by Yves Smith at Naked Capitalism
Dominic Stone: So do you know what’s going to happen?
Eric Finch: No, it was a feeling. But I can guess.
– V for Vendetta (“Beginning of the End”)
During the runup to the financial crisis, your humble blogger pointed out that financial time moved faster than political time. Market players often had better and more comprehensive access to important information than officials did and had strong incentives to act on it.
By contrast, regulated entities were motivated to shuffle their feet and mumble until problems became undeniable…and then the regulators themselves would too often hope gunshot wounds would magically heal themselves, rather than risk having to answer embarrassing questions by going into emergency response mode.
Compounding these institutional and behavioral issues was the fact that decades of deregulation had produced a financial system that was tightly coupled. That means, in layperson-speak, that when a problem starts, it propagates thorough the system too quickly to be stopped. There aren’t enough natural or man-made firewalls to arrest the cascade.
With the Ukraine conflict, commentators have fixated on the timetable for prosecuting the war, trying to argue that the fact that Russia has not already “won” (whatever “won” means) implies Russia is losing, despite Russia and its allies having taken over 20% of Ukraine and continuing to gain ground with a mere peacetime expeditionary force. Russian officials have also made clear that they aren’t following a timetable. Some analysts have even argued that the seemingly slow pace is to Russia’s advantage. It does not merely allow them to continue the conflict without resorting to a general mobilization. It also appears to lead Ukraine to bring the war to the Russian front line, facilitating the destruction of the Ukraine army and equipment away from major cities, where civilian casualties would be greater. And the front line is not all that far from Russia, facilitating resupply.
However, there is also a big difference between when a war is won or lost versus when the vanquished is finally prostrated. For instance, Germany’s World War II fate was sealed in the Battle of Kursk, but it was nearly two full years more before Germany surrendered.
Some Western military experts have argued that Ukraine lost within weeks…
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