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Economy

We can’t afford sacred cows

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We cant afforded afford sacred cows

In my last piece I pointed out how the Republican tax plan simply nibbles around the edges. It doesn’t provide any real tax relief, and it certainly doesn’t reform the corrupt system. More importantly, the GOP is clearly no longer interested in cutting spending now that Barack Obama is no longer President, and Democrats are suddenly concerned about the deficit.

Spare me.

The fact is we need MASSIVE spending cuts and nothing can be off the table. I mentioned the other day that one of the problems with cutting spending is that everyone is in favor of it, as long as you don’t touch “my” stuff. Everyone has their sacred cows in the federal budget, and we can’t afford them anymore.

The biggest one for the GOP has long been defense spending. Democrats point to “unnecessary wars” as the biggest reason for our national debt. Well, it’s not the biggest reason, and even if it was that’s a crap complaint. National defense is a power specified in the Constitution for which the federal government can raise and spend money. Social programs are not. However, the Democrats are not entirely wrong that defense spending is out of control.

I’ve been both a military officer fighting a war and I’ve been a working civilian trying to make ends meet. Here’s what I know for certain from both of those perspectives:

  1. As taxpayers we owe it to our military men and women to make sure they have the best training, facilities, equipment, and weapons in the world. We have been succeeding at this for decades.
  2. Military Officers and the civilians that work for the military have a fiduciary duty to the taxpayers to make certain that their money is being spent efficiently. Right now, they are failing at this and in the most egregious ways possible.

Now, before you get your knickers in a twist, this isn’t a hit piece on the military. I was in the military for 10 years and nothing I ever do, except being a father, will be as meaningful. Yet if we’re going to talk about cutting spending we have to look at our sacred cows, and that’s means facing some hard truths. I have solutions, not just rhetoric, and I have personal experiences to back up my thinking on this, so bear with me.

Solution 1) Change the military spending culture

When I was a young Captain, I sat in a staff meeting at Ft. Sam Houston, San Antonio, Texas. I was the operations officer and we were going over budget requests. After going over the requests, many of which were superfluous at best, the colonel looked at everyone and asked if there were any others. He said, “I know higher told us to do better on spending money but I want to spend all our money and all theirs too.”

My eyes went as wide as saucers as I looked at the man I worked with, a civilian contractor who was a retired lieutenant colonel. He knew what I was thinking and we discussed it later back at our office. We couldn’t very well complain about potential cuts to defense spending when this was the attitude about how to spend money. He even agreed with me, but he advised me there was little a captain could say to a colonel about it.

At is point it was 2011. The Global War on Terrorism (GWOT) had been going on for 10 years with no end in sight. Money was nearly limitless for those operations and any operation even vaguely connected to them, which is to say, the entire US military. That kind of spending is addictive and many officers, especially those of my generation, had no concept of a military on a strict budget. However, having grown up in the military, raised by an officer who did, I understood these principles.

Solution 2) Change the way the military issues contracts

For decades the US military has issued contracts to the lowest bidder, and almost invariably has them run into cost overruns before the project is complete. It’s just the way it’s done. When my father was put in charge of renovating a dental clinic at Ft. Meade, MD, the contractors came to him expecting more money, as was routine. Not to be, as COL Wilhelm reworked the contract to make it fit within budget.

This should be the way all military officer conduct business with contractors. If contractors can’t do the project that they are bidding on for the amount that they bid, then they shouldn’t bid on the contract for that amount in the first place. Contractors have to be broken from the idea that there will always be more money, so they don’t have to worry about cost overruns. Some contractors blame the military for changing the orders, and I have no doubt this is sometimes the case, which leads me right to….

Solution 3) Change the way the military plans for the future

John Kerry isn’t exactly one of the great minds of the last 50 years, but during his campaign against George W. Bush in 2004 he did have (to me) one memorable line. When speaking about cell phones he said “I really think they should finish inventing these things before they sell them.” I chuckled at that one. It was funny because it was true.

In the same way, the Pentagon has a tendency to put the cart before the horse. They ordered the USS Gerald R. Ford, the first of the Ford-Class aircraft carriers, even though several key components of the new ships hadn’t even been designed yet. Though the Ford has been delivered, it was far over budget and won’t be ready for deployment for several years. Its arresting gear, which allows aircraft to land on the short airfield that is its deck, doesn’t currently work, and needs major changes to be made to work.

The Navy wants a next generation aircraft carrier to handle 5th generation aircraft? Makes sense. It doesn’t make sense if the technology hasn’t been invented yet. It also doesn’t make sense if the 5th generation aircraft in question have themselves become a costly boondoggle that never should have been in the first place. The Joint Strike Fighter project, which has now become the Lockheed F-35A/B/C Lightning II, has been a nightmare of cost overruns and failing systems.

The F-35 was supposed to eventually replace several different aircraft across the DOD. The traditional “A” model would have theoretically replaced 4th generation fighters for the Air Force like the F-16. The “B” variant would have replaced the iconic Harrier jump jet for the Marines, as it is supposed to have the same short take off and vertical landing capabilities as the Harrier. The “C” variant was supposed to be designed for the rigors of landing on an aircraft carrier like the USS Ford, the under constructions USS John F. Kennedy, or the 3rd Ford-class carrier, the USS Enterprise.

I have a family member who is a former aerospace engineer for Boeing and worked on the competitor for the F-35. Even from my meager military flight training, it seemed to me that trying to make three very different aircraft from one airframe was a fundamentally flawed idea from the state. I posed this supposition to my family member. He agreed wholeheartedly. This was never a good idea to begin with and never should have been adopted.

Solution 4) Time to start leaving some behind

In the military we live by the creed “leave no one behind.” Well, this became a bit of a joke at the Army Medical Department at Fort Sam Houston. We called it “No Sergeant Major Left Behind” or “No Colonel Left Behind.”

Why? Because these sergeants major and colonels would create high-paying civilian jobs, doing exactly what they were doing in the military and then retiring and sliding right into those jobs, thereby double dipping, their retirement PLUS a well-paying government civilian job. Did the jobs need to be done? Mostly. But they largely could have been done by someone making less money or in the military. Instead, you have military officers using the system to enrich themselves by staying on the government gravy train. This is a systemic problem that must be addressed.

The Takeaway

I could write a book about how expensive things are in the military, and how much casual waste there is. I could spend two chapters just on how sick it made me seeing how little the big-wigs in the Pentagon care about such things. Maybe I will someday. But for the purposes of this article, let me just point out that there are a LOT of ways that spending can be cut even in the DOD. It’s a lot easier to talk about cutting unnecessary spending in social programs when we’ve made the military more efficient, and believe me, the Pentagon could use a good house cleaning.

I wasn’t thrilled with the idea of James Mattis as the Secretary of Defense. There was no doubt in my mind he could do the job. He certainly had the military credentials. But in my mind the most important issue of the last decade is a massive government out of control and runaway spending. General Mattis wasn’t going to fix this, and it doesn’t appear that he has. It CAN and SHOULD be done though.

We can and should provide our service members with the best of everything, but that doesn’t mean we just throw money at every problem. We need that money to be used efficiently, and that is a concept of which the current crop of officers and civilians at the Pentagon doesn’t have the slightest understanding. You would hope that a well-known and successful businessman as commander-in-chief would put the DOD on the right path. However, based on the latest Trump Hotel closing, anyone paying attention knows that the persona of “great businessman” is more of a myth than anything when it comes to Trump. It would be nice if he took a look and realized we need to cut spending everywhere, but it seems unlikely the self-proclaimed “king of debt” will make strong moves toward that anytime soon. Otherwise, he’d be rejecting this horrible tax plan the GOP congress has put forward and come up with one of his own.

Economy

Reminder: Tech Giants are not monopolies

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Reminder Tech Giants are not monopolies

There is a lot of disgust aimed towards tech giants such as Google, Facebook, and Twitter. And why not? These companies are large, incredibly biased, and quite powerful. Their reach is everywhere, striving towards omnipresence. Their influence can sway public opinion, as evident on issues such as Net Neutrality and to reach back for a more benign issue, SOPA 2014. Another concern is the pubic safety of personal information. Data breaches, hacks, and leaks are all significant risks. In China, Google has assisted the government with the surveillance of their people. And while public safety is an issue, the solution of regulating these large companies as monopolies is fraudulent in its premise. The enact anti-trust laws would ignore the simple fact: neither Google, Facebook, or Twitter are monopolies.

Antitrust

But denotation doesn’t stop individuals from advocating action. Kurt Schlicter of Townhall wrote a fiery piece advocating for serious regulation.

And what’s also scary is their willful manipulation of the algorithms that determine what can and cannot be said and read. If you don’t exist on Google, in many ways, you really don’t exist at all. Well, that’s intolerable. Our free society conducts its business on the Internet, and if one unaccountable, partisan group can decide what topics can and cannot be discussed, we no longer have a free society. We’d have a fascist one, and fascists are bad even if those fascists swill kombucha tea, bike to work at a Mountain View campus, and spew ridiculous mottos like “Don’t be evil.”

By definition, a monopoly is when a single firm has absolute market share. Yet the federal government has its own definition. And that definition is comprised in the form of antitrust laws. Ryan Cooper of The Week proposed:

It could be that careful anti-trust action could build a market with several search competitors, and thereby create some competition. But certainly all search platforms should be forced to follow something like a railroad’s common carriage rules, where websites are not allowed to be ranked according to how much they might profit the platform itself, and get fair access to search traffic.

This action would break Google apart into several companies and only enrich Google shareholders. The Google splinters would crush the actual competitors of Google rendering making this polygopoly a more clear monopoly for the shareholders than it was already before. Historically speaking, the Rockefellers gained an immense amount of wealth after Standard Oil broke apart. Again it must be said about how Coopers supposition is a flagrant misuse of antitrust law.

Suicidal?

Microsoft’s battle in the 1990s is a crowning misuse of antitrust law. Microsoft was found to be a monopoly because they put their own software, internet explorer, on their own operating system, Windows. What Microsoft did was clear business instinct. Yet the feds and several states wanted to split them up. Their plan ultimately failed but the precedent remains. In 1999, Milton Friedman referred to companies seeking to break up Microsoft as suicidal, seeking action that would one day be used against them.

“Under the circumstances, given that we do have antitrust laws, is it really in the self-interest of Silicon Valley to set the government on Microsoft? Your industry, the computer industry, moves so much more rapidly than the legal process, that by the time this suit is over, who knows what the shape of the industry will be. Never mind the fact that the human energy and the money that will be spent in hiring my fellow economists, as well as in other ways, would be much more productively employed in improving your products. It’s a waste! But beyond that, you will rue the day when you called in the government. From now on the computer industry, which has been very fortunate in that it has been relatively free of government intrusion, will experience a continuous increase in government regulation. Antitrust very quickly becomes regulation. Here again is a case that seems to me to illustrate the suicidal impulse of the business community.”

The USFL is another clear example where using antitrust was literally business suicide. The United States Football League launched in 1983 as a spring alternative to the NFL. Yet in their poor management, they moved to fall where the NFL had all of the TV contracts and sued the NFL for antitrust. In truth, their very existence disproved the notion that the NFL was a monopoly, also the existence of college football. The USFL invested everything into the antitrust suit and won $3 dollars($1 tripled).

Competition

Google/ Alphabet

Search Engine, adsales, appstore, Youtube, email, consumer electronics, operating systems, big data, web browser, programs, social network etc.
  • Verizon (Yahoo, AOL) – failed internet giant, search engine, adsales, email
  • Apple – fellow tech giant, consumer electronics, app store, operating system
  • Microsoft – operating systems, direct competitor to Google’s word processing platform, web browser(sort of), app store, search engine
  • DuckDuckGo – private search engine
  • Opera – web browser, free VPN/ adblock
  • Brave – web browser with adblock
  • Netflix – content streaming platform
  • Hulu – Content streaming platform
  • TV – not a company but a replacement for Youtube
  • Yelp – review website

Facebook

Social networks, text app for europeans,
  • Twitter – microblogging platform
  • Minds – social network
  • Snapchat – picture messaging, social network
  • Craigslist – localized ad sales
  • Reddit – online community based on interest
  • Myspace – Technically still a thing, rebranded as a music page
  • Codias – political social network

Twitter

Microblogging platform
  • WordPress – webhosting, blogging platform
  • Gab – Turkish microblogging platform
  • Steemit – cryptocurrency social network for original content creators
  • Kialo – social media platform for civil debate
  • Micgoat – video/blogging platform for debate

Conclusion

As you can see, Google is so large and expansive, they cannot be considered a monopoly, for their is competition every industry they are in. Their most serious competitors are other tech giants, like Microsoft and Apple. Facebook has numerous competitors as does Twitter. Just because their competition lacks prominence, doesn’t mean there is a monopoly.

The titans of tech are not monopolies, nor should we want them treated as such. Treating Facebook as a monopoly would create at least three large companies. And these newly divided large companies would eventually merge together and crush the alternative social platforms that currently exist. Rather these platforms would benefit from these companies remaining large and having bad PR. These companies will create innovations and capitalize on their fall should they end up like Yahoo or Kodak.

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Economy

Mimi Walters says CA rail is the epitome of taxpayer waste

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Mimi Walters says CA rail is the epitome of taxpayer waste

The idea was doomed from the start, at least to those who understood the magnitude of the project California Democrats were pushing. A nice-to-have it like California’s high-speed rail is only nice to have when it doesn’t cost billions of dollars in a state that has trouble keeping to its budget.

Representative Mimi Walters (D-CA) from Orange County understands this all too well. As one of the few Republican representatives in the leftist state, it’s up to her and other fiscally responsible representatives to make Sacramento listen to reason.

In the quote, she was referencing a LA Times article that further criticized the project. When the LA Times points outs waste coming from Sacramento, you know it must be bad.

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Economy

GE Appliances CEO Kevin Nolan credits tax cuts for more investments, jobs

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GE Appliances CEO Kevin Nolan credits tax cuts for more investments jobs

GE Appliances is poised to invest another $200 million into domestic manufacturing, creating hundreds of jobs and helping to boost Kentucky’s economy. This is the latest in a string of expansion investments that the company needs in order to meet increased demand.

CEO Kevin Nolan credits tax cuts for the recent major investments. It isn’t just that demand is higher because more people are working and keeping what they bring home. The corporate tax cuts that Democrats have been trying to paint as cronyism for the greedy business elite are playing a big role in U.S. companies expanding their operations and increasing the workforce.

The changes in rates and favorable tax treatment of investments in machinery and equipment play a big role in our expansion plans.

Citing Tax Reform, GE Appliances Launches $200M Investment in U.S. Manufacturing, Adding 400 Jobs

https://www.shopfloor.org/2018/10/citing-tax-reform-ge-appliances-announces-200-million-investment-u-s-manufacturing/“GE Appliances has long been an exemplary corporate partner for Louisville and the Commonwealth,” Kentucky Governor Matt Bevin said. “This iconic company has employed many thousands of Kentuckians for generations, and we are grateful for their most recent investment in the Bluegrass State. As GE Appliances continues to adapt to a changing marketplace, we are confident that they will remain a perfect fit right here in Kentucky—America’s center for engineering and manufacturing excellence.”

Appliance Park, GE Appliance’s headquarters, is a 900-acre facility that’s home to five manufacturing plants, a technology and engineering center, industrial design and the largest warehouse in its distribution network. The company started manufacturing operations there in 1953. The complex generates an annual Kentucky economic impact of $4.6 billion annually and employs more than 6,000 workers.

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