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Tensions Run High Between France and Turkey
From:
Albert Goldson --  Cerulean Council Albert Goldson -- Cerulean Council
For Immediate Release:
Dateline: New York , NY
Tuesday, November 3, 2020

 

Albert Goldson, Executive Director of the think-tank Cerulean Council, provides his risk assessment of the Turkish perspective with respect to the heightened tensions in the Eastern Mediterranean and exacerbated by the recent terrorist killings in Paris in the article entitled, Tensions Run High Between France and Turkey, published 1 November 2020 in The Millennial Source.


Supplemental information supporting this perspective is as follows:

Turkey Overview

For several years Erdogan has sought to be the leading voice in the Muslim world. He has leveraged Turkey’s advantages:

• Large population of 82 million (2nd only to Germany in Europe).
• Shared border with Europe.
• NATO member with the 2nd largest army in the organization.
• One of the few officially secular and democratic Muslim countries even though in present-day practice Turkey is less secular and politically more illiberal.
• Multi-generation of European-born citizens of Turkish origin.

Inflammatory Verbal Jousting

Erdogan’s brusque rebuke with respect to Macron’s insensitive comment on equating Islam with terrorism is to underscore not only Macron rather the Eu leadership’s continued ignorance and racism on Muslims and reluctance to engage in a genuine understanding of the Muslim world.

The alleged racism against Muslims by the French government may have merit. In response to riots in the banlieues several years ago, the French government has institutionalized racism by codifying many earlier state of emergency decrees which are crafted in such a way in that it targets the Muslim communities.

For this reason Erdogan has been able to take the leadership role in the Muslim world by creating a united front. On the other hand Eu countries have rallied around and supported France’s decisions to target the Muslim community to root out potential terrorists. This has created a dangerous political “Mexican standoff” between a Christian Europe and the Muslim world.

The Eu block support on the matter may be more durable than the world Muslim community because the Eu is an institutionalized and integrated geopolitical block.

The Muslim world is politically and geographically diverse with numerous groups within the Muslim community: Turkish, Iran (Persian), Arab (Middle East and North Africa), south and southeast Asian countries like Pakistan, Bangladesh, Indonesia and Malaysia each of whom have distinct historical economic and political relationships with Eu countries.

Furthermore there are “hard” political alliances and rivalries in the Middle East. For example: Turkey and Saudi Arabia have been at loggerheads for years because of Erdogan’s support of the Muslim Brotherhood in Egypt (a threat to Saudi Arabia) and support of Qatar.

Eastern Mediterranean Hydrocarbons

A confluence of events is contributing to the intensifying geopolitical tensions in the Eastern Mediterranean between Turkey and Greece in their pursuit for energy self-sufficiency and dominance.

The mainstream media is supporting western governments’ contention portraying Turkey as the aggressor in their attempt at an energy power grab through naval intimidation.

Although Turkey has the largest economy in the region and the second largest military in NATO, they have been deliberately excluded from critical agreements which would make them equal partners with respect to dispute resolutions and access to resources in the region.

The legal discriminatory agreements that are politically isolating Turkey are the following:

• The United Nations Convention on the Law of the Sea which Turkey is not a signatory. This body is called upon to resolve maritime disputes.
• The newly formed EastMed Gas Forum, referred to as the Opec of Mediterranean gas, includes as members Egypt, Israel, the Palestinian Authority, Jordan, Greece, Cyprus and Italy, an oddball membership all of whom have compatible economic interests in gas exploration in this region, not necessarily compatible political interests amongst themselves.
• Turkey is a NATO member, the second largest, and a European country, it is not an EU member and for this reason cannot benefit from Eu agreements.

Interestingly the Turkish energy exploratory vessel is exploring in areas where no gas reserves have been discovered. However because Turkey does not have rights to extract gas reserves, this particular type of vessel’s presence has been challenged by Greek military vessels.

For this reason any discussions with respect to disputed maritime zones is hotly adversarial rather than diplomatic member-to-member conversations towards a mutually satisfying resolution.

Copyright 2020 Cerulean Council

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.


 

 

The Dragon | Wolf Warrior Diplomacy

Around 2017 the Chinese government, overwhelmed by relentless criticism on its domestic and foreign policies, decided to push back aggressively in the diplomatic arena with Wolf Warrior verbiage. The term “Wolf Warrior” comes from the highly successful movie series of that name that features a Rambo-like character who defends Chinese citizens and humanitarian projects worldwide.

Eschewing diplomatic niceties by turning the other cheek and figuring enough is enough, Chinese diplomats worldwide, with the tacit permission from Beijing, are responding in equal brusque measure. The Chinese government has been incensed over the double-standard and sometimes blatant racism when they establish commercial and military agreements worldwide which are viewed as economic enslavement while western commercial and military agreements are viewed as development.

The Eagle | Wolf Warrior Diplomacy

Interestingly the same year China initiated its Wolf Warrior diplomatic style, Trump began his blunt, aggressive Rambo-style verbiage against worldwide criticism of American decades-old policies which he inherited. Counter-intuitively, whether by design or default, despite almost four years of bombastic remarks Trump has kept the US out of military conflicts. Refreshingly America is the punching bag that punches back. Perhaps verbal salvos are just as effective as military salvos but with zero deaths and collateral damage

Trump is far more comfortable with corporate wars not military ones and has managed nicely to avoid the latter. The withdrawal or the reduction in military force has put the brakes on America’s creeping unsustainable overreach which is historically the economic kryptonite (bankruptcy) of empires past to support an over-stretched military. 

Unlike his Chinese counterpart who has initiated a broad-based tactic, Trump has crafted America’s Wolf Warrior style around himself and a handful of high-ranking diplomats. This tactic generates public awareness to long-standing, economically draining uncompetitive policies and trade agreements under previous administrations which have badly hurt the American worker.

It’s not a question whether Trump is successful in his foreign policy initiatives rather how this aggressive tactic is one of necessity to engage in immediate dialogue to bring about change. Furthermore this “in-your-face” tactic not a sign of a dying empire, rather a transformative rebirth in which America will no longer be held politically and economically hostage by a collective of spoiled nations whose survival rely almost exclusively on our military umbrella.

Euro-Slackers

The Europeans may think of Trump as uncouth and brutish, which indeed he is, but he’s breaking unwritten protocols and establishing a precedent for future American administrations regardless of party affiliation. This street talk on the world stage has psychologically shaken up the staid and often smug European establishment many of whom believe that there’s no urgency in halting Russian and Chinese encroachment everywhere particularly in cyber-space; or that the US will forever provide a robust military umbrella.

US and China | Kindred Yet Incompatible Spirits

The timing of how the US and China have implemented this new diplomatic style independently is telling. They are the largest economies in the world who are competing for hegemonic dominance everywhere. Because there’s no longer a sole source of economic power, the rest of the world are playing the US and China against each other.

There’s a thin yet distinct line between disrespect and critical discussion. China justifiably has a thinner skin than the US however everyone knows the location of those lines. Disrespect has it limits. This means that the US and China have more in common than originally imagined on every level: private, corporate and governmental.

Each one’s Wolf Warrior diplomacy tactics are running simultaneously but in parallel. Though even an informal collaboration between the two on this matter would be politically impossible, the spirit of “professional courtesy” is aligned with respect to soft-pedaling criticism of a mutual third party who has given them both unnecessary grief.

Future American Geopolitical Real Politik

If the Democrats win the upcoming elections it would behoove them to continue and refine Trump’s no-nonsense American diplomatic Warrior Wolf style otherwise the momentum will be lost with foreign slackers who revel in the US doing the heavy-lifting and avoiding real responsibility for decades. The hammer has been added to the diplomatic toolkit for purposes of rethinking and re-setting relationships.

One crisis to apply this tactic are the most insidious crisis such as climate change and related issues such as supply chains. The pandemic has exposed the fact that these global organizations were ill-equipped from an organizational and decision-making perspective to respond swiftly. For this reason withholding funding or membership withdrawal applied cleverly can be effective in motivating behavioral change in these international institutions to reorganize and become efficient and effective.

The usual diplomatic language has failed to meet the urgency for a robust and genuine global collaboration to tackle climate change which is why unvarnished tough talk at the highest levels is required.

Taming the Linguistic Taboo

This new 21st century governmental foreign policy public relations playbook practiced tactically at the highest levels can compel counter-parties to overhaul their sclerotic procedures and accelerate means to provide solutions to critical issues like climate change and other urgent matters.

As hyper-aggressive hedge fund owner Bobby Axelrod in the popular TV series “Billions” says, “No one walks away from a negotiation happy.” There will always be [back-door] political deals but reaching solutions can still be achieved by overcoming administrative and operational dysfunction.

In sum the pandemic represents a fresh start - a wake-up call – to be better prepared for the inevitable future crisis. Perhaps future crisis may not as daunting as the present-day one; insidiously they may be far less intense but diverse occurring in short-order creating a compounding effect.

 

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.

The pandemic has triggered de-urbanization in the US as residents with financial means seek to decamp the hyper-density, high cost and increasing violent crime of urban areas to a more tranquil and safer landscape facilitated by the magic of remote working.

The Unmasking of the Glamour of Urban Living

During the 2000s and 2010s urban living was viewed as the new long-term future as Smart Cities would offer all the promised conveniences of modern 21st century living. Mass transit was aggressively promoted as environmentally friendly to reduce the carbon footprint supported by the conversion of many downtown streets into walking plazas, and construction of new buildings and conversion of old buildings into green offices and residences. Finally low crime rates made this decision a no brainer and powerful allure for newcomers, domestic and international, rural and suburban.

The model works quite well under ideal economic conditions but frays rapidly under stress. The pandemic has shattered the model because urban density facilitates the virus’ ability to spread. Large protests against corrupt & incompetent governments, and aggressive law enforcement applying sometimes violent and discriminatory tactics degraded the urban quality of life turning even upscale urban areas into cauldrons of chaos.

Even with the development and distribution of a safe vaccine on the horizon, urban citizens are decamping to small urban cities because successful full-time remote work – encouraged by their employers - eliminates commuting expenses and time-consuming hassles. Those left out are essential workers whose on-site presence is required.

This sudden exodus strongly infers that most urban dwellers not only lack the confidence of a positive near-term future in urban living but perhaps never liked living in the city in the first place. Certainly there are many urban dwellers who have the financial wherewithal to leave at any time but they’ve decided to stay.

This trend bodes badly for large urban cities because regardless how they reinvent themselves they are unlikely to woe back the departed nor approach their pre-pandemic glory for at least a generation. The pandemic has broken the reset button enabling an economic rebound to return the urban areas to their former glory.

Channeling George Carlin | Revitalization vs Gentrification

As thousands of urban dwellers decamp to small cities and towns, the description provided by the media smacks of double-standard.

George Carlin’s classic soft language skit described how bygone expressions which are today considered ‘politically incorrect” have been replaced by language that offends few but confuses all.

Why is it called “revitalization” when mostly Caucasian residents of a higher socio-economic status enter another mostly Caucasian neighborhood which raises real estate prices? Wouldn’t that be considered “gentrification”?

But the word “gentrification” is often used when Caucasian residents of a higher socio-economic status move into a rundown (never described as “shrinking” or “dying”) neighborhood with mostly residents of color?

The difference between the two words can be described as “displacement”. In a revitalized phase no one is displaced while during gentrification longtime residents are displaced (“priced out”) by higher rents or higher taxes for homeowners that they can no longer afford.

Classical case studies in NYC are the neighborhoods of Harlem, Bed-Stuyvesant, Williamsburg and Fort Greene, to name a few which, in which gentrification did not raise the financial fortunes of the multi-generational “indigenous” residents. Homeowners were few and far between because their low-paying jobs made it difficult to get a mortgage, even during the pre-gentrification period of pre rezoning depressed prices. For those that want to remain, considerably higher real estate taxes make remaining in their neighborhood difficult.

Domestic Self-Exile

The irony of this migration into domestic self-exile from the big urban cities is that small town and city residents couldn’t afford to live in the large cities are now having large city residents come to them. For this reason real estate prices – renters and new homeowners – are rising exponentially creating greater population density and subsequent pressure on public services against modest municipal budgets.

In addition to an economic shift, lifestyle tensions will rise between the newly arrived and long-time residents as big city residents consciously or unconsciously impose their sophisticated lifestyles on the small city citizenry whose lifestyles are far simpler. Seeking to recreate big city services with a small town vibe, demands for vegetarian/vegan restaurants and exotic coffees don’t fit the daily or aspirational culinary lifestyle of a small city resident. Welcome to the gentrification of Americana.

Domestic Expatriates

Surely there will be elements in their new medium-term paradise will have a nostalgic yearn for urban life when the economic situation stabilizes and becomes far safer, not necessarily pre-pandemic safe, but at an acceptable level.

Psychologically urban dwellers may get bored after living in a quieter environment and crave the social and professional “rush” and dynamics of the big city. This is particularly true as fall weather approaches with winter not far behind with its shorter days and shorter daylight against the possibility of tighter restrictions or even future lockdowns as surges occur worldwide. This exposes the harsh reality of the limits of technology to sooth the human soul. Robot dogs may not poop on the carpet but they can’t love.

Political Shift to Violet

The other element is the subtle and slightly noticeable shift politically as blue state residents enter red states and visa-versa creating a grayer political landscape and change in voter profile. In fact by mixing the colors blue and red you get violet resulting in an organically grown third political representation in districts which cannot be readily classified Democrat or Republican.

Demographic Endgame

The exodus from large, dense urban areas will continue short to medium-term as the trends of mass employment, increased homelessness, rise in crime, fewer urban public services and overall degradation of quality of life.

Nonetheless these same trends in the urban areas will eventually adversely impact smaller urban and even rural areas to where the exodus have fled. A deep recession or depression whose negative elements, like a virus, tend to eliminate sanctuaries which adheres to the old adage, “A person meets his destiny on the road he takes to avoid it.”

 

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.

 


The Pandemic Paradigm

The pandemic with its myriad of lockdowns has destroyed the retail industry from high-end luxury to low-end bargain basement triggering unprecedented bankruptcies and vaporizing decades-old, beloved retail stores.

Historically when danger approaches man and beast seek shelter underground in their respect caves. The fundamental change to reacting to danger in the 21st century is that with information technology, humans are seeking sanctuary in the cloud by working and socializing remotely.

Some luxury brands were laggards to embracing technology and ended up being dragged kicking & screaming into the cloud. Their reluctance to adapt was their belief that their high-end clients strongly preferred shopping in-person and they didn’t want to “cheapen” the brand by allowing anyone, anywhere with a credit card to purchase their exclusive products.

The collapse of the retail industry is illustrated in the following chart entitled Retailers Face Mass Extinction in Pandemic Fallout provided by Coresight Research and The Wall Street Journal and presented by Statista, an online statistical firm.


Shopping in the Cloud

The fashion retail firms with foresight pre-positioned themselves for a shift to online business were far better able to adapt to an abrupt change in the economic landscape and maintain some semblance of business while closing their brick & mortar stores.

The financial advantages of operating mostly online include lower fixed costs without the hassles of negotiating leases, operating expenses, on-site security personnel and/or technology and adhering costly municipal regulations.

Operating mostly in the cloud is the present-day new normal despite the precipitous drop in commercial leasing prices. All businesses have suffered several profound shocks within the last 20 years notably 9/11, Great Recession and the present-day pandemic creating a justifiable paranoia that screams, “What’s next?” with the new mindset of being nimble to adapt to long-term tough times.

With respect to the American consumer, they’ve become comfortable shopping online 24/7 without risking an “arm and a leg” in a world of protests, civil unrest and skyrocketing violent crime while shifting the risk to delivery personnel. This particularly applies to the thousands of urban residents who have decamped to smaller cities and towns where there are fewer, if any, of the higher-end fashion shops.

The following chart entitled Covid-19 Crisis Accelerates Shift to Online Retail provided by the US Census Bureau and presented by Statista, underscores this powerful shift to online shopping:

The Cloud & Tactile Disconnect

Despite all its conveniences the present-day pandemic era of robust growth of cloud-based shopping may be short-lived and wane in a post-pandemic landscape. Consumers may strongly prefer the tactile shopping experience particularly for higher end clothes to justify their expenditures. The best of best technologies even holograms cannot replace the irreplaceable tactile experience.

Then there’s the so-called “shopping experience”. The brick & mortar’s real-life aesthetics represent a far different shopping experience than the online aesthetic design. Some firms may have great product but a terribly designed web or a firm with a marginal product has terrific sales because of great web design making image and perception far more critical elements in the online world to generate sales.

The Demise of the Brick & Mortar Model

The pandemic economic destruction on brick & mortar stores represent a weight wrapped around their necks, the death keel for most, as they seek financial sanctuary in the cloud through online operations. The cloud represents that oasis where these firms can survive. Though firms are making their operations leaner and nimbler, generating sufficient sales is challenging.

Furthermore maintaining customer loyalty was already a slippery task pre-pandemic because customers, particularly the younger generations, became less brand loyal and far more price-sensitive by seeking quality over labels.

With limited brick & mortar operations direct customer interaction barely exists making it difficult to monitor and assess changes in customer sentiment vs. best-guess online marketing surveys results. In a hyper-competitive field such as the fast-changing world of fashion, being proactive and ahead of the curve in customer preferences is paramount for maintaining market share, sales and profits.

Finally although market share is important, the pie is far smaller due to lower demand through mass unemployment as customers shift priorities to purchasing and stocking up on survival essentials such as food and medicines.

This stark trend is evident in the following chart entitled Mass Exodus of Retail Storesprovide by Coresight Research and The Wall Street Journal presented by Statista.

Uneven Recovery for Fashion Retailers

The recent financial recovery of the fashion (clothing) industry within the retail market has been uneven. The following chart entitled Clothing Stores Fall behind in Uneven Retail Recovery provided by the US Census Bureau and presented by Statista, articulates fashion’s struggle during the June-August 2019 v 2020 year-on-year comparison with 2020 sales 22.6% below that of 2019 during this period.

Pop-Up Solutions

A hybrid solution in the rebalancing of brick & mortar and online shopping is reinvigorating the pop-up store. The advantages of pop-up stores are the following:

·         Immediate market survey information by speaking directly with current and prospective customers to gauge customer sentiment on present-day and new product lines

·         “Up-designing” pop-up stores to look like boutiques.

·         The limited liability and loss of inventory to offset the risks of looting by organized mobs on high-end retail shops which is occurring regularly in Soho, NY in broad daylight.

·         Because of the commercial leasing collapse firms should be able to obtain highly favorable and flexible leasing arrangements in prime locations well into the post-pandemic era.

A New Frontier in e-Commerce

The first step for the immediate to near-future is whether the e-commerce business can make up for lost brick & mortar sales.

The second step medium-term to long-term step (post-pandemic) is whether the decrease in brick & mortar sales will eventually meet at the crossroads with the ascendent online sales and provide an acceptable return-on-investment.

These trends provoke the big question: what are the limits as to how far one can leverage technology to generate and maintain long-term online sales to justify the elimination of the brick & mortar model?

 

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.

 


The pandemic has provided the corporate leadership the opportunity to exploit the global, broad-based ubiquitous practice of remote working in order to reconfigure their business model in a way that increases the gulf between themselves and the workers.

Corporations are pursuing a dual track approach of “social distancing” with “business distancing” by leveraging informational technology (IT) with the syrupy public relations pitch of safety, health, convenience and efficiency for all.

Furthermore the decades-old efforts to flatten management levels has accelerated. Corporate leadership has applied the age-old tactic of “divide & conquer” by creating a virtual wall between and amongst middle management and workers by encouraging the continuation of remote work.

This has resulted in the following:

·       Workers: The inspiring and dynamic in-person gatherings are replaced by remote communications which eliminate the emotional ability to galvanize a strong rank & file collective to challenge the corporate leadership’s practices & policies.

·       Middle Management: Remote work has disabled their ability to advance within the company or seek better opportunities elsewhere.

Perversely the economic demand destruction and mass unemployment have raised the rate of personnel retention across the board.

Hal 9000 | The Unblinking Sentinel

Quantum advances in AI in the white-collar world are enabling major companies to utilize it in the interview and hiring process which they boast supposedly removes human bias. On the flip side AI operates through the infamous proprietary algorithmic “black box” which has been proven to be (deliberately or not) biased. This shift to utilizing technology offers a certain level of legal protection because no one can be personally accused of bias or inappropriate behavior.

This new aforementioned hiring development was presented by The Wall Street Journal IT video series entitled “Upstream”, in the following short video entitled Artificial Intelligence The Robots Are Now Hiring.

The easiest positions to be filled through AI technology will be low-skill labor requiring merely a deep-dive security check for prior criminal activity.

Corporate Alcatraz

For middle management, even the most talented are adrift in perpetual business purgatory. At minimum the final stages of a job interview are conducted in-person not only with the primary contact rather a team of colleagues who eventually makes a recommendation. Pre-pandemic it became standard practice for even the most modest entry-level analyst position to require endless numerous face-to-face interviews before a decision was made.

Even the best of present-day or near-future technology such as holograms can never substitute the intimate in-person encounter whether at the office or offsite at a nearby restaurant for wining & dining.

Nowadays most manager’s careers that have been treading water forever, are in a long-term to permanent career lockdown just the way corporate leadership wants it for the purposes of absolute control, zero personnel turnover and less overhead costs.

Middle Management | The Vanishing Rear Guards

Under the present-day draconian circumstances, middle management has the unenviable duty of being the gatekeepers and buffer between the C-suite and workers while at the same knowing that they have a considerably insecure and short career lifespan. The multiple layers of protective management in the past are no longer needed because of information technology and remote work as cloud-technology provides the same protection plus an enormous human resources cost-saving.

For this reason middle management will continue to serve an important political purpose for corporate leadership in various roles as required as the wafer-thin vanguard gatekeepers, foil and cannon fodder.

This cannon fodder role can be played out when middle management is assigned on the periphery of projects with vaguely described responsibilities. Within this contractual cauldron they’re the designated scapegoat if the project fails.

It’s the same deliberate practice when corporate leadership hires white shoe consultants who are coerced to “back in” supporting data to provide a rubber-stamp CEO and shareholder approval to fund a pet or customized high-risk project. The coercion component is to remove any independent doubts about the success of the project by strongly suggesting that future and lucrative business with the white-shoe consulting will be in doubt.

Armed with the consultant’s Good Housekeeping seal of approval, corporate leadership is protected like a form of insurance and who can conveniently blame the white shoe consultant’s incompetence for any fiascos.

The High Life at the High Table

The near-future corporate leadership will be replenished and populated by DNA copies of the present-day leadership who will be even further psychologically disconnected from real working people. This trend reduces even eliminates empathy, boosts self-entitlement and narcissistic behaviors resulting in a corrosive attitude that corrupts decision-making. Big corporations’ dominance will be codified through government policy through their powerful lobbying efforts to protect their interests.

With these new development access to the upper levels becomes almost impossible as articulated through a famous scene between fictional character Gordon Gekko in the movie “Wall Street”.

For this reason the enormous socio-economic divide between the wealthy and everyone else will become increasingly wider & deeper creating unsustainable asymmetrical social structures.

As long as profits are strong and robust shareholders won’t squawk in the same way they’re mum as these same corporations look the other way as exploitive labor practices continues unabated not only in developing countries but also domestically in the US. Any government punishment will be nothing more than a wrist-slap assessing manageable fines that are eventually a tax write-off by the end of their fiscal year.

The High Table God Complex

The confluence of these trends to consolidate more power & control leads corporate leadership down a dangerous road to perdition of having a god complex. They become like the ancient gods unseen, unheard, operating from a (virtual) cloud – an eye-in-the-sky command. Without any direct contact with their workers they become emotionally disconnected from on-the-ground activities. The invisible man in the cloud is hardly an inspiration for sustained quality productivity through grassroots inspiration and innovation. For this reason the corporate landscape will mirror the societal one with a crisp & clean divide between rich and poor protected by AI-sentinels.

 

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.

 

 


Healthy Food at Unhealthy Prices

Counter-intuitively the looming food insecurity crisis will trigger an increase in America’s other epidemic: obesity. As permanent unemployment grows and becomes more entrenched, more residents will make agonizing choices on how to budget their dwindling savings among food, shelter (rent/mortgage), utilities and health care.

The affordability of healthy food choice such as fruits and vegetables against the reality of lower savings and increased prices for these items become rapidly unsupportable. The survival alternative is cheaper and far less healthier foods which provide the necessary calories (albeit often empty and harmful) to meet minimal daily caloric requirements.

A study by Drexel University in Philadelphia of 2,800 urban Americans in a Multi-Ethnic Study of Atherosclerosis (MESA) matched data collected on diet with food prices at nearby supermarkets. Healthy foods were defined as dairy products, fruits and vegetables; the junk food were defined as soda, sweets and salty snacks. It was determined that when the prices of healthy food far exceeds that of junk food, consumers are inclined to purchase the latter. Consider this a form of self-rationing.

Dr. David Kern, the study’s lead author added, “We found that, on average, healthier perishable foods were nearly twice as expensive as unhealthy packaged foods: 60 cents vs. 31 cents per serving, respectively.”

According to the Office of Disease Prevention the following chart provides the range of minimum calories required for male and female adults, adolescents and children:

Gender/Age group

Daily Caloric Minimum (sedentary)

Daily Caloric Minimum (active)

Adult men

2,000

3,000

Adult women

1,600

2,400

Adolescents

1,400

3,200

Children

1,000

2,000


For this reason although the level of food insecurity may not be as severe as forecast, the health of Americans will deteriorate considerably as long as the economy suffers through a depress/recession with continued high unemployment regardless of future stimulus packages.

Historically during wars or crisis the population were forced to adapt to a food shortages by reducing food consumption which is usually of inferior quality with a caloric count that barely minimal survival levels. Only the wealthy have been able to maintain their culinary lifestyle, at least in quantity and/or quality, during these difficult periods. This pandemic is no different.

America’s Ever-Expanding Waistline

According to the October 2017 report by the Centers For Disease Control and Prevention entitled America is Fatter Than Ever, and presented by Statista, an online statistical firm, America’s obesity rate has exploded since 2000. Most disturbingly this includes youth obesity because younger people are more likely to stay obese and can result in an early death in adulthood. The report adds that over 70% of Americans are either overweight or obese with normal weight citizens in the minority.

Additional factors that will exacerbate the problem are governmental lockdowns and restrictions that prevent general physical movement include:

·         Couch Potatoes All: The employed are telecommuting while the unemployed are surfing the web seeking employment of any kind which most likely involves telecommuting.

·         Exercise: Many gyms have closed because of bankruptcy. Those that are open have restrictive workout rules. For the unemployed gym membership costs are now unaffordable and getting motivated to exercise sufficiently at home is a huge challenge.

The present-day focus has been on the vulnerability of obese citizens to Covid-19. Anecdotally the mainstream media, in a tongue in cheek manner, has reported on many people gaining considerable weight during the initial spring lockdowns. Nonetheless the aforementioned restrictions remain which prevent even the most disciplined person from losing the weight gain, assuming they were a normal weight prior to the lockdowns which constitute only 30% of the Americans. Certainly that figure has decreased since it’s publication.

One can probably project that the general demographic trend since the lockdown has been the following:

Before Lockdown (weight)

Present-Day (weight)

Normal

Overweight

Overweight

Obese

Obese

Morbidly obese

What this means is that we’ll have a considerably fatter America whenever this economic crisis ends which could last for years. Medium-term this will put enormous strain on the cost of medical care to treat the associated conditions of obesity.

 

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.

 

The sudden and rapid implosion of the global economy has disarmed Big Government’s and Big Business’ ability to react and adapt. Even the most credible governments are struggling with containing the social and economic chaos. Most ominously under the present-day unprecedented dysfunctional American leadership at all levels distracted by the presidential elections weeks away, neither political party is able to halt the socio-economic freefall.

Homelessness is Helplessness

The exploding homelessness continues unabated sweeping up those citizens who earlier in 2020 earned a decent living wage. The following chart is entitled The US Cities with the Most Homeless People compiled by US Department of Housing and Urban Development and presented by Statista, an online statistical firm. It captures America’s disturbing rises homelessness through 2019 (pre-pandemic) in ten cities, 6 of which are in California which grew 16.4% between 2018 and 2019.

Below are additional figures indicated in the report whose particulars can be accessed through the aforementioned link:

·         Of the 567,715 homeless nationwide only 63 percent live in sheltered accommodations.

·         Half the homeless are in the country’s 50 biggest cities.

·         About 25% of the nation’s homeless population live in two cities: New York and Los Angeles.

·         Despite New York City’s large homeless population, most have sheltered accommodation with only 4.4% living on the streets vs about 72% who are unsheltered in California.

The Emergence of the American Favela

The projected surge in homelessness whose new “members” will be the newly permanently unemployed from the lower and middle classes and non-violent criminals released to minimize Covid-19 spreading in prisons millions of American are at risk to living in a Brazilian-inspired favela-like environment. The trend points to squatters taking over and occupying the oversupply of luxury residences and empty office buildings converting them into high-rise vertical slums.

The de-gentrification process begins with ever enlarging encampments. They become shantytowns and finally American-version of favelas replete with a self-governing albeit violent power-sharing arrangements with local warlords. As long as the crime and violence are self-contained, law enforcement will let them be.

It will be politically and operationally more difficult to remove the homeless squatters because unlike the neighborhood-specific police raids such as on the East Village squatters in the late 1980s, gentrification sprouted in many neighborhoods in each city.

Soylent Green Level Food Insecurity & Riots

According to the New York Food 20/20 report, “Even before the pandemic, more than 11 percent of Americans endured food insecurity. California and New York accounted for the greatest number of homeless individuals in the country, at 22 percent and 16 percent respectively. In New York City, 40 percent of residents there—or 2.5 million people—lacked “self-sufficiency,” or the ability to cover basic necessities including food, housing, healthcare, and childcare.”

Furthermore the report added in the section entitled “Diet Quality Covid-19 influenced the Healthfulness and Affordability of New Yorkers’ Diets” (pages 46-47) emphasized that diet related diseases such as adult obesity (25%), diabetes (10%) and hypertension (29%) make residents more susceptible to Covid-19. The diet-related health risks are far more onerous for the lower- socio-economic residents who are mostly Black and Latino.

The food banks’ largest expense is nutritious food particularly fruit & vegetables that offset the poor yet only affordable diets of many residents who don’t have health insurance.

Underscoring this dilemma according to The Gothamist article 27 September 2020 entitled “More Than 6 Months After the Pandemic Hit, Flushing’s Largest Pantry Still Overwhelmed By Demand”, Pedro Rodriquez, executive director of La Jornada food bank in Queens explained that gentrification is one of the causes creating food insecurity through unaffordability. For example the cost of food in a gentrified neighborhood could be 25%-50% higher than in a nearby non-gentrified neighbor which puts extreme financial pressure on senior citizens, low income residents including undocumented residents.

With demand outstripping supply, mostly due to logistical shortcomings not actual available supply of food, it’s conceivable that we can have nationwide food riots as depicted in the classic movie Soylent Green (1973) which at the time it was filmed seemed like a ludicrous futuristic fantasy given that America was (and still is) the world’s breadbasket. Future fine dining for millions of Americans may look like the “luxurious” dining scene between Charlton Heston and Edward G. Robinson in the aforementioned movie.

The Mad Max Lifestyle

It may be a macabre projection however the present-day trends in homelessness and food insecurity are leading to a dystopic landscape this fall through next spring as millions of Americans lose their shelter and have no money or access to food. For this reason a new criminal “industry” might emerge to fulfill this need.

Food Jackings

Every supply chain is as strong as its weakest link. With respect to food distribution it’s the transition between the source (storage facility) and the end points (supermarkets and bodegas).

In bold Mad Max inspired style product-laden food trucks are hijacked, are driven to a location where smaller trucks await for loading and eventual sale on the black market.

The other more complicated yet potentially more lucrative option is stealing empty 18-wheelers. With impeccable Ocean’s 11 precision the hijackers meet their colleagues at a cold storage facility whose security has been breached resulting in a massive yet rapid loading of foodstuffs. From there they drive to a third location where a convoy of smaller vehicles are loaded for future black markets sales.

A less complicated method is small organized groups who food-jack customers overflowing with prepper foods in the parking lots of supermarkets or super-stores like Costco. They can also follow the customers to their residence for immediate or future home invasions knowing they have the financial resources to buy food.

Economic Restoration is the Vaccine

Only a powerful economic restoration can reverse these ominous trends that will play out locally, regionally and nationally. The first stage is psychological, the distribution of a reasonable safe Covid-19 that will provide hope that a certain level of normalcy can be achieved which I project occurring in the spring 2021.

The second stage is ironically far more difficult because the economic timetable is far more challenging than the development of a vaccine. A credible, new leadership can provide a psychological buffer and a foundation for socio-economic stability and growth.


Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.

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