Subject: some papers..
From: "Thad Brown" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Sat, 30 Apr 2011 14:54:03 -0400

Dear Hunter,

It was wonderful seeing you last evening at the Corcoran and having  
the opportunity to meet Kathleen.

The talk you're preparing for the upcoming leadership conference  
sounds spot-on. I've been banging Michael for months on the IO  
campaigns coming out of the Financial Times concerning the China  
economic and security juggernaut.  Yes, yes, they have trillions in  
the bank. Yes, yes they make iPhones and every other running shoe on  
the planet. Yes, yes they wish to buy any and all high tech defense  
firms in the US. But when China's real disposable income per cap is  
figured in, it's a different picture: think Mexico at best. The FT  
seems to have a dog in this fight and their statistical analysis is  
flat-out slanted and pro-Chinese regardless of the facts.

On the security side, the US has forgotten more than the PRC ever  
knew. One example: China has yet to build an aircraft carrier and  
isn't likely to have one before 2014 ( I don't count the rusty old  
jalopy they bought from Ukraine). The US had eight carriers before WW2  
and built or converted another thirty-five during the war. Since  
then... The "man centuries" of experience in  naval warfare alone,  
both surface and submarine, counting both victories and defeats, put  
the human organizational advantage all on the US side -- none on  
China's. China seems to be able to build one-of-a-kind of many things,  
eventually, but building hundreds seems to be harder. There's a  
paradox in this: usually the prototype is the hard part and the copies  
are much easier IF an organizational capability is deep and in place.   
This organizational skill which the US has and China lacks is the key  
factor explaining the overwhelming difference between the two. The US  
is being asked to confuse mass produced consumer good (made in China)  
with overwhelming national capacity (GDP/P). End of rant.

Am working up the contours of "political risk" tied to elite dynamics,  
to produce composite measure from our databases. Some components will  
measure "stress" and "cohesion" in the entire system of elites at the  
country level, for instance while other measures of stress and  
cohesion and volatility will be able to monitor specific, targeted  
companies and their relevant elite coalitions -- subnational,  
national, and transnational. Elite signals of upcoming events as well  
as calibrations of the effects of events on normal political patterns  
of elite interactions and networks will also be important. The punch  
line, of course, is getting both the dynamics of the elites right and  
getting a coherent story (theory) that interprets the data clearly and  
concisely. The narrative is as important as the data. The note will  
also discuss what other companies and academic groups are doing on  
political risk.

Attached are several IPS notes. The "Memo" is being read by by seniors  
in Tampa and in Mullen's office. Would be very interested in your take  
on this. The Shudder memo detects a disruption in the normal pattern  
of elite dynamics. We isolated this before both presidential and  
parliamentary elections across the Middle East. It appears to be an  
indicator of elite attention prior to formal action or the  
mobilization of mass voting publics. We suspect that this indicator  
can be generalized to non-electoral events such as emergency meetings  
of the G20.  In NYC I passed to Chris a chart showing a comparable  
shudder w/n the global banking system, but that's still being checked- 
out. The Consensus Islam piece was written by Kitty Holland and just  
plain smart.

Will have the Aloca blurb first part of the week. Will send along the  
working draft on political risk as soon as it's in English.

Best wishes to you and Kathleen.

Thad