August 31, 2012

"The ‘deterrence works’ fantasy" or Context is Everything

Worth printing in full:

By Charles Krauthammer, Published: August 30

There are few foreign-policy positions more silly than the assertion without context that “deterrence works.” It is like saying air power works. Well, it worked for Kosovo; it didn’t work over North Vietnam.

It’s like saying city-bombing works. It worked in Japan 1945 (Tokyo through Nagasaki). It didn’t in the London blitz.

The idea that some military technique “works” is meaningless. It depends on the time, the circumstances, the nature of the adversaries. The longbow worked for Henry V. At El Alamein, however, Montgomery chose tanks.

Yet a significant school of American “realists” remains absolutist on deterrence and is increasingly annoyed with those troublesome Israelis who are sowing fear, rattling world markets and risking regional war by threatening a preemptive strike to stop Iran from acquiring nuclear weapons. Don’t they understand that their fears are grossly exaggerated? After all, didn’t deterrence work during 40 years of Cold War?

Indeed, a few months ago, columnist Fareed Zakaria made that case by citing me writing in defense of deterrence in the early 1980s at the time of the nuclear freeze movement. And yet now, writes Zakaria, Krauthammer (and others on the right) “has decided that deterrence is a lie.”

Nonsense. What I have decided is that deterring Iran is fundamentally different from deterring the Soviet Union. You could rely on the latter but not on the former.

The reasons are obvious and threefold:

(1) The nature of the regime.

Did the Soviet Union in its 70 years ever deploy a suicide bomber? For Iran, as for other jihadists, suicide bombing is routine. Hence the trail of self-immolation, from the 1983 Marine barracks attack in Beirut to the Bulgaria bombing of July 2012.

Iran’s clerical regime rules in the name of a fundamentalist religion for whom the hereafter offers the ultimate rewards. For Soviet communists — thoroughly, militantly atheistic — such thinking was an opiate-laced fairy tale.

For all its global aspirations, the Soviet Union was intensely nationalist. The Islamic Republic sees itself as an instrument of its own brand of Shiite millenarianism — the messianic return of the “hidden Imam.”

It’s one thing to live in a state of mutual assured destruction with Stalin or Brezhnev, leaders of a philosophically materialist, historically grounded, deeply here-and-now regime. It’s quite another to be in a situation of mutual destruction with apocalyptic clerics who believe in the imminent advent of the Mahdi, the supremacy of the afterlife and holy war as the ultimate avenue to achieving it.

The classic formulation comes from Tehran’s fellow (and rival Sunni) jihadist al-Qaeda: “You love life and we love death.” Try deterring that.

(2) The nature of the grievance.

The Soviet quarrel with America was ideological. Iran’s quarrel with Israel is existential. The Soviets never proclaimed a desire to annihilate the American people. For Iran, the very existence of a Jewish state on Muslim land is a crime, an abomination, a cancer with which no negotiation, no coexistence, no accommodation is possible.

(3) The nature of the target.

America is a nation of 300 million; Israel, 8 million. America is a continental nation; Israel, a speck on the map, at one point eight miles wide. Israel is a “one-bomb country.” Its territory is so tiny, its population so concentrated that, as Iran’s former president Akbar Hashemi Rafsanjani has famously said, “Application of an atomic bomb would not leave anything in Israel but the same thing would just produce damages in the Muslim world.” A tiny nuclear arsenal would do the job.

In U.S.-Soviet deterrence, both sides knew that a nuclear war would destroy them mutually. The mullahs have thought the unthinkable to a different conclusion. They know about the Israeli arsenal. They also know, as Rafsanjani said, that in any exchange Israel would be destroyed instantly and forever, whereas the ummah — the Muslim world of 1.8 billion people whose redemption is the ultimate purpose of the Iranian revolution — would survive damaged but almost entirely intact.

This doesn’t mean that the mullahs will necessarily risk terrible carnage to their country in order to destroy Israel irrevocably. But it does mean that the blithe assurance to the contrary — because the Soviets never struck first — is nonsense. The mullahs have a radically different worldview, a radically different grievance and a radically different calculation of the consequences of nuclear war.

The confident belief that they are like the Soviets is a fantasy. That’s why Israel is contemplating a preemptive strike. Israel refuses to trust its very existence to the convenient theories of comfortable analysts living 6,000 miles from its Ground Zero.

Always Have a Plan B...and Be Courageous Enough to Develop It

I had the great pleasure of the attending the Change of Command ceremony for the Marine Corps’ Special Operations Command (MARSOC), where MajGen Paul Lefebvre handed over command to MajGen Mark Clark. I count myself quite blessed to have MajGen Lefebvre as an exceptional mentor, counselor, and the finest example of leadership at all levels. In bringing me into the Strategic Initiatives Group a dozen years ago, he gave me my start as an analyst and extended great patience, encouragement, and confidence as I found my feet in the art of finding and connecting ‘the dots’. Further, I have long admired his capacity for and dedication to ‘intellectual courage’ in saying things that needed to be said about subjects that others were unwilling to address. Specifically, the General has been a strong advocate of reviewing the Corps’ strategic purpose and the way in which it makes is optimal contribution to the Nation’s security especially as the operating environment has changed over the past decade and our national capabilities have correspondingly evolved. 

Whether we like it or not, the world changes. Old powers depart the scene and new powers emerge. Technological advances change the ability of actors to pursue objectives just as shifting power structures and alliances change the geographic and cultural settings of America’s security interests. A decade of war has had its impact on our forces, their relative capabilities and the relationships among the services and operational commands. For example, U.S. Special Operations Command (SOCOM) has dramatically changed in its role, capabilities, global presence, and utility and there are now different operational relationships between the national intelligence community and military forces deployed into operational theaters. One can also not ignore the implications of our country’s profoundly changed fiscal environment. With increased budgetary pressures driving expectations of relatively less resources being available for defense in the coming years it stands to reason that changes will be imposed on the military services. Service leaders should be accounting for this. 

For many years now, the Corps has stood firmly by its tagline “the Nation’s 911 force” and the related catchphrase “most ready when the nation is least ready.” But what does that mean in our current and projected-future context? What are the implications of a dramatically changed budget environment? Senior Marine Corps leadership has flatly stated that a Corps end-strength of 182,000 (accounting for a directed reduction of 20K Marines) is the absolute ‘floor’ for manpower, that anything less would compromise the ability of the Corps to serve the needs of the Nation. Yet 182K is still 8,000 more than what the Corps had only a few years ago and it was manned at that level in a much more robust economic climate. If what senior defense officials are saying is true, that the Defense Department is not actively planning alternative structures to account for the potential, and increasingly likely, implementation of sequestration in 2013 and beyond, then the military services will be quite unprepared for such cuts if/when they do occur. It is quite true that demand from the regional combatant commands (CENTCOM, SOUTHCOM, PACOM, et al) for Marines and Marine Corps units is stronger than ever. I suspect, however, this is because of the inherent nature, training and capabilities of Marines and the general utility of Marine Corps units when compared to the highly specialized nature of units from other Services. 

Criticism of the Corps for not developing an Option B (and C, D, E and F) that accounts for sequestration or other challenges to the preferred Marine Corps plan is applicable to the other services and the Department as a whole too. Any military commander worth his salt develops alternative courses of action and ‘branches and sequels’ when planning an operation, i.e. different ways to attack a problem and variations of ‘what if’ scenarios to account for the unexpected and “what if the enemy does ‘x’ instead of ‘y’”. Failure to do so introduces potentially lethal vulnerabilities to any plan since the commander, his staff, and the force will be unprepared such events. One reason the Services appear not to be doing so as suggested by the many folks who are wondering about the lack of alternative planning is that senior leaders are playing a game of ‘chicken’ with Congress -- ‘we have one plan and only one plan that we’re executing and you guys had better fund it or...’ Left unstated, of course, is what comes after ‘or...’ I think it is highly likely that the Defense Department will have its bluff called if not intentionally by Congress (for many reasons) then by default as a result of Congress’ inability to find budget savings elsewhere sufficient to avoid sequestration. Consequently, the Services will be caught flat-footed with their single options in a range of major programs suddenly fiscally untenable. 

Developing a "Plan B" does come with risks among them being the possibility that in a severely constrained fiscal environment one's preferred but very expensive system falls victim to the cheaper Plan B Alternative. Looking at alternatives also tends to threaten vested interests who have much to gain for the success of Plan A but perhaps not so much from Plan B. Alternative plans also tend to generate disruption or an uncomfortable bit of 'unknown' in an otherwise smoothly running, comfortable, and well understood operations. Look at alternatives and developing them into 'B' options takes courage. It can certainly upset some apple carts but it's the right thing to do for long-term success.

This coming Winter and Spring should be an interesting time for those in the programs and resources business.

August 26, 2012

The Strategic Competition in the Middle East

If you'd like to read a fairly short but very insightful item to gain a better understanding of the strategic context for much of the conflict in the Middle East read this item Stephen Crittenden, The Clash Within Civilisations: How The Sunni-Shiite Divide Cleaves The Middle East. From the opening:

"It is almost 20 years since the late Professor Samuel Huntington published his famous Foreign Affairs article, "The Clash of Civilizations?", arguing that cultural and religious differences would be the major source of conflict in the post-Cold War era. Forecasting a looming clash between Islam and the West, and another between China and the West, he wrote: "The fault lines between civilizations will be the battle lines of the future."

"But what about the fault lines that emerge within civilisations, and especially within the religious traditions those civilisations are founded upon? There is a dangerous 2,000-kilometre fault line running through the Middle East between Beirut and Bahrain via Damascus and Baghdad, which marks the present line of demarcation between the two main branches of Islam, Sunni and Shiite.

"The 1,300-year-old schism between Sunnis and Shiites was caused not by a theological dispute (those came later), but by rival clans in Muhammad's tribe, the Quraysh, squabbling over the succession after his death in 632 AD.

"Mostly the "Sunni-Shia Line" lies dormant, and ordinary Sunnis and Shiites live out their separate lives, side-by-side in relative harmony. In Lebanon and Iraq it has not been uncommon for Sunnis and Shiites to intermarry. But the Line is still always there, just below the surface, and it has recently re-emerged as the most significant factor reshaping geopolitical relationships in the Middle East, a region where religion and politics are always inextricably intertwined.

"At present, Syria is the key battleground on the Sunni-Shia Line..."

As I have said on many occasions the larger contest with which the U.S. should be most concerned is the strategic competition between Sunni and Shia and between Arabs and Persians. This competition is made manifest in the struggle for power and influence within Islam between Saudi Arabia and Iran. To the extent the U.S. involves itself in the Middle East and chooses various actors to support, it should do so with its eye firmly fixed on this competition.

August 25, 2012

2016: Obama's America - The Movie

I saw this movie today. Go see it. The (what I think to be) compelling argument presented by Dinesh D'Souza is quite disturbing. Whether you're a fan or a critic of the President I think the couple of hours spent at the theater is well worth the time. If you aren't already aware of the background for the movie, D'Souza advances the theory that Obama is driven primarily by an anti-colonialism paradigm, that his various executive decisions, the policies developed and implemented by his Administration, and his world-view and America's place in it are all explained by his view that the Third World--from which the Colonial Powers (old and new) extracted the wealth that enabled them to become Great Powers--should be compensated or avenged by reducing the power and influence of those Colonial Powers. 

Toward the end of the docu-movie, D'Souza also raises the question of how Obama came to win the Presidency. Frankly, I agree with his assessment. In short, he says it wasn't so much Obama's credentials for the office (which were effectively nonexistent) as it was the convergence of several contextual factors that resulted in him winning...with the primary factor being the race issue and the inherent desire of America to show that we (as a people and a country) had put racial matters behind us. 

D'Souza proposes that the world of 2016, following a second Obama term, would be more dangerous and more unstable both as a consequence of the reduction of America's ability to keep otherwise destabilizing trends in check and a lessened ability to respond to emerging crises.

Go see it.

The Evolving Employment Picture

Here is some reading from John Mauldin sure to cause you to go "hmmm..." then wonder how this story turns out. Extracts from the four main topics of his latest newsletter, Boomers Are Breaking the Deal:
- "[We] may be going through a technological shift in employment not unlike that in the Industrial Revolution." Mauldin means more than just the rise of the internet and the proliferation of handheld computing devices. He refers to the dramatic shift in employment patterns akin to the transition from farm-to-domestic worker that occurred with industrialization. 

- "[Between] 2007 and 2011, 98.3 percent of the job gains in that combined group [those with college degrees] went to the advanced degree holders. These days, it seems we're really in a grad school economy...only three of the 30 occupations with the largest projected number of job openings by 2020 will require a bachelor’s degree or higher to fill the position — teachers, college professors and accountants. Most job openings are in professions such as retail sales, fast food and truck driving, jobs which aren’t easily replaced by computers."

- "Since the end of the recession, the number of jobs has grown by less than 3 million, all of which have been gained by those in the 55 year and older category! And then some: Boomers have taken “market share” from those who are younger."

- "There are now half as many people getting some kind of Social Security benefit as there are workers in private employment paying into Social Security. And the trend is clearly advancing. This cannot be sustained...[One] in eight families is now getting food stamps... over 50% of US families get some form of government check each month, while the percentage of workers in the private workforce is shrinking."

Of course we should add to this the worrisome and destructive trend in national debt accumulation and our inability (or unwillingness) to develop and implement the systemic corrections necessary to correct our situation. Massively increasing debt levels, ever more people dependent on government largess (extracted from productive capital), fewer (good) job opportunities for an increasing number of younger folks, and a changing employment marketplace that we just don't understand.

Hmmm...I wonder how this story turns out...

August 23, 2012

Saudi Arabia vs. Iran

This article was forwarded by a dear friend who arguably understands the historical, cultural and religious framework of the Middle East better than anyone save Bernard Lewis (and I only make that exception because I know my friend's profound respect of and admiration for Prof. Lewis). I think we, the U.S., fail to fully appreciate the struggle between Sunni and Shia in the policies we develop and execute in that region. During the Cold War, we understood that crises in various regions were often proxy actions between Soviet and Western/U.S. backed surrogates, tactical actions in a larger/global strategic contest between the Soviet Union and the Western Democracies. Yet we miss the analogous condition when we look at the Muslim world. As we decide where, when, and how to intervene in Middle East affairs, we should always keep in mind that the real battle being waged is between Shiites and Sunnis, and Arabs (Saudi) vs. Persians (Iran). But enough of my babbling...please read: The Endless War: Saudi Arabia Goes on the Offensive Against Iran.

August 22, 2012


I first heard the phrase "a culture of lawfulness" at a book signing event for Leoluca Orlando, author of Fighting the Mafia and Renewing Sicilian Culture. The event was held in a meeting room at the Hay-Adams Hotel in Wash DC, an impossibly expensive place by mortal standards but what a wonderful venue! Given the opportunity to see the inside and sample some appetizers at someone else's expense... how could I decline? In actuality, I did want to hear from Orlando about his experiences battling the Mafia during the 1990s. As it turned out, he was not able to make the event but a very capable colleague of his spoke on his behalf. Mr. Orlando was mayor of Palermo, the capital of Sicily, in mid-1990s. He undertook the dangerous task of working with other groups--notably elements of the Catholic church, concerned citizens, the Press, and a handful of government officials at the national level--to combat the Mafia for control of the city. He realized that to unseat the Mafia dons, he would have to re-instill a 'culture of lawfulness' among the citizenry, i.e. a sense among the public that lawful conduct was not only a noble thing but essential to the longterm welfare of society at the most fundamental level. 

I don't know when the phrase was coined but many institutes, academics, and policy-wonks have adopted it when addressing the foundational attributes of a healthy society. The U.S. Institute of Peace defines rule of law as "an end state in which all individuals and institutions, public and private, and the state itself are held accountable to the law, which is supreme." Building on this principle, USIP goes on to address a culture of lawfulness this way: "the average person believes that formal laws are a fundamental part of justice or can be used to attain justice and that the justice system can enhance his or her life and society in general. Without a culture of lawfulness, the population will have no desire to access the system and may resort to violence to resolve grievances. For the rule of law to be fully realized, the population needs to follow the law and support its application voluntarily rather than through coercion." 

In other words, both the society and its government value a framework of law that applies to both equally and without arbitrariness. When the government, in particular, begins to act as though the law only applies when and where it sees fit, it loses the trust and confidence of the people. Study after study has shown that even young children sense when something isn't fair; when one person receives unmerited special treatment or another person is punished without just cause. When this occurs as the result of a government's arbitrary application of law, when favoritism is more influential than principle, when people lose the sense that they have a fair shot at having their case heard just as much as someone higher up the socio-economic ladder or affiliated with one political party over another...when a culture loses the sense that 'lawfulness' is important, desirable, noble, and good...the underpinnings of social, economic, and political stability begin to crumble.

All this came to mind as I read Prof. David Skeel's article, A Nation Adrift From the Rule of Law. Highlighting actions taken by our government in its response to the financial crisis of 2008, he thoughtfully extrapolates the dangers presented when the government uses a legal fig leaf to cover otherwise indefensible actions intended to pursue a specific agenda. As Skeel observes, while some extreme actions are understandable and even necessary in the midst of a crisis, they are deeply damaging when continued under false pretenses. Ultimately, they create a gulf of distrust and cynicism between the government and the people it is meant to serve. 

"Rule-of-law matters cannot be separated entirely from questions about the size and role of government. The more government grows, the harder it is to preserve rule-of-law virtues like transparency and clear rules of the game. But the rule of law is nevertheless a distinct and extraordinarily important concern, and it deserves separate consideration as the presidential campaign begins in earnest."

I agree with the Professor. Among all the other reasons making this upcoming election so important, the question of conduct by the Administration and Congress with respect to the "rule of law" in our country is among the most critical. We simply must rein-in our government and hold our elected officials accountable lest we completely lose sight of what has made our country as great as it has been.

August 19, 2012

Niall Ferguson on Why Barack Obama Needs to Go

I can't think of anything meaningful to add to Niall Ferguson's superb argument with which I wholeheartedly concur. From the conclusion of his article, "Obama's Gotta Go":

"The voters now face a stark choice. They can let Barack Obama’s rambling, solipsistic narrative continue until they find themselves living in some American version of Europe, with low growth, high unemployment, even higher debt—and real geopolitical decline.

"Or they can opt for real change: the kind of change that will end four years of economic underperformance, stop the terrifying accumulation of debt, and reestablish a secure fiscal foundation for American national security.

"I’ve said it before: it’s a choice between les États Unis and the Republic of the Battle Hymn."

August 18, 2012

Thinking About War With China

My post title differs from the article I want to highlight primarily because I agree with the author's premise that the strategic culture of countries and of their military services shape how they think about competitions and therefore fundamentally inform the policies, concepts, tools, and physical preparations necessary to be prepared for conflict if and when it occurs. There's an old saying in the military: "The more you sweat in peace, the less you bleed in war," (ascribed to Patton, among others) meaning the more effort you put into preparing for a potential conflict, the more likely you are to prevail and at less cost in lives and treasure. 

In his article "Preparing for War with China," James Holmes has this to say about service cultures and their influence on preparing for the next war:

"The hardware dimension of the U.S.-China strategic competition, however, is inextricable from the all-important human dimension. Weapons don’t fight wars, as strategic thinkers from U.S. Air Force colonel John Boyd to Chinese Communist Party chairman Mao Zedongremind us; people who operate weapons do. Both individuals and the big institutions they serve have deep-seated worldviews and ideas about how to cope with the strategic surroundings. A culture that comports with strategic and operational circumstances represents an asset. A culture that flouts reality is a huge liability.

"So the struggle between AirSea Battle and anti-access is about more than developing gee-whiz technologies. A culture war is brewing between two great powers with very different conceptions of the relationship among land, air and sea power. And again, ideas matter. As naval historian Julian S. Corbett explains, armaments are “the expression in material of strategical and tactical ideas that prevail at any given time.” What hardware a nation’s armed forces acquire speaks volumes about how strategic leaders think about war—and how they may wage it."

Keeping in mind "a picture is worth a thousand words" two graphics help highlight the importance of devoting ample thought to U.S. interests in Asia and what it might take to protect those interests.

This graphic depicts the long-running and increasingly contentious dispute in the South China Sea among a number of countries with economic interests in the area. Ownership of islands, even little-bitty ones, translates to fishing and mineral rights extending from them. China claims everything. It's neighbors have their own ideas.

Pulling back a bit, this graphic shows China's view of its 'defensive perimeter' often referred to in military circles as China's first and second island chains. 

You can see that if the U.S. felt compelled to respond to Chinese aggression in the region, whether to contest a grab for resources or come to the aid of an ally, it would have to penetrate and operate within an area well within China's ability to control. 

Our Defense Department should rightfully consider the implications of U.S. interests with respect to the military's potential need to act in support of those interests. In similar fashion, The White House and its State Department should keep geographic and military-related realities in mind as they develop positions and policies reflecting U.S. interests. 

Doing so in the midst of a crisis is too late. Far better to think about "what ifs" far in advance especially given the factors of organizational culture and bias raised by Holmes.

"How Change Happens" - Mauldin

In his latest 'Thoughts from the Frontline', John Mauldin republishes an article that has been his 'most popular one' in his long series of items. I can see why! It is a fairly long item and if read at his website, only available to subscribers. (By the way, subscription to a couple of his newsletters is free and something I recommend.) I've posted it here but given it's length the entire article is 'after the break'. 
If one can summarize, I guess it would be this:
- when confronted by unexpected and startling events, people look for answers that seem to make sense and that are easy to understand regardless of whether the answer is accurate or not. 
- long periods of stability allow for the accumulation of many, many factors and conditions that become interrelated.
- as the connections multiply, complexity likewise becomes more severe and it is exceedingly hard (if not impossible) to predict what might happen when some trigger-event occurs. In fact, you can't know what event will eventually serve as a trigger to a catastrophic event because of the complexity involved.
- the issues of complexity, instability, uncertainty and risk management are germane across the range of human endeavor (though Mauldin is most interested in its impact on financial markets)
- at best, people can mitigate the impact of catastrophic events that WILL happen by reducing their risk where they can and adopting practices in life that provide for the greatest resiliency.

For example, who could predict that a distraught shopkeeper's self-immolation in Tunisia would give rise to the "Arab Spring," that the U.S. housing bubble (actually the collapse of the financial/banking market due to the securitization of bad mortgages) would burst as it did when it did, or that the TEA Party movement would erupt as it did? Such things happen because of the accumulation of a great variety of conditions, factors, personalities, and human emotions over time. As addressed so very well in the article, one more event happens that starts a series of chain reactions.

Grab a cup of coffee and take 15 minutes or so to read the article.


"To trace something unknown back to something known is alleviating, soothing, gratifying and gives moreover a feeling of power. Danger, disquiet, anxiety attend the unknown – the first instinct is to eliminate these distressing states. First principle: any explanation is better than none… The cause-creating drive is thus conditioned and excited by the feeling of fear …"

– Friedrich Nietzsche

August 16, 2012

The Case for American Exceptionalism

This article illustrates why Paul Ryan was the best choice for Romney's VP. A few excerpts from Who Built America?:

"Economic freedom empowers entrepreneurs who have ideas and imagination, investors who take risks, and workers who hone their skills and offer their labor. Our exceptional country was built with the ingenuity, capital, and sweat contributed by individuals who risked it all to provide a brighter future for their families. America was founded on the shared belief that government's primary role is to safeguard our God-given freedoms, as individual initiative and a strong civil society are what make prosperity possible. America is exceptional for this very reason: No other country in the history of mankind was founded on such a powerful idea."

"Of course government has a critical role to play in establishing neutral rules that enable open competition, and in securing peace and order with courts, a standard currency, defense forces, first responders, teachers, infrastructure, and a safety net for the most vulnerable. Government can help create the space for innovation and prosperity, but government can not fill that space. Activist government overreach and ongoing economic stagnation have shown us why Washington should never try to displace what is best left to civil society."

"The moral case for individual initiative in a free economy holds that people have a God-given right to use their creativity to produce things that improve their lives. A free economy and strong communities honor the dignity of every person, reward effort with justice, promote upward mobility, and build solidarity among citizens."

"We don't need to change the nature of America. We do not need to disparage our success, deny our exceptionalism, or transform America. We need to recommit to our founding principles and rebuild what has been broken."

Implications and Consequences of Disorder

In The Drums of August, David Rothkopf does a superb job in discussing the dangerous context of the Israel-Iran problem but in doing so also lays out the general context for the current situation in the Middle East and the challenges that arise with the old, established order decays or is upended and a new order has yet to be established. Our current budget problems have certainly provided plenty of fresh wind to the long-running debate about America's role in the world. Whether discussed in terms of "global policeman," "neocolonial great power," "global busybody," "guarantor of access to the global commons," or "that shining city upon a hill" the fact of the matter is that the U.S. has global interests in the economic realm and as an extension our values, primarily in terms of individual freedom and acknowledgement of 'unalienable rights' of Man endowed by our Creator. Like nature, politics abhors a vacuum. When a dominant power declines other powers compete for dominance in the space that is left vacant. As Rothkopf points out, the Great Powers of the 19th and 20th Centuries provided a framework for order in much of the world. The end of the Cold War, the current reluctance of the U.S. to remain engaged as the dominant global power, and the aspirations of others (China, Russia, Iran, etc.) have combined to create a new vacuum in which new contests are being waged. America might not want to shoulder the costs of foreign engagement but it will have to bear the burden of the consequences of that decision nonetheless.

As for Israel and Iran, I think Michael Ledeen has provided the best observation yet in his most recent post on the matter, The Israel/Iran War Game.

In short, we can surmise and guess and debate and suppose all we want but unless we're actually involved in the most private of discussions currently ongoing in both capitals (Jerusalem and Tehran), we just won't know until whatever happens, happens. Regardless, it is in our (America's) power to decide whether to be influential or not. Personally, I hope we make whatever investments are necessary to 'call the shots' rather than be at the mercy of others who will not have our best interests at heart.

Bravo Mr. Barro!

Loved this WSJ opinion piece from Robert J. Barro, Ryan and the Fundamental Economic Debate. Barro gets to the underlying complexity of economic reality. Of course this means the argument he looks for will never see the light of day in the 'public discussion.' Too bad. 

Then there's this item from Thomas Sowell printed adjacent to Barro's: 
"This election is a test, not just of the opposing candidates but of the voting public. If what they want are the hard facts about where the country is, and where it is heading, they cannot vote for more of the same for the next four years. 

"But, if what they want is emotionally satisfying rhetoric and a promise to give them something for nothing, to be paid for by taxing somebody else, then Obama is their man. This is not to say that the public will in fact get something for nothing or that rich people will just pay higher taxes, when it is easy for them to escape taxation by investing overseas—creating jobs overseas. 

"Even if most Americans do not have their own taxes raised, that means little, if they end up paying other people's taxes in the higher prices of goods and services that pass along the higher taxes imposed on businesses. 

"There are no doubt voters who will vote on the basis of believing that Obama "cares" more about them. But that is a faith which passeth all understanding. The political mirage of something for nothing, from leaders who "care," has ruined many a nation." 

I recently received an email from a good friend, still in the Marines, who works with the Senate on a daily basis. He related a brief snippet that seems apropos: Senator to Marine Corps General, "General, the American people get what they vote for..."

August 15, 2012

Deficit, Debt, and the Fiscal Cliff

This post is more to provide awareness of good, concise references on the topic than for me to add anything of value to the discussion. Both items are products of the Council on Foreign Relations' 'Renewing America' initiative. 

U.S. Deficits and the National Debt is a solid primer on the topic, providing easy-to-read summaries of the major points and links to a host of additional reference material.

What is the Fiscal Cliff? does the same for the holding-our-collective-breath situation due to arrive January 2013. Also know as Taxmegeddon, the 'fiscal cliff' is the umbrella reference for the anticipated (feared) impact of the expiration of some tax relief measures and the implementation of new tax initiatives. 

With regard to the CFR/RA 'Fiscal Cliff' item, I'll add only two thoughts: 1) while mentioning the Budget Control Act of 2011 that will impose $55B in spending cuts on the Defense Department for 2013 alone, it doesn't mention the previous spending cuts already levied against DoD to the tune of $48B per year for the next decade also starting this coming year for a combined total of $103B of cuts per year, a reduction of nearly 20% of the base budget; and 2) much of the analysis I've read on the current federal debt ceiling concludes we may hit the new ceiling just prior to the Presidential election this Nov 6 vice early 2013 as many involved in the negotiations last summer had hoped. 

This raises the possibility that the White House will have to argue for yet another debt ceiling increase at the worst possible time in a presidential re-election campaign. I wouldn't be surprised to see some artful accounting with the national balance sheet between now and then.

"A Few Thoughts on 'Entitlement'"

I heard this on NPR's 'Fresh Air' segment, yesterday, and wanted to share. The link to the story, With Ryan's Ascent, A Few Thoughts on 'Entitlement' provides both the transcript as well as the audio story (7 minutes long) if you prefer to listen. 

"People are saying that Mitt Romney's selection of Wisconsin Rep. Paul Ryan as his running mate creates an opportunity to hold what Ryan likes to call an "adult conversation" about entitlement spending. In the present political climate, it would be heartening to have an adult conversation about anything. But bear in mind that "entitlement" doesn't put all its cards on the table. Like a lot of effective political language, it enables you to slip from one idea to another without ever letting on that you've changed the subject.

"Entitlement" originally had two separate meanings, which entered the language along very different paths. One sense of the word was an obscure political legalism until the advent of the Great Society programs that some economists called "uncontrollables." Technically, entitlements are just programs that provide benefits that aren't subject to budgetary discretion. But the word also implied that the recipients had a moral right to the benefits. As LBJ said in justifying Medicare: "By God, you can't treat Grandma this way. She's entitled to it."...The negative connotations of the word arose in another, very distant corner of the language, when psychologists began to use a different notion of entitlement as a diagnostic for narcissism...But it's only when critics get to the role of government that the two meanings of "entitlement" start to seep into each other."

I do believe that Romney's selection of Ryan does elevate the conversation of the campaign, or at least it should. There is nothing more important regarding the future of our country that the debate that needs to occur about how our country defines itself and what we are willing to do to ensure our children and grandchildren have as many opportunities and advantages as we enjoyed growing up. But for this debate to take place the American vote must take an interest and get involved in the discussion--at the dinner table, with friends and co-workers, and finally at the ballot box. Both aspects of 'entitlement' are important here...the legal definition that translates to large expenditures of public money and the cultural attitude toward 'rights', earned outcomes, and individual and societal expectations.

In my view both aspects of 'entitlement' should fall more heavily on the individual than on the government. To the extent we displace onto government our expectations for 'success in life' and the provision of wealth, we'll find ourselves wholly dependent on the government and less able to define for ourselves what it means to be an individual. Per Theodore Forstmann, “In a state-run society the government promises you security. But it's a false promise predicated on the idea that the opposite of security is risk. Nothing could be further from the truth. The opposite of security is insecurity, and the only way to overcome insecurity is to take risks. The gentle government that promises to hold your hand as you cross the street refuses to let go on the other side.”

August 14, 2012

Paul Ryan, National Defense and Long Term National Interests

Since the announcement of Paul Ryan as Gov. Romney's pick for his running mate there have been numerous articles in defense circles about Ryan's budget proposal, how it might impact the defense budget and veteran's issues, the lack of veteran experience on either ticket (for the first time since the 1920s neither presidential ticket has a veteran at either the President or Vice President position), and whether either team is up to the task of dealing with the challenges threatening the long-term security of our country. 

I think Romney's selection of Paul Ryan was brilliant and I am encouraged by what it says about the perspective of both men regarding the future of our country. As Chairman of the House Budget Committee, Ryan has more detailed knowledge of our current and projected-future budget and fiscal problems than probably anyone else in Congress. He knows and appreciates the fact that if we don't get our fiscal house in order, we won't have much ability to do anything--military or otherwise. 

Here are a couple of items that I think provide some good commentary about Ryan's views on such topics and Romney's related perspective: Romney's brilliant foreign policy choice and Stephens: Paul Ryan's Neocon Manifesto. I take these to say that Ryan isn't a fool and that he understands the severity of the long-term threat to America's strength and viability posed by our growing national debt. His guiding principles, as Stephens points out, include a deep appreciation for national defense because he believes that America and what it stands for are worth defending. He also understands that unless we get our currently out-of-control budget under control, we won't be able to defend squat much less see to our interests abroad. 

As a retired Marine I certainly have an abiding personal interest in the promises made to me and all of those who have served our country. While my service was driven by my 'love of country' and my desire to contribute as much as possible to the greater good, my country (via our defense policies) agreed to reward such service with various pay-and-benefit packages that include a pension and healthcare coverage. I served a total of 24 years in uniform, deploying all over the world and doing whatever I was directed to do in peacetime and in war. I kept up my end of the bargain and I expect our government to hold true to its word. That said, our nation has so frittered away our national wealth that we find ourselves in a massive hole that threatens our very future. I personally believe our country will have to discipline itself to a level we haven't had to deal with since WWII if we are to remain the world's preeminent power. 

Our military has the smallest numbers of ships and airplanes since prior to WWI. Our equipment is terribly aged as a result of continuous ops for over a decade. Yes, we need to ensure broken equipment is fixed and old equipment is replaced. It is also the case that personnel costs are a major portion of the budget and healthcare costs threaten to consume the defense budget if something isn't done to correct the situation. There are no easy answers and I suspect we as veterans will have to share some amount of the burden all Americans will be (should be) called upon to bear. I have no worries that should Gov. Romney be elected--and I profoundly hope his is--he will ensure our military is properly funded and our country's obligations to our veterans are honored. We have historically spent roughly 4.5% of GDP on defense and I've not heard or read of any serious proposals from either camp to change that. 

Lastly, please note the emphasis that President Eisenhower placed on economic issues and tax policy in this Radio Address to the American People on the National Security and Its Costs, broadcast May 19, 1953. Having served as the Supreme Commander for Allied Forces in Europe during WWII, he knew a thing or two about what it takes to win a war against a determined foe. Given this, I find his perspective on the importance of a strong national economy all the more instructive especially given the fact we were at that point in time facing a rising and war-experienced Soviet Union.

VDH: Our Civilization is Under Assault by Our Own Elites

I hope you take the time to read all of Hanson's latest post, Our Not So Best and Not So Brightest. Here's an excerpt:

"In short, our top pundits, our political elites, our very president all believe that they can blast the unfairness of high capitalism while doing everything in their power to enjoy its dividends — and demand an ethical standard from others that they habitually do not meet themselves. It is as if the more left-wing one sounds, the more anti-left-wing his tastes; the more the ethicist lectures on morality, the more he is likely to be unethical; the more green an advocate, the less likely the 800-square foot cottage replete with recycled water, a solar toilet, and 70-degree hot water. The only mystery here is whether there is some sort of logical connection. Does the profession of cosmic morality by design allow one to enjoy without guilt quite earthly sins? Why do super-rich liberals not like the Tea-Party upper-middle-class entrepreneurs? Are the latter in no need of liberal condescension? Do they not have quite enough money to show exquisite taste? Or are they grubby, too close to the struggle for a buck?

"Two final notes on why all this matters. First, when the left-wing media ceases to scrutinize public figures, the latter are emboldened to fabricate, cheat, plagiarize, and flat out lie. It is not that there are not conservative hypocrites, just that the present system makes it far harder for them to get away with these failings. (Imagine the press reaction to a Romney autobiography full of untruths; a Paul Ryan with a yacht docked in a no-tax harbor; a Charles Krauthammer lifting entire paragraphs from the work of others).

"Second, all of the above are part of an elite establishment that is supposed to set standards for emulation, but instead only coarsens civilization. Why tell the truth, hoi polloi, when everyone from Bill Clinton to Stephanie Cutter will not? Can we determine what is true and false, when we have no idea in Time magazine or in a presidential memoir whether the sentence is copied from someone else or simply made up? If the governor frequents prostitutes, how can there be a law against prostitution? After Elizabeth Warren, how can there exist such a thing as affirmative action? Cannot every white male in America assert that he has high cheek bones and so deserves a leg up on any other white male stupid enough not to claim his great-great-grandmother was a Cherokee?

"Our civilization is under assault. Those who have taken upon themselves to direct it are instead doing their own part to destroy it."

It's All Relative...

This article in the yesterday's Wall Street Journal reminded me of a point I raised repeatedly in discussions with groups across eastern Oklahoma when we would talk about America's troubled condition and whether we were in decline. My response was "yes, we do have troubles but let's not forget that America is somehow an isolated thing. We operate in a world that consists of other countries that have their own troubles and we need to keep that in mind when considering America's strengths and weaknesses." I definitely wouldn't want to bank America's future on the assumption that all other countries will be worse off that we are. We need to make decisions in our country with the clear objective of ensuring our economy, culture, military, and political system are as strong as possible. But I think that too often we look at our own situation with blinders own, not realizing that our situation is effected by what's going on in the rest of the world. Do we have debt problems? Absolutely! But if someone in the world with money (whether an individual, a company, or another country) is wanting to invest it someplace, they'll pick a place that is as stable as possible and presents both the lowest risk and the greatest potential for growth. Usually that means investing in America.

From "Troubles Abroad..." (by Sudeep Reddy), "Investors still appear convinced that the U.S. is the safest of borrowers, despite rising angst about government debt around the world...Why is Treasury debt still seen as one of the world's safest assets? The U.S. "effectively got a pass," said Tom Porcelli, chief U.S. economist at RBC Capital Markets. "If you needed to fly into the safety of a country, the U.S. was the best of the worst."

But few things in this world are simple and such is the case with the 'blessing' of being viewed as a safe haven for investment. We normally love to see others viewing our country as the best place to invest and we certainly benefit from being considered the strongest player on the field. But this comes with a cost, i.e. a strong currency means our exports are expensive relative to those of other countries. "More expensive" means we have a hard time competing that in turn means sales, production, and jobs go to our competitors. A weak dollar is actually good for exports but we emotionally recoil at the thought because it appears to reflect the view that our country is weak, less influential, less a 'player.'

There is also the problem introduced by the benefits of increased investment into the U.S. economy and the relative strength we enjoy when compared to the other major players in the global marketplace, i.e. the loss of a sense of urgency that corrections to U.S. spending habits need to be implemented as soon as possible. Again from Reddy, "U.S. debt is seeing similar effects, relieving some pressure on U.S. lawmakers to act with any sense of urgency, either on the economy or its debt troubles. "The flight to safety created a lot of complacency," said Adolfo Laurenti, deputy chief economist at Mesirow Financial. "Governments need incentives to act."

This is an important point. Our leaders in Washington know we cannot sustain our current trend in spending. Something has to change or we will end up as Europe. But people, and especially large organizations, have an extraordinarily difficult time making hard decisions when they think they can put off such decisions until 'later.' Our relative advantage in the world gives us breathing room, but it cannot protect us forever from the harsh consequences of irresponsible fiscal policy. Again, this is a time for true statesman to step up at the national level and make the compelling case for changing our ways. Paul Ryan has been diligent in doing so as Chairman of the House Budget Committee. Let's hope his selection as Gov. Romney's running mate indicates this election will be about 'big ideas' and the future of our country.

Winning the Peace

Several stories have hit ‘the wire’ over the past several days regarding events in Afghanistan with two items most prominent: attacks by Afghan military and police personnel on Americans (so-called 'green on blue' incidents) and growing concerns about the longterm viability of various projects around the country initiated and funded by America.

With regard to the attacks on Americans, we shouldn’t be surprised that they occur even though we will always be angered when they do. Afghanistan is very much in flux with various factions vying for power and all factions trying to find a favorable position in the Afghani power structure that will remain once the Americans are gone. Local alliances are ‘evolving.’ This means our people will be evermore cautious as the U.S. presence wanes and the locals become more aggressive in finding their position in the power structures that emerge. (On a side note, the three Marines killed by local police officials who had invited them to a meal then ambushed them once they were vulnerable were members of the Marine Corps Special Operations Command (MARSOC). An old mentor of mine, someone for whom I have the highest respect, is currently the commander of MARSOC and I know such losses hit him and the others of the command very deeply. It is a small, tight community of Marines and just like any unit that loses members in-theater, such loss is felt across the community. If all goes as planned, I’ll be blessed to attend the MARSOC change-of-command in a couple of weeks. I’m sure this incident among others will be cast a bit of a pall over the it should.)

Developing a ‘secure environment’ is among the most difficult tasks facing a military force in a theater of operations. Since the stakes are so high--literally 'life and death'--people don’t trust each other and they especially don’t trust outsiders even if the foreign forces have the best of intentions. Indigenous forces like the Taliban have an inherent advantage for all the reasons you’d assume: they live in and/or are from the area, they know their neighbors, the speak the local dialect and know the multitude of nuances that a newly arrived foreign force will never fully understand. These advantages can be overcome over time but ‘time’ is the critical element. Since the U.S. has announced a withdrawal date and is actively bringing forces, equipment and supplies home, the locals have little incentive to maintain loyalties with U.S. forces since such an affiliation will place them in the awkward position of having sided with the ‘enemy’ in the eyes of their indigenous competitors once the U.S. is gone.

The U.S. is faced with the challenge of making as much progress as it can in establishing a military, police force and local political establishment resistant to corruption and possessing the long-term interests of a stable Afghanistan even while the time available to do so grows shorter. Of course all our efforts are based on the presumption that the Afghan people want something more than what they have and that the ‘more’ will be akin to what we in the West value. A higher standard of living depends on some measure of wealth; wealth is derived from business; business depends on a stable infrastructure; and a stable infrastructure depends on a stable political and social system. In Afghanistan's case all these are in doubt.

Insight into the challenges underlying all of this is provided in the second set of stories recently in the news pertaining to construction/development projects meant to establish the infrastructure upon which a viable economy could be built that would provide the way of life we presume the Afghans desire. (Examples are here and here.) If you weren’t already aware you likely won’t be surprised to learn that millions of dollars have been wasted, that projects are behind schedule, of poor quality, and hobbled by corruption and mismanagement.

I guess the point to all of this is that ‘winning the peace’ is at least as difficult (perhaps more so) as winning a conventional war and in the long-run even more important. While some argue that this should be a key factor at the very outset of going to war (“what do you want to see in place after we win”) I think the immediate threat serving as the catalyst for war in the first place so far overmatches all other considerations as to make them irrelevant until the possibility of victory becomes a reality.

Gaining support for war is enabled by the immediate threat posed by one’s enemy; the public rallies to the flag, money flows, military forces focus on the task, etc. After the battle has been ‘won,’ however, public attention goes elsewhere, other issues gradually take center stage in political discourse, budget priorities shift. The military is inevitably left holding the bag, so to speak, trying to help establish some element of stability, helping the local population restore order, and supporting the long-term security and economic interests of the U.S. that the State Department knows are important but about which the general public and most politicians really don’t care. It is during this period that serious statesmen redouble their efforts to ensure that the compelling arguments are made and sufficient resources are found such that U.S. interests are served. Sadly, I don’t see any such effort happening today. The current Administration appears to have little interest in making a case for U.S. interests in the Middle East/Central Asia. Our domestic economic concerns quite understandably crowd out just about everything else especially in the midst of a Presidential campaign.

August 10, 2012

China's Future Prospects

In "Superpower Denied? Why China’s ‘Rise’ May Have Already Peaked," Minxin Pei readily admits the fools-errand aspect of forecasting the future of a country like China but he does an admirable job of outlining the numerous pressures on China and the problems China will have to resolve if it hopes to sustain its rise. As I have mentioned many times in the past, demographic trends have a tremendous impact on nations but because they evolve so slowly that are little noticed by people dealing with the cares of everyday living.

China's problems are many and include environmental, public health, terrific income disparity, ethnic tensions, rampant corruption, political fragility and statism, real estate bubble/speculation, massive amounts of 'bad loans' hidden on state controlled bank ledgers, a toxic business climate for foreign interests, and growing tensions with regional neighbors among many others. Does the U.S. have its own problems? Most certainly. As Pei points out, however, a nation's strength is a relative thing that must account for the status of other countries with which it competes or may be effected.

Our system as a whole--free market enterprise, representative democracy, a business climate that spurs and rewards entrepreneurialism and innovation--and the wealth of domestically-owned natural resources places us in a very advantageous position vis-a-vis China. China's history, especially while under Communist rule, does not bode well for its future.

China's situation reminds me of a runner who has not built a proper base for endurance then attempts to 'run with the big dogs'. China has made an all-out attempt to sprint to the front of the pack and by some accounts has made a solid mark in growth and the creation of a middle class. But like the ill-prepared athlete, it will have a very, very hard time maintaining its pace and meeting the growing expectations of its population. Many of the market reforms put into place by earlier leaders are being undone for the current set. I expect China will fade back into the pack since the burst of activity that vaulted it into its current position consumed the resources available and didn't account for the reality of its situation: a rapidly aging population, a skewed worker base, an eroding landscape quickly turning to desert, an economy (and whole cities) built upon false assumptions and brought into being by fiat vice true market growth, and a political framework that restrains and even punishes the very energy and creativity needed for a people and a country to grow.

August 9, 2012

Defining Our Country by "Big Issues"

I really liked this editorial from the Wall Street Journal, Why Not Paul Ryan? While I agree with WSJ's argument favoring Ryan as Romney's VP pick, I think the more important aspect of the article is its focus on how we should be defining this election. Ryan's doggedness in bringing attention to our fiscal and budget problems, pushing forward a responsible plan for dealing with these problems and serving as an (if not 'the') intellectual anchor for the Republicans in the Senate combine with his steadiness and presentation to make him an excellent choice for VP. But the WSJ is absolutely correct in saying that Romney should be making every effort to define this campaign and the future of our country as a contest between 'big' issues and those that are really quite 'small.' From the editorial:

"Personalities aside, the larger strategic point is that Mr. Romney's best chance for victory is to make this a big election over big issues. Mr. Obama and the Democrats want to make this a small election over small things—Mitt's taxes, his wealth, Bain Capital. As the last two months have shown, Mr. Romney will lose that kind of election.

"To win, Mr. Romney and the Republicans have to rise above those smaller issues and cast the choice as one about the overall direction and future of the country. Americans tell pollsters they are anxious and unhappy precisely because they instinctively know the country is troubled in ways it hasn't been since the 1970s. They know the economy is growing too slowly to raise middle-class incomes, while the government is growing too fast to be affordable.

"Above all, Americans are hungry for leadership. They want leaders willing to take on the hard issues, preferably without the rancor and polarization that have defined Mr. Obama's Presidency. But they will reward leaders who succeed despite the rancor, as Wisconsin voters showed by their huge turnout in support of Governor Scott Walker this year.

"Whatever doubts Americans may have about Mr. Romney's empathy or background, more of them will turn out for him if they see a leader with a vision and plan worthy of the current difficult moment. This is the kind of candidate and message that voters need to see in the Republican convention this month and into the fall, and it is the message that Mr. Romney's choice of a running mate should reinforce."

To the extent Americans continue to be distracted by petty issues peddled by petty people, we shall find our country a pale reflection of what it once was and a shadow of what it could be not only for us but for the rest of the world too. I steadfastly believe that a substantial portion of the answer to this problem is the lack of meaningful education in our education system; Americans have little real knowledge and understanding of where we came from, how we got to where we are at, the actual principles upon which our country was founded (not just the words, such as 'life', 'liberty', etc. but the principles those words represent), why those principles are so important and why our government is structured the way it is. When we neglect our foundation, the edifice built upon that foundation will surely crumble. Let's get back to the basics, shall we?

August 7, 2012

"Gore Vidal’s Fan Club": A Commentary on Our Culture?

Andrew Ferguson has written a terrific commentary in the latest issue of The Weekly Standard on the recent passing of Gore Vidal, a noted essayist, novelist and playwright. Vidal was one of those people embraced by the culturati and fawned over by people who want to be known for knowing people embraced by the culturati. You get my point. Ferguson's piece also serves as a commentary on the general practice by our society of ignoring massive flaws in personality, morals, ethics, principles or just plain lack of goodness so long as the person receiving the pass is funny, is outrageous enough, or is in the habit of 'courageously pushing the boundaries' in his or her line of work. Being especially good looking assuredly scores extra points and if one is known to score lots of their own points on or off the field, so much the better in the public eye. 

We regularly say we mean to teach our children how to be good people and how to live good lives and we definitely hear the outcry when an elected official or one of the one-percenters gets caught in an especially compromising position. But we only need to 'follow the money' (literally and figuratively) to see what people really value: paying obscene ticket prices to watch professional athletes who off-the-field lead anything but exemplary lives; spending millions at the box office to watch actors portray (and often actually live as) characters we would not want our children to emulate; or vote and re-vote for officials who show little real interest in or commitment to the long-term viability of our nation. Examples from Hollywood, professional sports, our financial sector and certainly our political class are so numerous as to be comical. 

I guess it's somewhat like the national drug problem. We take steps to hunt down the kingpins who produce and distribute the drugs that devastate swathes of our society but one can't help but observe that the kingpins wouldn't be kingpins were it not for the marketplace clamoring for their product. So long as the undesirable is lauded, rewarded and adulated it will displace what is supposedly desirable every time. 

I know the first step to combatting this is education in the home. The second step, much more difficult than the first, is honesty in our public spaces. I'm less confident we'll see much progress here; it's been a problem for man since our creation. Still, the noblest fights are those undertaken against daunting odds for the greatest of purposes.

August 6, 2012

Run, Hide, Fight

This video was produced by the city of Houston, TX, with a grant from DHS. I've seen several references to it in the news and though it was posted only two weeks ago it has already generated lots of comments (and video responses on YouTube) both 'for' and 'against.' Personally, I think it is a well done, responsible video that simply acknowledges the reality of our world and discusses the three primary options available to someone caught in such a traumatic situation. 

Widening of Panama Canal and U.S. Investments in Our Future

This really will be a 'game changer" for everyone whether countries attempt to account for it or not. Those that do will see increased trade, productivity, and job growth while those that don't will see the opposite. As noted in the article, the people, companies and facilities deeply involved in the logistical underpinnings of commerce are aware of the implications and are taking steps to account for the major shifts that will occur once much larger ships are able to transit the canal. In today's tough budget climate, however, finding the money to make improvements to the coastal and inland infrastructure necessary to take advantage of this situation is very difficult.

For example, the Tulsa Port of Catoosa (not far from where I live) provides direct access for goods and materials from the inland midwest to the deepwater port of New Orleans via the Arkansas and Mississippi rivers. It is fairly easy to see the connection between the massively increased trade capacity mentioned in the article and the opportunities implied for ports, communities, and industries in the mid-west yet the willingness (and ability) to make the capital investments necessary to take advantage of this opportunity seems problematic. It has long been known in this area that dredging the 445 mile-long shipping channel in the Arkansas River that connects the Tulsa Port of Catoosa to the Mississippi to a depth of 12 ft (from its current 9) would enable one third more cargo to transit at no additional expense (in practical terms the cost to have a tug move barges downriver is a fixed cost regardless how loaded the barge(s) is).

According to this story, a "ton of freight can travel 515 miles per gallon of fuel by barge, compared with 202 miles per gallon by rail and 59 miles per gallon by tractor-trailer...Each foot you can load a barge deeper adds about 250 tons to a payload," meaning you can move fewer barges for the same amount of cargo or more barges for a dramatic increase in cargo throughput, both at greater efficiency and less cost. The cost to dredge is estimated to be $180M.

While this seems a lot, it pales in comparison to the losses incurred from lessened throughput capacity. Consider this study about the lower Mississippi in which the author compares a decrease of $45M to the US Army Corps of Engineer budget to an annual loss of $9B to the US economy. The lower budget for the USACE means it will have to reduce its dredging operations resulting in assured channels of 38 feet instead of 45 feet leading to less-fully-loaded ships and barges. So, a decision to save $45M will result in the loss of $9B. Doesn't seem to be too smart. Yet our government(s) is in the habit of making such horrible decisions, witness the Solyndra and Cousin-of-Solyndra debacles.

The point to all of this? I guess it is related in an important way to an earlier post about the role of government. There are some things only the government can really do (such as defending the country, tackling nation-wide infrastructure (e.g. Eisenhower's push for the interstate system), guaranteeing the freedoms and restrictions articulated in the Constitution, etc.) while there are other things (most things!) that should be left in the hands of the free-enterprise market. Running a competitive, profitable shipping company, for example, is a market responsibility. Ensuring commerce can flow to, from, and around market is perhaps a government responsibility and by this I mean the construction and maintenance of the transportation system without which nothing else is possible. Something to think about when considering the expenditures our Congress will debate and the next Administration will advocate.

TR's "Citizenship in a Republic"

I recently re-read a speech given by Theodore Roosevelt at the Sorbonne, the great university in Paris, April 23, 1910. The speech, “Citizenship In A Republic," contains the famous section now known as "The Man in the Arena." Beyond this oft-quoted paragraph, however, the speech has a number of remarkable sections and touches upon a great many themes that are as relevant today as ever. The speech is pretty lengthy but if you have a bit of time I recommend wading through it. Keep in mind that the writing reflects the time period, i.e. it can be cumbersome reading. But don't let that discourage you! Roosevelt addressed individual responsibility, civic virtue, equality (in opportunity, not outcome...and why this difference is important), national identity and pride, one's contributions to the betterment of society, the dangers of self-interested politicians, and much more. The speech is well-worth the time to read in its entirety. Here are some excerpts:

"[S]uccess or failure will be conditioned upon the way in which the average man, the average women, does his or her duty, first in the ordinary, every-day affairs of life, and next in those great occasional cries which call for heroic virtues. The average citizen must be a good citizen if our republics are to succeed. The stream will not permanently rise higher than the main source; and the main source of national power and national greatness is found in the average citizenship of the nation. Therefore it behooves us to do our best to see that the standard of the average citizen is kept high; and the average cannot be kept high unless the standard of the leaders is very much higher.

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

“But the average man must earn his own livelihood. He should be trained to do so, and he should be trained to feel that he occupies a contemptible position if he does not do so; that he is not an object of envy if he is idle, at whichever end of the social scale he stands, but an object of contempt, an object of derision.

“In the next place, the good man should be both a strong and a brave man; that is, he should be able to fight, he should be able to serve his country as a soldier, if the need arises. There are well-meaning philosophers who declaim against the unrighteousness of war. They are right only if they lay all their emphasis upon the unrighteousness. War is a dreadful thing, and unjust war is a crime against humanity. But it is such a crime because it is unjust, not because it is a war. The choice must ever be in favor of righteousness, and this is whether the alternative be peace or whether the alternative be war. The question must not be merely, Is there to be peace or war? The question must be, Is it right to prevail? Are the great laws of righteousness once more to be fulfilled? And the answer from a strong and virile people must be "Yes," whatever the cost. Every honorable effort should always be made to avoid war, just as every honorable effort should always be made by the individual in private life to keep out of a brawl, to keep out of trouble; but no self-respecting individual, no self-respecting nation, can or ought to submit to wrong.

“It is highly desirable that a leader of opinion in democracy should be able to state his views clearly and convincingly. But all that the oratory can do of value to the community is enable the man thus to explain himself; if it enables the orator to put false values on things, it merely makes him power for mischief. Some excellent public servants have not that gift at all, and must merely rely on their deeds to speak for them; and unless oratory does represent genuine conviction based on good common sense and able to be translated into efficient performance, then the better the oratory the greater the damage to the public it deceives. Indeed, it is a sign of marked political weakness in any commonwealth if the people tend to be carried away by mere oratory, if they tend to value words in and for themselves, as divorced from the deeds for which they are supposed to stand. The phrase-maker, the phrase-monger, the ready talker, however great his power, whose speech does not make for courage, sobriety, and right understanding, is simply a noxious element in the body politic, and it speaks ill for the public if he has influence over them. To admire the gift of oratory without regard to the moral quality behind the gift is to do wrong to the republic.

“There should, so far as possible, be equal of opportunity to render service; but just so long as there is inequality of service there should and must be inequality of reward. We may be sorry for the general, the painter, the artists, the worker in any profession or of any kind, whose misfortune rather than whose fault it is that he does his work ill. But the reward must go to the man who does his work well; for any other course is to create a new kind of privilege, the privilege of folly and weakness; and special privilege is injustice, whatever form it takes.

“To say that the thriftless, the lazy, the vicious, the incapable, ought to have reward given to those who are far-sighted, capable, and upright, is to say what is not true and cannot be true. Let us try to level up, but let us beware of the evil of leveling down. If a man stumbles, it is a good thing to help him to his feet. Every one of us needs a helping hand now and then. But if a man lies down, it is a waste of time to try and carry him; and it is a very bad thing for every one if we make men feel that the same reward will come to those who shirk their work and those who do it.

“Ruin looks us in the face if we judge a man by his position instead of judging him by his conduct in that position.

“Of one man in especial, beyond any one else, the citizens of a republic should beware, and that is of the man who appeals to them to support him on the ground that he is hostile to other citizens of the republic, that he will secure for those who elect him, in one shape or another, profit at the expense of other citizens of the republic. It makes no difference whether he appeals to class hatred or class interest, to religious or antireligious prejudice. The man who makes such an appeal should always be presumed to make it for the sake of furthering his own interest.

“I believe that a man must be a good patriot before he can be, and as the only possible way of being, a good citizen of the world. Experience teaches us that the average man who protests that his international feeling swamps his national feeling, that he does not care for his country because he cares so much for mankind, in actual practice proves himself the foe of mankind; that the man who says that he does not care to be a citizen of any one country, because he is the citizen of the world, is in fact usually and exceedingly undesirable citizen of whatever corner of the world he happens at the moment to be in.”

August 5, 2012

The Role of Government - Where's the Debate?

Last week's Economist had a very good editorial concerning the lack of debate in our current presidential contest regarding the role of government. From the article: "AMID all the name-calling in America’s presidential campaign, a serious subject has begun to emerge: what role should government play?...Both men’s positions have been contorted by each other’s attack ads. But there is a real left-right division, personified by the two candidates. Mr Obama, who has spent most of his life in the public sector, academia or community work, plainly thinks the state has a bigger role to play—in galvanising the economy when demand collapses (as in 2008) and in moderating inequality. By contrast, Mr Romney, who made $200m or so in private equity, believes that the best thing that government can do is to get out of the way—by cutting taxes, reducing regulations and leaving people to build their businesses...America needs a man who can spell out what he thinks a modern government should do—and then how to pay for it. With luck the debate will push either Mr Obama or Mr Romney to do that. At the moment, neither seems to understand the central domestic challenge of the next presidency."

Indeed, we are headed to the largest tax increase in U.S. (or perhaps anyone's) history with mandatory cuts of $100B to take effect this January across government expenditures if Congress fails to act (which will likely happen). Yet both the Executive and Legislative branches refuse to stop or greatly reduce spending for any current program, refuse to stop the creation of new programs that require new spending, and endlessly argue about how much or little to increasing spending for current programs. I still remember Sen Coburn's tirade this past January during arguments about whether to increase the federal deficit ceiling wherein he noted that while the Senate was discussing raising the debt ceiling by $1.2B they hadn't canceled or reduced spending for a single government program!

Why is it that our elected representatives have such a hard time dealing with such plain, simple, fundamental issues? I know one reason is that various constituencies have differing interests, all demanding such special treatment in the law and almost all requiring funding or exemption under the tax code. An elected official keeps in mind that canceling a program 'injures' whatever group was benefitting from the program. String enough canceled programs together and you have a sufficiently large population of 'injured' voters that will make sure you aren't reelected, not in a coordinated manner but as a consequence of their aggregated anger. (I'm not implying by the above that politicians always or mostly vote with the sole purpose of ensuring they get reelected. Most of them don't, i.e. vote with this primarily in mind. But it is the case that a politician can't do what he was elected to do--represent his electorate--if he can't stay in office for any length of time. More on that in another post...) I think it would be easier for elected officials to hold the line, and perhaps push it back, if arguments on spending were made within an understood and publicly accepted framework on the fundamental role of government. Big or small (number of employees at such-n-such an expense)? More or less intrusive? Highly focused in its authorities across a broad spectrum of issues or quite general in the framework it establishes, with the details left to the individual states and local communities to work out?

Yes, small, limited, minimally intrusive government is at the heart of the TEA Party and "conservative right" movements while the "liberal left" embraces a much more activist role for government but this argument is not being explicitly made by the presidential candidates in ways that shape their policies and translate to plans they would put into action in January 2013. Wouldn't some 'plain talk' be a good thing for once?