We’ve started the year with a series of longer, standalone articles on this website, but I want to go a different direction today and hit a few different topics that have been on my mind this week. Also, while we’re here, one programming note: I will publish normally next week but then be off for vacation on the following Friday, February 27th. For now, let’s go to Japan.
Takaichi and the Democracy Variable
About two weeks after she’d taken office in October, Japanese Prime Minister Sanae Takaichi was already driving China insane. The inciting incident came November 7th during testimony in the Diet, as Takaichi departed from longstanding Japanese ambiguity and suggested that a Chinese invasion or blockade of Taiwan could constitute a “survival-threatening situation” for Japan. Such a situation is one of several limited exceptions to a pacifist Japanese constitution that restricts the use of military force, and Takaichi’s candid response to a question from an opposition lawmaker was a strong implication that Japan would join multi-lateral military efforts to defend Taiwan.
A conniption ensued. From Bloomberg in November:
Takaichi said that if military force were to be used in a Taiwan conflict, including the use of warships, it could be considered a “survival-threatening situation” for Japan. That classification is significant because it would provide a legal justification for Japan to deploy its military to help defend friendly nations.
Her comments on Friday sparked anger from Xue Jian, the consul-general of China in the western city of Osaka, who took to X to say that Japan’s stance in considering a Taiwan contingency as threatening its own survival as a fatal path chosen by “foolish politicians.” “If you go sticking that filthy neck where it doesn’t belong, it’s gonna get sliced right off. You ready for that?” Xue wrote in a separate post.
Xue, the consul-general in Osaka, eventually deleted the comments about beheading a sitting foreign leader. His media peers continued the offensive—a CCTV Twitter account asked whether Takaichi was kicked in the head by a donkey, a China Daily commenter called the Prime Minister an “American running dog,” while Hu Xijin, the former editor of the Global Times, called Takaichi “an evil witch.”
Chinese diplomats and journalists may have been trying to make an example of Japan and Takaichi in an effort to warn other countries in the region against allying with Taiwan or the U.S.. Whatever their motivations, the volume and tone of the response was pretty unhinged. China’s Ministry of Foreign Affairs warned, “Whoever dares to challenge China’s bottom line will face a resolute, head-on blow and be shattered against the great wall of steel forged by over 1.4 billion Chinese people,” while a spokesman added, “Those who play with fire will perish by it!” The rhetoric was followed by a raft of escalatory actions, including China advising its citizens not to travel to Japan for vacations, suspending select Japanese imports, pulling Japanese performers off stage in China, and restricting the flow of rare earths to Japanese companies.
All of the above is useful context for Xi Jinping’s semi-regular attempts to cast China as a “responsible global actor,” and, of course, for Takaichi’s soaring popularity in Japan over the past few months and her party’s landslide victories in last Sunday’s elections. The Takaichi-led Liberal Democratic Party now has a super-majority within Japan’s government, and from a geopolitical perspective, that means Takaichi will have wide latitude to increase military spending and move in lockstep with the United States. China’s attempts to isolate Japan in the wake of Takaichi’s comments—meetings with governments throughout Asia and letters to the U.K., France, and United Nations—were unavailing on every front, and ultimately left China looking like the isolated party. Worse, the entire affair seemed to make clear to the Japanese public that concerns over Chinese aggression are not hypothetical, and increased military spending (a Takaichi tentpole) is probably a reasonable response.
A popular reaction to this sequence has been to revel in the blindspots exposed in Chinese strategy. I certainly understand the sentiment, and agree that China’s insecure, aggressive and ultimately clarifying behavior tends to be counterproductive. I also can’t help but admire any world leader who, to channel Holly McLane in Die Hard, can drive the CCP that crazy. Bigger picture, though, what I found most interesting about Sunday’s landslide elections was the reminder from Japan that the democratic world’s response to China will be decided in no small part by the will of democratic voters.
Consider this a coda to what I wrote two weeks ago about the globalist world leaders who seem incapable of reckoning with the world as it exists today. To the extent the modern world requires clear-eyed leaders, the same will be true of citizens. Takaichi is not part of the globalist cohort; she is closer to an unapologetic nationalist and avowed fan of Trump. Her party dominated last weekend thanks to her personal popularity, with a platform that emphasizes immigration reform and cost of living concerns, in addition to her stance on Chinese aggression. Though she’s been branded “far right” by some in the media, this interview in the New Yorker describes her political instincts as more pragmatic than her critics seem to think.
Whether Takaichi succeeds or fails as Prime Minister, the opportunity she’s been given is a reflection of the Japanese people and what they want. And for all the world’s commentary on grand strategies and leaders at Davos, including my own, all these leaders have domestic considerations and constituents that will decide their fate and that of their agenda. Moreover, domestic elections are rarely decided by foreign policy, which means that local scandals can dramatically swing international affairs. Some of this obvious, of course, but because it goes without saying, we may not mention it enough. The primacy and capriciousness of domestic politics is so fundamental and such a foregone conclusion that it’s easy to overlook what a massive variable it is to any projections of our geopolitical future.
Take Keir Starmer, one star of last month’s article, who has spent the past two weeks embroiled in a scandal related to the Epstein files and a former U.K. Ambassador to the U.S. He currently sits as “the most unpopular British prime minister since records began”. Or take Kamala Harris, whose foreign policy would have been a lot more popular than Trump in both Beijing and Davos, and who lost in 2024 because of cultural issues, inflation and Elon Musk buying Twitter. Gavin Newsom, a U.S. contender in 2028, is notably friendly with China. Meanwhile, due in part to immigration resentment and economic anxiety, Japan now has a Prime Minister who is set to increase military spending to unprecedented post-war levels and sits squarely in alignment with the U.S.
As leaders all over the world stand for election in the years to come, there will be ample opportunity for voters to prioritize pragmatic strategies, national interests, and economic security—or not. The Dutch government recently appointed a series of hawkish ministers after last fall’s Nexperia mess, but the ruling parties lack a majority to set policy unilaterally. Elsewhere, rejecting U.S. calls to action is both popular and understandable, because the Trump Administration makes it hard to be loudly pro-America. Even tacitly aligning with Trump proved politically radioactive for center-right candidates in Australia and Canada. Likewise, spending billions of dollars on re-industrialization or re-armament efforts becomes less popular if it comes at the expense of social safety nets.
What should be clear to everyone is that if we’re in the middle of Schrödinger’s Cold War, many of the world’s most decisive strategic choices will be made not only by leaders, but by the people who live in these countries and choose who represents them. Outcomes will vary by country, including the United States, where this fall’s midterms provide an opportunity for voters to check Trump’s power (which may explain why the Administration is currently very invested in the stability of its China trade truce, and, by extension, the American economy).
In the meantime, Takaichi’s ascendance is good evidence that democracy is not, in fact, dying. Not in Japan, the United States, or elsewhere. That’s both affirming and reassuring and, when you consider what’s at stake and what typically drives domestic voting decisions, a bit unsettling.
How to Fix Tanking in the NBA
Last weekend the Utah Jazz introduced their newest star, Jaren Jackson Jr., and proceeded to bench him for the entire fourth quarter as the team forfeited a double-digit lead and lost the game on purpose to maximize their odds at landing a top draft pick in May’s NBA Draft Lottery.
For days, fans across the NBA anxiously awaited to see how the Jazz’s big man lineup of Lauri Markkanen at the three, Jackson at the four and Jusuf Nurkic (next year this spot will be filled by Walker Kessler) would play together. … At one point late in the third quarter on Saturday, the Jazz led the Orlando Magic by 17 points. Jackson and Markkanen were incredibly efficient, scoring 49 points on 55.3% field goal shooting. …
The trade was a success! This team is good!
A little too good.
In the fourth quarter, “Tank Note” took over. Head coach Will Hardy — and likely Danny Ainge and Ryan Smith — had seen enough of this new look team. Hardy yanked Jackson, Markkanen and Nurkic in the fourth quarter. With Keyonte George going out earlier in the game with an ankle injury, the Jazz managed to only play one starter in the fourth quarter, rookie Ace Bailey.
The Jazz lost the game 120-117. Just how they drew it up.
That was one of at least a dozen examples of increasingly egregious tanking seen across the NBA this year. I attended a Nets-Wizards game in Brooklyn last weekend in which the Wizards sat more than half their team, and were trailing Brooklyn by 30 points with eight minutes left in the second quarter.
Displays like that are going to become even more common over the next two months. The current draft lottery system has more flattened odds than it used to and was adjusted in 2017 to dissuade the worst teams from tanking. That initiative has been an utter failure; today’s worst teams stay bad for longer, tanking year after year to land a top pick that’s now harder to secure, while the smoothed odds actually increase the expected returns to mediocre teams who decide to punt their season. This year it’s all become widespread, and after last week’s trade deadline, the NBA has at least seven teams (the Wizards, Kings, Jazz, Pacers, Nets, Mavericks, Grizzlies) with no incentive to win and lots of incentive to lose as many games as possible over the final two months.
Of the Jazz gimmicks—benching stars mid-game to ensure they lose (which they did again on Monday)—ESPN’s Bobby Marks said, “What Utah is doing right now is messing around with the integrity of the NBA.” He’s clearly right, of course. Instead of players throwing games, we saw a coach try to do it (the Jazz actually won Monday’s game; they’ve since shut Jackson Jr. down for the season). And to be clear, this isn’t an indictment of Hardy or his team; given the incentives of the current system, they’re making the right choice!
I may write more about the general malaise around the NBA in the next few weeks, but in the meantime, I’ll just note that while tanking has always been a problem, it will be an even bigger PR problem for the league in an environment where half the league’s superstars are injured, the season is so long that even teams themselves look “borderline disinterested”, and no one feels good about the state of the product. Throw in a quarter of the league sitting healthy players and openly punting 3-4 games a week, and it makes the whole league look like a tremendous waste of time.
So, here’s what the NBA could do to avoid this problem in the future.
- Teams in seventh place or lower, in both conferences, are all entered into the NBA lottery in May.
- Each of the 18 lottery teams has the same odds.
- The lottery determines the top five picks.
- Picks 6-18 are then determined by record, with the worst teams getting the highest picks.
That’s it!
That system pulls in playoff teams, broadening the pool of lottery entrants and further randomizing the outcome, while also limiting the incentive for, say, an eighth place team to tank out of the playoffs for a chance at a top five pick. Every lottery team gets a 6.25% chance at number one, and losing games in the meantime does not move the needle one way or the other. This would allow the Jazz to play their veterans in the fourth quarter, and the Wizards to play their young guys in Brooklyn. The worst teams in the NBA can still count on picking 6-10, potentially rebuilding with top ten picks across successive seasons. And yes, flattening the lottery odds would remove a surefire path to franchise-altering superstars—tanking entire seasons in exchange for draft position—but the NBA’s reformed odds have already sort of done that (while failing to curb tanking).
Mind you, unlike my admittedly wild prescriptions for the NBA Cup, what’s offered here is not a groundbreaking solution. We’re not abolishing the draft, introducing a wheel, etc. This is an obvious, common sense fix that would be better for the NBA’s business and has been sitting there for about 15 years.
If Adam Silver watches this season unfold and fails to galvanize owners to take any meaningful action in this direction, it will be yet another indictment of a commissioner who’s lost control of the league in a dozen other areas, as well. Alas, I’ll be surprised if that’s not exactly what happens.
In Defense of Regulation
From the New York Times Editorial Board:
This editorial board has long supported marijuana legalization. In 2014, we published a six-part series that compared the federal marijuana ban to alcohol prohibition and argued for repeal. Much of what we wrote then holds up — but not all of it does.
At the time, supporters of legalization predicted that it would bring few downsides. In our editorials, we described marijuana addiction and dependence as “relatively minor problems.” Many advocates went further and claimed that marijuana was a harmless drug that might even bring net health benefits. They also said that legalization might not lead to greater use.
It is now clear that many of these predictions were wrong. Legalization has led to much more use. Surveys suggest that about 18 million people in the United States have used marijuana almost daily (or about five times a week) in recent years. That was up from around six million in 2012 and less than one million in 1992. More Americans now use marijuana daily than alcohol.
As a millennial who spent most my teens and twenties convinced that America needed legalized marijuana, the sentiments in that editorial resonate. The Times soft pedals the implications of its second-guessing, but the takeaway seems clear. The execution of legalization was mishandled, and while there are millions of people who can use marijuana recreationally without any consequences, the net impact of all this has been (and will continue to be) negative. Legalized gambling, particularly on apps, strikes me as a similar story.
The Times, for its part, argues that in the future marijuana should be regulated like alcohol and tobacco, mimicking “relatively high taxes, open-container laws and regulations on alcohol and nicotine levels,” and “balanc[ing] personal freedom and public health.” Reasonable, unobjectionable goals, but it’s not clear to me that those sorts of measures would be enough to curb some of the negative impacts the rest of the editorial describes.
Leaving aside the policy specifics of the debate itself, the discussion reminded me of a distinction that’s occurred to me a number of times over the course of hosting Sharp Tech and debating policy prescriptions for the tech world and beyond. “Government regulation” is a catch-all term that describes everything from building codes to antitrust enforcement to nuclear power plants to cigarette advertising. It’s also become a pejorative term, in the course of incoherent AI executive orders or Abundance-adjacent discussions about American rejuvenation, as politicians on both sides lament regulation that slows down businesses, grid expansions or rebuilding a home in Pacific Palisades. The risk, though, is that we consciously or subconsciously conflate all government interventions into private affairs as a sort of saftey-ist intrusion into the freedoms that have typically spurred American dynamism.
The early returns from legalized marijuana and gambling are good evidence that moral regulation, for one, was probably more useful in American life than critics like me acknowledged. Fewer people want to make that argument, because an entire generation of politically conscious people came to associate the concept of moral regulation with people like Jerry Falwell, Newt Gingrich or Tipper Gore. Unfortunately, running the other direction may not be much better. Compare the talking points from Adam Silver’s 2014 op-ed arguing for legalized gambling to this account from Bloomberg last month:
The average DraftKings customer, Funt says, loses about $100 a month on the site. (That’s roughly what the company reports for average monthly revenue per user.) … Then there are the more diffuse and far-reaching costs. A trio of researchers from UCLA and the University of Southern California documented declines in across-the-board financial well-being in states following the legalization of sports gambling. Calls to helplines, online searches for help with gambling, and other markers of problem gambling are rising, too. …
Calls to gamble are now woven seamlessly into sports broadcasts via ads, team and arena sponsorships and commentators’ steady discussion of odds, spreads and probabilities. It’s unavoidable and, for many casual fans, including parents, that’s a problem. More than 50% of sports fans now believe that ads for sports betting should be banned during games and say that gambling has hurt the integrity of the games, according to a recent Ipsos poll.
Athletes also report new levels of online harassment and temptation. In an anonymous poll of professional basketball players, nearly half said the NBA’s gambling partnerships were bad for the league, describing an onslaught of threats and entreaties from gamblers.
Here again, I’ll leave the specific debate over gambling to another article, and note only that the story is more complicated than Silver made it seem in 2014. Legalized gambling (and a complete absence of friction thanks to apps) is not a problem for many people, but is it good or bad for the majority?
Looking ahead, the concept of the moral regulation, or social health regulation, should not be taboo. Whether it’s smart phones in schools, the incentive structure of social media platforms, OnlyFans and porn, or regulating and/or repealing legalized weed and gambling, there is no shortage of billion dollar businesses built on brain-altering, addictive products that may be a net negative for American society. The government actively grappling with these problems would be healthy and good; while everyone seems to agree that over-regulation has creeping, compounding negative consequences in a variety of areas, the next decade or two may remind us that a failure to regulate can be equally insidious.
To me, it’s becoming pretty clear that a defining challenge of the next generation in the U.S. will be to reject certain types of regulation while embracing others, and finding politicians who can reliably distinguish between the categories at issue. Good luck, you might say. And sure, it looks like one party has a tendency to regulate everything, everywhere, while the other has Donald Trump Jr. on the board of both Polymarket and Kalshi. Nevertheless, if a skeptic says it’s impossible for America to embrace regulation for personal behavior but exercise restraint with respect to industry, a historian might add that we did that for the first 75 years of the 20th Century.
The goal, in the broadest possible strokes, should be cutting away the web of bureaucratic and environmental red tape that has slowed everyone down (and driven a lot of industry offshore), while rediscovering the mettle to pass and enforce regulations that prioritize public welfare and productivity.
Anyone who cares about optimizing for national health had better invest in both sides of that spectrum.
Sharp Text is extension of the Stratechery Plus podcasts Sharp Tech, Greatest of All Talk, and Sharp China. We’ll publish once a week, on Fridays. To subscribe and receive weekly posts via email, click here.