America’s Fragile Empire

The United States is at its most vulnerable point since the Cuban Missile Crisis.

"SHALL WE PLAY A GAME?" "Love to. How about Global Thermonuclear War?" - War Games (1983)

Aside from the possibility of total annihilation due to global thermonuclear war, the United States is at its most fragile point in its entire history. This vulnerability is largely due to its dependence on the infrastructure of computer technology powered by the electrical grid. As we have seen in the recent super-storm, hurricane Sandy, when the power went out, many people were reduced to living in the dark and scrounging up what food and blankets they could for weeks. They were without power, without gasoline, and without transportation. They were miles from the nearest food supplies and electricity. From what I read, the response was far from immediate. Now imagine this situation hitting the entire Eastern Seaboard at one time, extending 300 miles inland to middle of the Appalachians. Power gone with not only no way to call in extra power crews, but no way to communicate and coordinate with them. But this time, the problem is not downed power lines, but every transformer blown and no way to replace them. Imagine food stores empty and no deliveries available or planned for weeks. Surely there would be a FEMA response, but the need would be so overwhelming that whatever resources FEMA had would be drained in a week. Sound impossible? Sound horrific and unimaginable? Here are several very possible scenarios that could cause just such a collapse of the United States in a matter of hours.

 After this I saw another angel …he called out with a mighty voice, “Fallen, fallen is Babylon the great! ..Since in her heart she says, ‘A queen I sit, I am no widow, mourning I shall never see,’ so shall her plagues come in a single day, pestilence and mourning and famine, and she shall be burned with fire; for mighty is the Lord God who judges her. And the kings of the earth, who committed fornication and were wanton with her, will weep and wail over her when they see the smoke of her burning; they will stand far off, in fear of her torment, and say, “Alas! alas! thou great city, thou mighty city, Babylon! In one hour has thy judgment come.” And the merchants of the earth weep and mourn for her, since no one buys their cargo any more… The merchants of these wares, who gained wealth from her, will stand far off, in fear of her torment, weeping and mourning aloud, “Alas, alas, for the great city that was clothed in fine linen, in purple and scarlet, bedecked with gold, with jewels, and with pearls! In one hour all this wealth has been laid waste….Alas, alas, for the great city where all who had ships at sea grew rich by her wealth! In one hour she has been laid waste.” -Revelation 18:1-19

EMP mechanism

Scenario 1 (Likelihood:low. Preparedness:none. Popular expectation: unthinkable): Electro Magnetic Pulse weapon. For the military, Boeing has recently developed a missile call CHAMP that has the ability to knock out computers and electronics. Although CHAMP is a directed energy weapon, an undirected EMP weapon would knock out all electronics for thousands of miles if detonated in the atmosphere. We face two crazy rogue states that seem to have no instinct for self-preservation, both of which are developing nuclear bombs and long-range missiles: Iran and North Korea. Iran has a submarine that can legally be in waters just over 200 miles offshore. Even with its questionable missile technology, if it were to launch an EMP weapon and disrupt only the Eastern Seaboard, the economic and infrastructure devastation would be extreme. (Similarly, N. Korea has developed a missile that can reach the West Coast.) The government estimates that it would take from 1 to 3 years to replace the transformers, electronics, and communications systems. Imagine the entire East Coast without power for 3 years. Not only would the electrical grid be down, but cars and trucks would be knocked out as well. Modern autos are dependent upon internal computers, which would be overloaded and fried by an EMP burst. Computers, by which every transaction in grocery stores and gas stations are made, would be out of commission, even if you could find a way to pump what little remaining fuel there is in the tanks. Water filtration and the water pumping stations gone offline. No tap water, no clean drinking water.

In the 1970’s, during the first oil embargo against the United States, people were beating each other up in gas lines. Imagine millions of people starving, hungry and without food, roaming the streets and fanning out into the countryside (those that could make it that far) in search of food. Many will be armed. The rest will want to be.

In the 1940’s and 50’s, the electrical grid of the US was not connected, so knocking out one locality did not extend the damage beyond the affected area. Since the 1960’s, greater and great connectivity has been established, leading to the potential for larger blackouts, as happened most recently in 2003, in which large parts of the N.E. were knocked out by a tree that downed a single power line. If an overload to the circuits were created by an EMP pulse on either coast, the blackout might well extend half way across the nation. Finally, a single blast in the upper atmosphere above Kansas would knock out the entire nation’s computer electronics, transportation, and electrical supply. Another consequence of an attack on the electrical supply, which would probably knock out large portions of the internet as well and all the computers connected to it, is that our country now depends upon “just in time” delivery of goods. Inventory, stored in centralized warehouses, is shipped as needed to places all over the country. But if orders cannot be processed because the computer and the telecommunications systems are down, nothing can be shipped even if the goods are available.

Compare this situation to the 1940’s. Phones were used, and that would still be a problem, but factories were set up in various parts of the country, controlled by manual labor, not computers. The electric company’s power went only as far as the last utility poll. Steel mills operated by coal delivered by trains. Combustion engines did not depend upon computers, and even burned out distributor caps and wires could be easily replaced. There was also no possibility of an EMP attack at that time. But even if there had been, the recovery time would have been much shorter due to the state of technology. We were not dependent upon computers but the US Post Office, and most of our engine power was based upon simple, mechanical function. Cars did not even start to get computer circuits until the mid-70’s. What I’m saying is that it would be easier to recover from an attack years ago, when we were more decentralized and less dependent upon the power grid, electronics, and computers.

Scenario 2 (Likelihood:High. Preparedness:Developing. Popular expectation: unthinkable): Crippling cyber attack on electrical grid and/or internet. There are already hackers trying to break into our electrical grid, and some have succeeded. Leon Panetta and the Joint Chiefs have put out papers outlining the dangers and highlighting the real possibility of future successful attacks. Iran, and supposedly unofficial hackers in China, are playing cat-and-mouse games, trying to infiltrate everything from our military systems to banking systems, to the electrical grid, to nuclear power plants. As evidenced by the Suxtnet worm attack on Iran’s nuclear enrichment facilities, government sponsored hackers are creating a new front in counter terrorism and counter espionage. The threat is so real that the Joint Chiefs have defined some types of cyber attacks as an act of war. If there were a successful attack on our electrical grid and/or nuclear power plants by cyber warfare, the results to the US would be the same as outlined in an EMP attack,  perhaps more short-lived only if these outages do not result in overloaded equipment failures creating transformer burnouts. However, one nuclear plant going into overload would have a devastating impact on the economy.

In scenario 2, I want to focus on the economic impact of a successful attack on the banking system or the internet itself. While we know Iran and Islamic terrorists have a desire to bring down our entire system, the Chinese have the expertise to do so. I suspect that due to their production and supply of most of our critical computer parts, they have already embedded back doors and sleeper codes into most of our relays, switches and control boards. Let us just speculate that China’s designs on Japan’s territorial islands and the oil fields in the Philippines becomes more aggressive, leading to a confrontation and perhaps a war. Our allegiance to our allies puts us in a very difficult situation: first of all the Chinese own a lot of our debt; second, they manufacture a lot of our supplies, including our military goods (made in Taiwan, but infiltrated by Mainland spies for sure.) Perhaps they even have electronic codes to cause our jet fighters’ computers and missile guidance systems to malfunction. But even if they don’t, they do have thousands of paid hackers intent on disrupting everything from communications to infrastructure, and could conceivably bring down the internet and the functioning of the banking system. Say the attack is limited to a total disruption of the internet through an overload of relay switches and internet hubs. Even if the government can shut it down in a matter of hours, they have to keep it off. The banking system has records backups, supposedly in secure locations. However, what happens when ATM’s no longer work, sales transactions by credit card cannot be made, and gas cannot be pumped out of the ground. Even if this attack only lasts for a few weeks, all the problems of on time deliveries and food shortages apply. Panic. Stock market crash, and a broken economic system follow.  A run on banks might occur, except a bank holiday is declared, so you can’t get your money out; or only a small portion per day. But by then it will be too late. International commerce will have ground to a halt. The entire internet system of buying and selling will be disrupted, and the dollar will have collapsed as nations withdraw their currency from our system and no longer will buy our bonds.

Scenario 3 (Likelihood:nearly inevitable. Preparedness:none. Popular expectation: head-in-the-sand denials.): Banking collapse and/or US bankruptcy. This scenario is probable, but not necessarily in the immediate near term. The US dollar’s strength depends upon the full faith and confidence of the world in the US government. Since we seem to lack the political will to cut expenditures, raise revenues, reform the tax code, and remove unneeded subsidies, we are headed for a fiscal implosion. Government estimates of the long-term liability of the unfunded pension plans and public debt (Social Security, Medicare, etc.) are headed towards the $60 trillion-dollar range in years to come. That means eventual inflation and the inability of the government to meet these expected obligations without perhaps crippling taxes, which then in turn may drive down tax revenues due to lowered productivity. I don’t want to debate the political side of this issue or dispute CBO predictions (which all depend upon assumptions fed to them by politicians), but simply to point out that a person living well beyond his means, unable to pay his credit card bill, will eventually be shut off from more credit as the lender sees his credit risk as too great. When the other nations see that we are no longer credit worthy, we will have the economic equivalent of a cardiac infarction  – a heart attack.

Aside from the unsustainable debt accumulation, there is another potential cause for an economic meltdown: the Black Swan event. The Black Swan is the unexpected and unanticipated event that no one predicted and for which no one prepared. In short, it is when the unthinkable happens. 9/11 was a Black Swan that no one anticipated. These are things that no one wants to think about because the consequences are too devastating to imagine. Here are some potential Grey Swans (the ones we can anticipate aren’t black swans 🙂

  1. The Greek people finally reject austerity and withdraw from the Euro zone, and/or there is a run on the banks in places like Spain (this happened already several times this year in Greece and Spain). But this run is one that gets out of control, and the Euro collapses, leading to a shattering meltdown of the US stock market and US banks that are overexposed. (They all say they have passed the stress test, but no one knows what happens if Europe really goes in the toilet). Worldwide depression ensues and people in the US can’t get their money out of the banks to pay for groceries, etc.
  2. Another terrorist attack in a sea port that cripples international shipping. Wired Magazine did an article on what appeared to be a dirty bomb, spewing high levels of radiation, which arrived at a port in Genoa.  Apparently our radiation detection equipment is very good at detecting everything except real threats: “The radiation portals that were deployed in the aftermath of 9/11 are essentially fine, except for three problems: They won’t find a nuclear bomb, they won’t find highly enriched uranium, and they won’t find a shielded dirty bomb… Other than that, they’re great pieces of equipment.” (19.11 November Issue 2011 p.190).  Say Iran or Islamic terrorists are able to get a bomb planted in a shipping container in a Middle Eastern port, like the one that went to Genoa. Suppose it gets detonated in a US port or European port. Immediately international shipping is brought to a standstill, and again panic ensues. The same goes for a dirty bomb which contaminates 40 city blocks in New York. It isn’t the bomb that is the problem, it is the economic aftermath.
  3.  A dirty bomb smuggled across the border and detonated in a US city. Already there are Hezbollah operatives in Mexico, using the drug traffickers to smuggle people, weapons, and cargo into the US. Suppose they decide to up the ante-up over our support of Israel, and they successfully detonate a radiological or chemical or biological device. Again, the ensuing panic will send the stock market into a tailspin. Our already fragile economy, barely recovered from the crash of 2008, may collapse.
  4. War between Iran and Israel shuts off the Gulf of Hormuz to oil transportation. While the response to this crisis may be short-lived, it will not be if Iran counter attacks with world-wide terror as it has threatened, or the conflict goes nuclear.
  5. Something else: a truly Black Swan.

In Conclusion

When the dog bites, when the bee stings When I’m feeling sad, I simply remember my favorite things and then I don’t feel so bad!

My Favorite Things

Julie Andrews sang of her favorite things as a way of forgetting about the bad things. But it is the really bad things you don’t want to think about that could ruin your day. In sum,  our nation’s reliance upon technology, electricity, computers and the internet puts us in the most vulnerable position we have ever been in as a nation, where a single critical event could turn our happy masses into starving mobs. Political chaos, economic collapse, mass starvation, and a government unable to cope with the nationwide extent of the problem, would turn us very quickly into a Third World country from which there would be no easy recovery, and perhaps where Americans would turn on each other in a scramble for food and water that would scar the psyche of every one left on earth. It would be far worse in the cities, where there is no place to grow food or get clean water, and where the trek alone of hundreds of miles would probably cause the death of millions. We have watched these shows on television about pretended apocalypses, but even without thermonuclear war or backpack nukes, the infrastructure of the United States is so fragile  and the threats already so real, that one brazen attack by a deluded adversary could bring the whole system down. After all, wasn’t economic devastation Osama Bin Laden’s real objective?

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