Thursday, March 27, 2014

A Chilly War

Hi ho, hi ho, it’s off to war we go.  Da da duh da, da da duh da…. Oh, wait. That’s not the accurate Disney lyric, is it?  It just seems so listening to the frothing by a variety of “leaders” up in arms over the annexation of Crimea.  In August of 2013 my blog Fight Fight Fight looked at the various wars that the U.S. is involved with and whether they made sense.   I’m surprised that President Obama and a number of political leaders seem to have taken my comments literally.

“…It’s much better when we have a definable  enemy whom we can personify.  Vladimir Putin is the perfect foil – right out of Central Casting.  Quite dour looking.  He’s remaking Russia into the Soviet Union V2.0.  He’s given safe haven to Edward Snowden, a huge irritant to the Obama administration.  He’s declared war on gay people – throwing civil rights and basic humanity out the window.”

The media and political establishment are quite energized at being able to tell a black/white, good-guy/bad-guy story. Much easier to follow than the complexity of terrorism where the ‘enemy’ is spread out and there’s no leader to demonize. Russian’s reclaiming part of their land from Ukraine falls neatly into the simple narrative.

With Russian action the Obama administration is following my “suggestion” to draw Putin as the enemy for Cold War II.  Vlad helped the case by sliding into Crimea and annexing in a matter of days with no bloodshed or resistance from the people or “the West” brought a part of the Ukraine back under Russian control. He even had a vote, winning with 97.5%.

Senators like John McCain who are always chomping at the bit to go to war or engage the military in some way have lambasted the President for ‘losing’ Russia, as if it was some sort of board game. Two time Presidential failure Mitt Romney used the words:  “naivete” and “faulty judgment” on CBS to describe the Obama foreign policy.  Former Defense Secretary Donald Rumsfeld said a “trained ape” could do better.  Perhaps President George W. Bush (43) mistook what he saw when he “looked into the soul” of Putin in 2001? Or should he be blamed too?

The past year has seen a lot of political dust-ups over the NSA listening in on Americans as well as foreign leaders.  With all of that, nobody heard anything about tank and troop movement that Putin ordered?

The CIA reinvented itself after 9/11 – its self-described “greatest intelligence failure” –  to more nimbly move about and anticipate world events.  Missed another one.  Defenders say it’s impossible to read the mind of a madman like Putin.  Right, because those tanks and troops just materialized out of nowhere. Surprise! 

The problem isn’t what Obama did or didn’t do, what the NSA heard or didn’t hear, or what the CIA could figure out or couldn’t figure out.  The question is whether the U.S. needs to care about a small geographic region that’s home to 2.35 million people  - less than the number of people who live in Baltimore or Houston.

Russians remaking the map by force is against U.S. ideals. Is it against U.S. strategic interests? Does it justify a new cold war – or even a chilly war? If it does the U.S. President must articulate why American dollars, American prestige and American lives are worth it.  We're waiting.

Thursday, March 20, 2014

A teachable moment

I’m the product of educators, and am the “black sheep” of the family by not working in academia. I remember my Dad taking on some administrative responsibilities right when the school had to undergo a once-in-a-decade certification. It was a whole all-encompassing review. Having a set of standards across the educational spectrum may rub against my libertarian philosophy conceptually, but it is a practical and important way to ensure consistent quality across the country that I totally support. Making sure schools are able to teach the basics consistently is good public policy. Encouraging citizens to educate themselves is also good public policy. Providing financial incentives (loans, grants, etc.) to make that education accessible are good in theory, less successful in practice. Government as the regulator and primary funder/lender is ripe for conflict. Now President Obama wants (private) colleges to guarantee their results or face de-certification.

Americans now owe more than $1 trillion in student loans, nearly $30K per student. (This is more than Americans owe on their credit cards.)  The debt has increased as the costs for higher education have increased steadily – nearly double 10 years ago.  According to USA TodayA report issued in mid-August by the Department of Education shows that 57% of students received some sort of federal aid, and 41% of all undergrads had taken loans, up from 35% four years ago.”

I’m not sure that it’s the role of government to be in the loan business, especially when the regulate the same industry. But they are. It’s good to know that the U.S. Government has negotiated quite a good rate of return on its money for taxpayers. USA Today's reporting: “The law, regulating interest rates for federal student loans, was passed by Congress and signed by President Barack Obama this summer. It was hailed by politicians on both sides of the aisle as a win in the campaign to combat a rising tide of student loan indebtedness. … In total, the CBO projects the government to clear $175 billion in profit over the next decade on student loans.” As a capitalist I applaud this, as a citizen I'm not sure that students should be such significant financiers of the government.  

It’s not a one-sided payoff.  Median earnings of full time employees are nearly double if you have a college degree. So what’s the problem? Government earns a nice rate of return and students earn more after they graduate. President Obama has decided to add new regulations geared towards making sure that (private) colleges produce a citizen who has the capacity to pay back their loan.

USA Today reports: “Under the new requirements, the colleges will have to demonstrate that graduates' debt load on average does not exceed 20% of their discretionary earnings or 8% of their total earnings. Institutions must also demonstrate that former students' default rate does not exceed 30%. A program becomes ineligible for student federal aid programs if it fails to hit the debt-to-earning standards any two out of three consecutive years, or the institution default rate exceeds 30% for three consecutive years. Colleges could also be disqualified if the institutions are at near failing rates for four consecutive years.”

In short it means that to remain in business and certified schools must know how much their graduates make and whether they’re making their loan payments. It makes the NSA look like the ACLU and puts the college into the position of job-placement rather than educator.  It's incredibly invasive and is powerful evidence supporting why the Government should not be in the business of funding the industry that it regulates.

I have a BFA in theatre. I’ve never earned a full paycheck from my primary area of focus. Does that mean that my university failed? Should the program that I studied at be disqualified because I can’t demonstrate earnings related to my area of study? What about the fact that for the first few years out of college I deferred my payments and scraped along … should my school pay the price for this? Has the nanny state become so protective of people that there is no personal responsibility to educate yourselves, and the blame is on the institution?

The President’s new regulations shift the entire focus of higher education towards having graduates produce paychecks to cover the debt load of going to school. It’s perhaps the least progressive approach to education imaginable. The Bush (43) Administration’s focus on testing seems to be a bastion of educational integrity in comparison to this plan.  Congressional approval isn’t required of these rules – they have been issued by Executive Order.

President Obama tried something similar in 2012. U.S. District Judge Rudolph Contreras invalidated the rules, calling the requirements "arbitrary and capricious," because they weren't based on any economic studies. Now the Administration has economic studies to back up their revised approach.

Too bad the President didn't take the 2012 setback as a teachable moment – learning that education is not about producing a paycheck to pay the government back. He hasn’t. Schools will now have to produce paychecks for students rather than diplomas.

Thursday, March 13, 2014

A War on Defense?

I’ve never had the privilege of serving my country militarily, though I did try. At a career fair during my senior year of high school, I wandered over to the military recruitment table. When they asked what I was most interested in studying and pursuing. I was truthful: I was looking for a theatre school where I could have a life of performing! The guys in uniform shooed me away. I was actually serious – and said “What about the USO?” I don’t quite remember the response, but it certainly wasn’t all that inviting. So off to college I went, winding up with a BFA in theatre. There in the fall of my freshman year after I gave what I thought was a particularly brilliant performance in a scene, the professor took a moment, cleared his throat, and said “Dear boy, have you considered directing?” Thus my life beyond the footlights began where in short order I found my inner-producer. I probably would have been a terrible soldier as giving orders is more my style. Giving or taking orders – it’s clear that the Department of Defense needs some offense.

Defense Secretary Chuck Hagel spent most of last week defending his proposed budget. It would “slash” defense spending to half-a-trillion dollars, down from $680 Billion in 2010 ($16 billion more than the Obama Administration requested. Iraq, Afghanistan and other wars are extra.) “Hagel described the big reductions in spending as necessary to protect training budgets for the current force and to preserve money set aside to buy new planes, ships and ground combat vehicles.”

The U.S. budget is made up of mandatory spending, like Social Security and Medicare – where the costs are already determined by prior Congressional action. The expenditures can be changed, but they are so mired in politics that it’s unlikely in the foreseeable future that they’ll be addressed.  Budget hawks aim for ‘discretionary’ spending. Defense is the largest component of that at 19%. 

It’s a lot of money. How much exactly isn’t known. Once again in FY 2011, as in 2010, 2009, and, well, every year prior – the Department failed its financial audit. “Serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable."  With this track record the Department continues to get nearly one-fifth of every taxpayer dollar. What do they do with it?

According to Wikipedia, “The military of the United States is deployed in more than 150 countries around the world, with 164,227 of its active-duty personnel serving outside the United States and its territories and an additional 118,966 deployed in various contingency operations.”  It’s stunning to view the list of countries and how many service people are assigned. I’m struck as much by the 40,304 in Germany or the 50,341 in Japan as I am by the 1 Marine in Singapore or the 2 Army folks in Portugal. There’s 1.1 million service members serving in the contiguous US. What are all these people doing? The US seems only to be in a military conflict in one country currently – where US troops outnumber the enemy 12-to-1, according to The Huffington Post. I guess the drone revolution is still a ways off.

I am not an expert in military maneuvers, strategy or anything like that. I’m more of a protectionist than a globalist. I’m a pacifist on personal and religious grounds. The argument today about the DOD is not based on any of those reasons: it’s financial. The producer/financial analyst part of me knows there’s a better way. At a time of relative global peace it seems that spending 19 cents of every dollar on Defense is too much. Hagel’s proposed budget is a start – about a 17% reduction. We need a war on the Defense budget.

Thursday, March 6, 2014

Try Try Try Again

William Edward Hickson popularized the English proverb “If at first you don't succeed Try, try, try again.”  The sentiment is a good one – it encourages people not to give up.  It helps build endurance and character.  In my role as a not-for-profit executive I often find myself living the adage – constantly trying to move donors, audience, members, etc. towards something.  It requires patience and fortitude.  Many times it works out, but just as often it doesn’t.  In my case, you just move on.  In the case of politicians, it appears that even in defeat they won’t give up.

This week Congress voted for the 50th time to repeal ObamaCare.  I guess they don't care that the Senate and the President won't ever accept that.  They keep trying.  That's perhaps not the best use of time and resources and focus, but with the checks and balances system, it's relatively meaningless and they can keep whacking away at it.  Too bad the system doesn't work elsewhere in government.

In 2002 the National Security Agency (NSA) launched a program known as “Trailblazer” which according to Wikipedia:  “intended to develop a capability to analyze data carried on communications networks like the Internet. It was intended to track entities using communication methods such as cell phones and e-mail. It ran over budget, failed to accomplish critical goals, and was cancelled.” 

Waste, fraud and abuse came to light in a whistle-blowing incident that ended when then NSA Director Michael Hayden “told a Senate hearing that the Trailblazer program was several hundred million dollars over budget and years behind schedule.”  The American public was outraged and pushed back to have the program ended.  It was supposedly shut down in 2006 and the whistle-blower was criminalized and punished.

We know today that the NSA simply renamed and expanded the program, continuing to collect data – this time far more widespread than was known or authorized.  The public didn’t learn of the expansive and all pervasive program until another whistle-blower (Edward Snowden) came forward with the truth.  The NSA didn't take no for an answer, lied about shutting it does, and went forward anyway after telling the public it was over.  And they're surprised at the push-back from the public when it was revealed?

The Troubled Asset Relief Program – known by the acronym TARP and by the shorthand “stimulus” was President Bush’s attempt to “save capitalism.” The American public flooded Congress with calls begging their representatives to vote no – with the message:  let the banks go under, let capitalism work.  They were heard – if for only a day.  Politician after politician spewed forth that their constituents were heard loud and clear and that the “no” vote was a great day for democracy.  Within a week a slightly smaller package ($700 billion) with far fewer restrictions came to Congress and passed comfortably.  When the public learned about it, approval ratings for Congress began a downward spiral that now has the august body in single digits.  Bush didn't give up - he and his administration kept going back to the well until they got the government to give a blank check to industry.

As discussed in last week's post, the FCC recently tried to impose itself into the decision making process of how news is made and disseminated.  Thanks to a brave FCC Commissioner, the matter came to light before the first news agency got the questionnaire.  The FCC hastily withdrew the report, announced that no survey would go out and tried very hard to pretend that this hadn't happened.  The public has breathed a sigh of relief.  But patterns are patterns:  this one will come back.

There are plenty of parables and passages about vigilance.  It’s up to us to live them before government tries again to curb the Constitution.