Economics
Does the American army’s future lie in Europe or Asia?
Published
1 year agoon

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THE YEAR 1973 was pivotal for America’s army. The force was battered and broken from Vietnam. In January the defence secretary announced the end of conscription; two months later the last combat troops left Vietnam. But the Arab-Israeli war which broke out on Yom Kippur in October planted the seeds of renewal. The lessons of that war, absorbed by American officers sent to Israel, helped reshape America’s army into the modern and professional force which would vanquish Iraq in 1991.
Today’s generals, who came of age during that transformation, are keenly aware of the resonance. “There’s a loose analogy between the early 1970s and the army of Desert Storm,” says General James Rainey, who leads the army’s Future Command, “and the army which invaded Iraq in the early 2000s and where we need to be in 2040.” Two decades of war in Afghanistan and Iraq wore out troops, equipment and ideas. A recruitment shortage remains unresolved. Now the rise of China and the lessons from the war in Ukraine have prompted introspection, renewal and reform.
Among army civilian and military leaders there are three big unsettled questions, according to people familiar with those debates. One is whether profound shifts in the character of war, some evident in Ukraine, might render ground forces less important, if not irrelevant.
A second is how to balance resources between Asia and Europe (Asia being the Pentagon’s priority, and Europe where Russia is rearming fast). The army can prepare for conflicts in both places, but it cannot actually wage those wars at the same time—and it is no longer asked to do so. The 2018 National Defence Strategy ended the “two war” standard, a change accepted by the Biden administration.
That leads to a third question, and the most existential for the army. What, beyond the provision of logistics and air defence, would be the role of a ground force in a future war in the Pacific?
When General Randy George, the army’s chief of staff, was recently asked for book recommendations, he cited “The Arms of the Future” by Jack Watling, a young British analyst. The book describes how in recent rounds of Warfighter, a big annual exercise led by America, combat brigades facing increasingly good sensors and longer-range and deadlier munitions took huge losses, emerging with 20% combat effectiveness. Artillery devastates infantry and armour well before they can get within sight of the enemy.
The war in Ukraine has reinforced those findings. Some argue that America’s army, better trained and armed than Ukraine’s, and with air cover, would fare better. General Rainey assumes the worst. “We’re going to fight under constant observation,” he says, “and in constant contact of some form. There is no break. There is no sanctuary.” He says American “lessons learned” teams were in place three days before the invasion to collect observations. They will have had some nasty surprises. American-made GPS-guided shells and rockets at first worked well; more recently, they have struggled against Russian jamming.
The army recognises that whereas it could once patiently muster its forces before launching a large offensive—as it did against Iraq in 1991 and 2003—it now has to prioritise dispersal, mobility and concealment. The drone attack which killed three soldiers in Jordan on January 28th was the first successful attack on American troops by aircraft since the Korean war. Katie Crombe, an army officer, and John Nagl, of the US Army War College in Pennsylvania, note in a recent paper that Ukraine’s battalion command posts comprise seven soldiers who dig into the ground and move twice daily. “That standard”, they warn, pointing to stubborn habits of more static command posts, “will be hard for the US Army to achieve.”
The commanders of battalions (about 1,000 soldiers) and brigades (a few thousand), the core units of combat in Afghanistan and Iraq, would be consumed by this intense fighting in a way they were not during counterinsurgency missions. The army is thus reorganising so that more of the burden of planning, logistics, command and control, and long-range firepower falls on divisions—larger formations typically led by two-star generals which stand farther back from the front lines and have more time and space to orchestrate the frenetic battles of the future.
What remains unsettled, says Billy Fabian, a former infantry officer and Pentagon planner, is how, precisely, the army’s combat forces should be organised for future wars: the balance between firepower on the one hand, dominant in Ukraine, and so-called manoeuvre elements, such as infantry and armour, on the other. “Fighting land wars is the army’s raison d’être,” he says, “and Ukraine raises tough questions that challenge deeply ingrained elements core to the army’s self-conception.”
Army dreamers
Hanging over these reforms is the larger question of where the army will be asked to fight. National defence strategies published by the Trump and Biden administrations instruct the Pentagon to focus on China. Yet the army increased its footprint in Europe after Russia’s first invasion of Ukraine in 2014. It has since reinforced the continent with a corps and division headquarters, an infantry and armour brigade, a rocket artillery battalion and numerous other support forces. In contrast, relatively few new forces have flowed into Asia.
For years the army’s principal role in the Pacific was to guard bases, provide air defence and handle logistics. To the extent it was a “manoeuvre” force, in military parlance, it was focused on North Korea. Other services have looked down their noses at it. “The navy has a stranglehold on the leadership of Indo-Pacific Command,” says Stacie Pettyjohn of the Centre for a New American Security, a think-tank in Washington. “They see the army only in a supporting role in a maritime theatre.”

General Charles Flynn, the commander of the US Army Pacific, vigorously rebuts such ideas. “Humans have this unique tendency to live on land,” he says. “At the end of the day, decisions are going to be made by the pointy end of a gun.” The primacy of land is as true in Asia as it is in Europe, he argues, not least because the region’s largest countries, like India and Indonesia, have military forces dominated by armies. By building ties to them in peacetime, the army can position itself to project military power westward.
The growing pace of exercises (more than 40 take place annually) is a core part of that. General Flynn points to the examples of Talisman Sabre in Australia and Garuda Shield in Indonesia. Both were once relatively modest army-to-army exercises. They have grown and now involve the navy and air force. Both also involved the army’s Joint Pacific Multinational Readiness Centre, in essence physical and virtual training equipment that can be deployed around the region to do things which could only have been done at a large base in Louisiana. Such drills are morphing into a near-permanent presence: the army is deployed in the region for eight months of the year.
Alongside that is a reimagining of how the army would fight. The premise is that China has optimised its forces to attack American satellites, ships and air bases. “What it’s not designed against”, says General Bernard Harrington, “is to find, fix and finish land formations that are distributed, mobile and networked.” That has prompted the creation of three experimental “multi-domain task forces”, or MDTFs, the first of which is focused on Asia and commanded by General Harrington.
Each MDTF has four battalions which can deploy small units along the first island chain which runs from Japan to the Philippines. The idea is that these can fight not just on land—soldier v soldier, tank v tank—but across domains. Imagine that America needs to target a Chinese ship. The MDTF’s “effects” battalion might jam the vessel’s radar and hack its networks; if that does not neutralise the ship, it makes it more likely that anti-ship missiles launched by a “fires” battalion will get through. The force’s long-range hypersonic missiles, which arrived last year, have a range of nearly 3,000km—enough to reach from Japan to Taiwan, or from the Philippines to the South China Sea.
Initial experiments with the MDTFs have shown promise, though some are sceptical that this high-tech vision of war would survive contact with reality. Two MDTFs are currently devoted to Asia, with a third for Europe. The original plan envisioned a total of five, with an additional one in the Arctic and one for global tasks.
All this would seem to offer a definitive answer to the army’s identity crisis: Asia first. Inside the Department of the Army, nestled within the Pentagon, there are doubts, though. One question is whether its own plans mesh with those of the armed services as a whole. “The army still feels marginalised in the Pacific,” says Ms Pettyjohn. Another is whether the army itself has pivoted ruthlessly enough. Its fleet of water craft has shrunk dramatically in recent years, for instance. “Water craft are an absolute indicator of true commitment to the Pacific,” says J.P. Clark, another Army War College professor. “They are quite expensive, only really useful for that theatre, and absolutely essential.”
Hard choices ahead
The MDTFs themselves remain “niche” formations, argues Mr Fabian. The largest allocated to the region is the 25th Infantry Division in Hawaii, he points out, a light-infantry division. “It seems like the army is trying to have it both ways,” he says. “Talk about fires and air defence for the Pacific, but stay a combined-arms force organised for close combat like it’s always been.” The army hedges its bets, says an insider, because it rarely wages the war it expects.
Trade-offs abound. Short-range artillery is vital for Europe; less so in Asia. “I just don’t know what you’d fire a 155-round at out in the Pacific other than the water,” quipped a top Pentagon official recently. The army will have to make firm choices in the next year or two, say officials. In part that is because it is creating more units than it can reliably man. The army expected to finish last year short of 10,000 recruits, a 15% shortfall and the second consecutive year of under-enlistment. Much of that is the result of America’s tight labour market, but it also reflects waning enthusiasm for military service, and for combat arms in particular.
The fall in the size of the “individual ready reserve”—reservists not allocated to a unit—from 450,000 in 1994 to 76,000 in 2018 worsens the problem. Ukraine shows how intense wars tend to chew up regular armies, requiring an infusion of citizens with military experience. Today’s shortage of combat soldiers is tomorrow’s shortage of reservists. Ms Crombe and Mr Nagl are among those who have floated the notion of “partial conscription”, an idea backed by just 20% of Americans. Now, as in the pivotal moments of the mid-1970s, the army finds itself wrestling with profound questions over its size, shape and purpose: questions that will eventually touch, as they did back then, its relationship to American society. ■
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Americans are getting flashbacks to 2008 as tariffs stoke recession fears
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April 26, 2025
Homemade barbecue pork chops. Katy Perry performs onstage during the Katy Perry The Lifetimes Tour 2025. A woman checks her receipt while exiting a store.
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A few weeks ago, as Kiki Rough felt increasingly concerned about the state of the economy, she began thinking about previous periods of financial hardship.
Rough thought about the skills she learned about making groceries stretch during the tough times that accompanied past economic downturns. Facing similar feelings of uncertainty about the country’s financial future, she began making video guides to recipes from cookbooks published during previous recessions, depressions and wartimes.
The 28-year-old told followers that she is not a professional chef, but instead earned her stripes by learning to cook while on food stamps. From Rough’s yellow-and-black kitchen in the Chicago suburbs, she teaches viewers how to make cheap meals and at-home replacements for items like breakfast strudel or donuts. She often reminds people to replace ingredients with alternatives they already have in the pantry.
“I keep seeing this joke over and over in the comments: The old poors teaching the new poors,” Rough told CNBC. “We just need to share knowledge right now because everyone is scared, and learning is going to give people the security to navigate these situations.”
The self-employed consultant’s videos quickly found an audience on TikTok and Instagram. Between both platforms, she’s gained 350,000 followers and garnered about 21 million views on videos over the last month, by her count.
President Donald Trump’s announcement of broad and steep tariffs earlier in April has ratcheted up fears of the U.S. economy tipping into a recession in recent weeks. As Americans like Rough grow increasingly worried about the road ahead, they are harking back to the tips and tricks they employed to scrape by during dark financial chapters like the global financial crisis that exploded in 2008.
Google is predicting a spike in search volumes this month for terms related to the recession that came to define the late 2000s. Searches for the “Global Financial Crisis” are expected to hit levels not seen since 2010, while inquiries for the “Great Recession” are slated to be at their highest rate since the onset of the Covid pandemic.
Porkchops, house parties and jungle juice
On TikTok, a gaggle of Millennials and Gen Xers has stepped into the roles of older siblings, offering flashbacks and advice to younger people on how to pinch pennies. Some Gen Zers have put out calls to elders for insights on what a recession may feel like at this stage of life, having been too young to feel the full effects of the financial crisis.
“This is, potentially, at least on a large scale, the first time that millennials have been able to be the ‘experts’ on something,” said Scott Sills, a 33-year-old marketer in Louisiana. “We’re the experts on getting the rug pulled out from under us.”
Those doling out the advice are taking a trip down memory lane the to tail-end of the aughts. Cheap getaways to Florida were the norm instead of lush trips abroad. They had folders for receipts in case big-ticket purchases went on sale later. Business casual outfits were commonplace at social events because they couldn’t afford multiple styles of clothing.
Porkchops were a staple dinner given their relative affordability, leading one creator to declare that they “taste like” the Great Recession. They drank “jungle juice” at house parties, a concoction of various cheap liquors and mixers, instead of cocktails at bars.
“There’s things that I didn’t realize were ‘recession indicators’ the first time around that I thought were just the trends,” said M.A. Lakewood, a writer and professional fundraiser in upstate New York. “Now, you can see it coming from 10 miles away.”
Customers shop for produce at an H-E-B grocery store on Feb. 12, 2025 in Austin, Texas.
Brandon Bell | Getty Images
To be sure, some of the discourse has centered around how inflationary pressures have made a handful of these hacks defunct. Some content creators pointed out that the federal minimum wage has sat at $7.25 per hour since 2009 despite the cost of living skyrocketing.
Kimberly Casamento recently began a TikTok series walking viewers through recipes from a cookbook that was focused on affordable meals published in 2009. The New Jersey-based digital media manager said she’s found costs for what were then considered low-budget meals ballooning between about 100% and 150%. In addition to sharing the price changes, the 33-year-old gives viewers some tips on how to keep costs down.
“Every aspect of life is so expensive that it’s hard for anybody to survive,” Casamento said. “If you can cut the cost of your meal by $5, then that’s a win.”
‘A very human thing’
This type of communal knowledge-sharing is common during times of economic belt tightening, according to Megan Way, an associate professor at Babson College who studies family and intergenerational economics. While conversations about how to slash costs or to make meals stretch typically took place among neighbors in the late 2000s, Way said it makes sense that they would now play out in the digital square with the rise of social media.
“It’s a very human thing to reach out to others when things are feeling uncertain and try to gain on their experience,” Way said. “It can really make a difference for feeling like you’re moving forward a little prepared. One of the worst things for an economy is absolute fear.”
Read more CNBC analysis on culture and the economy
Way said that Americans are quick to look back to the Great Recession for a guide because that downturn was so shocking and widely felt. However, she said there’s key differences between that economic situation and what the U.S. is facing today, such as the absence of bad debt that sparked the housing market’s crash.
Still, she said there’s broad uncertainty felt today on several fronts — be it tied to the economy, geopolitics or domestic policy priorities like slashing the federal workforce or limiting immigration. That can reignite the feeling of unpredictability about what the future will bring that was paramount during the Great Recession, Way said.
In 2025, it’s clear that economic confidence among the average American is rapidly souring. The University of Michigan’s index of consumer sentiment recorded one of its worst readings in more than seven decades this month.
With that negative economic outlook comes rising stress. When Lukas Battle made a satirical TikTok about feeling like divorces were increasingly common around the time of the Great Recession, the 27-year-old’s comments were abuzz with people talking about their parents splitting recently. (Though divorce has been seen as a cultural hallmark of the financial crisis, data shows the rate actually declined during this period.)
“There’s a second round of divorces happening as we speak,” Battle said.
Cultural parallels
That’s one of several parallels social media users have drawn between the late aughts and today. When videos surfaced of a group dancing to Doechii’s hit song “Anxiety,” several commenters on X reported feeling déjà vu to when flashmob performances were common.
Disney‘s reboot of the animated show “Phineas and Ferb,” which originally premiered in the late 2000s, similarly put the era top of mind.
Lady Gaga performing at Coachella 2017
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“Recession pop,” a phrase mainly referring to the subgenre of trendy music that dropped during the Global Financial Crisis, has caught a second wave over the past year as Americans contended with inflation and high interest rates.
Now, in 2025, as the chorus of voices projecting a recession ahead grows, pop music has some familiar sounds.
In 2008, artists such as Miley Cyrus, Lady Gaga and Katy Perry regularly appeared on the music charts. Both Cyrus and Gaga have released new songs this year. Perry kicked off a world tour this week.
“It’s almost a permission to feel good, whether that’s through song or something,” said Sills, the marketer in Louisiana. “It’s not necessarily ignoring the problems that are here, but just maybe finding some sort of joy or fun in the midst of all of it.”
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ECB members say inflation job nearly done but tariff risks loom
Published
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April 25, 2025
Guests and attendeess mingle and walk through the atrium during the IMF/World Bank Group Spring Meetings at the IMF headquarters in Washington, DC, on April 24, 2025.
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After years dominated by the pandemic, supply chains, energy and inflation, there was a new topic topping the agenda at the World Bank and International Monetary Fund’s Spring Meetings this year: tariffs.
The IMF set the tone by kicking off the week with the release of its latest economic forecasts, which cut growth outlooks for the U.S., U.K. and many Asian countries. While economists, central bankers and politicians have been engaged in panels and behind-the-scenes talks, many are attempting to work out whether trade tensions between China and the U.S. are — or perhaps are not — cooling.
Policymakers from the European Central Bank that CNBC spoke to this week broadly stuck a dovish-leaning tone, indicating they saw interest rates continuing to fall and few upside risks to euro zone inflation. However, all stressed the current high levels of uncertainty, the need to keep monitoring data, and the high risks to the growth outlook — sentiments also echoed by Bank of England Governor Andrew Bailey in his interview with CNBC on Thursday.
These were some of the main messages from ECB members this week.
Christine Lagarde, European Central Bank president
On inflation and monetary policy:
“We’re heading towards our [inflation] target in the course of 2025, so that disinflationary process is so much on track that we are nearing completion. But we have the shocks, you know, and the shocks will be a dampen on GDP. It’s a negative shock to demand.”
“The net impact on inflation will depend on what countermeasures are eventually taken by Europe. Then we have to take into account the [German] fiscal push by the defense investments, by the infrastructure fund.”
“We have seen successive movements, you know, announcement [of U.S. tariffs], and then a pause, and then some exemptions. So we have to be very attentive… Either we cut, either we pause, but we will be data dependent to the extreme.”

On market moves:
“When we had done our projections, we anticipated that… the dollar would appreciate, the euro would depreciate. It’s not what we saw. And there have been some counter-intuitive movements in various categories.”
“The German market has obviously been shocked in a positive way by the program soon to be put in place by the German government, with a commitment to defense, with a commitment to a big fund for infrastructure development.”
Klaas Knot, The Netherlands Bank president
On tariff uncertainty:
“If I look back over the last 14 years, in the initial days of the pandemic I think that was comparable uncertainty to what we have now.”
“In the short run, it’s crystal clear that the uncertainty that is created by the unpredictability of the tariff actions by the U.S. government works as a strong negative factor for growth. Basically, uncertainty is like a tax without revenue.”
On the inflation impact:
“In the short run, we will have lower growth. We will probably also have lower inflation. As we also see, the euro is appreciating as energy prices have also come down. So together with the sort of negative factor uncertainty in the short run, it’s crystal clear that it will accelerate the disinflation.”

“But in the medium term, the inflation outlook is not all that clear. I think there are still these negative factors. But in the medium term, you might get retaliation. You might get the disruption of global value chains, which might also be inflationary in other parts of the world than the U.S. only. And then, of course, we have the fiscal policy coming in in Europe. So this is actually a time in which you need projections.”
On a June rate cut and market pricing for two more ECB rate cuts in 2025:
“I’m fully open minded. I think it’s way too early to already take a position on June, whether it would be another cut. It will fully depend on these projections.”
“I would need to see a more structured analysis of the impact on the inflation profile ahead of us, and only then can I say whether the market is pricing fair or whether I don’t.”
Robert Holzmann, Austrian National Bank governor
On the need to wait for more data and news on tariffs:
“We have not seen this uncertainty now for years… unless the uncertainty subsides, by the right decisions, we will have to hold back a number of our decisions, and hence, we don’t know yet in what direction monetary policy should be best moved.”
“Before looking at data in detail, the question is, what kind of political decisions will be taken? Is it that we will have some tariff increases? Is it that we will have strong tariff increases? Is it that we will have retribution by high counter tariffs?”

On the ECB’s April rate cut:
“I think there’s a broad consensus [on rates]. But of course, at the margin, people differ.”
“My assessment is that at this time, it wasn’t clear yet to what extent [tariff] countermeasures were being taken. Because with countermeasures in Europe, prices may have increased. Without countermeasures, quite likely the price pressure is downward. And for the time being, we don’t know yet the direction.”
On the direction of interest rates:
“I think if the recent noises about an arrangement [on trade] were to be true, in this case, quite likely it is more towards the downside than the upside with regard to prices. But this can be changed with different decisions and the result of which, we may even imagine in [the] other direction. For the time being, no, it will be down.”
“There may be further cuts this year, but the number is still outstanding.”
Mārtiņš Kazāks, Bank of Latvia governor
On opportunity from tariffs:
“With all this uncertainty and vulnerability, this is also the time of opportunities for Europe.”
“It’s a time for Europe to grasp all the aspects of being an economic superpower and becoming a really fully-fledged political and geopolitical superpower, and this requires doing all the decisions that in the past, were not carried out fully.”
“This requires political will, political guts to make those decisions, and to strengthen the European economy and assert its place in a global world.”

On market reaction to tariffs:
“So far it seems to be relatively orderly … but if one looks at the spillovers to Europe, the financial markets are working more or less fine, we haven’t seen spreads exploding or anything like that.”
“But in terms, however, of the macro scenarios, this uncertainty is extremely elevated in the sense that, given the possible outcomes, the multiple scenarios and their probabilities are very similar with the baseline [tariff] scenario.”

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