When You Quote Robert McNamara

Aussie analyst Benjamin Schreer concludes his critique of American policy on Afghanistan at RealClearDefense by quoting Robert McNamara:

I deeply regret that I did not force a probing debate about whether it would ever be possible to forge a winning military effort on a foundation of political quicksand. It became clear then, and I believe is clear today, that military force—especially when wielded by an outside power—cannot bring order in a country that cannot govern itself.

We are presently in Afghanistan because no president has been able to bring himself to be characterized forever after as “the president who lost Afghanistan to the Taliban”. The inherent contradiction of being logistically dependent on a Pakistan that’s in collaboration with the Taliban does not appear to have occurred to anyone.

Not only can Afghanistan not govern itself, it does not have the financial ability to support a military capable of ousting the Taliban who are, after all, Afghans. I’m also beginning to wonder if military force wielded by an “outside power” incapable of governing itself can form the foundation of a “winning military effort”.

Not to mention that when you feel the need to quote Robert McNamara, you’re in real trouble.

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View from Abroad

In the comments section of a post at naked capitalism a foreign commenter summarizes U. S. politics pretty succinctly anno Domini 2017:

If you stand a reasonable, moderate candidate against a raging nut job, then the majority of the times the moderate will win. If you stand a vile, corrupt candidate up against a raging nut job, then there is an even chance that the raging nut job will win.

I certainly hope that’s the case. It actually might be the best case scenario. At this point I’m not entirely sure.

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Moral Hazard in Health Care

As Yogi Berra once put in theory there’s no difference between practice and theory; in practice there is. At the Sacramento Bee Dan Walters looks at the bottom line on universal health care for California:

A Senate Appropriations Committee analysis pegs costs of universal coverage at $400 billion a year, but suggests that half could be covered by redirection of existing federal, state and local government health care spending.

It added that “about $200 billion in additional taxes would be needed to pay for the remainder,” but also noted that half or more of that burden could be offset by eliminating direct health care costs now borne by consumers and their employers.

To put that in perspective, even $100 billion in new taxes would be the equivalent of a one-third increase in the $300 billion a year now levied by state and local governments.

In theory – one advanced by advocates – the two-thirds “supermajorities” in the Legislature and the governor could levy new taxes of that magnitude.

In practice, however, even if the supermajorities survive the recent spate of sexual harassment resignations and next year’s elections, there’s virtually no chance of such a vote.

For California’s plan to be truly universal, as Mr. Walters goes on to point out, it must cover illegal immigrants. I think that California’s remaining a sanctuary state and having universal health care is a fantasy. There is no way such a system could ever be stable and there is no way for Californians to pay for a system in which the costs are completely out of control. Every parent everywhere in the world with a sick kid would be moving heaven and earth to get to California to avail themselves of free health care.

Meanwhile here in Illinois one of the Democrats seeking to replace Gov. Bruce Rauner after the next gubernatorial election is running on a platform of a single-payer plan for the state of Illinois. Even states much more solvent than Illinois have rejected the idea as unaffordable. Illinois is bankrupt in all but name. How in the heck can a state that can’t even afford to maintain its roads pay the pensions it’s promised going to implement a single-payer system?

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Rule by 50%+1

I think the editors of the Wall Street Journal are asking the wrong question in considering the completely partisan nature of the tax reform bill making its way through Congress:

Part of the explanation is ideological. The Democrats as a party moved sharply left during the Obama years—on economics nearly as much as on identity politics. They have made income inequality their main economic priority rather than growth, and the fact that the slow-growing Obama economy increased inequality hasn’t changed that obsession.

One result is that there isn’t a pro-business Democrat left in the Senate, except perhaps on energy policy in fossil-fuel states like West Virginia and North Dakota. Democrats are now the party of Thomas Piketty, the French economist who thinks tax rates should return to pre-Kennedy levels to reduce inequality.

Democratic economists who might have offered an alternative view have no choice but to go along if they ever want to serve in another Democratic administration. They all saw what Elizabeth Warren and the Democratic left did to block Larry Summers from getting the job of Federal Reserve Chairman.

The other explanation is the political calculation that opposition will help Democrats retake the House and Senate in the 2018 midterm elections. President Trump is unpopular, and they figure his polarizing behavior will drive enough Democrats in the polls to save Senate incumbents even in states that Mr. Trump carried in 2016. Heidi Heitkamp (North Dakota), Joe Donnelly (Indiana) and Claire McCaskill (Missouri) figure that the safer play is to oppose all things Trump and mobilize the base vote.

Perhaps they should be asking what sort of tax reform would garner Democratic support? They appear to be assuming that Democrats would oppose any tax reform on partisan grounds. That closely parallels the situation with the Affordable Care Act.

Our government isn’t supposed to work this way. Congress is supposed to forge consensus, build coalitions, and make compromises. Government by 50%+1 of both houses of the Congress may be comforting for the winners but it also consolidates and embitters opposition. It’s no way to govern a country as large and diverse as the United States.

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Modern Totalitarians

Today’s editorial from the Washington Post on China’s technological surveillance state has one serious deficiency:

STEP BY STEP, China has been rolling out surveillance technology that is remarkably intrusive, comprehensive and ubiquitous. Eager to exploit gains in technology, Beijing seems little concerned about human rights or privacy violations.

On Dec. 10, the BBC reported that China seeks to build the world’s largest camera surveillance network, with 170 million closed-circuit cameras installed and an estimated 400 million new ones coming in the next three years. In the city of Guiyang in southwest China, correspondent John Sudworth agreed to add a photograph of his face to the database of the local public security bureau and have it flagged as a “suspect” in an experiment to see how long he could walk freely on the streets before the police could find him. He got out of his car close to the city center and walked toward a bus station. The exercise took just seven minutes.

Meanwhile, Human Rights Watch reported on Dec. 13 that Chinese authorities have been collecting DNA samples, blood types, fingerprints and iris scans, in some cases possibly without informing people, from a large swath of the population in the restive Xinjiang province in far northwestern China. Ethnic Uighurs in Xinjiang have long complained about repression and discrimination at the hands of the Chinese government; resentment has sometimes turned violent. According to Human Rights Watch, in a procedure rolled out this year, the authorities there are collecting the DNA and blood-type information under the cover of a “free annual physical exams program called Physicals for All.”

It is completely lacking in practical recommendations. What the evidence suggests is that the Chinese authorities would like to be totalitarians but don’t want to appear to want to be totalitarians.

In my view the Chinese people are entitled to have any sort of society they care to have and we’re entitled both to disapprove of it and to not have anything to do with them, taking the additional step of penalizing companies that assist the Chinese authorities in their plans.

We should also be asking whether our own government is seeking the same kind of intelligence on us? How about American companies? Do we really want that? Whose data is it, anyway?

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The Choice

There’s an interesting post at Quillette on how anthropologists came to romanticize hunter-gather societies:

The picture you get from reading articles in publications like the New Yorker and the Guardian, or from anthropologists like Douglas Fry and James Suzman, is often quite different from what a deep dive into the ethnographic record reveals. The excessive reliance on a single paper published 50 years ago has contributed to some severe misconceptions about hunter-gatherer ‘affluence,’ and their relative freedom from scarcity and disease. There is a tendency to downplay the benefits of modern medicine, institutions, and infrastructure – as well as the very real costs of not having access to them – in these discussions. And, despite what some may wish to believe, the hunter-gatherer way of life is not a solution to the social problems found in modern nation states.

The gist of it is that the human species has not been engaged in a 10,000 year old mistake. The lives of hunter-gathers tended to be, in Hobbes’s memorable phrase, “nasty, brutish, and short”. The only way in which hunter-gatherer societies could be construed as preferable to a sedentary habit is if you preferred for your children to die in infancy, you’d like to die of old age in your 20s, and you didn’t mind being always watchful for your neighbor trying to murder you.

The practice of a sedentary habit and agriculture was better than being a nomadic hunter-gatherer and industrialization was better than an almost entirely agrarian society. For the last 10,000 years people have successively chosen the better alternative, the one that led to longer, healthier, less precarious lives. Will post-industrialism prove to be better than industrialism? We can only guess.

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10 Most Significant World Events of 2017

It’s a big time of year for “top ten” lists. At RealClearDefense James M. Lindsay presents the Council on Foreign Relations’s list of ten most significant world events:

  1. Robert Mugabe’s Ouster
  2. Britain Triggers Article 50 (official beginning of divorce from EU)
  3. The Rohingya Crisis
  4. The Fall of Mosul
  5. Mohammad bin Salman Remakes Saudi Arabia
  6. Global Growth Picks Up
  7. The Globe Continues to Warm
  8. North Korea Defies the World
  9. Xi Jinping’s “Extraordinary Elevation
  10. Donald Trump Champions America First

Is he right? Wrong? Is there something that he’s missed?

I note that Time’s “Most Important…” is conspicuously missing from that list. And not a word about Meghan Markle.

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Statistics to Conjure With

I found these statistics in Stephen Moore’s Wall Street Journal op-ed on the future of retail startling:

By his estimate, the U.S. has at least 50% more retail space per person than Canada—and Canada’s figure is 50% higher than Germany’s. “It’s Germany that has it about right,” he concludes—which would mean the optimal amount of retail space is less than half the current American total. “I’ve traveled all over the country,” Mr. Freeman says. “The challenge is to find a place where retail isn’t overbuilt.” If he’s right, a severe real-estate contraction is coming, and weak stores and malls will get eaten alive. Can Macy’s survive? Probably not: “They are run by bean counters”—lawyers and accountants, not entrepreneurs.

There are some things in the op-ed that I agree with, for example this:

Somewhat counterintuitively, he argues that e-commerce is “not our enemy” but is becoming complementary to retail. Here’s his challenge to anyone who thinks digital sales are set to crush the old analog kind: “Explain Blue Nile. They were one of the first to sell online jewelry. Blue Nile comes in and blows the door off as one of our most successful stores. Who else? Apple! You can buy your phone online, and they can ship it to your house. But the Apple Store almost everywhere does giant business. Microsoft—same thing. Peloton is another one. They make exercise equipment and have just opened a store next to Nordstrom, highest sales in the country. They’re killin’ it.”

With a twinkle in his eyes, he tells the story of Bellevue Square’s 1,800-square-foot Tesla showroom. Tesla is largely an internet-based company, but it helped produce one of the biggest days in the mall’s history when Mr. Freeman says it sold close to $16 million worth of cars in 12 hours. “There were lines 10 blocks long, and the average person waited five hours,” he recalls, “the way people used to wait outside stores on Black Friday. There was even a sign in front of the store that read ‘limit of two cars per customer.’ ”

If that isn’t enough, he adds: “Guess what’s one of our most successful stores we just opened up three months ago? Amazon. They already mastered online book sales. Why are they creating a physical presence? Because they know they need to connect and fuse with you as a consumer.” That’s what he means by emotional fulfillment.

However, I don’t agree with one thing the op-ed claims. I don’t think it’s the “age of Amazon”. In fact I wouldn’t be a bit surprised if Amazon announced its intention of getting out of retail in five years. It isn’t making money in retail. It is in web services. Amazon’s stock has exploded in the last two years. How long can the company maintain that pace? Will its investors accept a company whose stock price doesn’t increase, that doesn’t show profits, and that doesn’t pay dividends?

I think we’re in the age of Walmart and Walmart will be the ultimate victor in the online retail space.

However, back to those statistics. Can the United States really prosper on the basic of personal consumption expenditures? Or, as I believe, do we really need to rebalance our economy in favor of business investment? Businesses used to invest a lot more with a lot less sales than they do now. The change is not due to phlegmatic personal consumption. It’s due to a decline in entrepeneurship among American managers.

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Parkinson’s Other Law

Many people are aware of Parkinson’s Law: work expands to fill the time allotted to its completion. Not as many are aware of C. Northcote Parkinson’s other law: once any large organization has completed its grand new headquarters, it marks the peak of its influence and power. It’s all downhill from there. That’s what I think of when anybody mentions Apple Park, as Rob Pegoraro does in his Washington Post op-ed:

Apple Park certainly sounds like a pleasant place to work, if not to have worked on. Journalists who have visited it — I haven’t — have said as much.

But if the company wanted to craft a target for resentment among its loyal customers, it could not have done much better than to put this circle of glass and metal on the map.

At his talk in Washington, Ive made a case that by putting designers across multiple disciplines in the same space, Apple Park will yield better products down the line. (Possibly years down the line: The Apple Watch, designed with zero input from Steve Jobs, shipped almost three years after Jobs’s death in October 2011.)

“I can’t imagine another time in the future where we get to try and make something that is for us,” he said. “Not to be indulgent in a sort of ghastly, selfish way; we made it for us, to try to help us do better.”

But the Apple customers of today can’t caress Apple Park’s wood paneling, stride uninterrupted through its threshold-free doorways or treat themselves to a non-soggy pizza at one of its desks courtesy of that patented pizza box.

Maybe Apple’s management will prove me wrong and Apple’s mystique isn’t synonymous with Steve Jobs. Nothing the company is doing has persuaded me otherwise.

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Prediction

Actually, predictions. The tax bill will be enacted and signed into law. It won’t be as good as the Republicans and the Trump Administration have been claiming and it won’t be as bad as the Democrats have complained it is.

The entire incident is remarkably similar to the Affordable Care Act. A major policy will be enacted under strictly partisan lines. It addresses a problem in serious need of attention. A flawed bill is enacted but it’s one that can be claimed accomplishes the task, in this case tax reform. It doesn’t accomplish the reform we really need. It isn’t as good as its proponents claim or as bad as its opponents do. It will be a political football for years to come.

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