1. The Internet
   
   
1. Time wasted. Regardless of its benefits, it is hard not to argue that the net is the No. 1  productivity killer for the majority of users. Whether you're a kid spending six to eight hours a day on TikTok or a game, or anyone of any age wasting time on everything from Monopoly to Facebook, the effects on your personal productivity (and, widening out, often that of your company, then your country, etc.) are immense.
   
   
2. Paving the road for your enemies to all targets. Earlier civilizations learned the hard way that paving a road to their town just let the enemy reach them more easily. The Romans had this down to an art. So, why did we think that paving a digital road to every target would end well? It's just dumb, and a primary productivity killer, with no way to measure the details.
   
   
3. Games, porn, and just pure bullshit (the last now a technical description first applied by Irish AI scientists to GPT). A major source of time wasted. See "A."
   
   
4. Ransomware and scams. How much time and money are spent each day or year on phishing, ID theft, hacks of all kinds, ransomware (hospitals - really??)? Again, no way to know, since many victims remain quiet, out of embarrassment or reputational fears, but the numbers are gigantic.
   
   

2. Cryptocurrencies
   
   
1. Money laundering. Since cryptocurrencies are made to order for laundering money, all we have to ask is: how much (no one knows), by whom (no one knows), and with what effect on global economic productivity? Certainly, laundering is a negative for all but those involved.
   
   
2. Enabling global criminal enterprises. If a criminal did not invent this tech, many have definitely benefited, through not only use, but also theft. We're talking about many billions of dollars per country per year.
   
   
3. Systemic destabilization. If money is stolen and then moved around the world to secret targets thanks to crypto, the legitimate economy suffers in myriad ways. There's a reason that enemies starting into war counterfeit the currencies of the opposing country. The unavoidable volatility of a so-called "currency" with neither an army nor a country behind it is made-to-order for those wishing to destabilize economic systems - which is one reason the US SEC determined Bitcoin et al. to be a security as opposed to a currency.
   
   

3. China's Role
   
   
1. China's chosen role as the top global economic parasite, via its InfoMerc national business model, is unmatched in history. This global productivity killer includes, but is not limited to, the global theft of technology intellectual property:
   
   
• Human-based (university students and profs, company employees, etc.)
  
  
• Net-based hacking (by group 61398, etc.)
  
  
• And all the related reasons former NSA director Keith Alexander called the result "the greatest transfer of wealth in human history."
  
  
2. Killing hundreds of thousands of world citizens with fentanyl.
   
   
3. Killing 20M+ world citizens with the COVID bioweapon, released through the Wuhan lab and then covered up.
   
   
4. The theft of personal data and the destructive influence campaigns related to TikTok.
   
   
5. The massive economic destruction of manufacturers via Shein, Temu, and other apps, while stealing personal information for later use in further reducing their productivity in many ways.
   
   
6. Positioning of logic bombs and hidden channels via solar-panel inverters, hackers penetrating the grid, industrial cranes, and so on.
   
   
7. Global economic attack via Party-subsidized EVs as tech enablers vs. world industries in dozens of key fields on the Politburo target list, including steel and aluminum production, lightweighting, advanced materials, battery tech, autonomous AI, chip design and manufacturing, lidar, radar, image AI, camera tech, mapping, mobile network management, fleet data management, and more.
   
   

4. Russia's Role
   
   
1. As destabilization agent via dis- and misinformation (the Internet Research Association, etc.), election manipulation, propaganda, sowing political division.
   
   
2. As economic sapper. Russia seems to be tasked within the CRINK alliance to use sabotage to interrupt logistical and information supply lines, from cutting undersea cables to using proxies for arson on shipping warehouses to attempting to plant bombs on international cargo planes to . . .
   
   
3. The economic effects of the Ukraine war in draining US/NATO coffers.
   
   

5. Chat GPT/LLMs
   
   
1. By releasing an always-broken technology that cannot be prevented from hallucinating - and then personally hallucinating over a predictive typing tech leading to so-called "artificial general intelligence" (AGI) - OpenAI CEO Sam Altman has worked overtime to guarantee that the world would fall for this sucker punch. His derivative product: a cute chat app all dressed up as Einstein. Note: Einstein was not famous for being chatty.
   
   
2. This, today, is likely the winner for the biggest productivity enhancer on all things that don't matter, to quote Sam; and, much more important, the largest productivity killer worldwide for all things that do matter.
   
   
3. And then, the completely terracidal cost in energy, money, and water, for building out trillions of dollars in the data centers required to run this faulty software - nothing like financial and planetary destruction to pull down your productivity -
   
   
4. (It is fascinating to watch Apple struggling with the incorporation of GPT into its phones, since its brand is built upon trust, and GPT regularly and reliably fails.)
   
   

6. The Black Market
   
   
1. Russia's KGB/klepto empire. Russia gets a special nod for turning the former KGB on the world during the collapse of the Soviet Union, moving it from domestic black market to, first, becoming the real Russian market (complete with assassinations and oligarchs), then into a global klepto empire. What better use for the KGB, while the FSB (successor of the KGB) and SVR (Russia's external intelligence agency) divvy up the domestic stuff?
   
   
2. The Mafia, Cosa Nostra, Mexican cartels, 'Ndrangheta, and every other criminal enterprise selling everything from humans to car parts to influence, aided by today's technology. What is the productivity hit we all take while these parasites suck the life out of their local communities? What tech do they use to do it? Any and all.
   
   

7. The dark web.

This secret extension of the internet is the home for every type of productivity killer that you can dream of, and much more. It's safe to say that anything being peddled on the dark web is subtracting from the productivity of legitimate businesses operating in the sunlight. This is a good place to ask: is it 10% of world commerce, or 50, or ??

8. Social networks.

We all want to have the grandparents talking to the grandkids, the friends from high school finding one another. But really, let's be honest: more kids commit suicide because of socnets. They do good when used among friends, but they make money by creating misery, social isolation, anger engagement, and a long list of other sad states, all of which are impossible to quantify and more than counter-productive.

Read the book Careless People and ask yourself how to gauge productivity lost every time Facebook gains.

While we could list many additional ways in which the hidden hand of technology is harming global productivity, the point is already clear. And the real question - how much damage is being done? - is unimportant, compared with the certainty that the answer is already "Much more than we suspected, or than the system can survive."

There seems to be a growing consensus that, while the net and related tech were exciting and marvelous in the Gee Whiz! early days, the last decade has seen a fast-growing trend of evil or wasteful use, which decreases our ability to simply get the things done that we want to get done.

When the experts talk about why the market is up or down, do you think they're considering any part of what we are discussing here? Not a chance.

And yet, do we agree that these and other hidden forces account for a very real, and perhaps sometimes major, contribution to perverting project plans, slowing things down, interrupting, intervening, damaging, breaking, destabilizing, devaluing, and increasing the cost of almost everything?

When you buy an object on Amazon, what part of that cost - both stated and hidden - comes from these other forces? Who knows? In fact, we'd have to say, Who cares?

Well - for this week, at least - we do, and we hope you do as well. It's time to realize we are not getting all of the data we need to plot our own economic futures with some sense of certainty, and that we would all do better, for ourselves, for others, and for the causes we believe in, if we could see technology's hidden hand.

Your comments are always welcome.

Sincerely,

Mark Anderson

mark@stratnews.com

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"A solar-powered calculator vs. this massive AI machine that took millions of hours to train, and that's running on, I don't know how many servers. It's huge. It's massive, and yet, people don't see the cost, and so they don't think about the cost, right? [. . .] We think it's free, or it doesn't come with a cost, but there is a cost." - Sasha Luccioni, AI and climate lead at Hugging Face, in a TED talk titled "AI is dangerous, but not for the reasons you think"; quoted in the Seattle Times

"In Washington, my colleagues Lulu Ramadan and Sydney Brownstone wrote a multipart series on the energy impact of data centers on Grant County. They found data centers in 2022 made up 40% of the total energy demand in the county, the equivalent of 190,000 households. Yet despite these environmental concerns, you rarely hear the public debating whether the benefits of AI outweigh the cost. [. . .] There are many uses for AI that are a collective societal good. AI could, ironically, help us better understand how to mitigate or predict the impacts of climate change. It could facilitate advances in science, resulting in lifesaving treatments. But not all types of AI are equal, and not all uses are equal, either." - Naomi Ishisaka, in "Smartphone AI Tools Come with Hidden Costs"; ibid.

"This deal signals the long-term demand for carbon removal necessary to mobilize infrastructure-grade investment and world-class execution." - Brian Marrs, Senior Director of energy and carbon removal at Microsoft, on the firm signing an agreement with Rubicon Carbon to finance 18M tons of carbon dioxide from the atmosphere; ibid.

The point in using all of the "ibid." quotes above from a single Seattle newspaper is that the unseen hand of technology's productivity costs (and benefits) is, literally, everywhere. This is no small issue.

"We wanted a way to make sure that humans stayed special and essential in a world where the internet was going to have lots of AI-driven content." - Sam Altman, Chair of Tools for Humanity (and CEO of OpenAI), on trying to buy everyone's retina scan in return for some crypto currency that he also owns; quoted in the LA Times

"There's big-time hype with a ton of customer friction and privacy problems." - Andras Cser, VP and Principal Analyst of security and risk management at Forrester, on Altman's new venture-funded company; ibid.

"In a few years, most medical image interpretation will be done by 'a combination of AI and a radiologist, and it will make radiologists a whole lot more efficient in addition to improving accuracy,' Dr. Hinton said." - Referring to comments by Geoffrey Hinton, SNS member and Nobelist; quoted in the New York Times; ibid.

"Alibaba is a poster child for the Chinese Communist Party's military-civil fusion strategy, and why Apple would choose to work with them on AI is anyone's guess. There are serious concerns that this partnership will help Alibaba collect data to refine its models, all while allowing Apple to turn a blind eye to the fundamental rights of its Chinese iPhone users. [. . .] It is extremely disturbing that Apple has not been transparent about its agreement." - US Rep. Raja Krishnamoorthi (IL), ranking Democrat on the House Permanent Select Committee on Intelligence; quoted in the New York Times

IT ISN'T JUST SNS --

After we had half-finished this issue of the Global Report, we got an email from our friends at WIRED. The editor's message about the topic seemed a perfect complement to this week's GR:

At WIRED, we've had a long-running obsession with rogues. This is, after all, a publication that was founded in the early '90s, born of a desire to champion the subversive, disruptive advent of the internet - and the hackers, hustlers, and blue-sky lunatics consumed by the possibilities of a digitized and interconnected planet.

Of course, WIRED had no idea, then, just what those rogues would ultimately unleash: a proliferation of bad actors wreaking havoc across the web; a booming industry of online conspiracy theorists whose dangerous convictions threaten everything from the health of our children to the strength of our democracies; and a coterie of tech billionaires with checkbooks and megaphones that reach from Silicon Valley all the way to the White House. Yes, rogues built the internet and inspired a technological revolution. Now, a mutated and much more powerful version of that same lawless spirit threatens to undo much of the incredible progress that technology and scientific inquiry have unlocked. DOGE Boys: I'm looking at you.

In this edition of WIRED, we're finding plenty of ways to show you just how roguish, how crooked, and how precarious our world has become. Matt Burgess brings you the inside story of Nigeria's Yahoo Boys and the "scam influencer" teaching them how to pull sophisticated digital cons on American victims. From Andy Greenberg, a timeline of ghost guns culminating in the one that Luigi Mangione allegedly used to murder a health care CEO in broad daylight - an act that's turned Mangione into the internet's most beloved rogue in recent memory. And from Evan Ratliff, the sweeping, bone-chilling saga of the Zizians, a group of gifted young technologists who became the world's first AI-inflected death cult and allegedly killed six people over several violent, chaotic years.

Scam influencers? DIY guns? AI death cults? Yes, things are rough out there." [. . .]

Katie Drummond

Global Editorial Director, WIRED

Note: Some letters may be republished to include subsequent replies.

Subject: Re: SNS Special Alert: "China at Cliff Edge"

Mark,

Terrific SNS briefing, offering contrarian insights to the headlines! And yes, China is going to suffer far worse than anyone expects.

Alas, I believe you are leaving out key players. There is the US ... and there is Trump & his backers (not the same thing, as the backers are finding out) ...

... and there is China ...

... and then there is Xi. And he is the player who has simple but under-appreciated motives. He and Putin & Trump are all concerned - above all - with personal survival. Putin often expresses (openly!) his fear of a repeat of the 1917 Soldier's Revolt that toppled the czars. Trump is desperately afraid of the US professional castes including the Officer Corps.

And Xi?

Xi fears being blamed for China's economic pain. And Xi has one saving throw. One that he has been working on, for years. Blameshifting.

If he can convince a billion Chinese that their pain is due to American aggression, then he rides the tiger and is not eaten by it. And Trump has given him that blame target, in neon.

Again and again, he does not care if China enters a recession or worse. He cares about staying on top.

I have for years been urging a POLEMICAL answer to Xi's "wolf warrior" victim-posing. It is absolutely vital that we answer this, before those billion angry Chinese demand something the world will not survive.

Thrive. And persevere!

David Brin

Author and Physicist
& SNS Ambassador for Science Fiction
www.davidbrin.com
Encinitas, CA

David,

Unfortunately, I cannot find a single thing to disagree with in your letter.

As always, not only contrarian, but correct.

Mark Anderson

Mark,

Xi is "begging for negotiations"?

Who can afford to be more patient, Trump or Xi? Who has a more patient constituency? Which population can endure more at the behest of the state? Want to wager? You only have to look north. Canada is more dependent on the US economy than China is. And its voters just rewarded Carney for taking a tough stance against Trump.

Xi is going to make this as painful and humiliating as possible for Trump, who will inevitably back down. 

We're 30 to 60 days away from some major supply disruptions - not just consumer goods, but the intermediate goods our own producers need. And prices of a lot of things are going to soar. Trump is in office now because of the COVID supply disruptions and high prices that hit under Biden. And that's not even considering the effects of retaliatory tariffs. 

I'm all for strategic containment of China. You don't do that by waging a trade war against the entire world. You organize the world against China. That was the whole point of the Trans Pacific Partnership - that Obama negotiated and signed, but Trump subsequently abrogated. Other countries can trade with each other without paying these tariffs. The intermediate goods their producers need will be less expensive than those of our producers. 

And Trump is an unreliable negotiating partner. In his first term, he signed, with great fanfare, a slightly tweaked update of NAFTA with our two largest trading partners, Canada and Mexico - that he is now violating. He is also breaching free trade agreements with South Korea, Australia, and other countries. It's hard to negotiate deals if the other parties don't trust that you will abide by them.

Broad tariffs are largely ineffective. Targeted tariffs can be effective, depending on the objective and how they're designed, as part of a broader trade strategy. Smart industrial policy might [comprise] these components:

- Identify strategically important manufacturing capabilities, like batteries, semiconductors, drones, etc. 

- Impose, and gradually phase in, narrowly targeted tariffs on imports of those products from China (not broad tariffs and not on allies).

- Subsidize domestic manufacturing in those strategic sectors. 

- Remove lower-priority regulatory burdens and contracting requirements. 

- Create common markets outside of China to gain economies of scale. 

We're not doing any of those things. To a considerable extent, we're doing the opposite. We are voluntarily inducing a recession and are destroying trading relationships that may not ever be fully regained.

Russ Daggatt

Founding General Partner
Denny Hill Capital
Seattle, WA

Russ,

In a rough order of some selected points from above:

1. You quote the point of the article - that China was on the cliff-edge of economic collapse - but, aside from some questions (yes, they tried to prepare), moved right on to what is wrong with Trump's tariffs. Fair enough, but also off subject.
   
   
2. As we've been saying for many years now, dealing with China is different from dealing with, say, the EU, or even Japan. So:
   
   
1. In general, broad tariffs are not effective or desirable, I agree; but
   
   
2. In the case of China, with 105 targets of US innovations slated for theft at any given time, and a years-old Made in China program in place by Xi, anyone paying attention will see that this is a massive, all-fronts war, between China (and its CRINK creation) and the West, led by the US. So, in this case, when the enemy is trying to destroy your economy, a broad response is exactly right, including partial or complete disengagement. As we like to say, every dollar sent to Xi goes toward a bullet of some kind or other.
   
   
3. While, at the time, I agreed re: the TPP (because it excluded China), I have also come to realize that, if you are the trade-balance loser in every large treaty grouping (we are), then trying to negotiate with large groups will fail. Negotiating 121, on the other hand, will almost certainly succeed. While it is rude and disruptive, I think this is behind Trump's desire to only negotiate per-country - which, this week, just led to a jump in tariffs to the EU up to 50%, perhaps because of the reason given - while the EU calls itself a body, each member country gets to set separate negotiating agendas. Frustrating for all.
   
   
4. If you want an unreliable negotiating partner, try Xi or Putin; suddenly Trump looks slightly better. I would suggest that changing his goals from 4-8 years ago is ok, given that the world has changed since then. Like war (and this is war), you go to battle with the army - and facts on the battlefield - you have, not the one you want.
   
   
5. I agree with all of your other points, regarding the proper way to negotiate, when you are NOT at war with the other side, and should note that you wrote an excellent book on negotiations, and it shows.

Thank you for writing in,

Mark Anderson

Mark,

Here's another special alert: 

WSJ - What a $15,000 Electric SUV Says About U.S.-China Car Rivalry

About a thousand companies from 26 countries exhibited at the Shanghai Auto Show last week, attracting more than a million visitors.

MotorTrend wrote: "Back in the '50s Americans used to go to GM's Motorama shows to get a glimpse of the future, gasping in awe at fully functional concept cars like the turbine-powered, titanium bodied Firebird III and exhibits that showed autonomous driving technologies. Fast forward seven decades and the world comes to China to see the future arriving in real time."

Toyota, Honda, Nissan and Mazda all launched new electric and hybrid vehicles in Shanghai - vehicles made in China with joint venture partners and cockpit OS and self-driving tech from Huawei, Horizon Robotics and Momenta.

China's auto market is twice the size of America's, more sophisticated, and growing faster.

Tesla's market share in China is 2%. GM and Ford have about 4%, through local joint ventures. The Japanese and Germans each have about 13%.

Asia-Pacific will not ally with the U.S. to boycott China. Look at the Aussie election results. The region trades more with China than it does with the U.S. and with Trump's tariffs the gap is widening.

Don't worry. The Chinese government will keep the lid on, and Trump is provoking a surge in nationalism and patriotism, not only in China, but everywhere in Asia-Pacific. 

Ordinary Japanese are starting to call the U.S. an enemy country. Polls indicate that they and the Taiwanese no longer trust the U.S. to defend them.

If China collapses, I'll buy you dinner in Friday Harbor. I might do that anyway.

Scott Foster

Journalist, Asia Times
Author, Stealth Japan
& SNS Ambassador for Asia Research
Tokyo

Scott,

I will address these points in a rough order:

1. Did MotorTrend magazine really say that people in the '50s went to see autonomous vehicles? I think someone should have warned them they were 70-80 years too early. Hope they weren't too disappointed -
   
   
2. China's auto market is 2x America. Well, they have $1.5B people, so, technically, it ought to be something like 5x bigger. They'll get there.
   
   
3. We all know that the entire sector has been chosen by the CCP for what looks like the largest subsidy program in Chinese, and likely world, history.
   
   
4.  This program has had different stages:
   
   
1. General subsidies, in the form of grants, cheap or free loans, IP theft of US tech, and subsequent transfer to Chinese car companies, leading to hundreds of new companies "overnight" (in a couple of years), and to the weird situation where things like phone companies (Xiaomi, for example) are also making cars.
   
   
2. Specific programs for enhanced competition, again flooded with cheap or free money, to find the top 30 winners, and then killing off the rest.
   
   
3. More specific programs, under Made in China 2025, whereby foreign firms are pushed out of all Chinese markets, including cars, batteries, phones, etc., leading to decreasing market share in Xi's feudal InfoMerc realm.
   
   
4. Yet more specific programs, focused solely on EVs and hybrids, for the purpose noted in the work above, and which we have covered at length. This occurred when the Politburo recognized that within the single product called the EV, a vast majority of the other markets they want to dominate could also be won. To this end, again, huge amounts of subsidization money has been spent to reduce pricing (sometimes specifically just out of Tesla's bracket) to increase sales and scaling in the domestic market.
   
   
5. As with almost all other parasitic programs in China (Huawei comes to mind), the CCP artificially goosed domestic purchases to create overnight success stories, growing the "winners" to massive scale in preparation for just one thing: the export onslaught that, also highly subsidized, would follow. We are in that stage today.
   
   
6. Therefore, looking a one-car show in China today should be done through the lens of all of the manipulations noted above. Unlike in a free market, where companies like GM or Ford respond to customer preferences in their EV programs, in China the companies do exactly what they are told by the party to do. And the show is where you get to see the result.
   
   
5. Regarding the Japanese / US relationship, two days ago the PM announced that the political / military relationship was more important than ever, as Japan worked to increase its funding and manufacturing, in partnership with the US, and against the Chinese threat. I don't mean that you are not spot-on correct re: the person on the street's reaction to Trump, but that on a more existential level, both countries need each other, know it, and say so publicly.

Thank you for writing in, and see you soon at FiRe 2025!

Mark Anderson

* On June 8-11, Mark will be speaking and moderating on a variety of subjects at the 2025 Future in Review conference, including interviewing his friend Sir Richard Dearlove, past chief of MI6 ("C" in Bond country), on his views regarding China and global strategic issues today; Dr. Lee Hood on his new global programs in longevity and phenomic health; and Pradeep Khosla, one of the top university chancellors in the US, on leadership in today's challenging and changing educational environment; and on the patterns the SNS team is seeing today, together with Ramesh Rao, head of the Qualcomm Institute; and on breakthroughs in AI and healthcare, with the Pattern Computer team; and hoping to see many of our SNS members in person. See the full agenda and sign up for FiRe 2025.  

In between times, he will be making sure that each and every blade of grass is exactly the same length, which seems to make people strangely happy.

"Strategic News Service," "SNS," "Future in Review," "FiRe," "INVNT/IP," and "SNS Project Inkwell" are all registered service marks of Strategic News Service LLC.

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