments will need to grapple with these tensions as they develop a new economic-security agenda. The world is quickly becoming more adversarial and fraught with risk. To maximize both security and prosperity, we will have to understand the complex interplay of forces that are creating it.

I see her article as a lament for the Pax Americana which is truly gone. We shouldn’t be too surprised. As much time has elapsed since World War II and today as did between the American Civil War and World War II.

In my view we should stop longing for a return of the Pax Americana because it isn’t coming back and turn our attentions to our own security and economic needs. For my part I think we should focus on our interests in Central and South America and ignore the Middle East. Note that at present our trade with Mexico exceeds our trade with China.

If, on the other hand, we remain committed to being a world-spanning superpower, we need to reindustrialize and do it quickly. You can’t be a world-spanning superpower while dependent on other not necessarily friendly countries for defense procurement.