Why Boeing Is Imploding? Part I

Part II (18 July 2013) can be found at this link
Part III (25 April 2019)) can be found at this link

President Obama says that restoring America’s competitiveness is one of his top priorities.  Yet under his watch, deindustrialization, financialization, and globalization continue without interruption.  Many advocates of defense spending argue that spinoffs from the Pentagon's R&D and high tech engineering practices are keys to reinvigorating America’s manufacturing economy.  For whatever reasons, Mr. Obama shows no intention of reining in defense spending by anything more than a cosmetic amount, even though the defense budget is higher now that at any time since the end of WWII (after removing the cumulative effect of 60 years of inflation), and despite the fact that the United States is spending about as much on defense as the rest of the world combined.  Let us hope Obama has not bought into the bogus arguments that spending more on defense will be good for restoring competitiveness in the manufacturing sector of the American economy.

Defense spending may be necessary, but it can not be justified on the grounds of increasing general industrial competitiveness.  In fact, the so-called spinoffs offs from Defense spending can transmit the corrupting effects of the politically motivated, cost-plus economics of the Military - Industrial - Congressional Complex (MICC) into the larger economy  The MICC not only subsidizes wasteful cost growth in the Pentagon, its activities infect the overall economy by soaking up scarce investment and human capital; corrupting the practices of science and engineering; distorting research content on a huge scale; while  providing incentives for inefficient production and management practices, (e.g. excessive outsourcing for political reasons - aka the political engineering practices explained here and here), not to mention the politicizing of industrial management.  

It is no accident high wage countries that spend a smaller proportion of their GDP on defense, like Germany, have more competitive industrial manufacturing sectors than the United States.  To quote, William Anders, former CEO of General Dynamics, “most [weapons manufacturers] don’t bring a competitive advantage to non-defense business,” and “Frankly, sword makers don’t make good and affordable plowshares.” [see page 58 and end note 4, The Domestic Roots of Perpetual War]

In the past, many defenders of the spillover effects of high-defense budgets invoked the competitive nature of Boeing Corporation as counterpoint disproving the preceding statements.  Boeing is a company that has been competitive in the commercial international aerospace markets, has been a major export earner, and is a huge defense contractor to boot.  Surely, Boeing is an example of serendipity and spinoff in the defense-private sector combination! 

But wait, the Boeing 787 is shaping up to be a disaster, at least from a cost overrun standpoint.  Can it be that  the corrupting effects of defense spillover, plus the not unrelated dysfunctional affects financialization and outsourcing of production,  have finally caught up with Boeing and are now dragging Boeing’s commercial competitiveness into the dustbin of commercial history, as these practices did earlier in commercial airliner production efforts of the Douglas and Lockheed and Martin corporations?  Is Boeing about to become the next welfare queen sucking at the Defense teat.

I asked my good friend Pierre Sprey for his opinion. Sprey is a brilliant engineer and a long time critic of defense design pathologies.  In fact, I call Pierre the All-Purpose Schwerpunckt because of his wide range of interests, knowledge, and the pithiness of his analyses.   He responded in his typical fashion, citing a 5 February report in the Seattle Times to buttress his argument.  Moreover, the Times report cites a brilliant internal Boeing Report, written in 2001 by Dr L. J. Hart-Smith, that describes the disastrous economic effects of excessive outsourcing that is now dragging Boeing down.  Hart-Smith reinforces Pierre’s points in spades (particularly Pierre's comment about political engineering*), although Hart-Smith’s paper is focused entirely on commercial applications!

Attached herewith is Sprey’s diagnosis of Boeing and the effects of defense management practices on Boeing’s competitiveness in commercial markets and the Seattle Times report triggering Pierre's analysis.  After reading this, I would urge you to study Hart Smith's important report.

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*FYI, the theory and practice of political engineering by all the players in the MICC are explained Defense Power Games and my June 4, 2002 Statement to Congress. 

Chuck Spinney

Why Boeing Is Imploding

Pierre M. Sprey

Boeing has been making money on commercial airliners for 60 years by creating and enforcing a wall between their military and their civilian manufacturing divisions. Their latest and largest-ever commercial venture, the 787, has turned into a classic DoD-style fiasco, with huge engineering, quality control, schedule and cost screwups. They have overrun their planned $5 billion investment by a breathtaking $12 to $18 billion. You don't have to be wearing a deer-stalker hat to deduce that the rotten practices bred by DoD procurement have finally infected the executive suite of Boeing's commercial division. The Seattle Times story below lifts a corner of the rug, revealing that the rot began when Boeing merged with McDonnell-Douglas--and when McDonnell executives began introducing the same mindless management techniques that had wrecked Douglas as a commercial aircraft producer. 

An in-depth history of the 787 Dreamliner disaster would almost certainly uncover the following lessons:

- The simple-minded Harvard Business School style focus on percent return on investment--combined with the executive greed engendered by outrageously excessive compensation geared to stock prices--was at the root of the Dreamliner's initial financial mismanagement and the subsequent years of financial coverup.

- Boeing's heavy outsourcing strategy (intended to bring in investment money and to sweeten overseas marketing deals) certainly caused the Dreamliner's engineering failures, disastrous loss of quality control, endless and uncontrollable schedule delays. These are exactly identical to the disastrous consequences of the DoD-encouraged outsourcing to subcontractors in 40 or more states (i.e., "political engineering") that wrecked the C-5, F-22 and F-35 programs. ["political engineering" and it companion practice, "front loading" are explained here and here.)

- Bringing into the Dreamliner team engineers from Boeing's military programs undoubtedly brought in lots of DoD's engineering malpractices: unwarranted avionics complexity; reliance on untested and overtouted composite materials; wishful thinking projections of weight, drag and production cost; use of finite element analysis, computational fluid dynamics and simulation modeling to replace solid hardware testing. 

In short, the Dreamliner stands as a perfect paradigm of the profoundly negative spinoffs for the U.S. economy of DoD (and NASA) high tech spending--exactly the problem that Ernie Fitzgerald (see The High Priests of Waste) and Seymour Melman (see The Permanent War Economy and Profits Without Production) warned us about over 35 years ago.

-----[Attached Seattle Times Report]-----

A 'prescient' warning to Boeing on 787 trouble

Boeing commercial airplanes chief Jim Albaugh had some unusually candid comments about the 787's global outsourcing strategy at a recent Seattle University talk.

Seattle Times business staff, Seattle Times 5 February 2001

Related

• 2001 outsourcing critique caused a stir
• Hart-Smith's 2001 paper on outsourcing (PDF)

In a late January appearance at Seattle University, Boeing Commercial Airplanes Chief Jim Albaugh talked about the lessons learned from the disastrous three years of delays on the 787 Dreamliner.

One bracing lesson that Albaugh was unusually candid about: the 787's global outsourcing strategy — specifically intended to slash Boeing's costs — backfired completely. [… continued]

An excellent critique of Israel's grand strategy ...

... which is to morally isolate itself by making enemies faster than it can kill them.  

If Israel's behaviour continues unchecked, the pro-Israeli biases in and distortions of US policies will intensify our own isolation until something snaps in our polity -- and then, Israel will be all alone.  

IMO ... Israel's only constructive option is to do a grand strategic U turn, which Israel's leadership steadfastly refuses to do.  On the contrary, it shows every sign of digging itself deeper into the self-destructive bunker mentality described by M.J. Rosenberg below. 

[Interested readers will find a summary of the basic ideas underpinning a constructive grand strategy, which are universal, in this blaster, where I criticized the US grand strategy pursued by the Bush Administration.]

Why Is Israel So Blind?

MJ Rosenberg, Political Correction, February 02, 2011 3:55 pm ET

http://politicalcorrection.org/print/fpmatters/201102020009

Those of us in the pro-Israel, pro-peace camp do not enjoy being proven right — although we invariably are.

Our standard recommendation to Israel is that it should move quickly to achieve agreements with the Arab states and the stateless Palestinians before it is too late.

And the Israeli response is that there is no urgency to make peace — except on Israeli terms — because Israel is strong and the Arabs are weak. [... continued]

Are Republicans or Democrats Better for the Economy?

By Chuck Spinney

http://www.theatlantic.com/politics/archive/2011/02/are-republicans-or-democrats-better-for-the-economy/70835/

[Earlier posts on this subject are here and here.]

This is my last post as guest blogger for Jim Fallows and I want to thank Jim and Justin Miller [of the Atlantic web team] for the wonderful opportunity to be a guest blogger.  It has been a fun gig, but quite frankly I am running out of steam.  But life is an interplay of chance and necessity, and serendipity has just offered up a chance for a final blast.

For several years now, I have been in an analytical battle with an official in the Department of Defense over the question of whether Republicans or Democrats are better for the economy.

Newk A. Mineshaftgap is the pseudonym of a senior career official in the Pentagon, with a civilian rank comparable to that of a general in the military. He must remain anonymous for policy reasons -- to borrow from the insightful reasoning used by President Merkin Muffley in Dr. Strangelove,  Minesthaftgap cannot get into a policy fight, because he works in the "the war room."

I can tell you this: Newk has a PhD in physics, but he is not a geek.  In fact, he is a bit of polymath, with wide ranging interests, including nuclear weapons, ballistic missile defense, battleship and tank design, global warming and carbon default swaps, economics, and the development of metrics for measuring the quality of medical doctors.   I have known Newk for about 20 years and consider him to be a good and most interesting friend with solid if somewhat eccentric instincts.  Politically, I would categorize Newk as an independent with libertarian biases.

So, as my last blast, let me offer the following link [PDF]  to Newk's latest report on whether Republicans or Democrats are better for the economy.  For a knuckle dragger from the Pentagon, his conclusions might surprise you.
___
[Jim Fallows note: Here's one sample from the paper, a chart on overall economic performance during post-World War II presidencies. Click for larger and more legible version. The percentage figures -- eg, "Clinton (62.5%)" -- are weighted calculations of how much control Democrats had of government policy during a given Administration. One hundred percent means that the Democrats controlled the White House and both Houses of Congress through the entirety of an Administration, as was the case for both John Kennedy and Jimmy Carter. Zero percent (which did not occur in this period) would mean complete Republican control of the White House, the Senate, and the House. A party gets 50% for holding the White House, and 25% for control of each House of Congress, pro-rated for years of control. For further details, check the paper, where you'll see many other explanations of how economic well-being should be assessed. Very interesting conclusions indeed. 

The Howling Wilderness of Carbon Credits

Note: this is a guest blog I posted on Jim Fallows Atlantic blog.

The Howling Wilderness of Carbon Credits

FEB 5 2011, 2:30 PM ET

By Chuck Spinney

http://www.theatlantic.com/business/archive/2011/02/the-howling-wilderness-of-carbon-credits/70817/

One of central causes of the financial meltdown was the lack of transparency in the complex derivatives, like bundled mortgages and credit default swaps.  Advocates of global warming would have us to believe that they can construct a transparent carbon emissions trading scheme that will provide market incentives to reduce the emission of greenhouse gases.  

At the center of this trading scheme is the idea of a carbon credit, which is a generic term for any tradable certificate or permit representing the right to emit one ton of carbon or carbon dioxide equivalent. Think of a carbon credit as property in a free market economy -- Ayn Rand, meet Global Warming.

Excessive Carbon emissions (like smoke from a steel mill or a coal fired power plant) can, in theory, be offset by buying carbon credits.  But the calculations involved will make bundled mortgage derivatives look like second-grade arithmetic, and, as Terry Macalister reported in the Guardian on 4 Feb 2011, carbon credits are very vulnerable to fraud and theft, so traders are wary of them, to say the least [emphasis added]: 

"Attempts to end the chaos inside Europe's emissions trading scheme (ETS) stumbled today when the market reopened, only for minimal trading to take place.

Traders were said to be worried that business could remain polluted by the theft of carbon credits in Austria and elsewhere that forced a shutdown of the scheme on 19 January, at the estimated cost of £90m in lost business.

The European commission has called on national carbon registries to beef up their IT security systems, but has upset traders by declining to publicly reveal the minimum standards now required.

The ETS is seen as a vital tool in the fight against climate change and the fraud is a setback to attempts to sell the cap-and-trade scheme to the US, Australia and elsewhere." ....[cont.]

I asked my good friend Marshall Auerback, an expert on the machinations of Wall Street who has degrees in philosophy and law, if he could elaborate on this vulnerability.  He responded as follows:

"And here's another story, which should make one VERY wary.  The person who developed the credit default swap, Blythe Masters from JP Morgan, is also behind the creation of this carbon capture program.  Leave it to Wall Street to find a way to extract an economic rent from pollution! 

The Emissions Trading Scheme (ETS)  amounts to nothing more than a privatisation of the commons asset which we call the atmosphere. The ETS would create private property relations over public space.  In Europe, it's been a colossal failure. The EU introduced what was known as the Clean Development Mechanism, which was an offset system allowing polluters in Europe to invest in emissions-reduction infrastructure in poor and developing countries and then use the "offsets" to avoid undertaking more costly emission reductions in Europe.

There is ample evidence of the projects having disastrous effects in poor countries and regions. There has been very little technology transfer from the rich to poor countries. The projects undertaken have often brought civic leaders in poor countries into conflict with land-holders with the latter enduring significant reductions in their capacity to feed themselves. Payola is rife!

This article in the Sunday Times (September 13, 2009) said:

The legitimacy of the $100 billion (£60 billion) carbon-trading market has been called into question after the world's largest auditor of clean-energy projects was suspended by United Nations inspectors.

SGS UK had its accreditation suspended last week after it was unable to prove its staff had properly vetted projects that were then approved for the carbon-trading scheme, or even that they were qualified to do so.

It is clear that emissions have not gone down much if at all yet prices of carbon-heavy goods and services have gone up. Yes: profits have gone up among the big polluters. The big winners have been the heavy polluters and the hedge funds (at least prior to the crisis) while the losers have been consumers, the environment, and poor communities.

Market-based systems are insensitive to equity issues. Fortunately, we'll never get this introduced here in the U.S., because it constitutes an attack on the Appalachian coal regions and Obama has already lost West Virginia and probably Ohio.  If he were to try this stuff, he might well lose Pennsylvania in 2012, and he'll be a one-termer."

Note particularly Marshall's comment about leaving it to Wall Street to hijack the "commons asset which we call the atmosphere."  The economic problem of any commons raises all sorts of squishy intellectual problems, because it is fundamentally about a question of moral values, not property values -- it deals with values we profess to uphold and expect others to uphold.  

It is ironic indeed that the assault on the "commons"  by carbon credits is being spearheaded by those advocating policies to reduce global warming.  These people profess to be protectors of the environment.  Yet the seminal article on the moral character of the problems in dealing with a commons, i.e., The Tragedy of the Commons, was written by the respected environmentalist Garrett Harding and appeared in Science in 1968.  In fact, Hardin's brilliant essay became one of the most important sources of intellectual pressure that led to the emergence of a institutionalized environmental protection movement, with the establishment of the Environmental Protection Agency in 1970! 

Chuck Spinney retired from the Defense Department in 2003 after 33 years service (bio) and now lives with his wife and dog on a sailboat in the Mediterranean. 

Egyptian Protests -- A Backgrounder

Egyptian Protests Grounded in Decades of Struggle; Portend Regional Transformation

Max Ajl, Truthout, 03 February 2011

http://www.truth-out.org/print/67425

Egypt is throbbing with resistance. Cairo is cloven between the forces of revolution and those of counterrevolution. Hundreds of thousands of people - on Tuesday, February 1, well over a million - have been streaming each day into Tahrir Square, the largest plaza in the Arab world, located in the heart of downtown Cairo. Army tanks line the streets, helicopters and F16s buzz overhead, and pro-Mubarak demonstrators, many of them hired thugs, bloodied thousands of protesters yesterday in Tahrir and elsewhere. Yet the people keep pushing for Egyptian dictator Hosni Mubarak's unconditional ouster, and not just in Cairo. Alexandria has been convulsed, while Suez, a small city abutting the Suez Canal, has been riven with some of the fiercest street battles between the police and protesters, while workers there have gone on strike, demanding that Mubarak step down from his palace in Heliopolis.

In response to rising rage, Mubarak addressed the Egyptian people on Tuesday, February 1, and promised to step down in September, stating that his "first responsibility now is to restore the security and stability of the homeland, to achieve a peaceful transition of power," assuring the crowds that he "was not intent on standing for the next elections" anyway.

Barack Obama, in reply to Mubarak's promise to slowly relinquish his grip on power, said that after his address he had spoken "directly to President Mubarak. He recognizes that the status quo is not sustainable and that a change must take place ... an orderly transition must be meaningful, must be peaceful and it must begin now." Clearly, Mubarak and Obama are coordinating their communications, as well as their strategies. They should be: Egypt receives $1.3 billion of military aid each year to make sure it follows American orders. [continued]

Madison's Nightmare: How Much Should We Spend for National Insecurity?

Chuck Spinney, www.theatlantic.com, 3 February 2011 

(Guest posting on James Fallows, theatlantic.com blog)

http://www.theatlantic.com/politics/archive/2011/02/madisons-nightmare-how-much-should-we-spend-for-national-insecurity/70687/

On 4 August 1822, James Madison wrote a letter to W.T. Barry about the importance of popular education and, by inference, the importance of the relationship of the First Amendment to the task of holding an elected government accountable for its actions.  He concluded his opening paragraph, setting the tone for the entire letter, by saying,  "A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance, and a people who mean to be their own governors must arm themselves with the power which knowledge gives." 

Nowhere is the farce and tragedy feared by James Madison more evident than in the national debate over if, or how much, the defense budget should be cut back as part of our efforts to reduce the deficit.  With the defense budget at war with Social Security, Medicare, and needed discretionary spending in education, investments in infrastructure, and elsewhere, it is a tragedy that must be undone if we are to protect our middle class way of life. 

A recent Rasmussen poll of 1,000 likely voters illustrates the farcical aspects of the defense debate.  Rasmussen asked two question that concern us here:

1. Does the United States spend too much on the military and national security, not enough, or about the right amount? Answers: 

• Not enough: 27%
• About right: 37%
• Too much: 32%

2. To ensure its safety, should the United States always spend at least three times as much on defense as any other nation?

• Yes: 25%
• Not sure: 35%
• No: 40%

An earlier poll by Rasmussen, conducted just over 2 months ago on 27 November 2010, found that only 58% of the people thought the United States spends more on defense than any other nation in the world. 

So, to the extent that these polls reflect what Madison called popular knowledge and the means for acquiring it, they can be summarized as follows: 64% of the people think the defense budget is "about right" or too small, but only 25% think we should three or more times as much as any other nation, while 58% think we are spending more than any other nation.  

Let's see how this popular knowledge matches up to reality.   

First, how large is the current Fiscal Year 2011 defense budget?   

Rasmussen's report tries to shed light on this question by saying the total defense budget is estimated to be about $719 billion, but acknowledges that this number does not include veteran's care, which amounts to $124 billion, implying a total of $843 billion.  These budget numbers are misleading, however, because they are outlays, and as such, they represent the result of several budgets.  Moreover, these numbers are not inclusive.  

Outlays measure the amount of money the Pentagon is spending, not what Congress has authorized it to spend.  There are two measures of authorization: TOA (Total Obligational Authority) and BA (Budget Authority).   

The differences between TOA and BA are technical and small, and most people use BA to measure the size of the defense budget.  BA is the amount of money Congress gives to an agency each fiscal year.  It can be thought of as the annual deposit in that agency's checkbook.  The money in a given year's BA is often spent over a period of years (in the case of a new aircraft carrier, that period could be as long as 10 years), so 'outlays", like Rasmussen is quoting, in a given year, can include BA appropriated from Congress in several earlier years as well as the current year.  Debates over the appropriate size of defense budget (often referred to in shorthand as 'spending,' as appears to be the case in Rasmussen's questions) are really about how much BA should Congress appropriate each year.  

This question of new BA is at the heart of the political issue concerning the Pentagon's contribution to deficit reduction, for example. 

The appropriate budget total (BA) for the 2011 Defense Department's budget (budget category 051) -- $712 billion -- can be found in Table 5.1 in the historical tables  of the current President's Budget (051 outlays appears to the be number Rasmussen is using).  

Some additions to the DoD budget are quite obvious and are clearly laid out in Table 5.1.  For example, Table 5.1 adds the $18.8 billion appropriated for the Energy Department's (category 053) nuclear warhead program and $7.6 billion for the direct defense related activities of other agencies (category 054).  These direct additions yield the President's estimate of total BA for national defense of $738.7 billion, or $20 billion higher than Rasmussen's estimate.  This should be considered the lower bound of any estimate for the current defense budget. 

The Rasmussen report, correctly in my opinion, implies budgets to support veterans should also be included when comparing total US defense budgets to those of other countries.  But this addition is only one of many.  The table below was compiled by friend Winslow T. Wheeler, who spent many years as a staffer on Senate Budget Committee trying to sort out how much we actually spend on defense.  Note that the "National Defense Total" is the same as that in Table 5.1 of the Presidents historical tables.  As you can see, the entire picture is quite complex, but adding in indirect defense induced/related budgets results in an annual security budget of just over one trillion dollars for 2011.

How Large is the Defense Budget?

Source: Winslow T. Wheeler, Director Straus Military Reform Project, Center for Defense Information 

So, in answering the first question: how large is the current defense budget?   Reasonable estimates place it between $739 billion and one trillion dollars for 2011 -- take your pick.   

According to Rasmussen's poll, 64% of the people think this is about right or too small, and only 58% think this range is more than that of other nations.  This brings us to the second question: How does our defense budget compare with the defense budgets of other nations?   

The most recent estimates for China and Russia, the nations with the next two largest defense budgets, compiled by the Stockholm International Peace Research Institute (SIPRI) are for 2009.  If one assumes that recent growth rates continued through 2010 and 2011, and we added in estimates for the effects of inflation, the estimate for China's current  defense budget would rise to $125 billion and that of Russia would rise to $69 billion.  Bear in mind, these are very rough estimates, but this estimate for China's is higher that that used by Rasmussen, and therefore more conservative in a comparative sense.   

These numbers tell us that the US defense budget is between six and eight times as large as that of the next largest nation. (Bear in mind, we are ignoring the contributions of our Allies in NATO, Japan, etc.)  Note that only 25% of the likely voters interviewed think we should spend more than three times as much as the next largest nation, but at the same time, 64% think the current budget is about right or too small.  One wonders how this response would have changed if Rasmussen asked the real question: Do you think we should continue to spend between six and eight times as much as the next largest nation? 

Are you beginning to get a feel for how cognitive dissonance creeps in to shape the debate over the defense budget? 

The people whose opinions are being sampled have good reason to be confused.  In fact, their cognitive dissonance reflects a tiny tip of the iceberg that is Madison's nightmare. On 26 January, that farce-tragedy mutated into a comic opera.  

First a little background. 

For years, Pentagon decision makers have admitted, and members of Congress have understood, the Pentagon can not keep track of the money Congress authorizes it to spend, for the simple reason that the Pentagon's bookkeeping systems are an un-auditable shambles.  This is an old problem that I, among others, have been writing about since the late 1970s. Auditability and transparency go to the heart of the idea of a representative republic.  A government of the people, by the people, and for the people must be answerable to people. 

That is why accountability is an absolute requirement of the Accountability and Appropriations Clauses of the Constitution, which assign the power of the purse to Congress.  This was made an explicit legal requirement by the enactment of the Chief Financial Officers Act of 1990, which required the Inspector General of each agency in the Federal government to certify that its agency was in fact accounting for the funds Congress gave it. 

Yet to date, the Pentagon has been unable to comply with the requirements of this law.  I testified about this problem many times to Congress -- and I refer interested readers to my last statement to Congress in June 2002, which pretty well summed up this mess, describes its ramifications, and describes one pathway toward fixing the problem.  My sources in the Pentagon tell me the situation is worse today than it was in 2002. 

The Pentagon leaders in successive administrations have addressed this problem by urging patience, telling Congress repeatedly the Pentagon has a plan in place to solve the audit problem.  That is true, the Pentagon does have a plan, but it is what we in Pentagon used to call a 'cape job', because decision makers in successive administrations keep moving its deadlines further into the future.  Obama's Pentagonists are just the most recent in a long line of snake oil peddlers.  John Hamre, the Comptroller and Deputy Secretary of Defense during the Clinton Administration, for example, promised to fix the problem by 1996.  After a couple of stretch outs in the Bush Administration, Obama's minions are continuing the scam by 'promising' to "fix" the problem by 2017 or 2018, long after they are forgotten in the dustbin of history. 

Twenty years after passage of the Chief Financial Officers Act, only one conclusion is possible from the repetitive charade: either the Pentagon's leadership is not competent to fix the problem or, more likely, it does not want to fix it.  As I explain here and in the Domestic Roots of Perpetual War, there is good reason to have a bookkeeping shambles.  It serves a useful, if nefarious, purpose: think of it as a kind of intellectual grease that keeps the money flowing throughout the Military - Industrial - Congressional Complex (MICC) -- a lot of people are getting rich, building careers, and accreting power out of hyping the money flow. While soldiers at the pointy end of the spear and taxpayers are getting hosed, generals are going through the revolving door to big jobs in industry; congressional staffers on defense committees move into high ranking political jobs in the Pentagon, which then gives them a spring board to big jobs with the defense contractors; industry titans move between jobs in industry, the Pentagon, and back to industry; and contractor pac money flows to congressmen.  The result is a self-sustaining harmonious circular flow of money through the political economy of the MICC -- what we in the Pentagon call a self-licking ice cream cone.  

This Madisonian farce-tragedy took a thoroughly comic twist on 26 Jan 2011 at a congressional hearing, where the new, 'pro-defense' Chairman of the House Armed Services Committee (HASC) and card carrying member of the MICC, Buck McKeon (R-CA), signaled his objection to the tiny reductions in the defense budget that President Obama was recommending in the name of improved economic 'efficiencies.'  After the hearing, Rep. Randy Forbes (R-VA), chairman of the HASC readiness subcommittee amplified McKeon's signal by invoking a truly bizarre leap of logic: Forbes argued that, since the Pentagon doesn't really know where the money is being spent, then perhaps it should not talk about finding efficiencies! 

Welcome, dear reader, to the Hall of Mirrors that is Versailles on the Potomac! 

I have a better idea for providing the popular information needed to exit Madison's nightmare: Perhaps the Congress ought to use its Constitutional oversight (as opposed to its 'overlook') powers to force accountability on the Pentagon in the spirit of the Constitution.   

Congress should freeze the defense budget in current dollars (or better, in my opinion, reduce it each year by two to three percent) until the Pentagon can pass an audit, as explained in this letter a group of former DoD employees and congressional staffers (including myself) sent to the Simpson-Bowles deficit reduction commission. 

But the courtiers in the Hall of Mirrors needn't worry about this threat to their patrimony. We never received an answer, perhaps because everyone in Versailles is too busy licking their chops over the emerging opportunity to hack away at Social Security and Medicare and the other wasteful 'entitlements.'

King David Doubles Down on a Failed Strategy

Anyone who thinks we should remain in Afghanistan because we are making progress and that the Afghans want us to stay should read this important report (excerpt below) by David Hastings in Rolling Stone.  

My earlier discussion of the flaws in President Obama's second strategic review, which approaches this subject from a different but complimentary angle, can be found here.

King David's War

Petraeus has a new plan to finish the war: Double down on a failed strategy

David Hastings, Rolling Stone, 02/02/11

Excerpt 

.... "Thanks to such internal maneuvering, the strategic review did little to clarify the timetable for withdrawal. The final report, in fact, says almost nothing. We are making progress, but that progress is fragile and reversible. We have broken the momentum of the Taliban, but there will still be heavy fighting next year. The troops will start coming home soon, but they won't start coming home soon. We aren't "nation-building," the president says, though we'll stay in Afghanistan past 2014 to build its nation. It was, in the end, a nonreview review, which suited Petraeus just fine, giving him more time to shape the outcome not just in Kabul, but in Washington. As the general had spelled out in his doctoral dissertation, winning the hearts and minds of Congress is what matters most. Or as one U.S. military official puts it, "If anyone can spin their way out of this war, it's Petraeus."

During his time in Iraq, Petraeus earned the nickname King David, for the imperious manner in which he ruled over the ancient city of Mosul. In Afghanistan, a more apt honorific might be the Godfather. To get America out of the war, Petraeus has turned to the network of warlords, drug runners and thieves known as the Afghan government, which the general himself has denounced as a "criminal syndicate." Within weeks of assuming command, Petraeus pushed through an ambitious program to create hundreds of local militias — essentially a neighborhood watch armed with AK-47s. Under Petraeus, the faltering operation has been expanded from 18 districts to more than 60, with plans to ramp it up from 10,000 men to 30,000." ... click here to view entire article.