Archive for July 2014

Summer Recess

July 19, 2014

Congress is lumbering into its summer recess. This is the time our Senators and Representatives use to recharge their batteries, attend fund raisers, and otherwise plan for their next Congressional session.

The notebook that contains their fall upcoming plans is bare of substance, unfortunately.

For Representatives, a plan book might correctly reflect certain needs of their district. They are, of course, “representatives” of those who elected them. “Must do’s” which raid the public trough and return tax dollars to their local district will help the district and get each representative reelected.

But is that short sighted?

Without knowing the specific wish list each Representative has developed, it is safe to say their list is incomplete. There are important legislative bills that impact all districts, some directly and others indirectly. Immigration reform is an obvious challenge which may seem remote to some districts yet the way the US handles economic refugees says a lot about who the citizens of our 50 States have become.

Another top of the list bill should be a broad list of infrastructure projects aimed at maintaining roads, bridges, railways, and rivers. At the heart of this essential work would be appropriate taxes to pay for it (no free lunch). While it does not matter which tax is increased or newly added in order to afford infrastructure repair, gasoline is an ideal place to begin.

The idea of raising gasoline taxes, unfortunately, is “off the table” and that says the worst about our representatives. The US and a few other third world countries still offer gasoline at the $4 a gallon or less (an unsustainable appeasement to voters).  The modern industrialize world, on the other hand, have all increased gasoline taxes in order to covered road related expense and to encourage more fuel efficient transportation.

Even an exceptional country like the US would do well to consider this. It is not a sure bet that our Representatives will even consider infrastructure maintenance, much less how to pay for it.

Our representatives’ tactics (as opposed to a strategy of ensuring a sound infrastructure for maximum economic results) simply do not include taxes to pay for necessary services.

If you were to ask them, however, about the role of productive assets and depreciation write offs each business uses, my guess is they would be able to cite chapter and verse. He might say, “a business invests in machinery and equipment and receives a tax deduction from its revenue equal to a prorated portion of an assets value based upon the asset’s productive life”.

The representative knows a wise businessman/woman would save this deducted amount so that they could maintain the asset (say a machine or truck) so it would last a long time, and when it was too old to be useful, there would be enough money to replace it.

The fundamental law is that assets wear out and must be repaired and ultimately replaced. Why cannot our Representatives comprehend the US public productive assets the same way?

One might think these public servants were absent from class when depreciation was taught.


July 18, 2014

On a certain level, the Ukrainian insurgency is understandable. The West wants to draw the Ukraine away from Russian Federation’s influence in an attempt to weaken Russia.   The Russian Federation wants to do the opposite.

Russian strategy involves weakening the Ukrainian government (minimizing nationalism forces) and as a result, allowing century old natural ties between the Russians and Ukrainian people to show through. Just as drawing boarders around certain middle east territory and calling it “Iraq” or “Syria” does not make a natural nation, claiming the lands known as the Ukraine are separate and distinct from Russian ties is just as hollow.

On another level, however, special interests in both countries are mainly interested in their personal wealth.  Surprise, surprise. These special interests are closely linked to the national leaders (who also seek wealth enhancement).   From this alliance, foreign policy is drawn.

A weakened Ukraine will serve the needs of corrupt leaders best allowing them to divert money to themselves. In this regard, the Russian Federation’s self interest plays into the time honored practice of political leaders fleecing their people. The West’s strategy assumes a “zero sum game” and what Russia loses, the West gains.  

The Ukrainian insurgency has pitted Russian supplied “insurgents” against the formal Ukrainian military (surrogates for the West). Innocent Ukrainians as well as combatants from both sides have died in sporadic skirmishes. The loss if life on both sides has been senseless especially given the stated goals of the common people.

I wonder whether the political leaders think about these deaths?

Yesterday, however, there was an event that made these deaths look small. A Malaysian Airline Boing 777 jet plane, carrying close to 300 non-combatant passengers, was shot down while flying from Amsterdam to Kuala Lumpur.

The already senseless insurgency can boast of even greater collateral damage.

It might be understandable were the downing of the 777 an isolated non-combatant event. When boys play with guns, bad things happen.   Just look to Gaza, Iraq, or Syria to see the impact of proxy wars upon the local non-combatant population.

I wonder whether they teach this (non-combatant collateral damage) in the schools where young men and women go to get their Statecraft degrees?

Over Saturated and More

July 15, 2014

The last week New Jersey newspapers have been full of rumors about further Atlantic City casino closings. With the recent announcement of the Trump Plaza closing, the total this year comes to 4. The popular question is why?

A PhD is not required to answer this question. Since Atlantic City’s hay day, casinos have sprouted up in nearby Pennsylvania as well as Connecticut, Massachusetts and Maryland. In short, there are too many gambling locations for too few gamblers.

A harder question to answer is why have only certain casinos closed?

Atlantic City has two clumps of casinos. The largest number are strung out along the boardwalk next to the ocean. For reasons that are not clear, the cliental which frequents the AC boardwalk are lower blue collar. While this cohort does frequent the casinos, they are not “big rollers”.

The streets on the opposite side of the Boardwalk casinos present another marketing problem. There, one finds homeless and unemployed people (urban poverty). The prospects of a casino hotel guest taking a walk around the nearby neighborhood is not too attractive.

So the Boardwalk located casinos have relied upon “drive-in, drive-out” guests.  In other words, the casino could be located anywhere which was a convenient drive.

With the overall market size decreasing due to the new casinos in other States, the Boardwalk casinos were left to compete on the basis of what each offered compared to other Boardwalk casinos. Some tried harder than others. Those that have closed were not competitive enough.

Atlantic City’s urban poverty is not a new phenomena. As each new casino was announced to great fanfare, politicians promised jobs, new housing, and in short, a new Atlantic City. The new city on the hill never happened and now the die is cast with no more promises about a bright future.

The Beauty of Athletes

July 14, 2014

This past week the residents of Cleveland rejoiced on the news that Labron James would return to play basketball for the Cleveland Cavaliers. James is considered a great athlete and maybe the best playing basketball today. Basketball players are all tall men (or women), some just taller than others. Their ability to almost float in air as they drive for the hoop is magical.

College and Professional football teams are busily preparing for their 2014-15 season. Each team has picked their best athletes and are filling their heads full of new plays. While the goal of each team remains making gobs of money, the speed and agility of these player, cutting left or right and then accelerating to top speed is breathtaking.

Baseball has reached its mid-summer break. Time for the annual “all-star” game. In a hard to imagine the picking process, fans select the starting “all-star team” by voting as many times as they wish for the player of their choice. All Stars? The second half of the 2014 Baseball season will begin later this week. Winning teams for sure make more money. They almost always possess the best players too. Hitting a baseball traveling at close to 100 mph is an amazing accomplishment.

Not to be overlooked, ice hockey professional teams are also screening junior league players for future stars. Come the winter, winning hockey teams can thrill the audience and crowd out basketball as a fan favorite with their full rink dashes and powerful slap shots. For those fortunate franchises, hockey means money.

Stepping back, it appears we have a deal with organized sports. We pay for tickets, television rights, and merchandize. In return we expect to see great athletes, performing great athletic feats, and of course, winning. Fair deal?

Yesterday made one wonder.   The FIFA World Cup Soccer championship took place in Brazil. Germany beat Argentine 1-0 after 120 minutes of full out effort by both teams. Watching these athletes run, cut, and jump to head the ball and then racing back on defense was awe inspiring. Looking at each athlete, there was no sign of fat. Each player was fit and gave no hint of wanting to pause. (I cannot think of now popular American sports athlete who look this fit.) While most of these athletes play for club teams and earn a good living, playing for a national team is an honor. Lots of money was made by FIFA but for the players, it was about winning for their country.

What could be more demanding and athletic than world class soccer? Hmmm.

How about bicycle racing and the Tour d’France?

Spying On Germany

July 13, 2014

A new kerfuffle involving the sprawling US spy bureaucracy made news this week. The CIA station chief was deported by the German Government over charges the CIA had recruited German citizens to spy on their government.

Immediately two views were put into play… “friends don’t spy on friends” and “Everyone does it”.   Do either of these apply?

It may be true that most all nations do some type of spying on other nations. Industrial espionage has long been charged against countries like China and France. Recent NSA revelations makes it clear that the US spies on everyone at least to the point of collecting the data.  France and China (and a lot of other countries) have discrete connections between key government agencies and policy makers, and private industry. Government intelligence gatherings helps these businesses who in turn employ more French and Chinese citizens.

The key to this type of spying is “deniability”. In fact the first rule of spying is that the spy agency must deny any involvement in order to shield its government from consequences. The denial must be believable, however.

In the case of the German spying, the entire story may not have been leaked yet. The actual CIA involvement may have been as little as seeking very low level information and in no way aimed at undermining the German Government. Who knows. Local German politics could also have blown this situation out of proportion. Maybe.

What is the case, however,is the CIA got exposed with its hand in the cookie jar. On that basis, the CIA station chief should have asked himself/herself to be relieved or, if silent, should have been recalled by Washington immediately. The Station Chief needed a “time out” in order to refocus his/her priorities on how to conduct undercover work.

And while the Station Chief was in “time out”, what about his/her administrative head where ever that person resides? And while we are at it, it might be fruitful to follow the chain of command, maybe all the way to the CIA Director. Why?

To do nothing sends a confusing message. The US could be saying “we didn’t spy”, so there is no reason to recall anyone. The evidence and past revelation of NSA spying strongly indicate otherwise. Or, as it appears in this case, “yes we did spy but there was no harm so there should be no foul”. But good spy craft would not have been uncovered and weakened spy organization does not portend good things for the future.

Saying nothing also implies a lot and tells Germany it does not count. Nothing short of an official apology will do.

Stepping back from the specifics of this issue, another troubling example of US government agencies operating without sound leadership and governance. While examples of this happen with all Administrations, it seems that President Obama’s has produced more over a wider range of departments. It suggests that the role of chief executive is far more difficult when political appointees are added to existing bureaucracies. Without clear direction and accountability, these political appointees will find it easier to “go along and get along” than provide governance. And, when a line is crossed, unless the chief executive holds the department head accountable, the next excursion is likely to be worse.



The Border Hot Potato

July 12, 2014

Women and Children, many unaccompanied, are streaming across the south west US boarder. It is reported they are fleeing violence and economic hardship. For many politicians, this situation is a gift from heaven.

For these politicians, there is reason to demand increased boarder security and the golden opportunity to spread fear amongst voters.

In earlier times, immigrants were more welcome. The Statue of Liberty comes with a poem containing these lines,

“Give me your tired, your poor,
 Your huddled masses yearning to breathe free, 
The wretched refuse of your teeming shore…”

What has happened to change public opinion so greatly that what in the past were viewed as potential resources and are now viewed only as a liability?

Of course there have been other times in American history when immigrants were felt unwanted and at times feared. But the overwhelming American experience has been that immigrants helped propel America into global leadership and wealth.

To be sure this current crop of Salvadorian, Guatemalan, and Honduran have no right to self immigrate. There was no US invitation nor are there pre-arranged jobs waiting them. So how does the richest country in the world deal with such a situation?

House Speaker John Boehner said the President should enforce the law. Hmmm. I wonder what law he means?

Currently law requires women and children be released pending an immigration hearing. What?

A law from George W Bush era, ratified unanimously by the Senate, restricts the immediate deportation because of fear that “human traffic-ing” might be involved. But if your goal is to curry favor with xenophobes who in turn might vote for your party, then Boehner’s comments might make sense.

In the recent past, newspaper headlines have been all about Mexican undocumented workers. Congress has failed to deal with this issue and now with women and children entering the country Congress is facing a much more nuanced threat.

Republicans who have consistently tried to deal with undocumented aliens “tactically” have been punished in opinion polls and in the last Presidential election. US demographics shout to Republicans that they need a better “strategy”.  Hispanic US citizens have become a major voting influence.

Immigrants and immigration are now and always has been a mixed bag of opportunity and challenges. Immigrants displace current workers and those displaced workers need to find work someplace else. If these displaced workers find as good or better employment, then all is forgiven. If not, then immigrants are bad.

Immigrants from Central America (including Mexico) arguably represent a special situation. These immigrants are our neighbors and if one thinks about it for a moment, carry with them a number of cherished American values. These would-be immigrants are religious, hard working, and strong family people. In short, they are like most of us.

Of course there is a limiting immigration rate which our economy could support. It is also important that these immigrants show their willingness to assimilate (language, allegiance to the country). I suspect the Mexican undocumented workers have already shown this. Otherwise how could an estimated 11 million be living already in the US?

The immigration issue is a hot potato for both parties. Regrettably, both parties’ willingness to use “tactics” on this issue has had the consequence of failure to form any national consensus. So far Democrats seem to have won the Hispanic vote with their “tactics”.

Unfortunately the undocumented worker problem is not going away, sealing the boarders is inadequate (if not impossible), and ultimately the US needs immigrants to supplement our natural birthrate.

The only question should be is who will be the immigrants?

Caught Again In The Middle

July 11, 2014

“Ground Hog Day” is a movie where the same sequence of events seems to reoccur to Bill Murray all the time. It’s like deja vu all over again, so to speak. Looking at the news reports covering events in Gaza reminds me of that movie.

Once again, inexplicably, radical arab elements have chosen to fire enormous numbers of rockets into Israel. We have been here before. And we know what to expect. Israel will extract serious damage in retribution. In short, the poor, average Palestinian Gaza citizen will get the crap beat out of them.

After the rocket supply is exhausted, and world condemnation shifts to Israel (who will keep pounding), a cease fire will be agreed to. As the dust settles, we will see that Gaza wil have slid a little further into the sewer of humanity. And nothing else relating to a lasting peace between the Palestinians and Israelis will have changed.

World opinion can be an important goal. When Israel disproportionately responds to a Palestinian provocation as is too often the case, world opinion sides with the weaker Palestinians. So when peace talks are progressing (like a snail) and Hamas (or some other radical group) acts out (kidnapping, bombing, or stray rocket fire), how Israel responds can impact world opinion.

Almost always, Israel’s response has the flavor of an Arab argument settlement. “If you steal my chicken, I will steal two of yours”.  That’s like but even better than “an eye for an eye, a tooth for a tooth”.

This particular Hamas provocation seems over the top. Firing over 100 rockets a day from Gaza where Israel has established blockades and strict boarder controls is impressive. But why this suicidal action? What are the Palestinians thinking?

There are two leadership attributes of resistance movements which seem to be in play. (1) For a resistance to flourish, it must have an enemy. With a well defined enemy, the rest of the citizenry will accept hardship when promised a better life in the future. (2) A resistance does not have to deliver the mail, sweep the streets, or fill pot holes. In short “resisting” is not governing or making a government work. It is perfect, however, for resistance leaders to scrape out a living while others remain destitute.

With this Hamas mind set matched against the Israeli negotiating philosophy (step one, divide the spoils in half, Israel takes its half and then Step 2, Israel returns to the bargaining table to dispute the other half), it is hard to see any end to this mayhem.

Israel’s past actions have brought it close to being an apartheid State (the way it is occupying the West Bank), and its excesses in reacting to provocations could justify “crimes against humanity” charges.  Hmmm.

But what else could Israel have done with a belligerent such as Hamas and Hezbollah and the tactics they select?