Biden Withdraws From Race – What’s Next?
President Biden made a significant announcement on July 21, revealing his decision to withdraw from the 2024 presidential race. This has created a major upheaval within the Democratic Party, necessitating the urgent selection of a replacement just weeks before their convention. Biden's decision, unprecedented for a sitting president and presumptive nominee so close to an election, underscores the gravity of the crisis following his widely criticized debate performance against Trump. In a statement posted on social media, Biden explained that while he had originally planned to seek reelection, he believes stepping aside is in the best interests of his party and the nation, allowing him to focus solely on fulfilling his duties as president for the remainder of his term. He also indicated plans to address the nation later in the week. Former President Donald Trump, the Republican nominee, responded by criticizing Biden's presidency but expressed confidence that Vice President Kamala Harris, if nominated, would be easier to defeat than Biden himself.
The states have already conducted their primaries, leaving Democratic voters with no opportunity or mechanism to directly choose a replacement. At this stage, the decision falls to Democratic delegates—state and local party officials elected during the primaries—to determine who will succeed Biden as the party's presidential candidate, either at the Democratic National Convention or earlier. However it unfolds, this process is set to pose significant logistical challenges for Democrats in the coming weeks. The convention is slated to commence on August 19 in Chicago. On July 19, the party confirmed plans to conduct a virtual roll call between August 1-7 to officially nominate a candidate, ensuring compliance with Ohio's ballot certification deadline amid ongoing disputes. Whether this plan will proceed following Biden's withdrawal remains uncertain.
The nomination process will involve the approximately 3,900 pledged delegates to the Democratic National Convention who will select the party’s candidate. If Biden had not dropped out, the 99% of delegates who were pledged to the president would have had to vote for him. However, now they are free to choose whom they want. In addition, there are about 700 “superdelegates,” such as governors and Members of Congress, but they do not get to vote in the first roll call vote. If the delegates do not coalesce around one candidate, then there will be an “open convention.” They will hold an initial vote with just the pledged delegates, and then the superdelegates will join the vote. As one description put it, the delegates “are lawyers and school board members, labor activists and faith leaders, lifelong Democrats and party newcomers. Some of them just turned 18; others are pushing 80.” That diversity will make it hard to coalesce around one candidate in the initial round, but not impossible.
The US election will be turbulent for the next few months as the Democrats choose their new nominee and attempt to rebuild the campaign. They will also be fighting a major uphill battle as the indicators are strongly in Trump’s favor. Unemployment has increased to 4.1%, inflation is still around 3%, mortgage rates are still high (though expected to drop), Q1 GDP growth was only 1.4%, wokeness is increasingly unpopular, immigration as a key voting issue, and Trump’s defiance following the assassination attempt all indicate that he is most likely to win. How Democrats choose their nominees for president and vice president will determine if they are capable of mounting a campaign to win the election. There is a reduced chance for them to win, but by choosing the right pair, they could erode Trump’s support in critical swing states like Michigan and Pennsylvania. Analysts will need to delineate the relevant variables for the likelihood of a Democratic nominee winning.
Importantly, Biden stepping down means there is a much higher likelihood of major and violent protests in Chicago during the convention, especially if a nominee is not chosen by then. Left-wing activists will attempt to sway the delegates, and if they are upset by the choice, e.g., one who is not pro-Palestine enough or not strong enough on racial justice, then they will likely revolt. Those in the protective space should take Biden's decision as an indicator of a higher likelihood of violence at the convention.
Microsoft Blames EU for IT Outage
The IT outage on July 19 affected up to 8.5 million Windows devices due to a faulty antivirus update from CrowdStrike. Microsoft blamed a 2009 EU agreement for preventing them from blocking the update, which caused widespread disruptions including flight delays, health service issues, and payment failures globally. The update affected computers by granting privileged access to the kernel, crucial for system operations. CrowdStrike acknowledged the issue, with many affected devices now restored. The incident underscores ongoing regulatory debates, including EU efforts to enforce access on Apple devices under the Digital Markets Act. Now, Meta will not launch new AI products in the EU because of regulations. Insight Forward has regularly forecasted the balkanization of technology partially due to burdensome EU regulations, and the recent events along with Microsoft’s willingness to openly blame the EU indicates that this will be catalyzed over the medium term.
Philippines Affirms Sovereignty Over Shoal
The Philippines affirmed its intention to uphold sovereignty over Second Thomas Shoal in the South China Sea, despite a recent resupply agreement with Beijing for Filipino troops stationed on the BRP Sierra Madre. Manila rejected China's claim that the deal required prior notification and verification of deliveries to the shoal. Tensions have escalated at the shoal, marked by recent confrontations, including one where a Filipino sailor was injured. The agreement aims to mitigate these tensions through increased communication channels while Manila maintains its stance on asserting rights in its maritime zones. This was an important step of challenging China because the previous government of the Philippines was significantly more conciliatory towards Beijing, but President Marcos has taken a more pro-American stance. If Trump is elected in the US in November, then China is going to become the main focus of the administration’s foreign policy, and allies like Philippines will be critical.
DOD Issues 2024 Arctic Strategy
The Department of Defense issued its 2024 Arctic Strategy, and the document addresses growing geopolitical and environmental challenges in the region. Emphasizing readiness for high-latitude operations, the strategy highlights increased reliance on satellite technology due to climate change and shifting geopolitical dynamics. It identifies Russia's and China's expanding Arctic presence as key concerns, advocating for investments in space-based capabilities for communication, intelligence, and monitoring. The strategy also underscores the role of the Arctic in U.S. missile defense and calls for modernizing radar systems and enhancing satellite coverage through partnerships with NATO allies. The U.S. Space Force plays a pivotal role in supporting these efforts from bases like Clear Space Force Station in Alaska and Pituffik Space Base in Greenland. This document indicates an important priority for the DOD, which offers insight into everything from where the DOD will apply resources to possible places for great power competition. Insight Forward has previously analyzed “geopolitics beyond land,” and the DOD’s Arctic strategy will involve all aspects of geopolitics beyond, including space, technology, and maritime security.
China Cuts Interest Rates
China unexpectedly slashed both short-term and long-term interest rates in a broad move aimed at stimulating economic growth, the first such adjustment since August 2023. The cuts, which include reductions in the central bank's key rates for short-term policy and market operations, as well as benchmark lending rates, follow weaker-than-expected economic data and a recent leadership meeting. The People's Bank of China's decision is seen as a response to slowing growth momentum, rising deflation risks, and challenges in the property sector and consumer sentiment. Analysts suggest these measures are also influenced by global economic trends, including potential rate cuts by the Federal Reserve. China has had a general economic slowdown, and therefore, they need to increase borrowing and weaken the currency to help manufacturers. The Federal Reserve could soon start cutting rates as well because inflation in the US has slowed, but it is unclear if that will happen by the end of the year. There are risks for China cutting rates, but the country needs the stimulus based on several systemic fragilities, such as the possibility of deflation and increasing opposition to China’s export dominance.
Paris Olympics
The Paris 2024 Olympic Games, scheduled to begin on July 26, face a range of potential security threats. Concerns over terrorism are particularly elevated due to the ongoing Israel-Hamas conflict and the history of Islamic State (IS) targeting high-profile events. France has raised its security alert to the highest level following attacks such as the one in Moscow by IS-Khorasan Province (IS-K). Russia's history of cyber-attacks on the Olympics and potential state-sponsored actions by Iran or Russia pose additional risks. Domestically, various groups, motivated by issues such as the Gaza conflict, environmental concerns, or far-left and far-right ideologies, may attempt to disrupt the Games - likely targets include public transport infrastructure as well as the games venues. To counter the threats, France has deployed around 75,000 police, soldiers, and private guards, and stringent access controls around key areas like the River Seine. Anti-drone systems, radars, and divers will patrol critical zones, and extensive cybersecurity measures are in place to protect against potential cyber-attacks on infrastructure and ticketing systems.
“Everything tends towards catastrophe and collapse. I am interested, geared up and happy. Is it not horrible to be built like that? The preparations have a hideous fascination for me."
- Winston Churchill
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