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I've said this before but must say it again. Morale in this game is not modeled correctly and makes no sense.
In my last game (playing as the plucky Brits), I took over north Africa, retained Malaysia and through strategic brilliance cut the Japs supply lines in china and left the Indians and Chinese to finish them off. I then landed on the Japanese mainland and advanced towards Tokyo.
The Americans were useless as always. They had landed a few units in Japan and then left, and their pacific fleet basically cruised around doing nothing.
So, I've surrounded Tokyo and Japan is about to be defeated. The USA is untouched by war, has the worlds second biggest navy, is richer then anyone else but surrenders to Japan when their ally is about to defeat the enemy because of low morale. Wrong.

Several patches back some rather punitive negative morale events got added, deducting NM points from the US each turn for certain locations if controlled by the Japanese. I adopted these into my WitP scenario and had the same syndrome (tho not so bad as to cause auto surrender), and will be dialing them back (again...) for my next update.

Morale is correct. You're wrong.
The American people were not interested in the war in Europe.
With a heavy population of Italians, Germans, etc. the general population just wasn't that interested in getting killed with the old country. The primary population of white Angelo Saxon Protestants, Irish Catholics read the newspapers of the war, but had better things to do, then interrupt their lives over a Corporal and Bullies armies.

Politicians is different story.

Pearl Harbor changed it all.
The recruiting went insane after the Japanese conducted the sneak attack.

The morale is important in the Pacific.
The morale was incredibly high in the Pacific.
FDR begged for a battle to won.
Tarawa got alot of young people killed. Ill trained, Not prepped correctly.
Made good newspaper headlines. A must.
So, if the USA is just gonna sail around and do nothing to Japan, morale dumps.
Far as the game, players just leave the Pacific.
Dump enough units in Hawaii, take the everything to England (Carriers, Planes, Marines)
MacArthur goes to India/China.

Now, look at the real battles when the USA went to war with Japan, and then shortly Germany
Germans were already into Russia.
The American initial battle morale in North Africa, was horrible. Yanks get smacked, hard.
Until Patton. The European gamechanger.
Battle of Atlantic, those early naval recruits didn't' want be in middle of the ocean.
(I know this from direct relatives)

Pacific different story. The USA immediately wanted to kill Japs.
Look at the brave battle of Midway which was only 6-months later.
Outmatched, willing to take risk and suicide Dive Bomb.
Different race, religion, & the sneak attack main reason for the passion.
Doolittle raid, early campaigns were quick to go: Midway, Coral Sea, Guadalcanal
You don't turn this switch over to Europe.
It's about morale and desire of the Americans.

"You just don't turn it off" ---Rambo

Interesting topic.

I have asked before for a Doolittle raid event to be included (like the Dakar raid event). It would cost money but be good for US national morale. Now that the Pacific islands have a morale drag on the US this could really help and would be historically accurate.

Overall I agree that the morale penalties in the Pacific are fair and the Allies now need to fight on all fronts to avoid the morale drop. It is not WiE. However I do think the morale penalty for Manila is a bit high, as the Philippines won't be retaken for a long time and the penalty is 50 a month straight away and rises to 100 per month in 1944. Allies won't get near Manila for most of 1942 - 1944 so that is harsh. It could be 30 per month like the other islands and rise to 50 per month in 1944.

Since the Hawaii penalty was introduced I have seen a lot more action there in PBEM games. Pearl has changed hands twice in my current game against Taifun. Japan gets a bonus and it slows down the overall Allied effort, but it puts the IJN at risk for longer and there have been a lot more fleet battles in recent games.

Yep, many games are being lost in the Pacific based on key Islands/Cities.
USA morale gets low, their fighting skill is awful.
Something had to be done, to get Japan and USA to fight.
Risk/Reward arrived. Incentives.