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Can a Nation Attack a Company?

North Korea keeps testing missiles that can reach the United States. China could turn off trade with North Korea, and effectively force them to stop, but that isn’t happening. Why the hell not?

A story in Newsweek says the bulk of Chinese trade with North Korea involves just ten Chinese companies. The working assumption is that those ten companies are so “connected” and powerful that even the Chinese government can’t influence them, or might not want to try.

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North Korea is an Information Problem Disguised as a Military Problem

In the year 2017, most of our national problems are information problems. And by that I mean having the right information would allow us to solve most problems.

Consider the nuclear threat from North Korea. That’s an information problem disguised as a military problem. 

I hope that statement seems wrong to you, so you will be extra-impressed when I change your mind in the next hundred seconds.

If the U.S. government tries to strongarm China to control North Korea’s nuclear program, that might cause more problems than it solves. No one likes a government-to-government confrontation of that type. China would have to push back. It could get ugly fast.

But imagine what would happen if American consumers knew which American companies were doing the most business with China. 

And imagine American consumers understanding that China can turn off the economy of North Korea, like a switch, any time it wants, thus controlling North Korea’s nuclear ambitions.

Now connect the dots.

If you treat the North Korean nuclear threat as a military problem, it becomes one. If you treat it as an information problem, with an economic variable, it becomes that instead.

I’m in favor of my government trying to negotiate an agreement with China, Russia, and North Korea. But if our leaders can’t get it done, I ask the government to get out of the way. Citizens can take care of this one directly.

All we need is some information.

I think that took me less than a hundred seconds. 

You might enjoy reading my book while enjoying a delicious beverage because it is hot outside.

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Solving the North Korea Situation

I have some spare time this morning so I thought I would solve the North Korean nuclear threat problem.

The current frame on how all sides are approaching the problem is a win-lose setup. Either North Korea wins – and develops nukes that can reach the mainland USA – or the United States wins, and North Korea abandons its nuclear plans, loses face, loses leverage, and loses security. Our current framing of the situation doesn’t have a path to success. 

So how do you fix that situation?

First we must acknowledge that a win-lose model has no chance of success in this specific case because North Korea responds to threats by working harder to build nukes. That’s no good. You need some form of a win-win setup to make any kind of deal. That’s what I’m about to suggest. And by winning, I mean both sides get what they need, even if it isn’t exactly what they said they want

What the U.S. wants is a nuclear-free North Korea. That would be our win.

What North Korea wants is an ironclad national defense, prestige, prosperity, and maybe even reunification of the Koreas on their terms. So let me describe a way to get there. 

The main principle to keep in mind is that you can almost always reach a deal when two parties want different things. If we frame the situation as North Korea wanting nuclear weapons, and the U.S. not wanting them to have those nukes, no deal can be reached. There is no way for North Korea to simultaneously have nukes while having no nukes.

So you need to reframe the situation. The following deal structure does that.

Proposed North Korean Peace Deal

China, Russia, and U.S. sign a military security agreement to protect

BOTH

North Korea and South Korea from attack

BY ANYONE

for 100 years, in return for North Korea suspending its ICBM and nuclear weapons programs and allowing inspectors to confirm they are sticking to the deal.

At the end of a hundred years, North Korea and South Korea agree to unify under one rule. No other details on how that happens will be in the agreement. North Korea will be free to tell its people that the Kim dynasty negotiated to be the rulers of the unified country in a hundred years. South Korea will be free to announce that unification is a goal with no details attached. We will all be dead in 100 years, so we can agree to anything today. (That’s the key to making this work – all players will be dead before the end of it.)

The U.S. withdraws military assets from South Korea.

South Korea and North Korea reduce their non-nuclear military assets that point at each other.

Over the course of the 100-year deal, there could be a number of confidence-building steps in the agreement. For example, in ten years you might have a robust tourist arrangement. In twenty years, perhaps you can do business across borders. In fifty years, perhaps a unified currency (by then digital).

A hundred years is plenty of time for the Kim family to make their fortunes and move to Switzerland, or wherever, before unification is an issue. The deal might require some sort of International amnesty agreement for any North Korean leaders looking to get out of the country before unification.

Under this proposed deal structure all sides get what they want. North Korea’s leader can tell his people that their nuclear program was a big success because it resulted in the United States withdrawing forces, and it led to an eventual Korean unification on his terms. There is no opposition press in North Korea to dispute that framing. This looks like total victory to North Korea. That’s a win.

For the United States, a credible deal to get rid of North Korean nukes is a win. China and Russia would look like the adults in the room. They win too.

South Korea wins too, obviously. 

And this deal would probably result in Nobel Peace Prizes for the leaders of all countries involved. 

Students of history will recall that Great Britain agreed to lease Hong Kong from China for 99 years to avoid any risk of China taking Hong Kong militarily. The long lease period allowed both countries to agree to a deal that could not have been reached for a shorter time period. And it gave everyone time to plan for the peaceful transfer. No two situations are alike, but you can see how a hundred-year deal makes it easy to agree to difficult things today. We’ll all be dead before any of it matters. And if you work toward a common goal for a hundred years, the odds are good that it can happen. One way or another.

This is the sort of deal that would have been impossible in prior years. But the Trump administration understands the structure of dealmaking. This solution is available for the taking.

Update: President Trump tweeted that trade between China and North Korea is up 40% in the first quarter. Look at how he frames it:

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This is what I have been describing as Trump’s go-to strategy of creating two ways to win and no way to lose. In this case, China either clamped down on North Korea (we win), or we can say we tried to get them to help and they refused.

That’s a free pass to do whatever we need to do, no matter how much China dislikes it. Hey, we tried it the other way. Clearly it didn’t work.

And it sets the table for all sides to get more serious about solving this non-militarily. Would you want President Trump to have a free pass to kill you?

My suggested deal structure is the only non-military option, as far as I can tell.

UPDATE:

China and U.S. agree to joint military exercises over North Korean threat.

You might enjoy reading my book because I should get the Nobel Peace Prize for unifying North and South Korea with my excellent ideas.

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The North Korean Weapons Test Pattern

We’re seeing speculation in the press that the United States might be behind North Korea’s recent failed missile tests. By way of context, North Korea has had some bad patches before, but they experienced a new streak of “bad luck” at about the same time President Trump got into office.

Probably a coincidence.

Find the pattern on this Whencast from WhenHub (my startup). You can share this on social media.

You might enjoy reading my book because the test launches went well.

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How to Structure a Deal With North Korea

One of the most useful things I learned in business school was that you can usually make a deal whenever the parties involved don’t want full control of the same limited resources. That’s why a peace deal in Israel is impossible – because both sides want the same land. But that’s a rare situation (fortunately).

The more normal situation is the one we see with North Korea and the United States. The United States doesn’t want the same limited resource that North Korea wants. And China has their own interests. That kind of situation almost always means you can reach a deal if you look hard enough.

At the moment, we have about 75% of what we need for a nuclear deal with North Korea. Both the United States and China are putting unprecedented economic and military pressure on North Korea, and that means North Korea will start to get flexible. But without the remaining 25% of what is needed for a deal, no breakthrough is possible. North Korea is unlikely to agree to anything that makes it seem as if it caved to pressure from the United States. You have to solve for that to get a deal. That is the missing 25%.

So let me tell you how to do that.

I’m about to suggest a somewhat impractical idea just to make the point about how deals get made. This is what I call the “bad idea” that is intended to generate some creativity toward a better idea. 

So here’s the bad-idea form of the deal:

1. North Korea abandons its Nuclear Weapons program and agrees to international inspections.

2. In return, China agrees to provide military protection to ensure the continuation of the current North Korean government.

3. South Korea gives up its side of the Demilitarized Zone and declares it North Korean territory but permanently occupied by Chinese forces.

You don’t need a DMZ buffer zone if China is the military player on the other side of the fence from South Korea. And with this deal structure, the leader of North Korea gets to say he expanded his empire and found a way to keep the country safe from invasion forever.

4. Trade deals and aid would become available to North Korea upon signing the deal.

5. The United States agrees to remove forces from South Korea, as they would be an unnecessary expense once China takes over the DMZ.

I’m guessing there are plenty of reasons why giving South Korea’s side of the DMZ to North Korea, on the condition that it is occupied only by Chinese defensive forces, is a bad idea. But I think you see the deal format.

In my example, South Korea really gives up nothing by gifting its side of the DMZ to North Korea. That land was useless. And once occupied by Chinese forces, tensions should drop to nearly zero. China has no reason to attack South Korea, now or ever.

While South Korea would be giving up nothing of actual value, it would look like a big win for North Korea because they would be gaining territory and permanent Chinese military assistance. And that gives them a story to save face.

In persuasion language, you need to give North Korea a “fake because.” They probably already want peace, but they don’t have a good public excuse for why they would cave to pressure and settle for it. Giving them something that has little value but can be exaggerated to seem like it has great value becomes the “fake because.”

I’m not predicting we’ll see a deal that involves the DMZ land ownership. But any workable deal with North Korea would have a “fake because” in the design. Until you see that, don’t expect much progress.

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You might enjoy reading my book because fake because.

The North Korea Reframe

Prior U.S. presidents framed the North Korean nuclear program as a problem between the United States and North Korea, with China as an unhelpful third party with its own interests. That framing was weak and useless. North Korea did whatever it wanted to do.

President Trump recently changed the frame. Now it’s not so much a problem between the United States and North Korea as it is a branding battle between China and the U.S., with North Korea being the less-important part of the equation. President Trump has said clearly and repeatedly that if China doesn’t fix the problem in its own backyard, the USA will step in to do what China couldn’t get done.

See the power in that framing? China doesn’t want a weak “brand.” 

With the new framing, we already see China talking tougher about North Korea. They stopped buying North Korean coal, which is something they said they would do before Inauguration Day. But by then, Trump had already reframed the situation the way I described. And he was weeks from being Commander-in-Chief when he did it.

The only thing lacking in Trump’s reframing was a credible threat that he would launch a decapitation strike against North Korea. That problem was solved over chocolate cake at Mar Lago when the visiting President of China, Xi, observed Trump give the order to send 59 Tomahawk missiles into a sovereign country that had pissed him off just a few days earlier.

Then Trump ordered an “armada” of American warships to the vicinity of North Korea just to remind Xi that we have options.

Trump also suggested that our trade negotiations with China will go a lot better if North Korea is no longer a problem. Trump didn’t go so far as to suggest adding a “North Korea tax” to Chinese imports, to pay for our military presence in South Korea, but I like to think it is an option.

This is the sort of thing I was hoping to see when the Master Persuader took office. His reframing on North Korea is pitch-perfect. We’ve never seen anything like this.

Some of you will be tempted to argue that nothing has really changed. But I think the face-to-face meeting between Xi and Trump, and the movement of North Korea to a branding competition between superpowers is a big, big deal. It would be hard, if not politically impossible, for Xi to go easy on North Korea from this point on.

In related news…

This has been a good week for President Trump. So far, we have seen:

1. Sean Spicer (accidentally?) caused the opposition media to argue that Hitler analogies are ridiculous. 

2. The Syrian attack established Trump as a measured and decisive leader. His popularity will rise. Even many of his critics supported the attack.

3. Trump solved for the “puppet of Putin” allegation by attacking its client state, Syria.

4. Trump’s Supreme Court nominee succeeded, albeit the hard way.

5. The healthcare issue is moving forward after the initial trial-balloon that was more of a negotiating step than a real proposal.

6. Tax reform is now on hold for healthcare reform, but no one thinks that is a bad way to go. The savings on healthcare are part of any budget and tax plan.

7. Relations with China look good. Trump and Xi had good chemistry.

8. China is putting the pressure on North Korea like never before.

9. The economy is good, and optimism is high, in part thanks to Trump. (Mostly the optimism part.)

10. Iran is probably a bit more flexible this week after watching the Syrian attack.

11. News coverage had already mostly evolved from “Trump is Hitler”  to “Trump is incompetent.” The Syrian attack and the North Korean situation moved Trump to “Effective, but some of us don’t like what he is doing” I wasn’t expecting that to happen before the end of the year.

You can tell me other presidents have had better starts. But I doubt that is the case. Keep in mind that Trump started in the deepest hole of any president, ever. He’s already halfway out of the hole and establishing himself as a strong leader on international issues.

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Wiretapping Word-Thinking

The other day, President Trump declared that “President Obama was tapping my phones in October, just prior to Election!”

Then the world went nuts. 

Former CIA Director James Clapper denied that Trump was wiretapped, saying, "There was no such wiretap activity mounted against the president, the president-elect at the time, or as a candidate, or against his campaign,“

Yet we know General Flynn was in Trump Tower when his conversation with the Russian diplomat were recorded.

Does that mean Flynn was “wiretapped”? 

No. But it might mean the person on the other end was. And we already know he was.

Does it mean Trump Tower was “wiretapped”?

No. But it might mean that the person on the other end was. And we already know he was.

And what does “wiretapping” even mean in a world in which all communications are recorded routinely? if the government records you routinely, and then it decides to look at some of those records, with a court order or without, has any “wiretapping” happened? I don’t think so.

And what does it mean to say “Obama was tapping”? Does it mean he directly ordered it, or does he just have to wonder aloud how awesome it would be if someone did it? We expect presidents to have deniability about the spooky stuff because we watch television shows and that makes us smart.

I don’t have an opinion about what happened, or didn’t happen, with the wiretapping. But this story did make me laugh when I realized we find ourselves in the following fun situation:

1. President Trump is the world’s biggest liar (according to his foes).

And…

2. President Trump now has direct access to more national secrets than any other living human being.

And that means fun. 

This wiretapping situation shows us how much fun it will be. Six months ago, if Trump made a hard-to-believe claim about something that is also hard to verify, the country would assume he was lying, incorrect, or negotiating. Now, if he says something hard-to-believe, such as the recent wiretapping claim, you have to wonder if the President knows something you don’t. Because he knows a lot of somethings you don’t. 

If history is our guide, this odd situation, in which the most famous “liar” in the world also has access to the world’s best secrets, will be more entertaining than dangerous. We’re seeing that entertainment now. Trump can make any claim about hard-to-verify situations and we’ll all have to wonder if he knows something we don’t.

I feel sorry for the people watching the other movie – the one in which President Trump is essentially Hitler. In my movie, he’s having a bumpy transition ride but generally doing the people’s work. My movie is more of a comedy. And you could not write a better comedy than one in which the biggest “liar” in the world is in charge of the biggest secrets in the world.

Mmm, popcorn. 

About North Korea

In other news, watch President Trump force China to put the clamps on North Korea’s missile program by making it clear we’ll handle it for them if they can’t take care of their own backyard. If the United States has to take care of China’s problem for them, it sure would be embarrassing for China. And persuasive.

I base my North Korea prediction on the assumption that by now President Trump has burrowed so far into the brains of the Chinese leadership that he’s already got functional control, Master Persuader style. They just don’t realize it.

If you are a television news producer, you will probably enjoy using the WhenHub app because it will show your invited guests on a map as they approach their various studios. No more worrying who will be late. Just send the guest one text with a link to ask them to temporarily show up on the map on their way to the studio. The geostreaming ends automatically soon after they reach their destination.

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