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we can’t simply replace one simplistic narrative, about the super power of mitigation policy, for another, focused only on the burdens it imposed and not at all on the costs of doing much less — or nothing at all.

Let’s start with the title. What is the big failure, as you see it?

McLean: I think it gets at things that had happened in America even before the pandemic hit. And among those things were, I think, a failure to recognize the limits of capitalism, a failure of government to set the right rules for it, particularly when it comes to our health care system; a focus on profits that may have led to an increase in the bottom line but created fragility in ways people didn’t understand; and then our growing polarization that made us incapable of talking to each other

How big is the failure? When I look at The Economist’s excess mortality data, I see the U.S. had the 53rd-worst outcome in the world — worse than all of Western Europe, but better than all of Eastern Europe.

McLean: I think one way to quantify it is to take all those numbers and then put them in the context of our spending on health care. Given the amount we spend on health care relative to other countries, the scale of the failure becomes more apparent.

o me, the most glaring example is the schools. They were closed without people thinking through the potential consequences of closing down public schools, especially for disadvantaged kids.

to compound it, in my view, public health never made the distinction that needed to be made between the vulnerabilities of somebody 70 years old and the vulnerabilities of somebody 10 years old.

In the beginning of the book you write, in what almost feels like a thesis statement for the book: “A central tenet of this book is that we could not have done better, and pretending differently is a dangerous fiction, one that prevents us from taking a much needed look in the mirror.”

This claim, that the U.S. could not have done any better, runs against your other claim, that what we observed was an American failure. It is also a pretty extreme claim, I think, and I wanted to press you on it in part because it is, in my view, undermined by quite a lot of the work you do in the book itself.

Would the U.S. not have done better if it had recognized earlier that the disease spread through the air rather than in droplets? Would it not have done better if it hadn’t bungled the rollout of a Covid test in the early months?

McLean: Everything that you mentioned — the point of the book is that those were set by the time the pandemic hit.

in retrospect, what we were doing was to try to delay as much spread as we could until people got vaccinated. All the things that we did in 2020 were functionally serving or trying to serve that purpose. Now, given that, how can you say that none of that work saved lives?

McLean: I think that the test failure was baked into the way that the C.D.C. had come to operate

But the big question I really want to ask is this one: According to the C.D.C., we’ve had almost 1.2 million deaths from Covid. Excess mortality is nearly 1.4 million. Is it really your contention that there was nothing we might’ve done that brought that total down to 1.1 million, for instance, or even 900,000?

McLean: It’s very — you’re right. If you went through each and every thing and had a crystal ball and you could say, this could have been done, this could have been moved up by a month, we could have gotten PPE …

When I came to that sentence, I thought of it in terms of human behavior: What will humans put up with? What will humans stand for? How do Americans act? And you’ve written about Sweden being sort of average, and you’ve written about China and the Chinese example. They lock people up for two years and suddenly the society just revolts. They will not take it anymore. They can’t stand it. And as a result, a million and a half people die in a month and a half.

Well, I would tell that story very differently. For me, the problem is that when China opened up, they had fully vaccinated just under two-thirds of their population over 80. So to me, it’s not a failure of lockdowns. It’s a failure of vaccinations. If the Chinese had only achieved the same elderly vaccination rate as we achieved — which by global standards was pretty poor — that death toll when they opened up would have been dramatically lower.

What do you mean by “lockdown,” though? You use the word throughout the book and suggest that China was the playbook for all countries. But you also acknowledge that what China did is not anything like what America did.

Disparities in health care access — is it a dangerous fiction to think we might address that? You guys are big champions of Operation Warp Speed — would it not have been better if those vaccines had been rolled out to the public in nine months, rather than 12

. But this isn’t “lockdown” like there were lockdowns in China or even Peru. It’s how we tried to make it safer to go out and interact during a pandemic that ultimately killed a million Americans.

McLean: I think that you’re absolutely right to focus on the definition of what a lockdown is and how we implemented them here in this country. And I think part of the problem is that we implemented them in a way that allowed people who were well off and could work from home via Zoom to be able to maintain very much of their lives while other people couldn’t

And I think it depends on who you were, whether you would define this as a lockdown or not. If you were a small business who saw your small business closed because of this, you’re going to define it as a lockdown.

n the book you’re pretty definitive. You write, “maybe the social and economic disasters that lockdowns created would have been worth it if they had saved lives, but they hadn’t.” How can you say that so flatly?

I think there are still open questions about what worked and how much. But the way that I think about all of this is that the most important intervention that anybody did anywhere in the world was vaccination. And the thing that determined outcomes most was whether your first exposure came before or after vaccination.

Here, the shelter-in-place guidelines lasted, on average, five to seven weeks. Thirty nine of the 40 states that had issued them lifted them by the end of June, three months in. By the summer, according to Google mobility data, retail and grocery activity was down about 10 percent. By the fall, grocery activity was only down about 5 percent across the country

Nocera: Well, on some level, I feel like you’re trying to have it both ways. On the one hand, you’re saying that lockdowns saved lives. On the other hand, you said they weren’t real lockdowns because everybody was out and about.

I don’t think that’s having it both ways. I’m trying to think about these issues on a spectrum rather than in binaries. I think we did interrupt our lives — everybody knows that. And I think they did have an effect on spread, and that limiting spread had an effect by delaying infections until after vaccination.

Nocera: Most of the studies that say lockdowns didn’t work are really less about Covid deaths than about excess mortality deaths. I wound up being persuaded that the people who could not get to the hospital, because they were all working, because all the doctors were working on Covid and the surgical rooms were shut down, the people who caught some disease that was not Covid and died as a result — I wound up being persuaded about that.

We’re in a pandemic. People are going to die. And then the question becomes, can we protect the most vulnerable? And the answer is, we didn’t protect the most vulnerable. Nursing homes were a complete disaster.

There was a lot of worry early on about delayed health care, and about cancer in particular — missed screenings, missed treatments. But in 2019, we had an estimated 599,600 Americans die of cancer. In 2020, it was 602,000. In 2021, it was 608,000. In 2022, it was 609,000.

Nocera: See, it went up!But by a couple of thousand people, in years in which hundreds of thousands of Americans were dying of Covid.

Nocera: I think you can’t dispute the excess mortality numbers.I’m not. But in nearly every country in the world the excess mortality curves track so precisely with Covid waves that it doesn’t make sense to talk about a massive public health problem beyond Covid. And when you add all of these numbers up, they are nowhere near the size of the footfall of Covid. How can you look back on this and say the costs were too high?

Nocera: I think the costs were too high because you had school costs, you had economic costs, you had social costs, and you had death.

McLean: I think you’re raising a really good point. We’re making an argument for a policy that might not have been doable given the preconditions that had been set. I’m arguing that there were these things that had been put in place in our country for decades leading up to the pandemic that made it really difficult for us to plant in an effective way, from the outsourcing of our PPE to the distrust in our health care system that had been created by people’s lack of access to health care with the disparities in our hospital system.

How would you have liked to see things handled differently?Nocera: Well, the great example of doing it right is San Fran

I find the San Francisco experience impressive, too. But it was also a city that engaged in quite protracted and aggressive pandemic restrictions, well beyond just protecting the elderly and vulnerable.

McLean: But are we going to go for stay-at-home orders plus protecting vulnerable communities like San Francisco did? Or simply letting everybody live their lives, but with a real focus on the communities and places like nursing homes that were going to be affected? My argument is that we probably would’ve been better off really focusing on protecting those communities which were likely to be the most severely affected.

I agree that the public certainly didn’t appreciate the age skew, and our policy didn’t reflect it either. But I also wonder what it would mean to better protect the vulnerable than we did. We had testing shortages at first. Then we had resistance to rapid testing. We had staff shortages in nursing homes.

Nocera: This gets exactly to one of our core points. We had spent 30 years allowing nursing homes to be owned by private equity firms that cut the staff, that sold the land underneath and added all this debt on

I hear you saying both that we could have done a much better job of protecting these people and that the systems we inherited at the outset of the pandemic would’ve made those measures very difficult, if not impossible, to implement.

But actually, I want to stop you there, because I actually think that that data tells the opposite story.

And then I’m trying to say at the same time, but couldn’t we have done something to have protected people despite all of that?

I want to talk about the number of lives at stake. In the book, you write about the work of British epidemiologist Neil Ferguson. In the winter of 2020, he says that in the absence of mitigation measures and vaccination, 80 percent of the country is going to get infected and 2.2 million Americans are going to die. He says that 80 percent of the U.K. would get infected, and 510,000 Brits would die — again, in the abs

In the end, by the time we got to 80 percent of the country infected, we had more than a million Americans die. We had more than 200,000 Brits die. And in each case most of the infections happened after vaccination, which suggests that if those infections had all happened in a world without vaccines, we almost certainly would have surpassed two million deaths in the U.S. and almost certainly would’ve hit 500,000 deaths in the U.K.

In the book, you write about this estimate, and you endorse Jay Bhattacharya’s criticism of Ferguson’s model. You write, “Bhattacharya got his first taste of the blowback reserved for scientists who strayed from the establishment position early. He co-wrote an article for The Wall Street Journal questioning the validity of the scary 2 to 4 percent fatality rate that the early models like Neil Ferguson’s were estimating and that were causing governments to panic. He believed, correctly as it turns out, that the true fatality rate was much lower.”

Nocera: I know where you’re going with this, because I read your story about the nine pandemic narratives we’re getting wrong. In there, you said that Bhattacharya estimated the fatality rate at 0.01 percent. But if you actually read The Wall Street Journal article, what he’s really saying is I think it’s much lower. I’ve looked at two or three different possibilities, and we really need some major testing to figure out what it actually is, because I think 2 percent to 4 percent is really high.

He says, “if our surmise of 6 million cases is accurate, that’s a mortality rate of 0.01%. That is ⅒th the flu mortality rate of 0.1%.” An I.F.R. of 0.01 percent, spread fully through the American population, yields a total American death toll of 33,000 people. We have had 1.2 million deaths. And you are adjudicating this dispute, in 2023, and saying that Neil was wrong and Jay was right.

hird, in the Imperial College report — the one projecting two million American deaths — Ferguson gives an I.F.R. estimate of 0.9 percent.

Bhattacharya’s? Yes, there is some uncertainty around the estimate he offers. But the estimate he does offer — 0.01 percent — is one hundred times lower than the I.F.R. you yourselves cite as the proper benchmark.

Nocera: In The Wall Street Journal he does not say it’s 0.01. He says, we need to test to find out what it is, but it is definitely lower than 2 to 4 percent.

Well, first of all, the 2 percent to 4 percent fatality rate is not from Neil Ferguson. It’s from the W.H.O.

But I think that fundamentally, at the outset of the pandemic, the most important question orienting all of our thinking was, how bad could this get? And it turns out that almost all of the people who were saying back then that we shouldn’t do much to intervene were extremely wrong about how bad it would be

The argument then was, more or less, “We don’t need to do anything too drastic, because it’s not going to be that big a deal.” Now, in 2023, it’s the opposite argument: “We shouldn’t have bothered with restrictions, because they didn’t have an impact; we would have had this same death toll anyway.” But the death toll turned out to be enormous.

Now, if we had supplied all these skeptics with the actual numbers at the outset of the pandemic, what kind of audience would they have had? If instead of making the argument against universal mitigation efforts on the basis of a death toll of 40,000 they had made the argument on the basis of a death toll of more than a million, do you think the country would’ve said, they’re right, we’re doing too much, let’s back off?

McLean: I think that if you had gone to the American people and said, this many people are going to die, that would’ve been one thing. But if you had gone to the American people and said, this many people are going to die and a large percentage of them are going to be over 80, you might’ve gotten a different answer.

I’m not arguing we shouldn’t have been trying to get a clearer sense of the true fatality rate, or that we shouldn’t have been clearer about the age skew. But Bhattacharya was also offering an estimate of fatality rate that turned out to be off by a factor of a hundred from the I.F.R. that you yourselves cite as correct. And then you say that Bhattacharya was right and Ferguson was wrong.

And you, too, Joe, you wrote an article in April expressing sympathy for Covid skeptics and you said ——Nocera: This April?No, 2020.Nocera: Oh, oh. That’s the one where I praised Alex Berenson.You also cited some Amherst modeling which said that we were going to have 67,000 to 120,000 American deaths. We already had, at that point, 60,000. So you were suggesting, in making an argument against pandemic restrictions, that the country as a whole was going to experience between 7,000 and 60,000 additional deaths from that point.

when I think about the combination of the economic effects of mitigation policies and just of the pandemic itself and the big fiscal response, I look back and I think the U.S. managed this storm relatively well. How about each of you?

in this case, Congress did get it together and did come to the rescue. And I agree that made a ton of difference in the short term, but the long-term effects of the fiscal rescue package were to help create inflation. And once again, inflation hits those at the bottom of the socioeconomic distribution much harder than it does those at the top. So I would argue that some of what we did in the pandemic is papering over these long-term issues.

I think as with a lot of the stuff we’ve talked about today, I agree with you about the underlying problems. But if we take for granted for a moment that the pandemic was going to hit us, when it did, under the economic conditions it did, and then think about the more narrow context of whether, given all that, we handled the pandemic well. We returned quickly to prepandemic G.D.P. trends, boosted the wealth of the bottom half of the country, cut child poverty in half, pushed unemployment to historical lows.

What sense do you make of the other countries of the world and their various mitigation policies? Putting aside China, there’s New Zealand, Australia, South Korea — these are all places that were much more aggressive than the U.S. and indeed more than Europe. And had much, much better outcomes.

Nocera: To be perfectly honest, we didn’t really look, we didn’t really spend a lot of time looking at that.

McLean: But one reason that we didn’t is I don’t think it tells us anything. When you look at who Covid killed, then you have to look at what the pre-existing conditions in a country were, what percentage of its people are elderly. How sick are people with pre-existing conditions?

I just don’t think there’s a comparison. There’s just too many factors that influence it to be able to say that, to be able to compare America to any other country, you’d have to adjust for all these factors.

But you do spend a bit of time in the book talking about Sweden. And though it isn’t precisely like-for-like, one way you can control for some of those factors is grouping countries with their neighbors and other countries with similar profiles. And Sweden’s fatality rate in 2020 was 10 times that of Norway, Finland and Iceland. Five times that of Denmark. In the vaccination era, those gaps have narrowed, but by most metrics Sweden has still done worse, overall, than all of those countries.

On the matter of omniscience. Let’s say that we can send you back in time. Let’s put you both in charge of American pandemic response, or at least American communication about the pandemic, in early 2020. What would you want to tell the country? How would you have advised us to respond?

McLean: What I would want is honesty and communication. I think we’re in a world that is awash in information and the previous methods of communication — giving a blanket statement to people that may or may not be true, when you know there’s nuance underneath it — simply doesn’t work anymore

o I would’ve been much more clear — we think masks might help, we don’t know, but it’s not that big of an ask, let’s do it. We think the early data coming out of Italy shows that these are the people who are really, really at risk from Covid, but it’s not entirely clear yet. Maybe there is spread in schools, but we don’t know. Let’s look at this and keep an open mind and look at the data as it comes in.

Mea culpa. For those past two decades, I’d prospered and thrived in the new political economy. And unharmed by automation or globalization or the new social contract, I’d effectively ignored the fact that the majority of my fellow Americans weren’t prospering or thriving.

And I and my cohort of hippie-to-yuppie liberal Baby Boomers were complicit in that.

Economic inequality has reverted to the levels of a century ago and earlier, and so has economic insecurity, while economic immobility is almost certainly worse than it’s ever been.

What’s happened since the 1970s and ’80s didn’t just happen. It looks more like arson than a purely accidental fire, more like poisoning than a completely natural illness, more like a cheating of the many by the few—and although I’ve always been predisposed to disbelieve conspiracy theories, this amounts to a long-standing and well-executed conspiracy, not especially secret, by the leaders of the capitalist class, at the expense of everyone else.

In 40 years, the share of wealth owned by our richest 1 percent has doubled, the collective net worth of the bottom half has dropped to almost zero, the median weekly pay for a full-time worker has increased by just 0.1 percent a year, only the incomes of the top 10 percent have grown in sync with the economy, and so on

A union? Sure, fine. But I was talent. I was creative. I was an individual. College graduates tend to think of themselves that way, younger ones all the more, younger Baby Boomers at the time probably the most ever. And the intensified, all-encompassing individualism that blew up during the 1960s—I do my thing, and you do your thing—was not a mindset or temperament that necessarily reinforced feelings of solidarity with fellow workers or romantic feelings about unions.

“The Greens were on the way to being a party of the political middle,” said Manfred Güllner, director of the Berlin-based Forsa Institute, a polling firm. “Now the Greens have landed back to exactly where they were for a long time: a small party that caters to its followers that is far removed from being a major party.”

As the Greens have pivoted back to their traditional agenda, the party has bumped up against the limits of what many Germans are willing to sacrifice at a time of economic insecurity stemming from the war in Ukraine, higher inflation and the lingering effects of the Covid pandemic.

Exhibit A in voter disillusionment was a bill that Mr. Habeck promoted requiring that newly installed home heating systems run on at least 65 percent renewable energy starting next year.

“They squandered a lot of their success because they seemed detached from ordinary people,” said Markus Ziener, a visiting fellow at the German Marshall Fund. “Instead of setting incentives, they were seen as telling people what’s right and what’s wrong, as wanting to lecture people.”

Experts said the law, which was passed in weakened form in September, has helped fuel the growing popularity of the far-right Alternative for Germany party, or AfD, which is polling at more than 20 percent, around the highest in its history.

Like other far-right parties across Europe, the AfD has added opposition to climate policies to its agenda, alongside issues like immigration, seeking to capitalize on the economic anxieties of working people.

“What happened with the Heizungsgezetz was all of a sudden literally the Greens were knocking on people’s doors, asking, ‘Show me your heating, and it has to change,’” said Andrea Römmele, a political scientist at the Hertie School in Berlin. “It was too fast.”

“It’s the deepest crisis in the Greens’ history,” he said. “Robert Habeck is the most talented politician in Germany by far. He has become a scapegoat. But he can get them past it.”

Google’s generative-AI-powered search is the true nightmare for publishers. Across the media world, Google generates nearly 40% of publishers’ traffic, accounting for the largest share of their “referrals,” according to a Wall Street Journal analysis of data from measurement firm SimilarWeb. 

“AI and large language models have the potential to destroy journalism and media brands as we know them,” said Mathias Döpfner, chairman and CEO of Axel Springer,

His company, one of Europe’s largest publishers and the owner of U.S. publications Politico and Business Insider, this week announced a deal to license its content to generative-AI specialist OpenAI.

publishers have seen enough to estimate that they will lose between 20% and 40% of their Google-generated traffic if anything resembling recent iterations rolls out widely. Google has said it is giving priority to sending traffic to publishers.

The rise of AI is the latest and most anxiety-inducing chapter in the long, uneasy marriage between Google and publishers, which have been bound to each other through a basic transaction: Google helps publishers be found by readers, and publishers give Google information—millions of pages of web content—to make its search engine useful.

Already, publishers are reeling from a major decline in traffic sourced from social-media sites, as both Meta and X, the former Twitter, have pulled away from distributing news.

, Google’s AI search was trained, in part, on their content and other material from across the web—without payment. 

Google’s view is that anything available on the open internet is fair game for training AI models. The company cites a legal doctrine that allows portions of a copyrighted work to be used without permission for cases such as criticism, news reporting or research.

The changes risk damaging website owners that produce the written material vital to both Google’s search engine and its powerful AI models.

“If Google kills too many publishers, it can’t build the LLM,”

Barry Diller, chairman of IAC and Expedia, said all major AI companies, including Google and rivals like OpenAI, have promised that they would continue to send traffic to publishers’ sites. “How they do it, they’ve been very clear to us and others, they don’t really know,” he said.

All of this has led Google and publishers to carry out an increasingly complex dialogue. In some meetings, Google is pitching the potential benefits of the other AI tools it is building, including one that would help with the writing and publishing of news articles

At the same time, publishers are seeking reassurances from Google that it will protect their businesses from an AI-powered search tool that will likely shrink their traffic, and they are making clear they expect to be paid for content used in AI training.

“Any attempts to estimate the traffic impact of our SGE experiment are entirely speculative at this stage as we continue to rapidly evolve the user experience and design, including how links are displayed, and we closely monitor internal data from our tests,” Reid said.

Many of IAC’s properties, like Brides, Investopedia and the Spruce, get more than 80% of their traffic from Google

Google began rolling out the AI search tool in May by letting users opt into testing. Using a chat interface that can understand longer queries in natural language, it aims to deliver what it calls “snapshots”—or summaries—of the answer, instead of the more link-heavy responses it has traditionally served up in search results. 

Google at first didn’t include links within the responses, instead placing them in boxes to the right of the passage. It later added in-line links following feedback from early users. Some more recent versions require users to click a button to expand the summary before getting links. Google doesn’t describe the links as source material but rather as corroboration of its summaries.

During Chinese President Xi Jinping’s recent visit to San Francisco, the Google AI search bot responded to the question “What did President Xi say?” with two quotes from his opening remarks. Users had to click on a little red arrow to expand the response and see a link to the CNBC story that the remarks were taken from. The CNBC story also sat over on the far right-hand side of the screen in an image box.

The same query in Google’s regular search engine turned up a different quote from Xi’s remarks, but a link to the NBC News article it came from was beneath the paragraph, atop a long list of news stories from other sources like CNN and PBS.

Google’s Reid said AI is the future of search and expects its new tool to result in more queries.

“The number of information needs in the world is not a fixed number,” she said. “It actually grows as information becomes more accessible, becomes easier, becomes more powerful in understanding it.”

Testing has suggested that AI isn’t the right tool for answering every query, she said.

Many publishers are opting to insert code in their websites to block AI tools from “crawling” them for content. But blocking Google is thorny, because publishers must allow their sites to be crawled in order to be indexed by its search engine—and therefore visible to users searching for their content.To some in the publishing world there was an implicit threat in Google’s policy: Let us train on your content or you’ll be hard to find on the internet.

The gripe drew a chagrined reply from Musk. “Unfortunately, the Internet (on which it is trained), is overrun with woke nonsense,” he responded. “Grok will get better. This is just the beta.”

While many tech ethicists and AI experts warn that these systems can absorb and reinforce harmful stereotypes, efforts by tech firms to counter those tendencies have provoked a backlash from some on the right who see them as overly censorial.

Touting xAI to former Fox News host Tucker Carlson in April, Musk accused OpenAI’s programmers of “training the AI to lie” or to refrain from commenting when asked about sensitive issues. (OpenAI wrote in a February blog post that its goal is not for the AI to lie, but for it to avoid favoring any one political group or taking positions on controversial topics.) Musk said his AI, in contrast, would be “a maximum truth-seeking AI,” even if that meant offending people.

So far, however, the people most offended by Grok’s answers seem to be the people who were counting on it to readily disparage minorities, vaccines and President Biden.

an academic researcher from New Zealand who examines AI bias, gained attention for a paper published in March that found ChatGPT’s responses to political questions tended to lean moderately left and socially libertarian. Recently, he subjected Grok to some of the same tests and found that its answers to political orientation tests were broadly similar to those of ChatGPT.

“I think both ChatGPT and Grok have probably been trained on similar Internet-derived corpora, so the similarity of responses should perhaps not be too surprising,”

Other AI researchers argue that the sort of political orientation tests used by Rozado overlook ways in which chatbots, including ChatGPT, often exhibit negative stereotypes about marginalized groups.

Musk and X did not respond to requests for comment as to what actions they’re taking to alter Grok’s politics, or whether that amounts to putting a thumb on the scale in much the same way Musk has accused OpenAI of doing with ChatGPT.

Analysts see the most optimal outcome for Israel probably consisting of degrading Hamas’s military capabilities to prevent the group from repeating such a devastating attack. But even that limited goal is considered a formidable slog.

Hamas is rooted in the ideology that Israeli control over what it regards as Palestinians lands must be opposed by force, a tenet likely to endure, experts said.

“As long as that context is there, you will be dealing with some form of Hamas,” said Tahani Mustafa, senior Palestine analyst at the International Crisis Group think tank. “To assume that you can simply uproot an organization like that is fantasy.”

The Israeli military said this week that it had killed about 8,000 Hamas fighters out of a force estimated at 25,000 to 40,000. But it is unclear how the count is being made

“They’ve been saying this for a while, that Hamas is collapsing,” Mr. Milshtein said. “But it’s just not true. Every day, we’re facing tough battles.”

The group’s top echelon are believed to be sheltering, along with most of its fighters and the remaining hostages, in deep tunnels. Although the Israeli army has said that it demolished at least 1,500 shafts, experts consider the underground infrastructure is largely intact.

The tunnels, built over 15 years, are believed to be so extensive, estimated at hundreds of miles long, that Israelis call them the Gaza Metro.

“From a professional point of view, I must give credit to their resilience,” he said. “I cannot see any signs of collapse of the military abilities of Hamas nor in their political strength to continue to lead Gaza.”

A string of Israeli assassinations of Hamas political, military and religious leaders also failed to weaken the group. It won control of Gaza in free Palestinian elections in 2006, then evicted its more moderate rival, the Palestinian Authority, in a bloody conflict the next year.

For Israel, the aim is first to dismantle the government, then to disperse the fighters and eliminate the commanders and their primary subordinates, the Israeli official said.

“The top leadership can disappear at any time because they can be killed, they can be arrested, they can be deported,” he said. “So they developed this mechanism of the easy transfer of command.”

Trying to eliminate Hamas entirely would require fighting from street to street and house to house, and Israel lacks both the time and personnel, said Elliot Chapman, a Middle East analyst with Janes, a defense analysis firm.

The Gaza fight has been compared to the campaign to wrest Mosul, Iraq, from the Islamic State less than a decade ago, but there are significant differences.

Notably, Hamas is organic to Gaza — it grew out of frustration with the mainstream factions abandoning the armed struggle against the Israeli occupation. Hamas refuses to recognize Israel, and according to its founding charter, is committed to its destruction.

Some Gazans curse Hamas, even taking to the airwaves or social media to do it, despite the organization’s history of repressing opponents. Other Gazans, however, say that they still back “the resistance,” and Hamas has long attracted support by providing services like schools and clinics.

“The right way to think about it is to degrade the organization to the point that it is no longer a sustainable threat,” said Marc Polymeropoulos, a retired C.I.A. officer who specialized in Middle East counterterrorism.

“You cannot just have a strategy of killing everybody,” he added. “You have to have that day-after scenario.”

In recent weeks, Biden has scrambled to show he is on top of the matter. He invoked the Defense Production Act to ramp up domestic production of baby formula, and his administration has airlifted supplies from foreign countries to try to address the mushrooming crisis. But the declaration by industry leaders that the scope of the problem was immediately clear to them in February raises questions of why the president was slow to learn of the issue.

“Seeing the empty shelves is unacceptable,” she said. “Seeing what families are going through is unacceptable. This is why we have been working 24-7 to make sure that we are using every lever at our disposal to deliver for the American people.”

Officials said United Airlines had agreed to transport Kendamil formula for free from Heathrow Airport in London to multiple airports across the United States over a three-week period. The formula will be distributed and available for purchase at selected U.S. retailers nationwide as well as online, the White House said.All told, about 3.7 million 8-ounce bottle equivalents of Kendamil infant formula will be delivered, it said.

Still, despite the all-hands-on-deck approach to replenishing the American supply, store shelves continue to be emptier: Data firm IRI reported Tuesday that the nationwide in-stock inventory figure was 76 percent for the week ending May 22, down from 79 percent the week before.

Andrew Adams, a federal prosecutor leading the task force, said in an interview that “targeting people who make their living by providing a means for money laundering is a key priority.”

Along with the Amadea, Imperial Yachts oversaw the construction of the Scheherazade, a $700 million superyacht that U.S. officials say is linked to Mr. Putin, and the Crescent, which the Spanish police believe is owned by Igor Sechin, chairman of the state-owned oil giant Rosneft.

Mr. Timchenko and his partners designed the Scheherazade — seized in early May by the Italian police — as a gift for Mr. Putin’s use, according to the assessment. Together, the three vessels may have cost as much as $1.6 billion, enough to buy six new frigates for the Russian navy.

But U.S. officials are not buying such explanations. Elizabeth Rosenberg, the assistant secretary for terrorist financing and financial crimes at the Treasury Department, said it was the responsibility of people in the yacht services industry to avoid doing business with people under sanctions.“And if you do,” she said, “you yourself will be subject to sanctions.”

Mr. Kochman, 41, got his start in the yacht business in Russia in 2001, the year after Mr. Putin took power, selling Italian-made yachts.

“We grow with our clients like parents with babies,

Locals have never seen Mr. Khudainatov. Mariangela Canale, owner of the town’s 111-year-old bakery, said she was worried that Portofino would become a place where the homes were mere investments, owned by wealthy people who rarely visited, and the community would lose its soul. “Even the richest residents have always come for a chat or to buy my focaccia bread with their children, or have dinner in the piazza,” she said. “They live with us.”

“The client may be fully immersed in the project, he might not be,” he said in a phone interview. “I channel everything through Mr. Kochman.”

“We are not currently working with anyone on the sanctions list and we have shared all requested information with the authorities, with whom we continue to work,” the spokesman said in an email.

But according to U.S. investigators, Imperial Yachts brokered the sale of the Amadea late last year to Suleiman Kerimov, a Russian government official and billionaire investor who has been on the U.S. sanctions list since 2018. He was among a group of seven oligarchs who the American officials said “benefit from the Putin regime and play a key role in advancing Russia’s malign activities.”

Mr. Clark, the lawyer for Imperial Yachts, said the company “would never knowingly create structures to hide or conceal ownership, nor would we knowingly broker deals to sanctioned individuals.”

One thing is clear, according to the U.S. task force: Members of Mr. Kerimov’s family were on board the Amadea earlier this year, based on investigators’ interviews with crew members, reviews of emails between the ship and Imperial, and other documents from the superyacht including copies of passports.

The cast of characters restoring Villa Altachiara to its former glory is familiar. Mr. Kochman’s BLD Management is supervising the project. Mr. Gey is helping to oversee the local and international artisans restoring the interior of the mansion. Yachtline 1618, an Italian high-end carpentry company that has worked on Imperial Yachts projects, is also involved.

We buy your yachts and you buy our gas,”

“Everything is under very strict nondisclosure agreements,” Mr. Gey said. “It’s a standard in the industry.”He added, “It’s not like there is something to hide.”

They were offering nearly unlimited cheap debt to keep the wheels of finance turning, and when that didn’t help, the Fed began purchasing massive quantities of government debt outright.

Investors dumped whatever they could, including ostensibly “risk-free” U.S. Treasury securities. As a global dash for dollars unfolded, Treasurys were no longer serving as the market’s traditional shock absorbers, amplifying extreme turmoil on Wall Street.

By week’s end, the Dow had plunged more than 10,000 points since mid-February as investors struggled to get their arms around what a halt to global commerce would mean for businesses that would soon have no revenue.

“It was sheer, unadulterated panic, of a magnitude that was far worse than in 2008 and 2009. Far worse,”

The idea of shutting down markets was especially discouraging: “It was a profoundly un-American thing to contemplate, to just shut everything down, and almost fatalistic—that we’re not going to get out of this.”

nearly two years later, most agree that the Fed’s actions helped to save the economy from going into a pandemic-induced tailspin.

“My thought was—I remember this very clearly—‘O.K. We have a four-or-five-day chance to really get our act together and get ahead of this. We’re gonna try to get ahead of this,’” Mr. Powell recalled later. “And we were going to do that by just announcing a ton of stuff on Monday morning.”

It worked. The Fed’s pledges to backstop an array of lending, announced on Monday, March 23, would unleash a torrent of private borrowing based on the mere promise of central bank action—together with a massive assist by Congress, which authorized hundreds of billions of dollars that would cover any losses.

If the hardest-hit companies like Carnival, with its fleet of 104 ships docked indefinitely, could raise money in capital markets, who couldn’t?

on April 9, where he shed an earlier reluctance to express an opinion about government spending policies, which are set by elected officials and not the Fed. He spoke in unusually moral terms. “All of us are affected,” he said. “But the burdens are falling most heavily on those least able to carry them…. They didn’t cause this. Their business isn’t closed because of anything they did wrong. This is what the great fiscal power of the United States is for—to protect these people as best we can from the hardships they are facing.”

They were extraordinary words from a Fed chair who during earlier, hot-button policy debates said the central bank needed to “stay in its lane” and avoid providing specific advice.

To avoid a widening rift between the market haves (who had been given access to Fed backstops) and the market have-nots (who had been left out because their debt was deemed too risky), Mr. Powell had supported a decision to extend the Fed’s lending to include companies that were being downgraded to “junk” status in the days after it agreed to backstop their bonds.

Most controversially, Mr. Powell recommended that the Fed purchase investment vehicles known as exchange-traded funds, or ETFs, that invest in junk debt. He and his colleagues feared that these “high-yield” bonds might buckle, creating a wave of bankruptcies that would cause long-term scarring in the economy.

Mr. Powell decided that it was better to err on the side of doing too much than not doing enough.

, Paul Singer, who runs the hedge-fund firm Elliott Management, warned that the Fed was sowing the seeds of a bigger crisis by absolving markets of any discipline. “Sadly, when people (including those who should know better) do something stupid and reckless and are not punished,” he wrote, “it is human nature that, far from thinking that they were lucky to have gotten away with something, they are encouraged to keep doing the stupid thing.”

The breathtaking speed with which the Fed moved and with which Wall Street rallied after the Fed’s announcements infuriated Dennis Kelleher, a former corporate lawyer and high-ranking Senate aide who runs Better Markets, an advocacy group lobbying for tighter financial regulations.

This is a ridiculous discussion no matter how heartfelt Powell is about ‘we can’t pick winners and losers’—to which my answer is, ‘So instead you just make them all winners?’”

“Literally, not only has no one in finance lost money, but they’ve all made more money than they could have dreamed,” said Mr. Kelleher. “It just can’t be the case that the only thing the Fed can do is open the fire hydrants wide for everybody

Mr. Powell later defended his decision to purchase ETFs that had invested in junk debt. “We wanted to find a surgical way to get in and support that market because it’s a huge market, and it’s a lot of people’s jobs… What were we supposed to do? Just let them die and lose all those jobs?” he said. “If that’s the biggest mistake we made, stipulating it as a mistake, I’m fine with that. It wasn’t time to be making finely crafted judgments,” Mr. Powell said. He hesitated for a moment before concluding. “Do I regret it? I don’t—not really.”

“We didn’t know there was a vaccine coming. The pandemic is just raging. And we don’t have a plan,” said Mr. Powell. “Nobody in the world has a plan. And in hindsight, the worry was, ‘What if we can’t really fully open the economy for a long time because the pandemic is just out there killing people?’”

Mr. Powell never saw this as a particularly likely outcome, “but it was around the edges of the conversation, and we were very eager to do everything we could to avoid that outcome,”

The Fed’s initial response in 2020 received mostly high marks—a notable contrast with the populist ire that greeted Wall Street bailouts following the 2008 financial crisis. North Carolina Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, gave Mr. Powell an “A-plus for 2020,” he said. “On a one-to-10 scale? It was an 11. He gets the highest, highest marks, and deserves them. The Fed as an institution deserves them.”

The pandemic was the most severe disruption of the U.S. economy since the Great Depression. Economists, financial-market professionals and historians are only beginning to wrestle with the implications of the aggressive response by fiscal and monetary policy makers.

Altogether, Congress approved nearly $5.9 trillion in spending in 2020 and 2021. Adjusted for inflation, that compares with approximately $1.8 trillion in 2008 and 2009.

By late 2021, it was clear that many private-sector forecasters and economists at the Fed had misjudged both the speed of the recovery and the ways in which the crisis had upset the economy’s equilibrium. Washington soon faced a different problem. Disoriented supply chains and strong demand—boosted by government stimulus—had produced inflation running above 7%.

because the pandemic shock was akin to a natural disaster, it allowed Mr. Powell and the Fed to sidestep concerns about moral hazard—that is, the possibility that their policies would encourage people to take greater risks knowing that they were protected against larger losses. If a future crisis is caused instead by greed or carelessness, the Fed would have to take such concerns more seriously.

The high inflation that followed in 2021 might have been worse if the U.S. had seen more widespread bankruptcies or permanent job losses in the early months of the pandemic.

an additional burst of stimulus spending in 2021, as vaccines hastened the reopening of the economy, raised the risk that monetary and fiscal policy together would flood the economy with money and further fuel inflation.

The surge in federal borrowing since 2020 creates other risks. It is manageable for now but could become very expensive if the Fed has to lift interest rates aggressively to cool the economy and reduce high inflation.

The Congressional Budget Office forecast in December 2020 that if rates rose by just 0.1 percentage point more than projected in each year of the decade, debt-service costs in 2030 would rise by $235 billion—more than the Pentagon had requested to spend in 2022 on the Navy.

its low-rate policies have coincided with—and critics say it has contributed to—a longer-running widening of wealth inequality.

In 2008, household wealth fell by $8 trillion. It rose by $13.5 trillion in 2020, and in the process, spotlighted the unequal distribution of wealth-building assets such as houses and stocks.

Without heavy spending from Washington, focused on the needs of the least well-off, these disparities might have attracted more negative scrutiny.

Finally, the Fed is a technocratic body that can move quickly because it operates under few political constraints. Turning to it as the first line of defense in this and future crises could compromise its institutional independence.

Step one, he said, was to get in the fight and try to win. Figuring out how to exit would be a better problem to have, because it would mean they had succeeded.

“We have a recovery that looks completely unlike other recoveries that we’ve had because we’ve put so much support behind the recovery,” Mr. Powell said last month. “Was it too much? I’m going to leave that to the historians.”

The final verdict on the 2020 crisis response may turn on whether Mr. Powell is able to bring inflation under control without a painful recession—either as sharp price increases from 2021 reverse on their own accord, as officials initially anticipated, or because the Fed cools down the economy by raising interest rates.

In his book The Four Loves, C.S. Lewis outlines the ways in which citizens should love their nations.

healthy patriotism is rooted in this deep and natural sense of home, it rebukes any sense of chauvinism or xenophobia. “In any mind which has a pennyworth of imagination it produces a good attitude towards foreigners,” Lewis says, “How can I love my home without coming to realise that other men, no less rightly, love theirs.” 

“As the family offers us the first step beyond self-love,” writes Lewis, “so this offers us the first step beyond family selfishness.” 

Critically, love of country rooted in love of home “is not in the least aggressive.” It “asks only to be let alone.” That’s not to say that it’s pacifistic, but “it becomes militant only to protect what it loves.” 

he uses a key word—“home.” He compares the love of your country to the “love of home, of the place we grew up in or the places, perhaps many, which have been our homes; and of all places fairly near these and fairly like them; love of old acquaintances, of familiar sights, sounds and smells.” 

, it is “not in the least aggressive.” It “asks only to be let alone.” As a nation that has endured its own aggressive attacks, how can we not empathize? How can we not do what we reasonably can to deter Russian aggression and help Ukrainians defend themselves?

It is this sense of peace and place that echoes in the prophet Micah’s words: “Everyone will sit under their own vine and under their own fig tree, and no one will make them afraid.”

No one claims that Ukraine is a perfect country.

Because

The chauvinist has no concern beyond our borders. The angry critic says we have no right to demonstrate concern, so long as we are still so flawed

In fact, it is our understanding of the value of our national home—and the deeply destabilizing and violent pain of the loss of others’ national homes—that leads to the network of defensive alliances that has maintained great power peace for so long.

NATO is not “American imperialism.” Our defensive alliances in Asia aren’t the result of “imperial overreach.” To continue the comparison to home, a defensive alliance is akin to a neighborhood watch, where neighbors look after and protect each other.

It is no coincidence, however, that the unhealthy nationalism of the modern incarnation of America First does seek to repeat those past mistakes

the reason isn’t just tactical or strategic, it’s philosophical—rooted in temptations and vices that Lewis warns against in the Four Loves. 

Essentially, the warning is against a sense of superiority—about both the past and present. As Lewis said, a love of country can lead to a “particular attitude to our country’s past” that has “not quite such good credentials as the sheer love of home.” 

“The actual history of every country is full of shabby and even shameful doings … The heroic stories,” Lewis writes, “if taken to be typical, give a false impression of it

Why is that dangerous? Why is it so important to understand history in full?

At worst we can hold the “firm, even prosaic belief that our own nation, in sober fact, has long been, and still is markedly superior to all others.” This belief “can produce asses that kick and bite.” “On the lunatic fringe,” Lewis warned, “It may shade off into that popular Racialism which Christianity and science equally forbid.”

Interestingly enough, the sense of superiority can create the same outcome as the sense of national self-loathing you sometimes see on far-left and far-right.

But this moment should cast our existing obligations in a different light, reaffirming their immense value.

the result is similar—an insular people, focused on themselves.

A criminal regime is on the verge of kicking down the door of a national home, and our nation should stand with the innocent, with those who wish to be left alone. We are all Ukrainians now. 

Who was attracted to this movement? Many were careerists: people happy to serve as apparatchiks, following whatever the party line happened to be at the moment.

when I say that I miss voodoo economics, what I really mean is that I miss the illusion — which I shared — that the impact of its rise would mainly be limited to the politics of taxes and spending. What we now know is that the embrace of crank economics presaged the general moral collapse of the Republican establishment.

This collapse opened the door for paranoia and conspiracy theorists of all kinds

There is, I would argue, a direct line from the Laffer curve, to Jan. 6, to Buffalo.

London’s luxury retailers are lobbying the U.K. government to reinstate VAT-free shopping for visitors. Big department stores like Harrods, owned by Qatar’s sovereign wealth fund, and Selfridges, which was sold for £4 billion in 2021 to Thai and Australian investors, relied heavily on tourist spending before the pandemic.

If overseas visitors continue to shop in Europe instead of Britain, landlords on the U.K. capital’s poshest streets could suffer. In 2022, London’s New Bond Street slipped out of the top-three ranking of the world’s most expensive retail streets, according to real estate firm Cushman & Wakefield. It was overtaken by Via Montenapoleone in Milan, where rents are now 9% above 2019 levels.

The financial cost, while vast, is impossible to calculate. In late December, Russia’s Communications Ministry reported that 10 percent of the country’s IT workers had left in 2022 and not returned.

those remaining in the depleted political opposition also faced a choice this year: prison or exile. Most chose exile. Activists and journalists are now clustered in cities such as Berlin and the capitals of Lithuania, Latvia and Georgia.

“This exodus is a terrible blow for Russia,” said Tamara Eidelman, a Russian historian who moved to Portugal after the invasion. “The layer that could have changed something in the country has now been washed away.”

the influx of Russians into countries such as Kazakhstan and Kyrgyzstan, which have long sent immigrants to Russia, set off political tremors, straining ties between Moscow and the other former Soviet states. Real estate prices in those countries have shot up, causing tensions with local populations.

For many Russians choosing to flee, Armenia was a rare easy option. It is one of five ex-Soviet countries that allow Russians to enter with just a national ID — making it a popular destination for former soldiers, political activists and others needing a quick escape.

Given the shared religion and use of language, Russians typically do not face animosity or social stigma in Armenia. Obtaining residency permits is also straightforward, and living costs are lower than in the European Union.

Yerevan has attracted thousands of IT workers, young creatives and working-class people, including families with children, from across Russia. They have established new schools, bars, cafes and robust support networks.

n the courtyard of the “Free School” for Russian children, established in April, Maxim, a construction company manager, was waiting for his 8-year-old son, Timofey. The school started with 40 students in an apartment. Now, there are nearly 200 in a multistory building in the city center.

“I did not want to be a murderer in this criminal war,” said Andrei, who is being identified by his first name for safety reasons

Like the White Russian emigres of the Bolshevik era and the post-Soviet immigrants of the 1990s, many of those leaving Russia because of the war in Ukraine are probably gone for good.

The family has adapted seamlessly to Yerevan. Everyone around them speaks Russian. Maxim works remotely on projects in Russia. Timofey likes his school and is learning Armenian. Maxim said he is sure the family will not return to Russia.

Tanya Raspopova, 26, arrived in Yerevan last March, with her husband but without a plan, overwhelmed and frightened.Then she heard that another emigre was seeking partners to set up a bar, a space where Russian expats could come together, and she wanted to help. Tuf, named after the pink volcanic rock common throughout Yerevan, opened its doors within a month.

They started with a neon-lit bar and kitchen on the ground floor, which soon expanded into a small courtyard. Then they opened up a second floor, then a third. Upstairs there is now a recording studio, a clothing boutique and a tattoo parlor. On a Wednesday night in January, the place was packed with young Russians and Armenians singing karaoke, drinking cocktails and playing ping-pong. “We have since created such a big community, a big family,” Raspopova said. “Tuf is our new home.”

Thousands have chosen the UAE, which did not join Western sanctions and still has direct flights to Moscow, as their new home. Russians enjoy visa-free travel for 90 days, and it is relatively easy to get a national ID, through business or investment, for a longer stay.

The high cost of living means there are no activists or journalists. Dubai is a haven, and the go-to playground, for Russian tech founders, billionaires under sanctions, unpenalized millionaires, celebrities, and influencers.

Shortly after the invasion, conversations in Moscow’s affluent Patriarch Ponds neighborhood turned to the best Dubai real estate deals, said Natalia Arkhangelskaya, who writes for Antiglyanets, a snarky and influential Telegram blog focused on Russia’s elite. A year later, Russians have ousted Brits and Indians as Dubai’s top real estate buyers, Russian-owned yachts dock at the marina, and private jets zigzag between Dubai and Moscow.

Russians can still buy apartments, open bank accounts and snag designer leather goods they previously shopped for in France.

The UAE’s embrace of foreign business has lured a stream of Russian IT workers seeking to cut ties with Russia and stay linked to global markets. Start-ups seek financing from state-supported accelerators. Larger firms pursue clients to replace those lost to sanctions.

About a dozen people arrived to discuss opportunities in India, which has maintained ties with Russia despite the war. Most expressed bitterness about the Kremlin’s politics and a longing for Moscow when it was an aspiring global hub.

“The most important thing for me is to be able to develop international projects and to integrate my kids into a global community, so they grow up in a free environment,”

Andrei works as a delivery driver and shares a modest room with two other men in a shelter set up by Kovcheg, a support organization for Russian emigrants. “Before the war, I never followed politics, but after the invasion, I started reading about everything,” Andrei said. “I feel so ashamed about what Russia has done.”

“Every extra month leads people to get used to a different country,” she said. “They get a job there, their children go to school, they begin to speak a different language. The longer the war lasts — the longer the dictatorship in the country continues — the fewer people will return.”

the expats could become “a repository of relevant skills for a better, freer, modern Russia.” For now, though, Rojansky said, the outflow sends a clear message.

Others derive purpose from specific kinds of responsibility.

People who had been working as station agents before their elevation were generally satisfied by their new roles. But supervisors who had previously worked as train drivers were noticeably less content: they felt their roles had less meaning when they no longer had direct responsibility for the well-being of passengers.

Firms need to think more creatively about career progression than promoting people into management jobs. IBM, for example, has a fellowship programme designed to give a handful of its most gifted technical employees their own form of recognition each year.

There is some logic here. Employees with a calling could well be more dedicated. But that doesn’t necessarily make them better at the job. And teams are likelier to perform well if they blend types of employees: visionaries to inspire, specialists to deliver and all those people who want to do a job well but not think about it at weekends. Like mayonnaise, the secret is in the mixture.

A handful of financial institutions produced them when Rio de Janeiro hosted in 2016, using a mixture of macroeconomic indicators and performances at previous Olympics to forecast total medal hauls for each country.

Gracenote’s distinguishing feature is the ability to produce quantitative analysis for each event.

Gracenote still uses the old system to produce its public medal table, which also deals in absolute forecasts, rather than fractional ones. If a French athlete, say, is the most likely to win an event, France gets awarded one gold medal in the table, even though the true probability of the athlete winning gold is less than 100% and his chances of claiming silver and bronze are greater than 0%.

The best way to answer that question is to take every previous contest in the sport and analyse how past results correlate with future success.

Yet only two events on the winter Olympics programme, curling and ice hockey, involve head-to-head contests.

Those that compete in teams have their scores blended with their compatriots. And for those that participate in a number of events, such as Ms Dahlmeier, results in related disciplines affect multiple ratings. A strong performance in the biathlon sprint, a group race, would boost her ranking in the pursuit, a staggered race, for example.

the Elo rating system, which was developed for chess by Arpad Elo, a Hungarian physicist. The formula exchanges ranking points from the loser to the winner, with greater rewards for beating stronger opponents. The difference in ratings points between two rivals can be easily used to calculate the probability that one will beat the other.

The bans have benefited Norway most, as the country will likely gain of the five of the 12 foregone medals—enough to nudge it ahead of Germany into first place in terms of total medals won.

Mr Gleave notes that the favourite only wins about 30% of the time, a lower share than in any other winter sport. Ms Dahlmeier’s rating has dwindled a little, but not by enough to suggest that last year’s record breaker has become this year’s flop.

Gracenote’s research into age curves for each sport shows that the best biathletes can maintain their peak performance into their early 30s (see chart). Expect to see more event-by-event forecasting at future Olympics, too.

Russian President Vladimir Putin is demanding that the West rewrite the post-Cold War security arrangements for Europe and demonstrated that Russia has the military capability to impose its will despite Western objections and economic sanctions.

“We all thought we were looking at a Europe whole, free and at peace indefinitely,” said Michele Flournoy, who served as the Pentagon’s top policy official during the Obama administration. “We knew that Russia would conduct gray zone operations and that Putin would use his KGB playbook to create instability on his periphery. But a wholesale invasion of a sovereign country to reorient its government is a different moment.”

“And we’re seeing that while Beijing doesn’t really like Putin’s tactics, they’re willing to band together as authoritarian states against the Western democracies,” Ms. Flournoy added. “We are going to see more and more of that in the future.”

China’s Communist Party leadership also saw pro-democracy protest movements in former Soviet republics as U.S.-engineered plots that could ultimately be used against Beijing.

For much of the past decade, the U.S. security establishment began taking note of what the Pentagon in 2015 called the “re-emergence of great power competition” and shifted from its emphasis of counterterrorism operations in the Middle East and Southwest Asia.

Defense Secretary Lloyd Austin has repeatedly cast China as the “pacing challenge” while Russia was seen as the lesser longer-term danger.

Even with annual defense budgets that soared over $700 billion, coping with an urgent Russian-generated crisis while preparing for a Chinese threat whose peak is still years away presents an enormous challenge for the Pentagon.

”The United States is particularly at risk of being overwhelmed should its military be forced to fight on two or more fronts simultaneously,” said a Congressionally mandated study of the Pentagon’s strategy that was issued in 2018

The era of nuclear reductions may come to an end as the U.S. military establishment argues for a large enough nuclear arsenal to deter both Russia’s formidable nuclear weaponry and China’s rapidly growing nuclear forces, which aren’t limited by any arms-control agreement.

“The United States is going to have to get used again to operating in multiple theaters simultaneously—not just militarily, but in terms of psychology and foreign-policy making,”

Already, debates are emerging among U.S. defense experts on whether the Pentagon should give equal weight to the twin challenges from Beijing and Moscow or focus more on the Pacific.

Should the West impose crippling sanctions on Russian banks and major companies, Moscow is likely to become more reliant on Beijing, which has issued a digital currency and is building a payments system separate from the West’s.

“It is already ending the amnesia about the importance of energy security,” said Daniel Yergin, vice chairman of research firm IHS Markit. “It means a new emphasis on diversification of energy sources for Europe and a new look at U.S. domestic and international energy policies.”

Advocates of using energy as a geopolitical tool say Washington should promote investment in U.S. oil and natural gas and approve new LNG export terminals and pipelines in the United States.

The 1997 NATO-Russia Founding Act precludes the alliance from permanently stationing additional substantial combat forces on the territory of its new Eastern and Central European members, but could now be repealed.

A recent poll by the European Council on Foreign Relations noted most Europeans see the Ukraine crisis as a broader threat to Europe. Some current and former officials, however, worry that the alliance’s solidarity could fray in the years ahead as it debates the need for greater military spending and wrestles whether its military ties with Georgia might stir new confrontations with Moscow.

the Alphen Group by former officials and other experts urges that European members of the alliance and Canada provide for 50% of NATO’s minimum military requirements by 2030 so the U.S. can focus more on deterring China.

“Everybody’s unified right now and outraged about what the Russians are doing,” said Alexander Vershbow, a former U.S. ambassador to NATO who also served as the alliance’s deputy secretary-general from 2012 to 2016. “But when we get down to making longer-term commitments to strengthen NATO’s defense posture and potentially revisit nuclear issues, it could become very divisive.”

It produces economic distortions as high IQ types get jobs as “money butlers.” (Chuck Collins, the author of “The Wealth Hoarders,” estimates that at least 90,000 people are employed in what he calls the “wealth defense industry.”)

Today the educated are losing their faith in upward mobility.

President Joe Biden has dramatically increased the flow of arms to Ukraine, including anti-tank missiles, anti-aircraft systems, drones, rifles and other weapons. Importantly, it was Trump who first sent lethal aid, in a major reversal from the Obama administration, which refused to send offensive weapons to Ukraine during the early stages of fighting in the eastern Donbas region.But Trump has a checkered past on this topic. As a candidate, his position was unclear at best. Trump campaign aides intervened during the 2016 Republican National Convention to block language from the GOP party platform that called on the US to send lethal arms to Ukraine.

The GOP is the party of the Russia hawks. For a half-century, one of their central organizing principles was opposing the Soviet threat," Graff said, adding that Trump upended that history and made some Republicans go soft on Putin. "But in this last month, a lot of Republicans who became wishy-washy on Russia have come back to their natural position as Russia hawks."

Trump's biggest lie was about the 2016 election. He rejected the reality that Russia interfered to help him win. Instead, he falsely claimed it was Ukraine who meddled, and that he was the victim. These lies, which he repeated dozens of times, were a double boon to the Kremlin: they downplayed Russia's brazen attack on US democracy, while simultaneously smearing Ukraine.

This was a break from decades of warm US policy toward Ukraine, especially when dealing with leaders like Zelensky who tried to reorient the country toward the West. Former President George W. Bush praised the Ukrainian people in 2004 for protesting a rigged election, and Obama celebrated the 2014 revolution that ousted a Kremlin-friendly government in Kyiv. "When Trump muddies the water by praising Putin, or undermines Zelensky and spreads falsehoods about Ukraine, this has real implications for how this crisis plays out," said Jordan Gans-Morse, a Northwestern University professor who was a Fulbright Scholar in Ukraine. "It shapes public opinion in ways that tie Biden's hands when he's a de facto wartime president."

This strong-arming by Team Trump forced Zelensky, in his first months in office, to navigate a surprisingly hostile relationship with the US, a supposed top ally in his fight against Russia. "Zelensky had more than enough on his plate when he came to power," Gans-Morse said. "The country was already at war with Russia. He's a political novice. And then, on top of that, the most powerful person in the world essentially extorted him, and he had to devote time and energy to deal with that. It's unclear what the full impact was, but it definitely tested Zelensky."

China’s technocrats have, to date, demonstrated competence in managing the economy’s imbalances.

Mainland China has delivered significant extra returns -- 87 basis points a year more than the mighty S&P -- for anyone willing to hack the wild volatility

“On balance,” Adam sums up, “If you want to be part of history-making economic transformation, China is still the place to be.”

The third point is where we disagree. We just don’t see China as having any good options for maintaining strong growth. 

we think China’s underlying growth story is coming to an end as the country’s economic imbalances become unsustainable and global decoupling picks up steam. The volatility and low valuations, on the other hand, are likely here to stay. 

Replace bad investment with domestic consumption. 

What imbalances are we talking about? In crude summary, China’s growth has been driven by debt-funded investment, especially in property and infrastructure. The problem is that the returns on these investments are in fast decline, even as debt continues to build up.

This can’t go on forever. Eventually, you have all the bridges, trains, airports and apartment blocks you need, and the return on new ones falls below zero (How do you know that you have arrived at that point? When you have a financial crisis).

The problem is that without a healthy consumer, China’s only real options to create growth are investment and exports -- and at the same time as return on internal investments are declining, the rest of the world, led by the US, are increasingly wary of dependence on Chinese exports. 

What are China’s policy options? Broadly, there are five, as Micheal Pettis explained to us:

Stay with the current model.

Replace bad investment in things like infrastructure and real estate with good investment in things like tech and healthcare.

Beijing has policy options.

Replace bad investment with (even) move exports and a wider current account surplus.

Just quit it with the bad investment. 

we think that options 1 and 5 are not really options at all. The current model will lead to a financial crisis as return on investment falls further and further behind the costs of debt. Simply ceasing to overinvest in infrastructure and real estate, without changing anything else, will simply kill growth. 

Option 2 might be summed up -- as Jason Hsu of Ralient Global Advisors summed it up to us -- as China becoming more like Germany.

The idea is that China would steer more and more money away from real estate and towards high value-add sectors from biotech to chip manufacturing. 

The problem with option 2 is that investment is such a huge part of the Chinese economy that it is difficult to see how that the capital could be efficiently allocated to the country's tech-heavy, high value-add sectors, which are comparatively small

The most promising Chinese firms are swimming in capital as it is. And developing productive capacity isn't just about capital. It takes things the state can't rapidly deploy, like knowhow and intellectual property.

Option 3 is more promising. China could start, as Adam suggests, by building up a proper welfare safety net. But it is reasonable to expect pretty serious social and institutional resistance to this sort of mass redistribution.

why hasn’t China increased its welfare state until now? Longtime China watcher and friend of Unhedged George Magnus suggests it is because of a deep bias in the Chinese policy establishment. “It’s how Leninist systems operate: they think production and supply are everything … if you see a demand problem as a supply problem, you get the wrong answers.”

Option 4, increasing exports’ share of China’s economy even further, may be in the abstract the most appealing. But it runs directly into the fact that both China and the US and its allies have reasons to reduce mutual dependence on their economies.

The emergence of geopolitical divisions between the west, on the one hand, and Russia and China, on the other, will put globalisation at risk. The autocracies will try to reduce their dependence on western currencies and financial markets. Both they and the west will try to reduce their reliance on trade with adversaries. Supply chains will shorten and regionalise… 

Russia must remain a pariah so long as this vile regime survives. But we will also have to devise a new relationship with China. We must still co-operate. Yet we can no longer rely upon this rising giant for essential goods. We are in a new world. Economic decoupling will now surely become deep and irreversible.

In all, the most likely scenario is that China’s growth just keeps slowing. That does not mean that investors in China will necessarily lose money. But it does suggest that generic China exposure -- simply owning Chinese equity or credit indices -- is going to be a losing proposition in the long-term