The Republican Crazy Train Tackles Foreign Policy

All of the Republican candidates for President spent the week of 10/7 preparing for a debate in South Carolina focusing on foreign policy. With a few exceptions, the sense of logic and subtlety conveyed by the candidates' answers would be comical if the subject matter didn't involve issues already addressed with the same flawed logic that have cost the United States trillions of dollars over the past twelve years.

A play-by-play analysis of the questions and answers in the so-called "Commander-in-Chief" debate has a very short shelf-life. The details can be read in their entirety at:

http://www.cbsnews.com/8301-505103_162-57323734/cbs-news-nj-debate-transcript-part-1/
http://www.cbsnews.com/8301-505103_162-57323734/cbs-news-nj-debate-transcript-part-2/

It's more useful to organize the insights offered by the candidates into a few key themes -- themes that will come up repeatedly throughout the campaign.


Listening to the Generals -- Principle or Dodge?

Ahhhhh, an oldie but a goodie. This one has become quite popular with novice Presidential candidates in both parties over the past four elections. After the disaster of Vietnam, a certain segment of the political class and voting public came to the conclusion that we lost the war in Vietnam because a bunch of meddling politicians "held back" somehow and didn't leave the battle to the professionals -- the generals. If only we had the manhood to stick it out dumping more tons of bombs on Vietnam, Cambodia and Laos, we would have emerged with our honor intact and another check in the Win column -- completely ignoring the fact that America dropped more bombs on Vietnam (6.7 million tons) than we did during World War II (3.3 million tons).

After fifteen years of relative military timidity, the US became more inclined towards action in the early 1990s using the so-called Powell Doctrine as a proxy for serious thought about when, why and how to deploy military force. Among other things, the Powell Doctrine states force should only be deployed if

a) an obvious national security interest is involved
b) a clear objective is identified and stated
c) a clear exit strategy is defined with objective criteria for executing that exit strategy
d) the country is willing to go all out in the effort
e) every other non-military solution has been tried

These bullets all sound logical but in reality, the Powell Doctrine has NOT been followed. Instead, it has been used to short circuit the analysis process within the government and military and sell poorly thought out missions to the public with a bizarre form of mental jujitsu that allows the Commander in Chief to state as a given that all of the criteria of the Doctrine have been met -- hence this press conference or address outlining the grim choice to the public -- and the very nature of the undesirable action being proposed must mean it is the correct action to take, knowing a politician could never hoodwink voters into a war by making it sound like a cakewalk. After the strategic mistake takes flight, that same jujitsu is used to reinforce the same flawed thinking and continue the mistake. Rather than wuss out, I need to "man up" and continue accepting a variety of difficult choices presented by my military, thus proving I'm capable of making the "tough choices."

For a novice running for President, the "listen to the generals" line is a perfect dodge from answering more pertinent questions about prioritizing resources between guns and butter. Of course, Herman Cain was among those to use the "listen to the generals" dodge in the debate in his responses to questions about the efforts in Afghanistan and Iraq. Saying you'd "listen to the generals" about when to withdraw from Iraq rather than declaring a timetable for doing so overlooks the following facts:

* Iraq refused to renew Status of Forces rules that would exempt American soldiers from criminal prosecution
* a continued presence in Iraq is not improving security on the ground
* a continued presence in Iraq is continuing to reduce troop readiness and supply readiness
* the American people no longer support a continued presence in Iraq
* the American people are clearly unwilling to pay taxes to PAY for a continued presence in Iraq
* the resulting debt from the war has helped to cripple our economy and long term fiscal health

Rick Santorum offered his own frightening twist on listening to the experts in response to a question about the leadership style he would implement as President. His response:

---------------------------------------------------
Well, I'll come into-- to the office of the presidency with a very clear agenda. And we'll-- I'll get people together that will share my point of view. When I was in the United States Senate, I didn't hire people who didn't share how I approach the problem. That's what the people of this country are electing. They're electing someone who's gonna be very crystal clear. And as you heard from my first two answers, I don't mince words. I say exactly what I believe.

And then I follow through and do what I say. I did that when I was in public life before, even though I represented a state that wasn't particularly conservative state. I followed through and did that. And I will surround myself with people who will execute what I promise the American public to do. And then we will go about the process of doing it.
---------------------------------------------------

That might be the single most frightening answer of the entire debate -- and that's saying something. Santorum is basically guaranteeing the American public he will lock himself in the White House surrounded by people who think EXACTLY like him on everything and that he and his team will proceed post haste, hellbent and unflinching, towards the direction he believes voters set by voting for him, any subsequent facts or changes in circumstances after the election be damned. Is this really someone you want within ten miles of the Situation Room or the national checkbook?


Torture Tactics and Tortured Logic

The November 12 debate also raised an interesting parallel to the "listen to the generals" dodge when the topic of torture was discussed. Support or opposition to waterboarding was first posed as a question to Herman Cain who promptly, unambiguously stated he does not support torture --- "Period" -- He said he supports the policies established by our military and would trust the judgement of our military leaders about what constitutes torture. He then promptly stated that he doesn't believe waterboarding constitutes torture and that he would re-instate it as an option. Again, an interesting contradiction to the "listen to the generals" principle, given that the practice was forbidden by the Army Field Manual and was not used by the US military until it was reintroduced by the CIA in Iraq and other black sites under cover of a flawed legal opinion manufactured during the Bush Administration by John Yoo and the DOJ's Office of Legal Counsel AGAINST the guidance provided by the military.

The same question was posed to Michelle Bachman who also stated her unambiguous support for the reinstatement of waterboarding as a legal tactic on the battlefield and elsewhere. Bachmann cites her short tenure on the House Select Committee on Intelligence as one of her foreign policy bona fides but a) wasn't on the committee at the time key decisions were reviewed for major terrorist actors and b) has not apparently considered a huge volume of analysis and reporting from people like Mark Bowden (see #1 for How to Break a Terrorist), Jane Mayer (see #2 for The Dark Side) and former FBI interrogator Ali Soufan (see #3) that shows torture not only failed to deliver actionable intelligence that thwarted attacks but it actually DELAYED and sometimes STOPPED progress that was being made with traditional legal tactics.

Bachmann followed up the debate and her tough-as-nails posturing on torture with an appearance on Meet The Press November 13. Despite a lead-in question from David Gregory stating that her support of waterboarding is in conflict with not only the current head of the CIA, David Petraeus, and tortured POW and former Republican Presidential candidate John McCain but the majority of the Pentagon brass as well, Bachman doubled down on the crazy by stating that taking waterboarding off the table essentially publishes our practices to the enemy, allowing them to train in advance for possible conditions if eventually captured and weakening our ability to capture battlefield intelligence. The only public figure Bachman could cite in support of her position? Dick Cheney.

The only two candidates who demonstrated the presence of any brain cells or a moral conscience were Jon Hunstman and Ron Paul, who both categorically rejected the use of torture in general and waterboarding in particular as ineffective, immoral and un-American.


Fighting a Trade War or Cold War with China

With the exception of some thoughtful caveats from Jon Huntsman, the Republican toolkit for dealing the numerous problems between the United States and China boils down to only two choices --- a trade war or a cold war. Rick Perry attempted to throw the gauntlet down and make a big sound bite splash by saying we need to declare that China will end up on the ash heap of history, as Ronald Reagan stated about the Soviet Union.

Really? That line might work in a 1980s context of cold war between two nuclear powers that had been fighting proxy wars against each other for 30 years. It makes far less sense as a strategy for managing a relationship with a country whose power and influence has grown in direct response to policies and spending by the American government and thousands of individual outsourcing and manufacturing decisions made by Corporate America. How exactly does Romney expect to bury a country on the ash heap of history that has lent our government $1.16 trillion? (#4)

If the Republican Party truly thinks the solution to the "China problem" is "burying" a country with 1.33 billion people on the "ash heap of history," they have a spectacular lack of perception of what's currently happening and a spectacular lack of imagination for alternatives. Why did no candidate speak of reviewing tax rules that might be treating construction of a plant in China with equal benefits as construction of a plant in America? Why did no one mention an effort to support groups within China fighting for improved working conditions and environment regulations -- changes that would drastically weaken the cost advantage China enjoys over US manufacturing because it can still treat workers in iPod and computer factories as mere one-in-1.33-billion disposable units of production?


Foreign Aid and Fits of Pique

Any discussion of foreign aid in a political context has to start by understanding why the issue is coming up and the assumptions made before the discussion even begins. Most American voters think the US spends more on foreign aid than defense. If asked, most Americans think foreign aid spending should be around ten percent of the budget -- an amount approximately TEN TIMES current actual spending. (see #5)

Spending on foreign aid can provide short term and long term benefits in a few key areas:

* providing tactical, short term relief for disaster recovery from floods, earthquakes, etc.
* providing resources to avoid or at least minimize human-led disasters from genocide or famine
* establishing contacts with people below the top tier of a government, providing crucial insight into a country's economic and political power structure

Rick Perry has a vastly different view of the purpose of foreign aid. Based on his comment in the debate, Perry views foreign aid as a major budget savings candidate (it's not) and a form of yearly scorecard keeping by which the United States can punish or reward our friends and allies based upon their behavior and the political trade winds within our election cycle. Perry stated he would zero-base the aid budget for every country every year. While neither debate moderator had the sense to pose a follow-up question about the practical implications, an online viewer did, asking "Would you zero-base Israel's budget too?" Perry immediately recognized the political twilight zone he had fallen into and stated Israel would be zero-based like everyone else but that he assumed they would continue to enjoy a substantial yearly aid budget.


Miscellaneous Head Scratchers

The debate offered a healthy dose of one liners that raise additional questions that best fit thematically under the general category of "Huh?"

The candidates were asked to identify actions they would take that have not been taken by the Obama Administration in response to the conduct of Iran and Pakistan. Newt Gingrich drew an analogy to some sort of top-secret triumvirate between Ronald Reagan, Margaret Thatcher and Pope John Paul II that resulted in the collapse of the Soviet Union and said he'd pursue similar partnerships against Iran. Swallowing the whole Reagan/Thatcher/Pope anti-communist Axis theory as a given, it would then appear that high on Newt's "to do" list upon entering the Oval Office would be "elect Iranian Pope" and "make Catholicism wildly popular in Tehran." I guess the devils are in the details.

Cain and Santorum appeared confused about whether Pakistan was or was not a key ally of the United States. Cain stated it wasn't clear. Santorum stated Pakistan MUST be an ally -- they are a nuclear power. Both seemed to grasp the difficulty of managing a relationship with a country whose geography is strategic but whose internal politics and social divisions prevent their conduct and our response from being neatly categorized into nice boxes. However, Cain and Santorum were either unable to correctly assemble the language to describe those nuances and shades of gray or were unwilling to use such language in front of an audience demanding simple black and white / good or bad answers. Either way, not an inspiring performance. By the way, for future reference, the correct answer to the question would be:

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Pakistan is a country we have treated as a political and military ally whose actual conduct since 1997 has materially harmed its own interests and those of the United States. Pakistan has been attempting to balance the power of moderates and extremists by working with America while still actively supporting Islamic terrorists and would-be nuclear powers by selling nuclear technology to countries like North Korea, China, Iran, Libya and Iraq. America must structure any aid and military support to Pakistan in ways which provide complete transparency to ensure those resources aid moderation in the country and can never be diverted to extremist factions within the country fighting American goals throughout the world.
-----------------------------

Rick Perry was stumped by what should have been an OBVIOUS follow-up question to his debate gaffe earlier in the week and his failure to remember "Department of Energy" as the third target of his cost cutting in the Cabinet. When asked how he would manage the country's nuclear weapons stockpile and program after eliminating the DOE, Perry immediately pivoted towards answering a prior question to another candidate. Either Perry didn't realize that DOE manages the nuclear arsenal and its development or he didn't realize entire departments of the government cannot be eliminated with the stroke of a pen without ensuring continuation of crucial obligations. Come to think of it, with Perry, that's not an "or" scenario.

At one point in the debate, the candidates discussed the merits and legality of killing American citizens acting abroad against America. After a few responses, the net Republican response appeared to converge upon the idea that a person, US citizen or not, acting abroad essentially in a theatre of war against American forces is essentially outside US criminal law and is essentially at war against America and can be taken out. That seems to be exactly the conclusion reached by the Obama Administration which approved a drone attack on September 30, 2011 that targeted and killed Anwar Al-Awlaki and wound up killing Samir Khan who was traveling with him. The two were leading bombing and propaganda efforts for al-Qaeda in Yemen. So much for policy contrast.


=======================

#1) http://watchingtheherd.blogspot.com/2007/04/how-to-break-terrorist.html

#2) http://watchingtheherd.blogspot.com/2008/10/book-review-dark-side.html

#3) http://www.telegraph.co.uk/comment/8833108/Torture-is-not-wrong-it-just-doesnt-work-says-former-interrogator.html

#4) http://www.nytimes.com/imagepages/2011/07/19/business/2110719_yuan_graphic.html

#5) http://www.washingtonpost.com/opinions/five-myths-about-foreign-aid/2011/04/25/AF00z05E_story.html

Gingrich and Cain on the Vital Issues

Herman Cain and Newt Gingrich appeared on Face the Nation October 9, 2011 (see #1) to tackle three vital issues affecting the future of every American over the next five years:

* Can Mormons be considered sufficiently Christian to a bunch of religious fundamentalists in Dallas, Texas?
* Why are a bunch of economically under-achieving ingrates making it difficult for the people on Wall Street to get to work so they can create more jobs?
* Are subpoenas for federal judges issuing rulings I don't like the best way to get rulings I like?

Let's see how they did.

My Religion's Older Than Yours

The first round of questions involved recent comments about Mormonism versus Christianity and each discipline's proper place on the sliding scale between "cult" and "legitimate faith".

Schieffer: Do you think that Mitt Romney is a Christian?

Gingrich: I think he's a Mormon and Mormons define themselves as a branch of Christianity.

Schieffer: Do you think Mormons are Christians?

Cain: I believe that they believe that they're Christians based on their definition but getting into whether or not they're more Christian than another group, I don't think that's relevant to this campaign.


Both attempted to put the politically correct number of rhetorical miles between themselves and the inflammatory comments of the leader of one religious sect about the beliefs of those in another religious sect. It's a delicate balance, really. One cannot just come right out and label the comments for what they are -- ignorant, moronic and UNRELATED to anything actually happening in the country -- cuz after all, one still needs the votes of a lot of religious conservatives to win the Republican nomination. However, one cannot exactly high five the people supporting those comments without alienating another thirty percent of independent voters needed in the general election.

What both failed to directly address is the Grand Canyon sized fissure within the Republican base that could tank the party in 2012 and beyond. If the larger party cannot prevent an ever-shrinking minority from restricting the candidate pool to a subset of the population pure enough to satisfy the dogmatic preferences of some religious nut in Texas, social and fiscal moderates will leave the party and independent voters will flock to Democratic candidates or those from some future separate party. On the plus side, future Republican primaries will be a cinch. The only ten people pure enough to decide who gets to run will be the only ten left in the party so it will be the same ten candidates for office every election.


I Thought Small Business Created All Jobs In America

Bob Schieffer quickly turned to the protests on Wall Street and in many other American cities. He started by playing a clip of a prior comment from Herman Cain:

And to be angry at somebody because they're successful is anti-0American in my opinion. Secondly, this is a distraction from the failed policies of the Obama administration. Why be mad you don't have a job at the bankers on Wall Street? They're the ones that help create the jobs.

BZZZZZT.

Cain may have won a few style points with the true believers occupying the Cxx level offices in the TBTF banks but earned zero content points with anyone with a brain with an answer that ignores the following facts:

* the executives and traders on Wall Street were spectacularly UN-successful, hence TARP
* all of the failed policies involved with the meltdown (including TARP, if you're so inclined) were all executed during the Bush Administration
* the meltdown of 2008 was so steep that statistics on the collapse took over two years to re-calibrate to the true number -- a drop in GDP of negative 8.9% in 4Q2008 and a net drop of 5.1 percent between 1Q2008 and 2Q2009, the worst performance since 1947 (see #2)
* Who said bankers create jobs? I thought small businesses and entrepreneurs created the majority of jobs in America. At least, that's what the Republican platform says when it's touting the "small-town America, mom-and-pop business and small farmer as the backbone of the economy" tripe every election season.

After Cain's answer, Gingrich rang in with this answer:

I think the sad thing is, this is the natural product of Obama's class warfare. We have had a strain of hostility to free enterprise and frankly, a strain of hostility to classic America starting in our academic institutions and spreading across this country and I regard the Wall Street protesters as a natural outcome of a bad education system teaching them really dumb ideas. I was with 35 realtors in Buford, South Carolina on Wednesday who are looking at a disaster in housing but they know that it's the Dodd-Frank bill, it's the Obama administration, it's Bernanke and Geithner and they're focusing their anger on the people who are causing them pain. They're not angry about other people being successful, they're angry about an Obama administration stopping them from having the chance to be successful.

BZZZZT. BZZZZZT.

Real estate agents are angry? Real estate agents think the Obama Administration is preventing them from being successful?

Real estate agents are right up there with bankers in personal, DIRECT culpability for the meltdown that hit their profession. They ARE professionals, right? Highly versed in the long term trends of local markets and the mechanics of home financing and affordability? Location, location, location and all of that, right? That's what the CEO of ReMax kept telling me in TV ads -- "there's never been a better time to buy a home."

Or are they merely one of many players extracting their cut for merely being present during a very complicated, expensive financial transaction? Shouldn't they have known that prior to 2004, families earning $70,000 per year didn't typically qualify for a $300,000 mortgage unless something was awry in the market? What were those real estate "professionals" telling their clients in 2002 when this started happening with home prices?

http://en.wikipedia.org/wiki/File:Shiller_IE2_Fig_2-1.png

Shouldn't they have known that prior to 2004, long term home price increases never outpaced inflation by more than 0.4% except during WWII after recovering from the Depression? I supposed those 3% and 6% commissions on extra volume on inflated prices paid for a lot of Xanax and Ambien to let them sleep at night.


Newt Explains the Balance of Powers

The final portion of the conversation focused on comments Gingrich recently made about the relationship between the Supreme Court and the Legislative and Executive branches and one particular case involving a judge in San Antonio. You can believe what you want about the San Antonio ruling which barred a prayer at a public school but you should also know that the judge's ruling was OVERTURNED -- in a few days -- by a superior court. Think about that. A case was brought to a judge, the judge reviewed the arguments presented, made a ruling, citizens objected, appealed the case to a higher court and the higher court ruled on this issue of VITAL importance to the future of Texas teenagers in a matter of days. I presume the only way the issue could have been resolved any faster is if it somehow involved the school football team.

Gingrich has his own solution to the problem of out-of-control judges whose decisions are "corrected" in a matter of days. In his speech to the Value Voters summit, Gingrich jokingly (???) suggested punishing "out of control" judges and courts by simply denying them funding for clerks. Or subpoenaing judges issuing rulings with which he doesn't agree to appear before Congress. Intrigued by this novel approach to checks and balances, Bob Schieffer asked Ginrich how such a plan would work. Here's how the dialogue went:


Schieffer: Well how in the world would you do that? They 're in one branch of government...

Gingrich: You subpoena them.

Schieffer: But one branch of government can't subpoena people in the other branches of government..

Gingrich: Of course you can.

Schieffer: They don't have to honor the subpoenas.

Gingrich: Bob if that's true, then the court can't say something to the Congress either can it? By your standards, this Supreme Court cannot dictate to the President and cannot dictate to the Congress. But they do. And there are clear provisions in the Constitution to re-balance it.

BZZZZT. BZZZZZT. BZZZZZT.

I think the Ouija board Gingrich is trying to use to channel the minds of Jefferson, Adams, Paine, Madison and the other authors of the Constitution has been hijacked somehow to the mind of some guy trying to sell term papers for hire on the web to high school civics students destined for Ds trying to steal a C.

The checks and balances in the Constitution don't always provide one branch direct (dictatorial) power over another. Many of the checks are more akin to each branch controlling some of the oxygen supply to the others, giving each an incentive to seek a middle ground allowing all three to continue functioning and serving the public. Before appearing in public again, Newt might want to calibrate his planchette pointer thingy so the board spells out the following basics when asked questions about the balance of power in the Constitution:

1) The Legislative branch gets to MAKE the laws and authorize spending.
2) The Executive branch gets to EXECUTE the laws -- faithfully and consistently -- and SPEND the money.
3) The Judicial branch gets to INTERPRET the laws when disputes arise about meaning or intent.
4) The Executive branch can check the Judicial branch through appointments.
5) The Legislative branch can check Executive appointments to the Judiciary via "advise and consent."
6) The Judicial branch can check the Executive and Legislative branches by declaring laws un-Constitution and hence unenforceable.
7) The Legislative branch can check the Executive branch via the power of the purse, veto overrides and impeachment.
8) The Legislative branch can check the Judicial branch by working for changes to the Constitution and by impeaching judges.

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So after the final round of this edition of Republican Primary Jeopardy, the scores are Cain minus $4000, Gingrich minus $8000 and the American public an even $0.


=====================

#1) http://www.cbsnews.com/stories/2011/10/09/ftn/main20117827.shtml

#2) http://www.bea.gov/faq/index.cfm?faq_id=1004

What Happened to Those People?

The memorials to the victims and heroes of the terrorist attacks on September 11, 2001 will be visited by tens of millions of people from all over the world for as far into the future as one can imagine. Each of the memorials provides a unique visual expression of the magnitude of the loss and absence while also conveying a sense of permanence and reverence that hopefully comforts those directly touched by the lives lost.

Whether intended as a thematic group or not, the designs of the memorials individually emphasize different aspects of our national character that served us so well during that day and the months afterwards. The memorial at Shanksville utilizes the space and solitude of the area to highlight the actual point of impact of Flight 93 and the role the forty passengers and crew played as the first literal tip of the spear in America's fight back against the terrorists. The design separates that Sacred Ground area from the surrounding ringed walkway and provides an "inner sanctum" that will be kept off limits to everyone but direct family members. Limiting access helps remind the rest of us that mere familiarity with a tragedy is not comparable to direct experience with a tragedy. Since that experience of limited access isn't practical in a working building like the Pentagon or a downtown area surrounded by millions, the "Sacred Ground" area at Shanksville helps provide a sense of that intimacy and privacy that all of the September 11 families need at some level in such an otherwise global experience. The forty aboard Flight 93 may not have been the first to realize their flight was being hijacked but they were likely the first Americans to be given information via family and friends over air phones and cell phones of the true nature and consequences of what was happening who were also in a direct position to do something about it. And do something they did. Instinctively. Without hesitation. Without a single second to spare. Here is the situation. Here are the alternatives. Here's what's right. Let's roll.

The memorial at the Pentagon provides a powerful counterpoint to the memorial that is the Pentagon's own reconstruction after the attack. In less than a year, the physical damage to the Pentagon building was virtually erased by a massive reconstruction effort. Like a science fiction cyborg with the ability to regenerate damaged parts in seconds and continue the offensive, the rebuilding of the damaged Pentagon provided the nation a chance to prove in tangible terms that mere physical damage alone cannot keep the military or the country from pursuing what needs to get done. Erasing that physical scar within a year to the date of its infliction like it never happened provided a crucial reminder to the world about the focus Americans can apply to any problem. The actual memorial on the grounds just outside the Pentagon provides both a place to marvel at the symbolic invincibility of an emblem of American strength while simultaneously absorbing a visual reminder of the individual citizens who truly provide that strength -- even at the expense of their own lives when necessary.

The design of the memorial in New York City perfectly threaded a needle through distinct, seemingly conflicting needs of family members, a bustling city with a hole torn in its core and a nation that lost a symbol of its ingenuity and drive for ever greater heights. Anyone who visited the World Trade Center towers up close will tell you photos could never convey the awe experienced in person by standing next to one of the monoliths, looking up along the side of the building and absorbing the sight as the building rose up to the vanishing point -- as if to say America sets its sights to infinity and damn it, we're going to get there. The memorial design literally preserves the impression those towers had on anyone who saw them and the sheer magnitude of ambition the creation of those towers represented. At the same time, the design of black granite, falling water and names of those who died in black bronze produces something for the city unimaginable in the days after the attacks -- a place where the sounds of water drown out the normal sonic distractions of a huge city to provide a bubble of isolation allowing contemplation of the magnitude of what was lost, both human and physical. As visitors walk around the perimeters and take in the names of the individuals who died, the vastness of those footprints underlines the hole in the lives of family members left behind. At the same time, visitors can't help but look up from the edges of the former buildings and be reminded that they're still in a country that believes the sky is the limit.

===========================

In some sense, monuments to the dead aren't really for the dead. They may not even be for the living. They're really for those in future generations. Memories and understanding fade and often distort over generations. The memorials for those who died in the attacks on September 11, 2001 are so poignant and effective at conveying the magnitude of the loss on that day that they ensure no future visitor will ever leave without asking one question:

"What happened to those people?"

What was going through their minds when they first realized what was happening? For those that realized their lives would soon end, what occupied their thoughts or provided them comfort in their final moments?

The answers are too painful and too inappropriate for the rest of us not directly impacted to consider. We CAN think about what happened to the rest of us.

Think about the teachers at P.S. 150, a school with 175 children located in the shadow of the World Trade Center towers. They had their own families and children to consider but safely shepherded all of those children through the black soot of the collapsing towers to safety at other schools to the north. Schools don't drill for "collapsing skyscraper and choking dust" disasters yet the teachers remained focused on their students, maintained calm and did the right thing. All in all, over nine thousand children in eight schools in the area were all guided to safety. While the children were off for the next few days, were the teachers off focused on their own families or watching TV coverage like the rest of us? No, they were huddled in other school buildings carefully and thoughtfully planning the experience they would provide to the children upon their return to the classroom, knowing that first experience posed a huge risk of trauma and opportunity for initial healing. They are EDUCATORS. They know these things. It's what they do. And they did it. Perfectly.

Isn't that something you want to know about your children's teachers if YOUR children are ever in a situation like those on September 11, 2001?

Think about the firefighters and police who survived the collapse and spent the next few days amid a flaming, toxic, hazardous waste site attempting to find survivors in the rubble. Think about the search and rescue teams from all over the country who drove non-stop to New York City to help in the search for survivors. Think about the weeks of exhausting hours those same teams spent after rescue became impossible and the remaining goal became recovery of those who perished to provide closure for their families. Sifting through tons of smoking, toxic filth for months and risking their own lives to do it -- even in pursuit of something as noble as providing closure for grieving families -- wasn't in the written job description of any of those who did the work. But it was in their character. It wasn't ever in question.

Isn't that something you want to know about the emergency responders in your community if YOUR family members are ever in a situation remotely like those on September 11, 2001?

So from the perspective of that future visitor decades or centuries in the future, what DID happen to "those people" in the past? US?

After seeing the thousands of individual acts of heroism, sacrifice and simple kindness demonstrated for MONTHS after the horrors experienced on September 11, 2001, how have so many reverted to increasingly divisive, "us versus them" politics in our country? Why have we allowed our political leaders to shift the blame for other unrelated financial disasters onto the shoulders of public employees in the form of layoffs and cutbacks to benefits and pensions previously committed? Why is there any question at all about complete coverage of medical care for anyone associated with those who worked the recovery at the World Trade Center? Hundreds of Americans put themselves in harm's way for others and made the right decisions without the luxury of time yet most Americans cannot be bothered to educate themselves about the social, fiscal and military issues facing the country when we have all the time in the world?

For those of us in the first post-September 11 generation, our most important responsibility going forward is to rethink our relationships with our fellow citizens, our government and the rest of the world and begin respecting the role all of us play in a healthy society, not just a growing economy. We need to ensure that a visitor to any of the memorials fifty, one hundred or two hundred years from now doesn't ask the question "What happened to those people?" in reference to US -- the post-September 11 generation. We saw all of those demonstrations of the decency and generosity of our national DNA in the months after the disaster yet have still grown apart as a people, eyeing each other as culprits for any inconvenience we suffer rather than as partners who can help solve any problem we face. We're better than that. WAY better than that.

Fun and Folly With Facts and Figures

Perhaps the most maddening aspect of watching the deficit debacle unfolding in Washington, DC is the utter failure of any parties (Presidents, Senators, Representatives, voters, media) involved with the spectacle to analyze the true financial impact of any of the proposals or the likely cost of a failure to formulate a viable solution and explain it to the public. Most Americans avoid any real-life use of mathematics like the plague but this is a situation where a few relatively simple calculations can cut through a great deal of FUD -- fear, uncertainty and DUMB.

The thought exercise below is intended to illustrate the true magnitude of ANY of the proposed spending reduction plans by contrasting them with a few obvious, IMMEDIATE impacts of an increase in interest rates that might result from a spooked credit market as our fiscal situation worsens. Why focus on interest rates? First, short term interest rates have a direct impact on both federal budgets and consumers that lends itself to being calculated, Second, the amount of federal and individual debt is a large enough "nut" that any increase in interest rates will produce additional, immediate and quantifiable "ripples" throughout the economy.

The point of the exercise is to illustrate how any voter in the country can cut through the fog emitted by our politicians using publicly available, politically neutral data and nothing more sophisticated than a calculator and a little bit of algebraic problem solving. Think of it as fun and folly with facts and figures -- and your financial future.


Key Statistics

First, here are the key statistics required for the analysis. Sources for most of these are provided as footnotes. A few of the values are calculated from the other values and a few are estimated and explained in the sections below.

    
2010 United States GDP:                 14,814,922,500,000
2011 Federal Budget:                     3,834,000,000,000
2011 Federal Tax Receipts:               2,334,000,000,000
2011 Federal Deficit:                    1,500,000,000,000
United States Debt:                     14,553,830,999,000
Yearly Federal Debt Interest Cost:         213,226,898,000  
US Households with taxable income:             111,839,400
Consumer Residential Mortgate Debt:     11,297,753,000,000 
Consumer Credit Card Debt:                 799,758,370,000
# Housing Units:                               130,159,000
Home Ownership %:                                       66.5%
Outright Home Ownership %:                              28.0%  
% Federal Debt w/ 1-year Financing:                     40%
% Home Loans with Adjustable Rates:                     25%
1-year Treasury Interest Rate:                           0.20%
Avg HH Balance for those with CC debt:             $15,788
Avg APR on cards with balance:                          14.67%
Avg Penalty APR:                                        27.00%

Any analysis based on these statistics must begin with some obvious caveats. First, federal government budget statistics use the government's fiscal year interval (October 1, 2010 to September 30, 2011 for "2011") while most consumer and business statistics involve calendar years. Figures on home ownership are partly derived from 2010 census statistics which may not be exact for 2011 but should not have changed more than a few percentage points. Finally, the interest calculations below avoid monthly accrual calculations of interest and stick with "simple interest." Since the analysis only looks at one year increments, the complexity of compounding interest over multiple years using monthly interest rates just clouds the underlying concept. If anything, the calculations below will understate the problems slightly.


Immediate Interest Rate Impacts

No person can claim to have a clue about exactly what will emerge from the Congressional sausage making regarding fiscal policies or how world markets will react to those policies. However, interest expense is such a huge portion of overall outlays that it's easy to quantify the impact on the budget of any change in interest rates. Since interest rates are already nearly zero and uncertainty and risk are only going up, it's more likely that rates go up rather down. So what happens in response?

First, we have $14.5 trillion in debt. Roughly 40% of that debt is financed with the equivalent of a 1-year adjustable rate mortgage in the form of Treasuries with maturities of one year or less. That means forty percent of that $14.5 trillion can IMMEDIATELY float to higher interest rates within one year. Here's the impact of a one percent increase in the 1-year Treasury rate:

   additional interest = (total debt) x (short term share) x (one percent)
                       = $14.55T x .40 x 0.01 = $58.2 billion

That's the impact to the government's books. The impact on families can quantified using the same process -- looking at debt floating at short term interest rates keyed off the 1-year Treasury. For families, the most obvious debts in that category are credit card debt and adjustable rate mortgages. There are obviously millions of consumers who use credit cards as a payment convenience only and pay their balances off in full every month or nearly every month. However, according to the credit card industry itself, the average balance carried by households who DO carry a balance at all is an astounding $15,788. For those households, the extra interest for a one percent increase in their rate is:

   addition CC interest = (avg balance) x (one percent)
                        = $15,788 x 0.01 = $158 yearly

Again, that's the yearly increase for each one percent increase in their credit card rate, Not too bad, huh? Well, keep reading.

The story for holders of adjustable rate mortgages is much worse. The math is simple but takes a few steps. The following numbers need to be calculated:

1) the total number of current mortgages
2) the average outstanding balance of current mortgages

For #1, we need the total number of housing units from census figures, the current "home ownership" statistic and the current "free and clear" ownership statistic. The math is simple:

  # mortgages = (total units) x (%ownership) x (1 - % free & clear) 
              = 130,159,000 x 66.5% x (1- 28%) = 62.3 million

For #2, the average mortgage balance can be calculated by looking at Federal Reserve data summarizing ALL mortgage debt, deducting out non-housing related mortgages then dividing by #1:

   avg mortgage balance = (housing mortgage debt) / # mortgages
                        = $11,297,753,000,000 / 62,320,129 = $181,286

The additional interest expense of a one percent jump in an adjustable rate mortgage with the average mortgage balance would then be:

    additional ARM interest = (avg mortgage balance) x (one percent)
                            = $1,813 yearly

Ouch. Now think back to the credit card debt portion of the picture. Interest rates on credit card balances aren't guaranteed of only jumping a few percentage points. Legislation enacted in 2009 prevents Bank B from raising a customer's rate to the default rate if the customer is current with Bank B but late with Bank A. That legislation does NOT block bank B from dropping the customer entirely and certainly doesn't prevent Bank A from raising the customer's interest rate to the default rate that averages 27%. Now that extra $1,813 in mortgage interest expense looms more ominously. That's $1813 less the consumer has to pay their credit card bills, increasing the likelihood of defaulting on one or all of their cards carrying the average balance of $15,883. If that entire balance shifts from an average 14.67% interest rate to the 27% penalty rate, the consumer is now looking at an additional $1947 in credit card interest charges yearly. Combined, at least a few "average" consumers could thus be out a total of $3760 in higher interest expenses.


Interest Rate Impacts on the Aggregate Economy

The real impact of interest rate hikes to individuals isn't fully apparent until those individual impacts are added together into a macroeconomic view. The math here isn't any more difficult. For consumers carrying $15,788 on revolving credit cards, any increase in interest expense is likely going to diminish net spending on new goods and services. If they HAD the money to pay off the balances before while still spending more money, the balances wouldn't be there. To determine the total amount of extra interest spent by consumers for this one percent increase in interest rates, the math is:

   total extra interest = (# households carrying balances) x (per household increase)

The number of households actually carrying a credit card balance can be reverse engineered from the total credit card debt statistic and the average carrying balance:

   # HH with balance = (total CC debt) / (average carrying balance)
                     = $799,758,370,000 / $15,788 = 50,656,091

The total extra interest paid by these households would then be:

   total extra interest = 50,656,091 x $158 = $7,997,583,700 yearly

Determining the total extra interest paid on adjustable rate mortgages from our one percent increase in interest rates takes a bit more doing. The total number of current adjustable rate mortgages isn't directly reported in any easy-to-find sources. However, the Federal Reserve DOES provide statistics on mortgage originations by fixed / adjustable terms and that mix has changed from 40% ARMs in 2007 to only 10% in June 2011. Borrowers who still qualify have grown wary of ARMs and the most aggressive lending practices built upon ARMs have been abandoned by most mortgage lenders. The number clearly isn't 40% but it clearly isn't 10% either. Why?

First, a huge percentage of ARMS originated between 2005 and 2008 likely involve homes whose value has dropped between 10-20 percent. Since the vast majority of those with ARMs paid little down on homes now worth 10-20 percent less, they have no equity. Second, the fact that many were "marginally eligible" borrowers to begin with means virtually none have assets that would allow them to put down a 10-20 percent down payment to re-qualify for a fixed rate mortgage.

Due to these factors, a conservative estimate of current adjustable rate mortgages could be SWAGed at 25%. From that, we can calculate an estimate of the total additional mortgage interest expense produced by a one percent increase in rates as:

   total increase = (# mortgages) x (ARM share) x (interest increase)
                  = 62,320,129 x 25% x $1813 = $28,244,382,500

Wow. That's a big number. Add all of the aggregate interest payment increases together and you get:

    federal interest increase        $58,215,323,996
    credit card interest increase    $ 7,997,583,700
    mortgage interest increase       $28,244,382,500
    ------------------------------------------------
    TOTAL interest increase          $94,457,290,196

Consider what that number means. It means for each one percent increase in interest rates, the US economy faces an additional $94.5 billion dollar drag on economic activity that goes to big banks that aren't lending to jump start the economy and to Treasury holders, many of which are outside the US. This is for a SINGLE PERCENTAGE POINT increase in short term interest rates. The current 1-year rate on Treasuries is an absurdly low 0.2 percent. Over time, a rate between 3 and 7 percent is much more typical.


Political Conclusions

A quick review of various debt reduction plans is enlightening but -- as will become evident shortly -- also infuriating. The April 2011 Obama plan called for $2.5 trillion in spending reductions over twelve years -- averaging $208 billion in yearly spending reductions -- and roughly $1.5 trillion in additional tax revenue. The Boehner plan that died on July 29, 2011 after reaching the Senate called for $1.2 trillion in spending reductions over ten years, averaging $120 billion per year in spending reductions with no additional revenue. The Reid plan still gasping for air calls for $2.2 over ten years averaging $220 billion in yearly spending reductions.

Of course, no one really mentions that NONE of these plans actually BALANCE a yearly budget to STOP ADDING to the cumulative debt. If the purpose of all of this posturing is to calm world credit markets to allow deficit spending to continue while we work on the REAL strategy, how likely are any of these plans to provide that confidence? The prior analysis estimated the yearly hit in additional interest expense on EXISTING debt as $58.2 billion for EACH PERCENT INCREASE in interest rates. If interest rates return to historical norms, interest expense for the Federal government will jump nearly $240 billion, completely wiping out any "spending reductions" claimed by any of these plans.

That impact doesn't even factor in the drag on the larger economy due to interest expenses incurred by consumers. At a time when overall economic growth as measured by GDP has already slowed to 1.3% for the second quarter of 2011, the extra $36.2 billion in credit card and mortgage interest paid by consumers will shrink retail sales by an amount equal to 0.24% of GDP at a time when every tenth of a percent in growth is CRUCIAL to supporting jobs and tax revenue. It can be argued that this $36.2 billion still counts as part of GDP since it is income to banks but given their reluctance to lend, much of this money essentially "dead ends" in the system and doesn't support growth.

In short, none of the interim solutions proposed by any of the parties so far materially move the country towards a long term trajectory that balances expenses and revenues, much less helps pay off actual debt. The question then becomes WHY ON EARTH would our politicians then risk spooking credit markets in the short term playing chicken with the debt ceiling when the downside of any panic in the market is so obvious? The answer is that our political process is selecting politicians who accurately reflect the ignorance of those doing the voting.


Conclusions for Individual Americans

The fatal ignorance of America's politicians and voters can be demonstrated by posing a single question:

You are an average American. Your household has the average American income of $50,000 dollars. Your household has an average size mortgage of $181,000. You are faced with the choice between:

A) a one percent increase in your average tax rate
B) a one percent increase in the interest rate on your mortgage

Quick! Which would you prefer? ____

If you're the average Tea Party supporting taxpayer, you reflexively answered (B) because you don't want more money going to the government. If you're the average Republican politician at the federal or state level, you reflexively answered (B) as well because your party has captured a predictable portion of the overall electorate who vote (B) allowing you to protect your corporate special interests who benefit disproportionately from those tax policies. In reality, (A) costs you well south of $500 while (B) costs you $1,810.

Just to reinforce the point, here's another test:

You are a typical American. Your household has an income of $80,000 dollars. Your household owns an home worth $235,000. Your current state has an income tax rate of 6%. Your CEO has decided to move your company to a state with zero state income tax. Whoopee! He or she makes $6 million yearly and will buy a house worth $2.35 million. You are faced with the following choices:

A) finding a job with identical pay and staying put
B) moving, buying an identical home and enjoying the zero state income tax rate in your new home

Quick! Which would you prefer? ____

This is a trick question. To find the right answer, you need two additional pieces of information -- the property tax rates in your current state and the new state. Let's assume the current tax rate is 2.5% and the new state's property tax rate is 5%.

For you, your state income tax savings won't be any larger than $4800 dollars. (6% of an $80,000 "nut") but your property tax bill will jump 2.5% on a $235,000 "nut" or $5875 dollars. At best, you lose $1075 by moving. Let's see how your CEO fares with the relocation. They save 6% on their $6 million salary "nut" -- $360,000 -- and their property tax bill jumps 2.5% on a mere $2.35 million "nut -- $58,750 -- saving them a net of $301,250. It's good to be the king, isn't it?

If you chose (B) for either question, you're an idiot, plain and simple. Like all things in finance, choosing the right strategy involves understanding the percentages working for and against you and the size of the "nut" to which those percentages are applied. Forget either one of these factors and you will eventually find you've lost a good portion of your "nut" to players who CAN keep them straight in their head.

The real conclusion from all of this analysis is that we are headed towards major problems. Choosing the right solutions or weeding out the bad solutions only requires the simplest of algebra to solve for a few unknowns. Our leaders instead focus on distracting voters from reality using arguments and statistics that amount to first and second order derivatives in calculus (percentage changes of percentage figures of growth or reductions, etc.). This approach will continue to succeed at draining our economy and enriching the few as long as the majority of voters fail to master even simple arithmetic. At least until we bankrupt the country. When we reach the point that we cannot assure soldiers under fire in a war their paychecks will be issued and Apple Computer has more cash on hand than the Treasury of a country that owns aircraft carriers and nuclear warheads, it's pretty easy to argue we're already there.

==============================

Sources:
1) budget -- http://www.gpoaccess.gov/usbudget/fy11/index.html

2) debt / tax payers / households -- http://www.usdebtclock.org/

3) residential mortgage debt -- http://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm

4) Treasury Rates -- http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

5) credit card statistics -- http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php

6) home rent / own stats -- http://www.census.gov/compendia/statab/cats/construction_housing.html

The Battle of the Business Models

Bob Lutz, noted "car guy" and former executive of various sales, marketing, operations and design functions at BMW, Ford, Chrysler and GM has a new book on the battle between the "car guys" (engineers) and "bean counters" (accountant / finance types) in American business. BusinessWeek (#1) and Time (#2) have both run short reviews of the book, unambiguously titled Car Guys vs. Bean Counters: The Battle for the Soul of American Business. Lutz writes from an obviously biased perspective and both magazine articles point out the tilt. However, there is a great deal of truth to Lutz' main point -- managing every aspect of a business with numbers and dollars as the only "truth" can be fatal to a company, an industry or even an economy. Interestingly, the Time story ends with this note:

Meanwhile, despite all the post-financial-crisis soul searching within the business community about the value of an M.B.A., schools are still churning them out. There are, and will be for the foreseeable future, a lot more bean counters than engineers in this country. But the same may soon be true in China, where the state plans to open 40 new graduate schools of business in the next few years. As Lutz puts it, "That's the best news I've heard in years."

========================

So what are the essences of these two polar opposite extremes of management philosophy? The "bean counter" model (as Lutz might term it) is built around the assumption that key decision factors about a product or business a) can be determined, b) can be quantified, and c) can be folded and abstracted into ever more complicated models whose pieces can be farmed out to armies of middle managers to create and massage then feed up the chain for final decision making. By the time the numbers reach the top, no doubt via a artificially abbreviated 300 character email read on a BlackBerry on a golf course somewhere, the decisions would seem straightforward. "Hmmmm, A>B, I guess we'll do A."

The "car guy" model attempts to differentiate between purely operational / financial factors suitable for number crunching and specialization in middle management while critical "intangible" decisions about style, technology and risk are left to key players professing to have a battle-tested understanding of the entire business and market though that wisdom may not be independently verifiable. Looking in from the outside, the "car guy" approach might either appear akin to management by a all-seeing oracle or cult of personality (if the business does well) or management by the seat of the pants instead of hard numbers (if the business executes poorly).

Bob Lutz obviously views himself as a "car guy" -- as someone who could have saved Detroit if only the morons in finance had listened. The flaw in Lutz's thinking is that he WAS in Detroit when it was producing some of the worst products ever foisted on the public. Maybe a different "car guy" example might be more instructional.

At this point, there probably is no more famous and successful proponent of a "car guy" approach than Steve Jobs and Apple Computer. Given the positive press about Jobs, one might think Jobs single-handedly coded the upgrades to the latest Lion release of OSX or designed the retinal display of the latest iPhones. There's plenty of negative press about Jobs' management and communication styles as well but Apple's financial success operating within a fickle consumer electronics industry cannot be denied.

Is Steve Jobs really that good? Is he really that indispensable? Or is his success at Apple more of an indictment of the broken thinking of most executives about product development and operations? A few observations might make the case that Jobs' success and that of Apple isn't because they practice the "car guy" approach. Instead, Apple is succeeding because its entire management team is truly managing the business properly -- by financials where it's appropriate and by technical factors where it's appropriate.

In January 2011, during Jobs' health sabbatical, BusinessWeek ran a short story on the managers within Apple in the line to succeed Jobs at the head of Apple. (#3) The bio for each of the top players repeated or implied a common theme -- many could EASILY be the CEO at any other Fortune 500 company. Not just because of the sheer sex appeal of "Apple" on their resume but because THEY WERE THAT GOOD.

My reaction?

Well, DUH!

Each of these executives is doing well because a) they are top notch in their respective disciplines AND b) because each of those disciplines is operating TOGETHER with a larger strategy that honors the function each is there to perform. Apple doesn't execute perfectly on everything every time but it beats the normal 85% new product failure rate because that larger strategy internalized a few crucial lessons from the past:

CONSUMER PRODUCTS REQUIRE A COHERENT VISION -- There were and probably still are at least a dozen ways to make an MP3 player or smartphone. However, any single product cannot simply reflect the "average" of dozens / hundreds of individual decisions about technical details and human factors. This is true for virtually all complex products but it is especially true with consumer products. All of those internally inconsistent compromises are directly / viscerally experienced by the end user and when enough don't add up, the product becomes.... well, a Zune. Steve Jobs absolutely gets this. The entire Apple team knows this. They know there's no guarantee that a new product reflecting a single coherent vision will succeed but there is a VERY HIGH likelihood that a product whose requirements and design were assembled by committee will crash and burn in the marketplace.

DON'T WAIT FOR YOUR COMPETITORS TO CANNIBILIZE YOUR CASH COW, DO IT YOURSELF -- Someone WILL eventually figure out how to steal market share from your current cash cows. It's not a matter of IF, only WHEN. So if it's only a matter of WHEN, it's much smarter for you to influence that WHEN by doing it yourself and coming up with better products. You cement your reputation as being innovative and you reduce "brand churn" by training your customers to expect better things from you rather than the competition.

DO YOUR HOMEWORK -- Does anyone think Steve Jobs sits at his kitchen table watching his kids eating pancakes arbitrarily deciding on his own how the user interface in iTunes will be designed or exactly what the gestures should be in the iPhone interface with a coin toss? Apple has armies of people -- yes some of them engineers but also graphic designers, physiologists and psychologists -- who continually analyze the way humans interact with existing hardware and software and how they react to new ideas made possible by new hardware and software. Apple also understands the tradeoff between flexibility and "open platforms" and uniformity / consistency. Personally, I don't like the closed "app store" model for the iPhones and iPads but as someone who spends 50+ hours per week working with crappy, bloated business software for a day gig, I absolutely understand the attractiveness of Apple's streamlined but locked-down model for consumers who just don't care about details and want one-click installation of new toys.

SHUT YOUR MOUTH! -- Don't say A SINGLE WORD about a new product until serial number 0000001 is physically in a box, through the supply chain and ready to hit stores. Jobs was around in 1983 when the term "Osborne Effect" entered the American business vocabulary. The term stems from a period in which a leading maker of "luggable" computers was suffering a sales decline as their original model was being outgunned by the competition. The CEO and founder, Adam Osborne, attempted to right the ship by announcing the firm had a much better product for less coming in a few months. Alrighty then, said all of Osborne's potential customers and current dealers, we won't order any more of these current models, we'll sit tight and wait for the new ones. The firm literally turned off its own cash flow, telegraphed the price point of its new product months in advance, allowed competitors to plan for the new product and beat its price, THEN FAILED TO DELIVER THE PRODUCT ON TIME. Of course, Apple has realized another benefit from this strategy. When Apple DOES communicate anything about its products, it gains literally millions of dollars worth of free advertising as dozens of web and TV outlets re-run its product announcements as news.

Is this really any mystery to anyone? SHOULD it be a mystery to anyone? It apparently is to many of those with business school / bean-counter blinders.

Maybe this is a more effective way to frame the alternatives: Let a bunch of engineers and bean counters do their respective jobs and you might get Apple or Netflix. Let a bunch of bean counters control the engineering and you get General Motors attempting to sell the same garbage under five different brands. Let a bunch of engineers control the accounting and financials and you get Enron, AIG, Bear Stearns and wholesale securities fraud that wipes out trillions of dollars in nominal wealth and threatens the entire world economy.

=================================

#1) http://www.businessweek.com/magazine/book-review-car-guys-vs-bean-counters-by-bob-lutz-07072011_page_2.html

#2) http://www.time.com/time/magazine/article/0,9171,2081930,00.html

#3) http://www.businessweek.com/magazine/content/11_05/b4213006960578.htm

The Republican Circular Firing Squad

Joshua Green's article "The Tragedy of Sarah Palin" in the June 2011 issue of The Atlantic (see #1) asks a seemingly simple question: What happened to Sara Palin? Green's article does a great job providing many details in Palin's political evolution that make the question more interesting but his answer to the question falls short by failing to explain what "Palinism" truly is.

As background, Green not only delves back into Palin's leap from mayor to governor but provides a useful summary of Alaska's economic and political history. Palin's rise really cannot be understood without understanding the political culture in Alaska that produced the circumstances she leveraged in making her leap to prominence. In a nutshell, Green boils the background down to a few essential facts:

* virtually everything political in Alaska is a function of economics in the state
* the Federal government controls 60 percent of the land in the entire state
* the state itself controls another 28 percent of all land
* the 12 percent of the land left has to serve the entire state economy
* virtually everything left is dominated by oil and natural gas development

In short, the state economy has virtually zero diversity and government budgets are almost entirely dependent upon taxes upon the oil and natural gas industries. As a result, virtually all political battles within Alaska stem from one of the following issues:

1) who (either the federal government or the State Of Alaska) controls energy development plans and leases, and
2) what the tax and lease rates paid by oil and gas producers should be for state resources

The state had gone back and forth on these issues since the scope of its oil reserves first made news in 1969. By 2002, Palin had finished her stint as mayor and gained statewide recognition losing a competitive race for lieutenant governor. She then campaigned for Frank Murkowski, helping him win the governor's race and putting her name on the short list to complete the remainder of his term in the Senate. She failed to get that slot but was given a position on the state's oil and gas commission, identified some ethical lapses on the part of a fellow commissioner in a private letter to the new governor who finally canned the official. Only one problem. That other commissioner was also the head of the state Republican Party. That problem quickly eliminated itself because the governor in the mean time had been renegotiating a new deal for pipeline rights that amounted to a MASSIVE give-away to energy interests at the expense of Alaskan taxpayers.

In Green's narrative of the Sarah Palin biography, this is where all the stars and moons aligned for Palin. She rode the tidal wave of public anger against the governor and his pipeline deal to launch a campaign against him in 2006, easily beat him in the Republican primary then defeat the Democratic nominee in the general election. And this is where it gets interesting for those whose Palin exposure started at the Republican Convention in September 2008.

Palin actually accomplished a great deal in her initial months as Governor of Alaska.

Palin eliminated the cronies who cooked the prior pipeline deal, took back control over construction and licensing of a new gas pipeline and led the charge to enact legislation imposing a new tax regimen on energy profits. She did this by leveraging her prior reputation as a reformer in battling the oil and gas commission, leveraging her popularity with voters after the election to combat existing Republican cronies still bent on preserving the old deals and even worked with Democrats when Republicans wouldn't go along.

How much of a win did Palin provide for Alaska? The new tax regimen on energy profits has produced budget surpluses for the state over a period where virtually every other state is operating in the red. Green cites state officials who estimate the tax bill she helped enact has kept the state budget $12 billion in the black.

And that is the point where Palin entered the national political landscape. John McCain had won the Republican nod for President in 2008 and, like Palin, was in a position outside the mainstream of his party. Few of his first choices for VP would have been palatable to Republican leaders and few of their first choices would have been palatable to him. McCain's selection of Palin as his running mate on August 29, 2008 was quickly pegged for what it was -- an attempt by McCain to "shake things up" by choosing someone with a track record as a "reformer" (albeit a very short track) without picking someone seen as a Republican insider.

In Green's analysis, Palin dutifully assumed the traditional role of VP pit bull by doling out the "red meat" attacks in her speech to the party base. However, her downfall has been her failure to realize that role is just that -- a role, not the defining function of a would-be VP or any political leader. Green goes on to pose the question "what if?" What if Palin maintained a focus on corruption instead of extreme conservative issues and petty personal politics? How might the Republican Party be different? How might the COUNTRY be different?

This is the point where Green seems to miss the key conclusion. Green defines "Palinism" in the same political branding terms that Sarah Palin herself would prefer --- a brand for a "maverick" politician in the best sense of the word -- someone associated with a few clearly articulated principals and long term goals for the public good who is quick on their political feet and capable of leveraging a variety of tactics and cross-political alliances in service to those higher principals.

Palin's true problem is that her dominant brand is something vastly different. Perhaps a more appropriate description of that brand would be three simple words:

Sarah Milhouse Palin

If one had to characterize how Sarah Palin would likely perform for any period of time in any position of power, one only has to picture Richard Milhouse Nixon. Palin has exhibited the exact same combination of pettiness and paranoia as Nixon. Green's story even provides an example of the behaviors and fixations that more accurately reflect that brand.

We already know what happens when someone with those personality traits is subjected to the dueling forces of extreme power and extreme focus and criticism. Even if no criminal activity is involved, there is no way a person with that combination can be productive on the national stage. If you can't live with at least fifty percent of people believing you're wrong or tolerate five or ten percent of your opponents trying to attack you without devoting gobs of mental energy each day to getting even, you simply do not have the temperament to play in the big leagues.

=================================

Perhaps the question Green should have addressed involves the dynamics within the Republican party that are producing such a stunted field of Presidential candidates for 2012. Mike Huckabee decided he preferred a gig in the Fox News commentariat paying him $500,000 yearly for a weekend gig. Nice work if you can get it and Huckabee got it. Donald Trump.... ...well, let's just say we all dodged a disaster there. Michelle Bachman? Right.

So let's look at the remaining contenders.

Ron Paul has sealed his fate by attempting to convince religious conservatives that his support of individual rights in the areas of prostitution and the purchase of heroin is completely one and the same with his support of individual rights providing freedom of religion. Ron, you can try pitching those Libertarian pipe dreams till the cows come home but politically, exactly what voting demographic are you after? The crack-smoking evangelical preacher who likes the ladies? Must we EXPLAIN this to you?

Mitt Romney is having trouble formulating an explanation for his prior legislative work on healthcare in Massachusetts that a) tows the current Republican line on how bad "Obamacare" is for the country, b) doesn't bad mouth his own achievement and cripple his political resume with centrist voters and c) somehow explains ANY difference whatsoever between "Romney-care" and "Obamacare". The best he's been able to do so far is words to the effect of "If a state does X, it's good because it's the right of a state to do the smart thing but if the federal government requires exactly the same X, then it's bad." Uh huh.

Mitch Daniels has yet to formally declare his candidacy and his popularity with the Republican base so far appears to be based upon the fact he's not carrying Romney's health care baggage and he knows many of the Republican power brokers of the Bush II era from his time serving as Bush II's head of the Office of Management and Budget. Given what transpired during the Bush II administration regarding management of the country's affairs and the budget deficits produced, it's hard to see the selling point of that resume. You apparently really have to want to see it.

Newt Gingrich has declared his candidacy for the Presidency and has already managed to alienate critical constituents of the Republican base by speaking his mind. Of course, Newt's entire political brand is based upon being an outside-the-box "idea guy" so it's absolutely no surprise he's already trotted into the doghouse. His offense? He appeared on Meet the Press on May 15, 2011 and labeled current Republican budget proposals as "right-wing social engineering" that have no more place in critical budget negotiations than Democratic attempts at left-wing social engineering.

That leaves Sarah Milhouse Palin. A national name brand making at least a couple hundred thousand dollars a year for occasionally appearing on Fox News while snagging $100,000 per speech who still has enough time to nurse grudges over what some local yocal might have written about her in the Wasilla Examiner or the Anchorage Gazette. Combine that behavior with her continued inability to name a book or magazine she's read in the past two years and she brings the term "small minded" to an entirely new plane.

And that really is the crux of the Republican dilemma. Small mindedness. The Republican faithful demand such rigid compliance with their ideological litmus tests that no potential candidate who has ever reached across the aisle or attempted to balance two or more competing thoughts on critical issues has a chance of escaping the Republican Party's circular firing squad. It's not only their default political battle formation, it seems to be their only formation.

==========================

#1) http://www.theatlantic.com/magazine/archive/1969/12/the-tragedy-of-sarah-palin/8492/

3519 Days for One Psycho?

The news that United States Special Forces have killed Osama bin Laden and captured his body should provide some sense of justice served to those who lost family or loved ones in the attacks sponsored by al Queda througout the world ranging from the the embassy bombings in Kenya and Tanzania on August 7, 1998 to the USS Cole on October 12, 2000 to the attacks on September 11, 2001 and beyond.

It should also provide a huge sense of satisfaction and the beginning of a sense of "mission accomplished" for the hundreds of thousands who have actively served in our military in the silent and not-so-silent war on terror.

For the rest of us in America less directly affected by the attacks or the wars launched in response, what are we to make of the news?

It's certainly a relief to know one really bad actor in the movie has reached an ending you'd wish on the evil villian in a Hollywood western. But the specifics of his demise point out a few issues that will continue posing problems for the world and the United States in particular.

The news reports now indicate OBL was killed in the city of Abbottabad, located 150km north of Islamabad and 200km east of Peshawer. Here's the description of the town from Wikipedia:

The city is well-known throughout Pakistan for its pleasant weather, high standard educational institutions and military establishments. It remains a major hub for tourism of regions in Khyber Pakhtunkhwa, Gilgit-Baltistan and Azad Kashmir in the summer.

A major hub for tourism? I suspect many Americans thought OBL was supposed to be camped out in a cave, cooking ten year old cans of beans on a can of Sterno wondering when the next dialysis machine treatment would arrive by camel or goat.

Instead, it sounds like OBL was hidden in relative plain sight within a relatively well known city within Pakistan, supposedly a US ally. He obviously moved around over the past 3519 days but he likely spent much of that time in similar settings. Since the Special Operations team presumably killed everyone at the compound housing OBL, we can be certain they will scour every square inch of the facility for cell phones, laptops, tape recorders and correspondence to help reverse engineer the network of contacts that allowed OBL to operate for so long.

President Obama's official announcement regarding OBL's death took pains to state that this effort to capture / kill OBL actually began last August when intelligence provided with cooperation from Pakistani sources was first provided to US intelligence to trigger months of clandestine vetting. Teamwork with our ally, that's nice. Yet other stories are reporting US Special Operations forces alone carried out the attack that killed OBL. Apparently, once vetted, we could not trust our Pakistani peers with details of the operation for fear of a tip-off.

While eliminating one really bad guy, information about the location of the operation and chain of people involved with the original intelligence and those found in proximity to the location where he was hidden is likely to shine a light on many other problems within the Pakistani government and the military's Directorate for Inter-Service Intelligence (ISI). This information is NOT likely to help stabilize and moderate Pakistan in the short term. Far from it.

The most important question posed by the elimination of OBL for the United States is simply "what now?".

OBL is gone but the echos of his madness are not silent, nor are the reverberations from America's responses to his madness. America launched two wars in response to fear of additional terrorism and both continue to exact a horrific toll of loss for American service men and women and an unsustainable economic burden to our economy. Since 2001, America has created a vast new hidden national security apparatus that is off-budget and unaccountable to most in Congress and unknown to most American citizens that is costing tens of billions yearly. Yet those billions spent didn't yield the intelligence that led to the elimination of OBL and they didn't yield leads that stopped the would-be underwear bomber headed for Detroit.

America was supposed to have learned many lessons about the communication needs of our first responders throughout the country but we squandered many of the funds allocated for those improvements to local and state pork projects or "studies" and now many states are so broke they're resorting to laying off first responders rather than equipping them properly as we swore we'd do after 9/11/2001.

3519 days for one psycho?

I certainly hope the families of the victims of al Queda's attacks in America and around the world can gain a sense of relief, justice and closure from the news. I certainly hope those serving in our military and their families can enjoy some sense of satisfaction and a little hope that their jobs might be able to wind down a bit.

For the rest of us? We still have some thinking and reflection to do. It shouldn't have taken 3519 days to nab the most notorious psychopath currently on the planet. The fact that it did indicates our efforts were not directed over much of these past 3519 days in the most effective directions and probably still are not directed where they should be.

Operation Huck Finn

Sometimes, it's interesting how seemingly unrelated events in the news arrive from different angles and practically SCREAM to be joined together to make a point, if only people were paying attention. Such is the case with these stories from the past two weeks:

Cleaning Up Huckleberry Finn -- Alabama publisher NewSouth Books, Inc. announced plans in January 2011 to publish an updated edition of Mark Twain's classic novel, with all 239 instances of the N-word replaced with the word "slave." The new edition renewed a decades old debate about the value of Twain's language in making the point of the book versus the angst produced by the raw language in modern classrooms for students and teachers alike. (see #1)

America's New Libyan Adventure -- President Obama commits American military resources to establish and support a no-fly zone, making the theatre safe for a rag-tag band of "rebels" to establish a new pax-democracy using nothing but 30-year old Toyota pickup trucks and a few semi-automatic weapons and shoulder-fired missiles. (see #2)

Corporate America Begs for a Tax Holiday Before Repatriating Overseas Earnings -- In the same week that stories of how General Electric not only paid no US federal income taxes for 2010, but actually received a credit for over $3 billion dollars, 60 Minutes took the time to visit the "corporate headquarters" of a few US firms -- in a sleepy little town named Zug in Switzerland -- which allow those firms to pay only 16 percent on major portions of their income rather than the American tax rate of 35 percent. An interview with Cisco CEO John Chambers featured a plea for special "tax holiday" legislation that might tempt firms such as Cisco to bring back hundreds of billions in profits. The key word there is probably "might." (see #3 and #4)

America Remembers a Deadly Milestone in Labor Relations -- Well, sort of. New York City marked the one hundredth anniversary of a deadly fire at the Triangle Shirtwaist factory in New York City that killed 146 workers locked in their factory by management that provided momentum to a labor movement that eventually improved safety for ALL workers. At the same time, many other Americans and pundits continued piling on union labor as one of a few key contributors to all that ails the country. This despite the fact that labor only accounts for 8% of the total US workforce and that many state and local budget issues stem from a collapse in property tax collections caused by the financial crisis and fraud, something produced entirely by Wall Street banks and non-existent regulatory oversight. (see #4)

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Probably top on my list of concerns about America is the sheer number of people who are not only ignorant -- of basic finance, of technology, of how the government is supposed to work and what a government is for, or about history and religion -- but PROUD of being ignorant. The origins and rationalization of that pride may vary. They might stem from some sense of religous spirituality that evolved to a point where faith supersedes logic and facts. They might stem from a cynical attempt at populism and a desire to avoid the appearance of "putting on airs". In many cases, they might just reflect the path of least resistance --- bein' ignert's just a lot less work, after all.

Regardless of the origins, the results wind up the same. This is the ignorance that produces ideas like:

AIDS is God's curse on gays. (Uh, noooo, it's a condition resulting from an infection by a virus that kills key defenses against infections humans can normally defeat with ease.)

I'm rich because God chose me. (Uh, that's possible but it's equally possible your fortune is really the result of a few fortunate decisions amid a larger financial bubble and your "prosperity Gospel" belief that God chose you to be wealthy and chose your neighbor to be poor is really after-the-fact rationalization for being in the right financial place at the right financial time.)

A zero-down ARM for a $500,000 house with only $80,000 in income is safe cuz home prices always go up. My real estate agent told me. (Uh, how can home prices continually rise when incomes are flat and productivity is nearly flat? Where are all those dollars being used to pay those ever-growing mortgage payments coming from if not actual hours worked? DEBT. And hey, dummy, your real estate agent could care less if you default on your mortgage six months later. As long as you close, they collect their commission and are out of the equation.)

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Rather than some new military "Operation Odyssey Dawn" in Libya to defend some indirect principle of freedom, America would be better off pursuing a project we'll call "Operation Huck". At $10.00 per copy, Operation Huck would cost a mere $3.07 billion (the cost of about six days of military operations in Iraq and Afghanistan) and provide The Adventures of Huckleberry Finn in its unabridged full glory to EVERY CITIZEN who would be required to read the original text cover to cover. The purpose of the operation would not involve forcing everyone to read a book with "the N-word" in it. Instead, the mission of the operation would be for all Americans to reach the climax of the book at the same time and maybe enable the collective "ah ha" moment we so desperately need.

The common analysis of Huck Finn cites Twain's use of dialect and frequent use of the N-word as literary devices in service of the following dependent series of goals:

A) truly capturing the level of education and sophistication (and lack thereof) of the mid-1800s American population

B) capturing the particular ignorance of the protagonist in the story, Huck, using the literary device of the naive narrator that tricks the reader into thinking ahead of the narrator

C) using a and b to heighten the tension around Huck's gradual realization of the humanity of slaves and the inhumanity of those who kept them, despite their genteel social veneer

D) bringing it all together at the point where a confused little boy thinks he's committing a sin that will damn him to Hell as he finally agrees to help Jim escape when in fact he's doing the moral thing but has been so twisted by his religion and upbringing that he is morally disoriented

E) thus depicting for American readers the true nature of the country's "original sin" and the problems that must be faced with race relations -- if an ignert 10 year old boy can figure out the real truth, surely the rest of us should be able to

In hindsight, I think Huckleberry Finn can be abstracted one more level beyond the moral issue of slavery and its damage to the country. Twain's masterpiece has survived because it's really a universal cautionary tale of the dangers of willful ignorance in any realm -- with slavery just as an example in a period piece setting. Willful ignorance seems to be America's lasting "original sin."

Do Americans think roads pave themselves? Do Americans think sewers just appear wherever they want a home? Do Americans think fresh water aquifers serving millions of people rebuild themselves after 100 years of service? Do Americans think firefighters just show up for free to risk their lives to stop a fire at your home? Do Americans think doctors magically become brain surgeons by "believing" how to do it? Do Americans think three telecom giants owning all the wires and spectrum and TV networks will tell them that GE buried dioxin in their town? Do Americans really believe it's appropriate for the US to continue loaning out military assets for every natural disaster or "humanitarian" intervention while our friends continue to steal our tax base from under us with artificially low tax rates? Do Americans truly believe that 8% of the total workforce belonging to unions produced the financial meltdown of trillions of dollars in complex, fraudulent financial instruments? Do Americans think no other nations have the financial muscle or political / moral interest to cover the cost of a no-fly zone to topple a terrorist dictator in their own regional backyard? Do Americans think all employers will voluntarily ensure safe working conditions and reasonable work hours while the CEO makes 230 times the average worker?

Maybe America IS the world's one indispensable nation. We're indispensable because we're the sucker. We're the sucker at the table in dealing with our own trans-national, tax-dodging corporate goliaths and the sucker at the table in dealing with the rest of the world community, a community more than willing to let us bankrupt ourselves playing cop on the beat for their regional conflicts while blaming us for desecrating their soil as we do their dirty work.

But everything will be all right. We have "faith." And all of us could be rich someday and don't want to pay high taxes.

=========================

#1) http://www.cbsnews.com/stories/2011/03/18/60minutes/main20044663.shtml?tag=mncol;lst;3

#2) http://dailyherald.com/article/20110402/news/704029870/

#3) http://www.theatlantic.com/business/archive/2011/03/did-ge-really-pay-no-us-taxes-in-2010/73178/

#4) http://www.cbsnews.com/stories/2011/03/25/60minutes/main20046867.shtml?tag=mncol;lst;1

#5) http://www.msnbc.msn.com/id/42273592/ns/business-us_business/

SOTU 2011: Ask Not

The power of a powerfully crafted message is really quite astounding. Fifty years ago, a man stood in the bright sunshine of a bitterly cold January day after taking the oath of office as President of the United States and spoke about the competing interests of two nuclear powers, pledged continued friendship to our cultural and spiritual allies, pledged assistance to countries making their first movements towards democracy and the unique challenges of a society coming to grips with the role it assumed while preserving freedoms for millions in the world while also correcting deficiencies in those freedoms for millions of its own citizens. In his thoughts on those uniquely American challenges, the new President tossed in a little rhetorical flourish towards the end of the address:

And so, my fellow Americans: ask not what your country can do for you--ask what you can do for your country.

Fast forward fifty years since that address and those few words have easily become among the most recognized words in our entire language, much less the American political dialogue.

Fast forward fifty years since those words were first uttered and they now could form the basis for a State of the Union address.


No Money

If a single word had to be chosen to represent the current economy, fumes might be the best choice. Federal, state and local governments not only have little or no reserve resources for "rainy day" surprises (did you know it SNOWS in New York City in winter?), many now have zero resources for routine minimal operations. If the worst of the financial crisis was behind us, toughing it out for 5-10 years might be painful but do-able. That's not likley the case, however.

The financial picture for the individual states and US Federal Government is a microcosm of the worldwide financial system. Like the US Federal Government acting as implicit backstop to possible state defaults in California, Illinois or New York, Germany is filing a similar role in protecting a precarious balance within the European Union states. Those precarious positions are the financial equivalent of an irresistable force encountering an immovable object -- and just about as predictable. The balance depends upon economies inflating local currencies to sop up OLD bad debt while simultaneously avoiding spooking new lenders from being concerned about the shrinking value of future units of currency used to pay back additional borrowing. The exact number of times this has occured in the past according to plan when trillions were involved isn't known but thought to be very close to zero.


No Willingness To Pay

The fiscal crisis hitting many states raises another fundamental problem facing the country. Based on most press accounts, there seems to be ZERO willingness on the part of any tax payers to pay more for existing services, much less additional taxes for additional services that might be required or advisable (little things like bridge repairs, staffing at financial regulatory institutions to detect future mass frauds, etc.). As an example, the State of Illinois recently raised tax rates SIXTY SIX PERCENT in an attempt to close their budget gap. Sounds draconian -- if not downright fiscally suicidal according to some -- until you realize that sixty six percent added on to a really small number is still a pretty small number. The state income tax rates went from 3% to %5 percent for individuals and from 4.8% to 7% for businesses.

Before jumping on a tax increase as a "job killer", stop and do some math. Assume the average small business pulls in about $1 million in revenue and the owner nets about $250,000. The extra 2% in income tax costs about $5000 which might be enough to hire a fry cook in a fast food joint for four months. Not exactly the kind of hit that's going to make or break a decision to buy a new $50,000 CNC machine or hire a full time worker with benefits.

Of course, the stink over a sixty six percent tax increase begs a more important question. Exactly WHAT was Illinois thinking by only having a 3% tax rate in the first place? Did Illinois find a solution to prevent roads from being destroyed by salt and snow plows? Did Illinois find a solution for primary, secondary and post-secondary education that was twice as cost effective as the rest of the country? Here's a summary of the state income tax rates for Illinois' neighbors (#1):

Iowa -- 6.48%
Missouri -- 6%
Indiana -- 3.4%
Kentucky -- 6%
Wisconsin - 7.75%
Michigan -- 4.35% ***

*** While not technically bordering Illinois, Michigan is another Northern industrial state that has suffered far WORSE economic decline than Illinois yet has a debt/GDP ratio no worse than Illinois and lower debt per capita.

Another interesting way to understand the scope of the debt crisis facing Americans is to reduce the national debt down to taxpayers. America's official 2010 population is 308 million. In that 308 million, there are approximately 114,825,000 households and roughly half of them pay no taxes. The $14 trillion in total debt amounts to $45,454 per American, or $121,924 per household or $243,848 per tax-paying household. Of course, no one's expecting us to pay back $14 trillion in one year. If taxes were restructured to reduce the debt (not just the deficit but the DEBT) to zero over 20 years, the average tax payer would have to eat $12,192 in extra principle payments yearly. If no one's willing to pay those kinds of taxes, where is the willingness to cut spending? Not "fraud and abuse" or "foreign aid" but REAL spending?

Here is one final example of tax hypocrisy for all Americans. For those of you opposed to a "government takeover" of healthcare, consider these questions:

* Did you ask your Congressperson to oppose the expanded Medicare drug program enacted in 2003?
* Are you opposed to Medicaid?
* Have you actually worked with a lawyer to "bankrupt" an elderly parent by transferring their assets in advance to family members so by the time they needed nursing home or hospice care, they were officially indigent and eligible for state aid?

Where's the rugged American sense of individualism and personal responsibility in THAT?



No Brains

There are many examples that could fall under this category but we'll keep it limited to military spending and healthcare, probably the two biggest expense categories jeopardizing the future of the country.

In the military area, perhaps the single statistic that best summarizes the insanity of our strategy or lack thereof is this:

* in 2010, America lost more troops to suicides (468 for active duty and reservists) than to combat (462)

That's the second year in a row this has been the case.

That really means the astronomically expensive wars being fought may not be "hot" in the traditional sense but are certainly "hot" in the psychological stress sense. More importantly, they are doing NOTHING to provide worldwide stability or a material reduction in risk from terrorism. Terrorist attacks have continued unabated worldwide and the thwarting of terrorist plots within the United States have had nothing to do with information gleaned from combat operations in Iraq and Afghanistan. Despite this mismatch between tools and results, we continue to spend $533 billion dollars yearly on "defense" -- twenty three percent of the entire federal budget. And that figure does not include additional billions in "national security" spending not even publicly budgeted. (#2) Despite all that spending on "national security", we continue to see cases where suspicious activity is reported directly to American agencies -- sometimes from family members of the would-be terrorists -- that disappears into the new Department of Homeland Security bureaucracy that is surpassing the dysfunction of the agencies it replaced and consolidated.

In healthcare, special interests continue to thwart any effort to change a status quo which is bankrupting the public and private sector alike through the mis-application of a delivery and payment system that provides inefficient / inappropriate care yet creates zero incentive for any of the participants (patients, doctors, payers) to alter the system.

Atul Gawande published a story in the January 24, 2011 edition of The New Yorker entitled The Hot Spotters addressing flaws in primary care delivery that are producing HUGE costs in emergency care. (#3) The story describes statistical analysis performed by a physician operating in Camden, New Jersey who found that one percent of patients in Camden area medical facilities were associated with THIRTY PERCENT of total costs. These one percent patients were not all afflicted with rare diseases only treatable by astronomically expensive cutting edge prescriptions. Instead, the vast majority had relatively straightforward conditions that remained untreated as patients lacking primary care resorted to emergency care from facilities solely designed for trauma care.

In one case, a woman with MIGRAINE HEADACHES lacking regular healthcare wound up making repeated visits to various ERs and incurring multiple CAT scans and MRIs which -- surprise -- turned up nothing actionable. In essence, the patient got no primary care, escalated to ERs when the pain became unbearable, saw a doctor aimed at ensuring she wouldn't DIE from something like an anyurism or stroke, then after finding no risks of imminent life-threatening issues, released her without ever solving the problem and thus without ensuring she wouldn't come back generating the same cycle of wasted tests. In other cases, patients requiring ongoing prescriptions after major illnesses failed to renew subscriptions or failed to take the medicine -- often because they were old and confused and simply needed someone to follow up with them.

OK America. You're not sold on "government healthcare." You think the current healthcare system is bankrupting American businesses and stifling job growth. What if there was a way to fund the cost of providing primary care physician services and in-home nursing follow-ups that could produce thirty-fold savings? What if -- horrors -- it involved a government program to pay for it? OK, you don't like a "government solution" so what if -- horrors -- it instead involved changing the regulation of insurance companies to lessen the fixation on payment and paperwork and allowed more physicians' time to be devoted to actual delivery of care?


No Choice

At this point in 2011, Kennedy's famous line about "ask not what your country can do for you, ask what you can do for your country" seems quaintly naive. Kennedy spoke at a time when a debate could be framed between a choice of people agreeing to work for improvements in society through the active involvement of goverment ("what your country can do for you") or people finding creative ways to work directly with other people for improvements to the country ("what you can do for your country").

Kennedy couldn't possibly imagine the peculiar form of conservatism that has overtaken the political landscape like crabgrass in August -- a cynical conservatism that assumes NOTHING good or efficient will ever come from ANY group of people acting together through government so any attempt to try is doomed to failure. Strangely, this cynical conservatism has no trouble trusting the fate of the country to individuals acting within a business setting with minimal taxes and even more minimal regulation, even as people crawl out of the wreckage of a financial collapse costing more than a trillion dollars and millions of jobs.

If that's what Americans truly believe, there really are no choices or challenges to pose in the State of the Union address. The entire speech could be boiled down and tweeted to the masses:

Ask not.

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#1) http://www.taxfoundation.org/files/state_individualincome_rates-20100327.pdf

#2) http://projects.washingtonpost.com/top-secret-america/articles/a-hidden-world-growing-beyond-control/

#3) http://www.newyorker.com/reporting/2011/01/24/110124fa_fact_gawande