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Welcome to another issue of SEA STATE!

This week, we are reflecting on the maritime strategy primer we published a few issues back. In the Tri-Service Maritime Strategy, the sea service chiefs assure us that the United States will fight and win in conflict. According to a new congressional “Report on the Fighting Culture of the United States Navy Surface Fleet,” this will prove to be a tall order. The results from the project are “unambiguous” – that the U.S. Navy surface fleet is adrift in a culture that is risk-averse, lethargic about warfighting and substantive training, and paralyzed by a zero-defect mentality.

As a surface warfare officer, I found this report especially prescient and distressing. Many of the observations felt familiar and revelatory. The overwhelming sentiment from the report is that the surface Navy is “dangerously off-course” and “Sailors and officers are unprepared for the difficulties of combat.” Are my shipmates and I fated to the future laid out in this depressing trend assessment? The message is clear: our culture is our strategic vulnerability.

Is there any room for optimism? Certainly, policy changes can redirect money and alleviate administrative burdens. But when elements of the institution are atrophied after years of disuse and lack the momentum to change, what do we do?

I offer that the interim solution lies with you. And me. And our peers, our Sailors, our bosses. It requires a grassroots effort of thinkers who reject the forecast of this report – that we are unable to alter the trajectory of our profession towards victory without the mandate of the bureaucracy.

In the absence of assigned curriculum, we have a responsibility to educate ourselves – to study our competitor’s motivations and capabilities, read dissenting opinions, and learn the history of those who have gone before us, whether it be 77 years ago in the U.S.’s last major surface battle or a ship that transited the South China Sea yesterday. That’s what we’re trying to do at SEA STATE – this newsletter is brought to you by a group of junior officers who are filling the gaps in our professional growth and sharing that with our peers.

As the recent report to Congress on the surface fleet warns, there isn’t time to learn when war is underway. What are you reading, learning and teaching to prepare yourself and the sailors, Marines, and Coast Guardsmen in your charge?

Sincerely,

Charlotte Asdal
SEA STATE Team Member

IN THIS WEEK’S NEWS

“U.S., China hold high-level talks, highlighting differences” (AP News): U.S. Deputy Secretary of State Wendy Sherman held talks with her Chinese counterparts on July 26th, outside of Beijing. These are the first discussions between high-level American and Chinese diplomats since the tense talks in Anchorage, Alaska, earlier this year. The U.S. reiterated its position decrying the treatment of Uighurs and Tibetans, as well as continuing the accusations of a Chinese-sponsored global cyber-hacking campaign. The outcome of the talks appear inconclusive, with no joint statements or settlements for future engagement.

• With another meeting between high-level diplomats, the Biden Administration’s China strategy is coming into greater focus. At the G7 Summit in June, President Biden and other G7 leaders launched the Build Back Better World Partnership as an alternative to China’s ‘Belt and Road.’ The Biden administration has also continued many policy decisions that originated in the Trump administration, such as classifying the treatment of Uighurs as ‘genocide’ and placing trade limitations on Huawei, a Chinese technology company. Additionally, the administration is working to create a stronger coalition of allies and tangible strategic initiatives.

• The growing emphasis on building coalitions is a welcome change in strategy. It is also one that particularly suits the skill set of the Navy and Marine Corps. The importance of alliances was recently highlighted by Secretary of Defense Austin while speaking at a conference in Singapore (see below). Forward deployed Navy and Marine Corps units that frequently participate in multinational exercises and port calls in the region have an opportunity to directly impact these important relationships.

“China meets with Taliban, stepping up as U.S. exits Afghanistan” (Wall Street Journal): On Wednesday, China’s Foreign Minister Wang Yi met with Taliban co-founder and leader Mullah Abdul Ghani Baradar in China to discuss steps towards establishing peace in Afghanistan. During the meeting, Wang called the withdrawal of U.S. and NATO troops from Afghanistan a “failure of U.S.” policy. Beijing likely views the U.S. departure as an opportunity to expand its role in the country, particularly with the Belt and Road initiative. Amidst the withdrawal of American forces, talks between the Taliban and the Afghan government have stalled, and it is widely feared that Kabul could soon fall to the Taliban. China’s direct engagement with the Taliban provides insight on Beijing’s view of Afghanistan’s political future, and it indicates that although U.S. forces are withdrawing from the country, it will not be the end of American attention there.

IN DEFENSE NEWS

“Pentagon chief calls for new regional order in Indo-Pacific” (Defense News): The U.S. Secretary of Defense has spent the past week traveling throughout Southeast Asia on his first official trip to the region. Speaking at a lecture in Singapore on Tuesday night, Secretary Austin reiterated what has become a key talking point for the Department of Defense: the idea of “integrated deterrence,” or, in his words, “using existing capabilities and building new ones, and deploying them all in new and networked ways...all tailored to a region’s security landscape and in growing partnership with our friends.” By enhancing partnerships with allies in the Indo-Pacific region, Secretary Austin believes the U.S. can help establish a new strategic order that deters some of China’s aggression towards its neighbors. As “integrated deterrence” becomes a centerpiece of the Biden Administration’s defense policy, junior officers -- especially those assigned to USINDOPACOM units -- can likely expect more operations and exercises to be planned in coordination with friendly nations and their armed forces.

“Philippine President Restores Visiting Forces Agreement with U.S.” (DoD News): President Rodrigo Duterte of the Philippines retracted a letter this week that would have terminated the U.S. and Philippine Visiting Forces Agreement (VFA). President Duterte cancelled the VFA over two years ago and has allowed only periodic extensions, a tactic that has contributed to tensions between the two nations. The continuation of the existing VFA will allow for the resumption of bilateral engagements between the U.S. military and the armed forces of the Philippines, a partnership that is critical to combat Chinese aggression in the region.

“Pentagon, reacting to Biden order, working on plan for mandatory COVID-19 vaccinations” (MilitaryTimes): Secretary Lloyd Austin is drafting plans to mandate COVID-19 vaccinations for all service members. So far, the vaccine is not a required inoculation because it has only received emergency use authorization from the FDA. These steps, however, indicate the Pentagon may not wait for full FDA approval. For many reasons, some service members have expressed hesitancy in receiving the vaccine. The military has tried to address their concerns by providing incentives and education without making it mandatory. But, as the pandemic continues to hinder readiness levels, the Pentagon is seeking other options to increase vaccination rates. In the meantime, masks are mandatory on all installations, regardless of vaccination status. As junior officers, we should be prepared to help inform our units of their options and direct them to medical professionals for facts on the vaccine’s safety.

“Navy Charges Sailor with Arson, Hazarding a Vessel in 2020 Bonhomme Richard Fire” (USNI): Following a criminal investigation into the five-day-long fire on the USS BONHOMME RICHARD, the Navy announced on Thursday that it may seek charges against a seaman apprentice for aggravated arson and hazarding a vessel. CDR Sean Robertson, a representative of the U.S. 3rd Fleet, stated that “evidence collected during the investigation is sufficient to direct a preliminary hearing in accordance with due process under the military justice system,” and that Vice Adm. Steve Koehler, 3rd Fleet Commander, is considering court-martial charges. The fire on the ship resulted in its decommissioning -- restoration costs were estimated to be nearly $3 billion -- and fleet-wide reforms to onboard fire safety programs.

A LONG READ FOR YOUR WEEKEND

“China’s Sputnik Moment? How Washington Boosted Beijing’s Quest for Tech Dominance” (Foreign Affairs) by Dan Wang

This article, written by an analyst of Chinese technology industries, first describes China’s economic landscape in which state-controlled firms and private enterprises co-exist with the latter typically outperforming the former. The state is interested in increased self-sufficiency in the technology industry, but has by and large not realized success in critical industries like aviation and semiconductor manufacturing.

Meanwhile, more successful private firms rely heavily on superior parts from the U.S. and elsewhere. The author posits that some economic policies enacted by the Trump administration to limit Chinese technological influence have actually backfired, constituting a potential ‘Sputnik moment.’ Instituting strict and broad export controls of U.S. technology did indeed injure some Chinese companies as intended, but it has also caused private firms to begin seeking the same domestic self-sufficiency the state desires. This alignment of interests could propel China’s technology sector in ways unfavorable to the U.S., weakening the American position vis-à-vis China both economically and geopolitically.

Whether or not you agree with the author’s argument for rolling back some of the U.S.’s current export controls, this piece highlights some of the nuances in the U.S.-China relationship -- even though these complex dynamics may not seem directly relevant to the day job of a junior officer, they are critical to understanding strategic competition writ large.

PODCAST OF THE WEEK

“Solving the Navy’s Strategic Bankruptcy” - Net Assessment by War on the Rocks

Should Navy leadership build budgets and strategy for the present, grey-zone competition between the U.S. and China? Or prepare for a conflict in the near-term? Or for the even longer-term view yet, should it prioritize long-term military-technical competition and “go all-in on next-generation systems with game-changing technologies that maintain the Navy’s technological advantage”? Each of these strategic camps have their supporters and detractors, contributing to a sort-of bureaucratic deadlock about where to invest in the Navy.

This episode of Net Assessment is hosted by Christopher Preble, co-director of the New American Engagement Initiative at the Atlantic Council and Melanie Marlow, Senior Associate in the International Security Program at CSIS. It also features Chris Dougherty, a senior fellow in the Defense Program at CNAS. The show examines Mr. Dougherty’s piece published in War on the Rocks similarly titled, “Gradually and then Suddenly: Explaining the Navy’s Strategic Bankruptcy.” It illuminates how, even among naval leadership, it's difficult to come to a consensus on future force structure requirements. It may help clear up some confusion for junior officers who may not understand the bureaucratic forces that led to a 2022 budget resulting in a net loss of four ships.

FOR YOUR FINANCIAL AWARENESS: INFLATION

Inflation is a word often used (and misused) by pundits to bolster arguments on both sides of the political spectrum. It’s a loaded term that strikes terror into the hearts of the evening cable news audiences. Most casual observers would correctly surmise that inflation means a rise in prices. While this is true, there is a lot more to understand about this economic principle and its practical impacts. In our ongoing effort towards the monetary edification of our readers, here are some key things to know about inflation.

1. Inflation isn’t always bad. Thinking about rising prices on anything is scary but inflation is a natural by-product of a healthy economy. In fact, the Federal Reserve (whose explicit purpose is to manage inflation) sets a target percentage for inflation every year. When inflation is gradual and predictable, it allows wages to grow comfortably alongside prices. This is why we pay $3.00 for a gallon of milk while our grandparents paid $0.05, because milk relative to our wages today is roughly the same throughout time.

2. Inflation can be bad. There are several examples in history of hyperinflation, situations in which inflation occurs so rapidly that currency becomes worthless; or simply, worth less. Wages aren’t able to keep up in these situations and it’s impossible to maintain a standard of living.

3. Inflation has many causes. Consumer demand for goods, unemployment, the amount of money in circulation, and interest rates are among some of the factors that play into the inflation rate. More recently, economists have been anticipating the re-opening of the economy following the pandemic as a potential trigger for high inflation.

What does this mean for the average sailor? Inflation is a force that as individuals we can’t control. However, we can anticipate it to our advantage. Considering investments resistant to inflation is a great way to diversify a portfolio. Real estate, Treasury Inflation-Protected Securities (TIPS), and Series I Savings Bonds are some investment vehicles that are well suited to hedge against inflation. In the case of real estate, real assets have historically kept pace with rising prices, while TIPS and I-bonds have increased returns during inflationary periods.

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This issue of SEA STATE was written and edited by Yash Khatavkar, Morgan Krasnican, Charlotte Asdal, Viraj Patel, Christian Hoffman, Travis Dill, Lauren Hickey, Scotty Davids, Phoebe Kotlikoff, Sarah Claudy, Jake Marx, Emma Quinn, Johnathan Falcone, Bryce McClelland, and Thomas Krasnican.

SEA STATE is not affiliated with the U.S. Navy, Marine Corps, or the Department of Defense. All views expressed or shared in this newsletter are the authors’ own and not necessarily endorsed by the U.S. government or any military entity.