The West and China: A Rabbit That Has Been Hypnotized by a Snake

Twain famously observed how history doesn’t repeat, but that it tends to rhyme.  America and the West learned a hard lesson during the Cold War when the preeminent communist power of the day attempted to sedate the free world into a geopolitical slumber using an ingenious approach.

Today, we are making an uncannily similar mistake, this time with the modern-day communist power of China. If we don’t heed the historical rhyming and lessons that come with it, troubled times are certain.

The 1950s and the Geopolitical Sedative of ‘Peaceful Coexistence’

In early 1956 Soviet ruler Nikita Khrushchev delivered a secret speech to the Twentieth Party Congress.  In it he unveiled the new official state policy of ‘peaceful coexistence,’ which the Soviet Union would apply when dealing with its rival, the West.

Peaceful coexistence was packaged to be appealing to western Europe and the United States.  The concept advertised a future where communist nations in the Soviet sphere could live alongside western democracies, without fear of constant strife and with an eye toward reducing tensions.

Of course, the Soviet Union’s and Khrushchev’s true intentions with the application of peaceful coexistence were quite different than what was promoted to the West.  Behind the rhetoric of détente sat the long-term twin objectives of lulling the West into a false sense of security and of laying the groundwork to decisively vanquish democracy.  Peaceful coexistence was in many ways a marketing campaign to produce the opposite result of its name.

The Soviet propaganda machine got fully behind the promotion of peaceful coexistence.

Countless influential individuals in the West, including the powerful in European and American governments, took the bait hook, line, and sinker.   Peaceful coexistence was quickly embraced by the elite and expert classes.

The few who early on saw peaceful coexistence as a sham were initially labeled as narrow-minded and backward thinking.  Until the Soviets brutally invaded Hungary later in 1956.  Russian tanks in the streets of Budapest immediately clarified that peaceful coexistence was nothing but a ruse to buy time, gain advantage, and outmaneuver the West.

Peaceful Coexistence Redux: Modern China and the West

China has been promoting its own brand of peaceful coexistence for decades.  It is masterfully good at it; China today is much more persuasive, effective, and patient than the Soviets ever were in the 1950s.

China’s version of peaceful coexistence has successfully permeated just about every institutional pillar of modern western society.

Academia, having a seemingly incurable ideological soft spot for communism and its cousin socialism, needed little coaxing to jump on the peaceful coexistence bandwagon.  Colleges have been eagerly pocketing Chinese money to fund a broad spectrum of research and programs.  Universities compete to take on as many full-tuition-paying Chinese nationals as possible in undergraduate, graduate, and postdoctoral slots.  Individual professors, departments, and universities across higher education are hopelessly conflicted and financially indentured to China.

The capital markets have behaved badly under the influence of peaceful coexistence.  The largest investment houses, banks, and private equity firms assessed the growth prospects of China, and happily poured trillions of dollars into the communist economy.  Much of that economy is designed to pilfer technology from the West, further militarize the communist nation to better prepare for conflict with the West, and to build strategic industries that aim to destroy competition in the West. Ironically, the biggest capitalists in the free world have willingly funded a regime that exists to destroy capitalism.

Big business, specifically global corporations, saw over a billion potential new Chinese customers for products. They quickly became transfixed with peaceful coexistence, to where companies began acting illogically.

Major US airlines refuse to acknowledge the nation of Taiwan on their global maps resting in the seat pockets of their planes, for fear of upsetting China.

Tech firms grant Chinese state security access to user personal data that they would never dream of providing to US authorities.

Peaceful coexistence coupled with over a billion potential viewers have hypnotized western media and entertainment.  The Chinese Communist Party acts as director, editor, and producer of most major Hollywood films these days.  And marquee athletes and professional sports franchises are much more comfortable deriding their home nations and ticket-buying customers than they are speaking truth to the power that is China.

The western environmental movement fully embraced peaceful coexistence and commits the most egregious acts of aiding and abetting China.  Much of this knowing collusion falls under the flaw and folly of ‘tackling climate change.’

Environmentalism used anti-science ideology and nonsensical concepts of zero-carbon and renewable energy to drive policy mandates, subsidies, and protections for products with supply chains controlled by China.

Environmentalism is proving to be a geopolitical trump card for China:  eradicating American energy independence brought on by the shale revolution and replacing it with a certain energy dependence on China.

Politicians, not always the sturdiest of moral fortitude and discipline, were often easy marks for China’s brand of peaceful coexistence.  Outwitted and outmaneuvered presidents, popes, and climate czars engage China with visions of world peace/détente, new members of the religious flock, and climate accords.  These western leaders bring back nothing of substantive value from the negotiating table, yet they readily cede value on the most vital of issues.

The biggest error politicians and state bureaucrats make when dealing with China is assuming discrete issues can be segregated from China’s grand strategy residing under its umbrella of peaceful coexistence.  Our self-anointed climate czar pretends we can put fundamental differences aside in a winner-take-all competition, so that we can agree on setting targets for future atmospheric concentrations of carbon dioxide.  China sees that miscalculation and happily utilizes it to secure more advantage and advance its strategic objectives.  That gives Code Red a new meaning.

A Wake Up Call from Sun Tzu

Communism remains the gravest threat to individual rights and human quality of life.  It desires to destroy the free world, bring what is left into its orbit, and grow its power.  The approach attempting to achieve these aims is insidious and steadfast.  It follows the ancient strategic teachings of Sun Tzu and the principles of Choho No Jutsu.

There is no art higher than that of destroying the enemy’s resistance without a fight on the battlefield.

Subvert anything of value in the enemy’s country.  Implicate the emissaries of the major powers in criminal undertakings; undermine their position and destroy their reputation in other ways as well, and expose them to the public ridicule of their fellow citizens. 

Do not shun the aid of even the lowest and most despicable people. Disrupt the work of their government with every means you can.

Spread disunity and dispute among the citizens of the enemy’s country.  Turn the young against the old.  Use every means to destroy their arms, their supplies, and the discipline of the enemy’s forces. 

Debase the old traditions and accepted gods.  Be generous with promises and rewards to purchase intelligence and accomplices.  Send out your secret agents in all directions. Do not skimp with money or with promises, for they yield a high return.

Act with Moral Superiority to draw the trust of the enemy’s people, in this way you gain the enemy’s own people as an ally against him.

Does reading that send a chill down your spine?

Global leaders of the communist ideology do not intend compromise, reform, or peaceful coexistence.  That was the reality during the Cold War with the Soviets, and it remains the reality today with China.

China understands that the elite in the free world desperately want to believe communism desires compromise and reform.  That desperate want is our biggest weakness.

The phrase ‘a rabbit that has been hypnotized by a snake’ is taken from the memoirs of German World War II and Cold War legendary spy chief Reinhard Gehlen, The Service.

America Needs a Third Party

I’m a big believer in America; where it came from, what it stands for, and its future potential. The United States is far from perfect, in both its history and its present. Yet it still represents the best social, political, and economic system to respect and nurture the individual.

But most sense something is very wrong with where the nation is heading. Look around at our national political leaders from both parties of late, is the best we can do? America needs a course correction.

Drastic change is not needed. The nation should not radically tear itself down and then rebuild itself into something perceived to be better abstractly but likely will be much worse. Keep the Electoral College, don’t stack the Supreme Court, defend the Bill of Rights, and preserve the free market.

But our political system is in dire need of new blood. Two parties have enjoyed a stranglehold on governance for too long. Where they were once different shades of similar ideals, today the two parties have split orbits to where they represent extremes that cater to the minority fringes and leave little for the large middle.

The Primary Problem

Primaries are mostly to blame for the current polarization of the two-party power cartel. A moderate Democrat has no chance when running against a proud leftist in a primary. A traditional Republican today may be dead-on-arrival when going up against a hard-right opponent.

Although moderates typically represent the strongest candidates to win the general election, today’s leadership in the Democrat and Republican parties, coupled with the primary election process, tends to kill off moderates before the general election.

The opposing party funds this dynamic, making it worse. How many times in the past decade have we seen one party funding commercials for the other party’s most extreme candidate in the primary election? The hope, of course, is that the extremist wins the primary, which will make it easier for the opposing party’s extremist to win the general. Experience has shown the logic works.

The dynamic also creates a talent drain in candidates. Many moderates with distinguished careers in politics have decided to step down rather than face a primary drubbing. Too many high-potential candidates never start political careers because of the radicalization of the primary party process.

People used to say to run for office you have to be nuts. Today, to successfully run for office you must be nuts, and extreme in ideology.

The General Conundrum

When candidates representing the extremes of each party prevail in the primaries, the choices in the general election leave much to be desired for moderate voters. If a moderate wants their vote to count and voice heard, they must choose the lesser of two perceived evils.

That gives an advantage to the leftist Democrat candidate in the general election. The leftist promises the world to voters and lavishes special interests with handouts, from universal income to college loan forgiveness. It’s hard to run against candidates who act as a political Santa Claus, where every day is Christmas, and the credit card bill never comes due.

To vanquish such an opponent, one needs sound ideas and a sensible platform that appeal to run-of-the-mill Americans. That hasn’t exactly been the descriptor of many Republican candidates these days, who obsess on their own form of cultural control, just from a different direction than their leftist opponents.

Between primary and general elections, moderate voters are bombarded with shrill messages from each extreme side. Messages get amplified beyond the campaigns, because each end of the spectrum enjoys its own major media outlets who are more than happy to stoke the partisan flames.

The moderate voter sees two options as election day approaches: someone whose extreme leftist views disturb but who offers the voter free stuff, and someone else whose extreme hard-right views frighten and who offers no free stuff. The exhausted moderate often ends up voting for the former, or perhaps simply staying at home and not voting at all.

The Remedy

The fix to our current political conundrum is surprisingly simple. What we need today is a third national political party. One where the Constitution is respected, individual rights reign supreme, government is minimal but covers its necessary responsibilities, the free market is unshackled, and fiscal discipline is exercised.

That description fits neither the Democrat nor Republican platforms of today. And these two parties have enjoyed a stranglehold on the presidency since 1852. Perhaps it is time to shake things up and fill the great middle void space that many Americans associate with.

Choice is good. Three options at the ballot box are better than only two. Particularly when the current two have radically evolved to the extremes.
The best fit for a third choice is libertarian. There are two classic strains of libertarianism.

The first is the purer and more extreme, the Ayn Rand view. Where all government intervention is a form of coercion, coercion of the individual is immoral, and thus government tends to be immoral. Government is not to be minimalized as much as it is to be eradicated. Government should not prevent or subdue individual choice, even if such choice might infringe on the rights of others.

The second strain of libertarianism is more practical, the Milton Friedman view.[1] Where government should still be minimized to maximize freedom of the individual to choose, but where government protects the ability of others to do the same. Individual choice remains paramount, but it must not infringe on the rights of others to follow their own values.

This second strain of libertarianism, when properly framed, would be attractive to many moderate voters today. Government out of our bedrooms and classrooms, the state spending only what it takes in, the shrinking of the Orwellian administrative state, releasing the Darwinian free market, and protecting individual rights and the Constitution.

A smaller, more nimble government focuses on the bare necessities of national defense, protecting rule of law and property rights, and preventing the infringement of individual rights. Taxpayers realize an honest-to-goodness rate of return on their investment.

Reversing the Slide

A third political party embracing a practical libertarian ideology would be an instant success in America. It’s not a break from western republican democracy, it’s a restatement of it. Many Americans would listen to the platform and rightly think, “well, yeah, isn’t that the way it’s supposed to be?”

Perhaps the biggest benefit to this third, new political party would be the inevitable moderation of the Democratic and Republican parties. The middle, a voiceless space today, would become relevant once again and demand that the extremes evolve toward the moderate middle or face the consequence of losing power.

A third party occupying the middle and embracing practical libertarianism would reform the primary election process without tearing it down. The leftist would struggle to make it through a Democratic primary. The hard-right nationalist is placed on the eccentric fringe of the Republican party.

Reasonable and compelling candidates organically sprout up from Republican and Democratic primaries. Coupled with the libertarian choice, citizens and taxpayers are in a better place no matter who prevails in the general election.

Cartels and Their Vacuums

Imagine if consumers had only two cola drinks to choose from, call them P and C. Over time, each option evolved to an opposite extreme. Brand P became laced with cocaine and extremely unhealthy, and brand C removed all sugar and caffeine to where it became nothing but tasteless, colored water.

If those two choices held cartel power and were protected from competition, no other product options would manifest. Many consumers would stop drinking cola beverages. If a new option was introduced with the features of what coal drinks used to offer, it would become an immediate commercial success.

Nature abhors a vacuum. But American politics have created an impressive vacuum and preserved it for too long. That’s to be expected with concentrated cartels, in business and politics. Time to break the cartel and create more choice.

President Biden recently bragged, “Milton Friedman isn’t running the show anymore.” So true, no matter if Democrats or Republicans hold power. And so sad, because if Milton Friedman’s libertarian views were running the show today, America would be in much better shape.

Few of us desire to practice politics. But all of us want to choose from the very best of options when it comes to selecting our political leaders. That’s what the Founding Fathers envisioned and that’s what we deserve.

Let’s get what we deserve.

1. Watch the video TAKE IT TO THE LIMITS: Milton Friedman on Libertarianism on YouTube to hear an explanation of ‘consequentialist’ libertarianism from Milton Friedman.

Mis“LEED”ing: Fact Versus Fiction for Green Buildings

How many times have we heard those worn-out taglines of ‘sustainability,’ ‘green is good,’ ‘triple bottom line,’ and ‘doing well by doing good?’  Study after study, report after report, and headline after headline.  All used to help justify products like electric vehicles and solar panels, as well as to defend related policy mandates, market protection, and subsidies.

Many of today’s largest markets and industries rely entirely on the ability of the expert class to continue to hoodwink consumers, taxpayers, and investors on the false need and an altered reality of certain products and standards.

Consider the case of green building design, specifically LEED-certified buildings.

For those unfamiliar with LEED, it stands for ‘leadership in energy and environmental design.’  It’s become all the rage in real estate these days, particularly for commercial and office space.  LEED-certified buildings enjoy an unchallenged reputation for better performance, accretive economics, and societal benefit.

That’s due in large part to an ocean of studies that posit LEED-certified buildings as superior to non-LEED-certified buildings in every imaginable way.

Creating the Need for LEED

A recent example is the October 2022 research report from real estate firm CBRE titled Green Is Good: The Enduring Rent Premium of LEED-Certified U.S. Office Buildings.

The title is an eco-marketing thing of beauty; a rich, concentrated trove of all the gimmicky tricks.  Employ an obligatory worn-out tagline (‘green is good’)?  Check.  Inject an aura of economic legitimacy (‘rent premium’)?  Check.  Infer a longevity that exceeds the half-life of CO2 in the atmosphere (‘enduring’)?  Check.

The executive summary doesn’t disappoint. It begins by boldly stating that an analysis of 20,000 office buildings in America found that the average rent of those with LEED certification was 31% higher than those of non-LEED-certified buildings.

The impressive finding indicates that renovating existing or building new spaces that have high energy efficiencies and meet LEED certification standards are well worth the effort and investment.

Except, when digging a little deeper into the study’s details and data, that’s not exactly the case. In fact, that’s not at all the case.

The Devil in the Data

As with many studies, reports, and news articles surrounding the vaunted energy transition, reading beyond the title and executive summary is vital.  Doing so for this study of the economics of LEED-certified buildings betrays a very different set of conclusions than the popular consensus and the report’s title.

The golden rules of real estate, including the ultimate of location-location-location being the three most important factors determining value, apparently still matter today, even with Code Red for humanity and approaching climate doom.

When the study’s data are adjusted under regression analysis for building location, building age, and renovation history, the premium that LEED-certified buildings enjoy shrinks from the advertised 31% down to just under 4% before COVID and only 3% after COVID. 

That’s a massive drop to a paltry, low single-digit premium that may be within the statistical noise and uncertainty of the study.  Meaning when an apples-to-apples comparison is performed, LEED certification doesn’t amount to much of any appreciable rent premium.

Building age is far more impactful than LEED certification.  The regression analysis found that office assets built after 2012 commanded a 14% rent premium over those that were built between 2002 and 2011. Each additional decade in age decreased rent by approximately 5%.

Data prove age affects rent much more than LEED certification.

What’s intriguing is that the complete report disclosed these findings and how they evaporated the trumpeted rent premium for LEED certification.  It’s all in the body of the report, which very few people take the time to read.

By the way, LEED-certified office buildings tend to be larger and higher quality assets concentrated in downtowns of expensive cities, compared to non-LEED-certified buildings. Which means LEED-certified spaces should enjoy higher rent premiums than buildings that are smaller, lower quality, and not located in the most exclusive of zip codes.

The report cites that a third of Manhattan’s office inventory is LEED-certified while only a tenth of Louisville’s office inventory is LEED-certified.  And Manhattan office space is pricier than Louisville’s.  Yet rent premiums of Manhattan offices versus Louisville offices have very little to do with whether the buildings are LEED-certified.  It’s because it’s Manhattan and Louisville!

Voodoo Economics

What you don’t find discussed in the study, which harms its credibility, is recognition that constructing a LEED-certified building is a more expensive proposition in up-front capital investment than constructing or renovating a non-LEED certified building.  If there is only a miniscule, or nonexistent, rent premium for the LEED-certified office, the rate of return will indicate a losing investment proposition, not a winning one. That is the opposite conclusion that the study’s title warrants.

The study also argues green buildings offer lower mortgage default risk for investors.  That may not be the case looking forward into the coming years, when considering LEED-certified buildings are disproportionately concentrated in at-risk real estate bubble markets of Manhattan, San Francisco, and so on.

Further, LEED certified buildings are a favorite of the tech industry. And the tech industry right now is on the verge of a major correction, with job losses piling up and with office buildings, many LEED-certified, being vacant and leases being abandoned.  LEED-certified buildings may post higher default rates than traditional offices as we experience the grips of a recession or slowdown, or certainly if another tech bubble bursts.

Unaddressed in the study and regression analysis is what impact government leasing of LEED-certified buildings has on rent spreads.  One of the largest tenants of metropolitan office space is often government.  If bureaucrats favor LEED-certified space and aren’t afraid to pay up with taxpayer dollars to rent it, rent spreads for LEED-certified buildings are likely to skew.  Without government subsidy, there may be no rent premium for LEED certification.  Perhaps, there might even be a ‘green discount’.

Communal Paradise Lost?

There are other flaws in the study.

It wrongly assumes de facto ‘increased productivity’ associated with LEED-certified buildings.  That’s not obvious or necessarily true for the workers who inhabit them.  Ledger entries of debits and credits by accountants working in a LEED-certified building don’t magically happen quicker or more accurately than they would when the accountant is working in a non-LEED-certified building.

There’s another false premise about LEED-certified buildings, particularly in the era of pandemic: the health and wellness benefits associated with LEED-certified buildings.  Today, there are health risks found in LEED design features.

For example, are low-flow water faucets in restrooms of LEED-certified buildings a health risk when it comes to hygiene and germ spread?  A similar question pertains to HVAC systems in LEED-certified buildings that try to balance energy efficiency targets with fresh air-to-recirculation air ratios.

These days, most office occupants do not relish the thought of breathing air all day that has longer average indoor residence time.  Or using faucets that trickle to wash hands.  The safer office building environment would employ higher water flows in restroom faucets to minimize germ transfer and HVAC systems using as much fresh air feed as practical.

And those celebrated common areas for collaboration, meeting, and eating utilized in LEED-certified buildings? Just another venue for potential disease transmission.

Pandemic necessitated a re-think of all facets of life and business.  Yet LEED-certified design has largely escaped such a re-think.  Why?  Aspects common in, or mandated by, LEED certification need an objective reassessment as to whether they are beneficial in the era of Covid.

Too Much of a Green Thing

A key conclusion buried in the study escaped mention in the executive summary and title.  The regression analysis found no statistically significant rent premium associated with higher levels of LEED certification.

Attaining a higher level of LEED certification requires more investment to achieve the target level of points. If there is not a statistically significant rent premium associated with higher LEED certification, then being greener is not better.  Being greener is a poor investment decision; investors lose money when spending to attain a higher level of LEED certification.

The Echo Chamber at Work

How one stumbles upon this report is emblematic of how the echo chamber works in media, the expert class, and environmentalism today.

A headline on a major business website mentioned the study title, specifically the ‘green is good’ hook.  The website article exclusively highlighted the report’s title and the opening statement of the executive summary that advertised the massive 31% rent premium for LEED-certified buildings. Only until tracking down the study and reading the body of the report will the regression analysis come to light.

That’s how the environmental racket operates these days. The green formula:

  • Perform a study to skew in the desired direction by applying favorable assumptions.
  • Push the desired findings in the executive summary.
  • Come up with a creative and eye-catching title (use those eco-taglines we called out in the beginning), then post or publish the report.
  • Collaborate with major media to rebroadcast and further amplify the desired sound bite or headline.

It’s not greenwashing. It’s worse. Most would consider it misleading and unethical.

Nick Deiuliis’ CNX Q3 2022 Earnings Call Remarks

The following is a summary of Nick Deiuliis’ introductory comments from CNX Resources’ Third Quarter 2022 Earnings Conference Call, held Thursday, Oct. 27, 2022.

I want to provide a few thoughts regarding the macro backdrop and how CNX is continuing to uniquely position itself not just amongst energy companies, but also amongst the broader equity markets.

During the second quarter call, we discussed in depth the world’s growing demand for responsible energy development and how natural gas sourced from the Appalachian basin is an essential catalyst fuel in delivering that future. We laid out our vision of Appalachia as the heart of a sustainable energy revolution, and we discussed the numerous opportunities CNX is developing to leverage our existing asset base and core competencies to create significant free cash flow opportunities for our shareholders beyond our core gas development activities.

Today, however, I want to pivot back to the core of our investment thesis and the actions we are taking to position CNX for long-term per share value creation in the face of increasing uncertainty on three main fronts.

First, during the third quarter, the macro-economic backdrop in the US has continued to become more uncertain as inflation continues to erode purchasing power, interest rates have risen sharply, and equities valuations have declined. Despite this challenging backdrop, CNX was able to execute an attractive long-term debt refinancing that further extended our maturities profile and thereby unlocked additional degrees of freedom with respect to our capital market activities. Our combination of consistent quarterly free cash flow generation, extensive available liquidity, and our long debt maturity runway uniquely positions CNX to take further advantage of any deepening valuation disconnects that might occur in either the equity or debt markets.

Make no mistake about it, CNX is well positioned to continue to play offense in this type of environment.

The second area of uncertainty that featured prominently during the third quarter is the continued inability of our elected representatives to achieve consensus on interstate pipeline permitting reform. Without a meaningful acknowledgment of energy realities from Congress, the natural gas industry continues to be unable to unlock the full potential of US shale to serve the obvious energy demand centers here in the US.

Despite Washington continuing to ignore rational energy policy for the time being, CNX is one-of-one who has positioned itself to work in this potentially capacity constrained world. So, while Appalachia awaits future pipelines to be built, CNX will continue to focus on executing our maintenance of production plan to generate an annuity-like stream of significant free cash flow regardless of where we are in the commodity cycle. In addition to our organic base development plan, we will leverage our extensive legacy asset base to create new free cash flow growth opportunities through our New Technologies efforts and deep dry Utica development. We will clinically allocate this incremental free cash flow to create long-term per share value growth.

The third and last area of uncertainty that I want to highlight is the pricing volatility in the natural gas markets, and what we experienced during the third quarter is a reminder of just how volatile the commodity markets are, as well as how difficult they are to predict. However, CNX is uniquely positioned to respond to this uncertainty through its consistent programmatic hedging strategy and its basin-leading cost structure derived from its midstream ownership.

These two strategic differentiators significantly lower risk and provide long-term free cash flow visibility throughout all phases of the commodity cycle. This de-risked approach creates opportunity for significant long-term per share free cash flow growth even if lower natural gas price scenarios were to materialize.

So, the CNX story is simple, yet unique. It is a story about keeping our head down and executing our sustainable business model plan over an extended time-period time to generate sustainable per share value. Most companies do well when gas prices are high. What makes CNX unique is our ability to still thrive when prices are low, and things get tough. Our sustainable business model does not rely on gas prices staying high or on accurately predicting the future, which we all know is impossible; but instead, it is based on building a business that works in whatever the future holds. We are over two and a half years into executing this plan across many different macro backdrops, and Q3 adds another successful quarter to our track record.

I’ll wrap up my commentary with some final thoughts on our social impact. As we’ve discussed before, CNX’s sustainable business model is not only focused on creating value for our shareholders, but also on creating tangible and impactful value in the local communities in which we’ve operated for the last 150+ years.

I wanted to take the opportunity to highlight the kick-off of the second class of young men and women who are entering the CNX Mentorship Academy this fall.

As a reminder, this initiative is focused on exposing students in our underserved urban and rural communities to the myriad of career opportunities that exist within not just the energy industry but also throughout the region. These young adults are the foundation of tomorrow’s economy, and we are excited to build upon the success of last year’s class and to continue to provide a unique corporate engagement model for others in the region to follow. This fits right into CNX’s vision for the region as we wait for pipes to get built out of the basin.

There is no reason to wait to bring demand and manufacturing into our regions, which will help lift communities out of poverty by creating long-term manufacturing jobs, all while lowering global carbon emissions and improving the economy.

Additionally, in furtherance of CNX’s overarching aim to creating tangible and impactful value for our local community, another effort we’ve engaged in is “The HQ at CNX.” The HQ as we call it was created to provide office space in our headquarters building for non-profit, charitable, underserved, and underrepresented organizations to elevate and thrive their business while enabling collaboration with like-minded business individuals. We view it as the living embodiment of our Foundation – to find the diamond in the rough that might not receive attention from the establishment but is doing the important, hard work on the ground in our communities.

That’s what CNX is after – investments we can make that produce returns not only for our company but for the wider region. For generations, this region has fed CNX with unmatched talent and CNX has in turn fed the region with jobs, investments in our communities, and quality of life derived from the product we bring to market. That virtuous circle that is part of the fabric of our legacy lives on today through initiatives like our Foundation, Mentorship Academy, and HQ concept.

The HQ initiative is well underway, and we’ve gotten in half a dozen co-workspace tenants, which include a local non-profit career development association, a regional non-profit mentorship organization, a small local university, and two female-owned for-profit businesses (one a social media/marketing firm and the other a deli). We are excited for the opportunities ahead for the HQ to help reinforce our overall tangible, impactful and local value add philosophy.

Click here for more information on CNX Resources’ third quarter 2022 results.

The Definitive Battle of the Civil War

The Civil War holds a unique space in the American experience.  We’ve been taught it in high school, entertained with it by Hollywood, and informed on it by documentaries.  The war between North and South was the result of philosophical, economic, and political fissures at our founding that metastasized into violent conflict seventy years later.  The unfinished business and unresolved differences not settled by the pen at the Constitutional Convention in Philadelphia in 1787 were settled by the rifle on farmlands turned into battlefields in the 1860s.

All wars have much riding on their outcomes.  But the American Civil War was particularly impactful.  It was not just the sovereignty of a nation, self-determination, or the demarcation of borders that were at stake.  Ultimately, this conflict would be about the inalienable rights of human beings.

Which means the outcome of the Civil War and the North’s victory over the South had implications far beyond preserving the Union.  A unified America’s ascendency on the global stage after the Civil War brought with it global benefits to countless nations and peoples for a hundred years: capitalism’s economic prosperity, republican democracy’s spread, and the defeat of fascism and communism, to name a few.

So understanding the military strategy, tactics, and luck of the Civil War matters.  The decisive moments of the war became decisive moments for humanity.

Conventional wisdom tells us the decisive moments of the Civil War are battles like Gettysburg and its crucial moments of Union General Buford securing the high ground at the start to Confederate General Pickett’s failed charge at the end.  And that the only theater that mattered was in the east where Lee faced off against the Army of the Potomac.  And how the economic might of the Union strangled the life out of the Confederacy.

All were significant in resolving the conflict in the manner it was settled.  But none were as critical to the war’s outcome than the events tied to a two-day battle in a remote corner of Tennessee that garners too little mention in classrooms, Hollywood, or bookshelves.

The most consequential event that impacted the outcome of the Civil War was the Battle of Shiloh.

It was fought in early April 1862 and got its name from a small church in its vicinity.  Ironically, Shiloh in Hebrew translates to ‘heavenly peace’.

The Battle of Shiloh was anything but heavenly.

At its start, Shiloh was the largest engagement of the Civil War to that point.  At its conclusion, Shiloh became the bloodiest battle in American history to that point.[1] The hope of a quick and decisive victory for either side by a single decisive battle died at Shiloh, along with thousands of soldiers.

But Shiloh matters most not for who got the best of who over the two days, tactical considerations, territorial gains, or numeric losses.  No; instead, the Battle of Shiloh matters most because of the impact it had on four leaders, two from each side.  The fates of these four men that were sealed at Shiloh decided the outcome of the Civil War and the preservation of the Union.

Let’s assess the battlefield fates of four disruptively innovative military leaders.

Albert Sidney Johnston

Johnston was a proven Army veteran officer before the Civil War, having served in various conflicts across the western United States.  Johnston was considered by Jefferson Davis to be the best general in the Confederacy until Robert E. Lee emerged (before the Civil War, Lee was under the command of Johnston in the US Army).

Johnston may have been the best officer in the entire nation before the war, and President Lincoln knew it: Johnston, who at war’s outbreak was serving as commander of the US Army Department of the Pacific, was rumored to have been offered the position to lead the Union armies when hostilities ensued.  After Johnston declined the offer, Lincoln then made a similar offer to Lee, who also declined.[2]

General Johnston was tasked with protecting the Western Theater for the Confederacy, including the all-important Mississippi River.  Despite lacking resources and equipment, Johnston was adept at making his forces appear much larger than actual to the Union.

But Confederate leadership dysfunction and the Union’s superiority in men and material led to defeats at Forts Henry and Donelson.  Facing pressure from Richmond, the southern press, and subordinates, Johnston headed into Tennessee looking to take the initiative.

Johnston managed to keep the Union off balance, concentrate his forces at Corinth, and receive reinforcement from coastal regions and cities in the South.  He then proceeded to launch an impressive surprise attack on the Union and Grant at Shiloh.  Johnston viewed the battle he instigated as a “conquer or perish” moment for the Confederacy.

The Union was caught by surprise and a rout ensued for much of the first day at Shiloh.  General Johnston led from the front, and he rallied Confederate troops early in the battle to encourage them forward and not to stop to loot and plunder Union camps that were hastily abandoned by panicked troops.

Leading a charge on horseback in mid-afternoon of the first day, Johnston was struck by a bullet that pierced an artery behind his knee.  Not feeling pain coupled with the profuse bleeding being concealed in his boot, Johnston and his staff were unaware that anything was wrong until he collapsed on his horse from a massive loss of blood.  By then it was too late, and General Johnston bled to death near the infamous Hornet’s Nest on the Shiloh battlefield.

Johnston was the highest-ranking officer on either side killed in action during the Civil War.  The loss devastated the morale of the Confederacy, from President Jefferson Davis down to the common foot soldier.  Davis lamented after Shiloh, “[W]hen Sidney Johnston fell, it was the turning point of our fate; for we had no other hand to take up his work in the West.”  Everyone knew the South lost one of its best leaders.

If Johnston survives the first day of Shiloh, the upsides to the Confederacy are obvious.  Most immediate would be that either the Confederates would have pressed the attack through the evening of the first day to decisively break the Union or that the Union’s recovery and success on the second day of fighting at Shiloh might have been squelched.  These controversial what-ifs are generally referred to as the ‘Lost Opportunity’ for the South at Shiloh, and historians have debated the topic heatedly for 150 years.

But more importantly, the Confederacy would have the benefit of a charismatic, experienced, and able commander for the critical and vast Western Theater of battle.  General Johnston would’ve made the Union and General Grant think twice before taking the initiative subsequent to Shiloh.  Vicksburg and Sherman’s Drive may have turned out differently.  That the military leadership of the Confederacy in the Western Theater under and after Johnston was often inept only makes the able Johnston’s loss more painful.

At a minimum, Johnston continuing to lead the defense of the Western Theater would have bought valuable time for the South.  With the Civil War being one of attrition and will, time offered a path for the Confederacy to victory: via either the Union tiring of the seemingly endless toll of war or with foreign powers coming to the aid of the South if they thought there was a chance for its victory.

Instead, Albert Sidney Johnston was lost that spring day in Tennessee, the Western Theater was where Grant gained confidence and rose in prominence, and Shiloh set the stage for the fall of Vicksburg, the splitting of the Confederacy, and the wrath of Sherman.  The butterfly effect of a single bullet changing the course of history.

General Ulysses Grant

General Grant led early Union success in the Western Theater with his victories at Forts Henry and Donelson in Tennessee.  These early accomplishments earned Ulysses S. Grant the nickname “Unconditional Surrender” Grant.

Ulysses Simpson Grant / Barr & Young / Albumen silver print, c. 1862 / National Portrait Gallery, Smithsonian Institution

But as Grant’s and the Union’s confidence grew in Tennessee, so did the danger.  The Confederate army was less than three miles away from the Union lines on the eve of Shiloh, yet the Union was oblivious to the enemy presence.  Grant was caught completely by surprise at the start of battle, the relaxed army employed minimal defensive measures, his troops were routed and retreated in panic the first day, and the losses were horrific.

But Grant rallied and took control the second day. Like Johnston, he led from the front.  On the second day, Grant came under heavy fire, with a musket ball hitting his sword at his side.

Perhaps the single most important saving grace for Grant and the Union at Shiloh was the weather.  General Johnston wanted to commence the surprise attack two days prior to when it occurred.  But heavy rains slowed the advance of the Confederates and delayed the attack.  Those extra days allowed Grant’s reinforcements that were arriving to his position to creep steadily closer to where they were able to join the fight and decisively swing the momentum on the second day of battle.

Grant was heavily criticized by many in the North immediately after Shiloh, and he was prepared to resign or take a leave from the army.  But President Lincoln understood Grant offered up one characteristic no other Union general early in the war seemed to muster:  proactive aggressiveness.  When a newsman argued to Lincoln that Grant should be removed, the President’s alleged response was: “I can’t spare this man.  He fights.”

Shiloh was a near-death experience for both Grant’s body and career.  But having survived the disastrous first day and rebounding the second day to push back the Confederacy, Grant built upon his earlier Tennessee successes, learned a few valuable lessons that improved the Union’s prosecution of the war, and set Grant up for the success of Vicksburg and ultimate command of the entire Union army.

Shiloh offered Grant a rare combination of wake-up call and confidence builder.  He exited the battlefield more aggressive than ever in taking the war to the enemy but more diligent in preparation.  The fall of the South was set in those muddy woods in early April 1862.

Nathan Bedford Forrest

After the war, Robert E. Lee was asked to name the greatest soldier of the war.  His response: “A man I have never seen, sir.  His name is Forrest.”  Nathan Bedford Forrest, a native Tennessean, was both an impressive force of nature and highly despicable.

Nathan Bedford Forrest, ca. 1862-1865

He was a self-made, successful, and wealthy plantation owner; one of the few soldiers to start the Civil War as an enlisted private and end it as a general; a visionary that revolutionized cavalry tactics despite having no formal military training; and an intimidating adversary who struck fear across all levels of the Union ranks.

Yet Forrest was a slave trader before the war, likely allowed the massacre of hundreds of Union troops after their surrender at Fort Pillow, and served as the first Grand Wizard of the Ku Klux Klan after the war.

Like Johnston and Grant, Forrest exhibited extraordinary bravery in active combat early and often in the war.

Through the war, he reportedly killed thirty men in hand-to-hand combat and had twenty-nine of his horses shot out from under him in battle.  Prior to Shiloh, in the winter of 1862, he evaded Grant’s siege of Fort Donelson by leading a break-out and escape of 4,000 troops.

Forrest, an unknown colonel at the time of Shiloh, was assigned to guard the flank of the Confederate lines at the start of the battle.  But hearing the battle rage for hours and receiving no new orders, he decided to unilaterally commit his cavalry to the battle.  His men’s charge helped break the Union’s until-then impregnable Hornet’s Nest, and Forrest made it to the bluffs overlooking the Union’s panic on the banks of the Tennessee River that evening.  Forrest and his cavalry staked the high-water mark of the South at Shiloh.

Forrest commanded the rear guard of the Confederate retreat from Shiloh, during which he led a cavalry charge at a Union skirmish line and found himself alone and surrounded by Union soldiers.  He escaped by viscously fighting his way out with pistol and sword, but not before he was shot and nearly killed.[3] He was the last man injured at the Battle of Shiloh.

After Shiloh, Forrest was turned loose to wage a tactically fluid cavalry guerilla war in the Western Theater.  He achieved a major victory at Murfreesboro, wreaked havoc behind Grant’s lines during the siege of Vicksburg, and secured victory after victory in battles across the western half of the Confederacy.

If Forrest dies during the retreat from Shiloh, the Confederacy would likely have suffered a more rapid collapse in the Western Theater.  That could have accelerated the demise of the Confederacy before Appomattox.

That’s because Forrest was exactly the type of leader the outnumbered, outgunned, and outspent South desperately needed.  His tactical genius overcame and nullified the inferiority of numbers.  Despite usually being the smaller force, Forrest applied unconventional tactics to keep his larger foe constantly off balance and loathing what was to come next.

Forrest recruited, trained, and equipped (often with captured Union arms) his men well.  They loved him for it and faithfully performed whatever task he requested.  Legend has it Nathan Bedford Forrest was the only cavalryman Ulysses Grant feared. General William Tecumseh Sherman lamented that, “Forrest is the devil.”

Shelby Foote in Ken Burns’ Civil War documentary states that the Civil War produced two “authentic geniuses”: Abraham Lincoln and Nathan Bedford Forrest.  Interesting how the former epitomized the best of the human condition while the latter left much to be desired.

William Tecumseh Sherman

Sherman was the trusted subordinate of Grant as well as Grant’s polar opposite in demeanor and style.  Sherman was volatile, opinionated, and always in manic motion.  A general once described Sherman as, “a splendid piece of machinery with all the screws a little loose.”

Gen. William T. Sherman, ca. 1860 – 1865

In the early stages of the war prior to Shiloh, Sherman was disgusted with the performance of, and questioned the commitment of, volunteer Union troops.  At the same time, he admired the commitment the Confederacy displayed between citizens and army.  He feared the contrast between North and South could spell trouble, and his experience at Bull Run did little to change his mind.

At the start of Shiloh, Sherman failed to understand the size and proximity of the Confederates to his lines and was caught off guard when the battle commenced.  Yet Sherman saved the first day for the Union.

Constantly on the front lines that first day, he suffered bullet wounds to his hand and shoulder, had three horses shot out from under him, and his coat and hat were riddled with bullet holes.  But he calmly held the vulnerable right flank and prevented Grant’s army from being tossed back into the Tennessee River and destroyed.

Ironically, Sherman persevered and became a northern hero with the help of an inexperienced and volunteer army that struggled at times on the first day but that also fed off his aura.  The very thing Sherman questioned, the ability of a volunteer army of green non-professional soldiers, became the instrument he wielded so effectively.

The bond between Sherman and Grant strengthened after Shiloh and the seesaw battles in the Western Theater, from Vicksburg to Chattanooga, continued with the North slowly grinding with momentum.[4]  When Grant was promoted and headed east to lead the entire army, he placed Sherman in command of the west.

Sherman commenced to apply his version of total war, looking to crush the South’s economy and political will to fight.  He captured Atlanta and burned it to the ground.  That victory helped reelect Lincoln and silence northern proponents of making peace with the rebels.  Sherman then cut a path of economic devastation to the sea.  The South’s will to fight was shattered.

If one of those bullets that found Sherman’s hand, shoulder, coat, hat, or three horses had fatally wounded him, the Union would have suffered an irreplaceable loss.  Sherman saved the Union at Shiloh, bolstered Grant’s confidence, clinched the Western Theater, innovated the concept of total war, secured Lincoln’s reelection, reinforced northern resolve, and crushed southern morale.

Sherman fought at both the first (Bull Run) and last (Bentonville) battles of the Civil War.  Losing Sherman to the fates of war in April 1862 at Shiloh might very well have changed the duration and course of the Civil War.

Shiloh: Forgotten Yet Hotly Debated

George Washington Cable fittingly wrote, “The South never smiled again after Shiloh.”  The battle, which was a must-win for the South that failed to materialize, occupies a unique space in Civil War lore.

Early morning fog over Shiloh National Cemetery

On one hand, it is largely forgotten, ignored, or placed in the shadow of the more famous Eastern Theater battles.

But on the other hand, the debate over Shiloh rages on.  Years of serendipitous winding through an exploration of writings on the battle brought realization of an intense discourse between Civil War historians as to the heroes and villains for each side.  There is little consensus and passionate opposing views about the key moments of Shiloh as well as the performance and what-ifs of Johnston, Grant, Forrest, and Sherman.

Perhaps the most controversial is Albert Sidney Johnston.  There are noted historians that view him similarly to what I suggest: one of the best the Confederacy had to offer and an irreplaceable loss in the Western Theater.  Yet other accomplished historians view Johnston as incompetent and slow to act, and they offer decent rationale for such a view.

Ulysses Grant is also quite the controversial figure among historians, although it feels as if with the passage of time his legacy is better appreciated and placed in a more positive light.

There is much less controversy about the innovative brilliance of Forrest and Sherman.  But these two share criticisms from many regarding their approaches to war and, in the case of Forrest, decisions before, during, and after the war.

Read More

If you wish to head deeper down the historical rabbit hole of the Battle of Shiloh and its main actors, consider the following as both entertaining and enlightening resources:

Shiloh: The Battle that Changed the Civil War by Larry J. Daniel

Ripples of Battle by Victor Davis Hanson

American Ulysses by Ron White

 

[1] The casualties suffered at Shiloh exceeded the totals of the Revolutionary War, the War of 1812, and the Mexican War, combined!  A shocked North and South were soon to find out things could get much more deadly than Shiloh, as the battles of Antietam, Fredericksburg, Gettysburg, and Cold Harbor loomed in the future.
[2] When Johnston resigned from his federal position in California to join the Confederacy, the Union attempted to capture Johnston during his journey east.  Johnston evaded capture and ultimately made it to Richmond.
[3] Forrest was shot through the pelvis and the musket ball lodged near his spine.  A surgeon removed it a week later, without anesthesia.
[4] Legend has it that Sherman was the one who talked Grant out of resigning from the army or taking a leave of absence immediately after Shiloh.