Healthcare Costs, Government Accounting and Accountability

The Congressional Budget Office has just released an estimate that the Health Care bill before the House of Representatives will actually reduce the deficit over the next 10 years. In fact, the numbers they give are:

a) The bill will cost $940 Billion over the next ten years

b) The bill will reduce the deficit – by raising more money – by $138 billion during that ten-year period.

c) The bill will reduce the budget deficit another $1.2 Trillion over the following ten years.

To which I have one question: Does anyone believe this?

First, take a close look at the numbers above. The first issue is that this bill will mean that the new healthcare plan will distribute $940 billion over ten years, while increasing tax revenue $1,078 billion. Then, according to the CBO the plan, which will ostensibly cost roughly $1 trillion over the following ten years, will result in $2.2 trillion in additional revenue.

Maybe I’m confused, but it seems to me that Americans are being told to spend an additional $3.3 trillion dollars over the next 20 years. As individuals, whether the money goes out as tax or a healthcare bill, it still goes out the front door. That works out to $165 billion more per year going out the front door. Or $550 per person per year more out the front door. Not per household, per person. For the average household of 4, that’s $2200. Per year.

Didn’t they say the point of this was to reduce costs to Americans?

But the point will be made that this will be paid by the wealthiest Americans. The ones who already pay the bulk of the taxes. And it will be paid by taxing their savings and investments, which provide the money for economic growth.

But, even more to the point, ask yourself some simple questions: when was the last time a government program stayed on budget. Medicare, started in 1967, has grown at a 13% compounded rate (on average) every year since then. That was in no one’s forecast.

Medicare was supposed to address a host of issues in the healthcare field, yet it seems that the situation ahs not only gotten worse since 1967, it has done so at an accelerated pace.

Healthcare is not alone in this regard. The Department of Energy, founded some 32 years ago – To Reduce US Dependence on Imported Oil – has done no such thing, has not been able to produce a viable national energy policy, our dependence on foreign oil grows and so does the DOE budget.

The Department of Education was founded in 1980. The Department states that its mission is ‘excellence and access.’ The Department of Education’s budget has grown from $14 billion in 1980 to $64 billion last year (it actually spiked in 2006 to $100 billion). Yet the problems of poor standardized test performances and high dropout rates among the poor continues; the problems the Department of Education was supposed to address. (For those who are curious, the US spends roughly $1.1 trillion per year on education, mostly at state and local levels, considerably more than is spent on national security.

We as a nation have spent a great deal of money on the Department of Education, on the Department of Energy, on Medicare and Medicaid. More to the point, we have spent a great deal more on these departments and programs then anyone ever suggested we ever would. The budgets have grown at truly prodigious rates over the years. But two things are also true: in no case have they successfully addressed the problem for which they were created, and two, having failed in their mission, no one has ever stopped (or even slowed) the funding of these programs.

Now we have the CBO telling us that the healthcare bill will reduce our deficits. I suppose one could argue that one of these days they are going to get it right. But I for one am not willing to bet on it.

Leadership in Government: Why it is so Rare

Several ‘key’ leadership positions were just filled in the government over the past week or so. What was interesting is that a number of them are, if not friends, at least acquaintances. In most cases both they and the folks they are replacing are not what one would consider superior leaders.

This is not meant to be pejorative. All of them are bright, hard-working, dedicated people. But there are lots of bright, hard-working people. But to read the biographies and resumes of the senior leaders of the various agencies and departments in Washington is to review the ranks of what appears to be the most brilliant, talented, clever, and imaginative people this planet has ever known. Every one of them is gifted with multiple degrees, participation in a wide range of leadership seminars, and a raft of experiences that truly boggle the mind.

Yet the agencies and offices they oversee seem little changed from one end of their careers to another. How can this be?

There are some who would argue that this is a testimony to just how horribly broken is our government; that if these paragons of virtue and learning are unable to fix it, clearly the system is beyond salvage. The truth is more mundane.

First, the fact is that, in most cases, despite the stellar resumes, these people simply aren’t brilliant. Brighter then average? Perhaps, perhaps not. They may have a wonderful education – on paper, but that alone is rarely a mark of either intelligence or success, and even more rarely a mark of real leadership.

Second, and more importantly, despite the fact that these people often go from one agency to another, sitting on top of ever larger numbers of people and larger and larger budgets, most of the people in Washington are decidedly not very good leaders. They may be good managers; in fact, many of them are quite accomplished managers, particularly of budgetary processes and procurement programs. But, their ability to establish goals, communicate those goals, and convince people and motivate people to pursue those goals – to lead – is usually limited.

So, how did they get there?

There are a lot of elements to it, which include issues such as political appointment, quotas and the like, but all of that is window-dressing for the real reason. The fact is, it is the nature of government to select ineffective, even mediocre people. In effect, they were chosen because they ‘look better than they are.’

Now, this is not to say that these people don’t ‘look good;’ they do. They have impressive resumes, they speak well, they are well educated. But they are thousands, tens of thousands, even hundreds of thousands of people in this country with impressive resumes. Why then do the same people keep turning up in Washington? Because that is what governments do.

Several hundred years ago an English philosopher – Thomas Hobbes – wrote a treatise on government titled “Leviathan.” It is a difficult book to read, but in it Hobbes identified the process that drives the behavior of governments (and any other large organization that has outlived its founders and settled into a condition of simple existence.) At its heart, governments – all governments – claim to do one thing: improve the life of their citizens. But for those who work within the government organism – the Leviathan – the government does in fact improve their lives, and usually more than the nominal improvement it provides to all other citizens.

More to the point, the Leviathan awards those who help the Leviathan; the more you help it, the more you benefit. The more you make government strong and secure, the more the government rewards you by promoting you, giving you more authority.

How then does this apply to people of perceived competence but de facto incompetence? Government must, in order to keep the general population quiescent, at least appear to be trying to make things better. Little real progress is necessary as long as everyone appears to be working diligently. However, at the same time, government bureaucracies recognize that their continued survival is dependent on maintaining the status quo. Dramatic changes can mean not simply that one agency receives more money, but that another loses money. The gaining agency gains more money and more power and thereby threatens other agencies. Accordingly, government agencies continually struggle for more money and authority, but with that struggling, few gain, and none lose, status quo is maintained, and the system grinds on; all at the expense of the taxpayer.

What happens if a truly capable figure takes charge of one agency? Very simply, the apple cart is upset. Agency X receives more money, more authorities, and others suffer. Power shifts. And power shifts – real change - are feared by the bureaucracies. In those cases where the government takes power from the populace, it will usually distribute it widely throughout the various bureaucracies, minimizing the amount of change within any one agency, which ensures the least infighting, and also making it that much more difficult for the power to be recovered by the people at some later date.

This has been seen in the US government over the past few years with the creation of the Department of Homeland Security (DHS). Some departments lost some authorities – and budget – and then further rules and regulations resulted in tighter controls over elements of DHS, the result being that DHS was less effective then initially planned and the budgets of the other agencies recovered, compensating for the “losses” to DHS. The same is true of the Director of National Intelligence, who was charged with ‘integrating’ the various elements of intelligence throughout the various departments, then was not given the real authorities to do so; more money is spent, more positions of ‘great responsibility’ are created, but no real authority was given to these new offices and the problems which motivated the creation of the office remain with little substantive change.

An excellent example of how government responds to cries for change is the Department of Energy (DOE). Created during the Carter administration, the DOE was founded to develop a comprehensive national energy policy that would break our dependence on foreign oil and lead us to a robust but sustainable energy infrastructure.

In more than 30 years since its creation it has yet to produce a comprehensive national energy policy, the DOE has enacted more constricting regulations on US energy companies, while US dependence on foreign oil has increased from 6.6 million barrels per day in 1977 to more than 10 million barrels per day today, US refining capacity has nearly stagnated and the US oil industry continues to age, non-carbon power generation (such as nuclear power) has nearly frozen in place, and the DOE budget continues to grow. To those who will point out that the DOE now must manage the US nuclear weapon arsenal, it is worth pointing out that the US nuclear arsenal has shrunk in size from well more than 20,000 to less than 5000, while spending has continued to increase and there are growing concerns about reliability. In short, the taxpayer has spent a great deal of money, “brilliant” people have moved in an out of the department, and very little that it was tasked to do has been accomplished in more than 30 years.

So, to return to our original question: Why do government organizations routinely, frequently pick mediocre leaders? The answer is an essential element of Hobbes’ political model: figures in leadership positions are chosen for a number of criteria, but the two most important are nominal experience, and ‘pragmatism,’ which in bureaucratic terms means precisely that he or she is willing to negotiate away any position. In short, they must be committed to preserving the organizations, and not be – in fact – committed to change. This doesn’t prevent changing and reorganizing to beat the band, as long as real change doesn’t take place. And that is why you can look at certain agencies in the government that go through regular and frequent reorganizations, yet the ‘folks in the trenches’ (the ones who do the real work), remain doing the same thing, often at the very same desk, though their titles may have changed and they have new bosses. Every appearance of change is provided, but there is little to no meaningful change.

Real leaders recognize certain truths about leadership. The most important is that leadership is about taking an organization ‘someplace,’ about having meaningful goals. At the same time, accomplished leaders understand that every organization must be focused to move forward. Having more than two or three goals translate quickly into having dozens of goals and then no goals. Effective leaders choose to focus on the two or three goals they wish to achieve; lesser leaders believe they can achieve many goals; and in believing so they invariably fail, and the organization remains fundamentally unchanged.

And that’s why they were chosen in the first place.

WHY INTELLIGENCE FAILS

The article below was first drafted several years ago and approved for release by my SSO (Special Security Officer), but never published. I have added some minor points to update the article in light of the incident on Christmas Day, but the fundamental conclusions are unchanged. This article represents a condensation of the book I am writing on Why Intelligence Fails and What We Need to do to Fix It.

“Another Intelligence Failure.” Once again elements of the Intelligence Community failed to ‘connects the dots’ and we (the US) almost fell victim to another terrorist attack.

Strictly speaking, the events of Christmas Day, wherein a man, by all indications associated with an al Qaeda related organization in Yemen, was able to board an airplane with an explosive device of some sort, are not the purview of the intelligence community. The intelligence community collects data, analyzes data, stores data and disseminates data. It is up to others to decide what to do with it. That, at least, is the mantra of the Intelligence Community leadership.

To give the IC credit, there are any number of events that the IC has acted on over the past one, five, ten and 40 years in which the right information was collected, the right analysis took place, the right people were informed, and the right decisions were made.

Such a claim misses the mark, however. A doctor who performs 5000 successful operations is still brought to task if he botches number 5001; an airline that flies several hundred thousand flights a year for a decade, without any incidents or injuries, is still ‘dissected’ by the FAA if they have an accident. The IC cannot claim a special exemption.

Furthermore, the fact remains that in nearly every case that comes to mind (and many that have received little if any attention), more then enough information had come to light before the incident and failure was not the result of some analyst to recognizing the impending event, but the failure of the system to act when notification began to move ‘up stream.’

In fact, a look at the failures of the past 10, 20 or 30 years and there are many, reveal few that were terribly nuanced once the facts were presented. In nearly every case, the information had been collected early enough, was fairly obvious, was correctly assessed, and then the system failed. Why? The answer requires a little background on the origins of the current US Intelligence Community.

A Brief History

The IC was created by the National Security Act of 1947 and a host of follow-on legislation. But, while each succeeding piece of legislation has changed elements of the IC, the fundamentals remain the same. And those fundamentals are a direct result of the Japanese attack on Pearl Harbor and the series of investigations that followed.

The essential lesson learned from the Pearl Harbor investigations was that there needed to be independent reporting directly to senior decision-makers in Washington, reporting that went around analytic debates and parochial – military service - interests. Senior personnel in Washington: the President, the Secretaries of Defense and State, the Chiefs of the services, needed instant reporting, without the delays that would result from internal analytic debate – from a communal sharing, as well as the delays that might be caused by service animosities.

The result was to separate from the Army and Navy large segments of their intelligence and cryptologic capabilities and create two new organizations: the National Security Agency and, with the remnants of the WWII Office of Strategic Services, the Central Intelligence Agency. These two offices, with their own collection and analytic and reporting systems, would report directly and independently to the President and other senior decision-makers.

But this conclusion – and the resulting organization and intellectual infrastructure - was based on a massive, unspoken assumption: that the problem being watched was clear and well defined. And in the case both of Japan and the situation facing the US in 1947 (when the legislation was drafted and passed) this was true.

In the case of Japan, the US identified the Japanese as a ‘competitor’ as early as 1900 and the capabilities of the Japanese navy were key drivers of US Navy construction and training for several decades. The US understood Japanese grand strategic designs (the East Asia Co-Prosperity Sphere) and the intentions of forcing the US and European powers from East Asia; the US understood Japanese political and economic strategies in China, South-East Asia and Micronesia; the US understood Japanese military strategy – both naval and ground (army), the intended conquest of Manchuria and coastal China and South East Asia, the likely move into Indonesia (the Dutch East Indies) and the Philippines by the end of the 1920s, before any invasion took place; the US understood Japanese operational issues – how the navy and army would move, their strengths and weaknesses; and we understood their tactics and their weapons – how they fought.

The failure at Pearl Harbor was specifically tactical and technical intelligence: the US lost contact on the Japanese Combined Fleet in November when the fleet changed its encryption, and the US failed to recognize that torpedoes could be adapted for use in the relatively shallow waters of Pearl Harbor.

It is worth noting that the first ‘attack’ of Pearl Harbor by aircraft from aircraft carriers was in a fleet exercise several years before World War II when US Navy aircraft ‘attacked’ the harbor during a fleet exercise.

In 1946 the US faced a similar situation: the Soviet Union. And the Soviet Union obliged the IC over the next 45 years by presenting itself as a symmetric intelligence target that always gave the IC something to report on.

As with the Japanese, with the Soviet Union the US had a clear grand strategic picture: the spread of global communism; there were clear Soviet political and economic strategies that were tracked by the IC; there was a clear and massive military strategy that was dissected in great detail. Over the course of the next 4+ decades the IC followed Soviet military plans, identified the major theaters of operations of the Soviets, and developed detailed analyses of Soviet operational, tactical and technical capabilities. The IC tracked Soviet ships and aircraft, monitored the readiness and training status of Soviet regiments across the Warsaw Pact and kept detailed matrices that equated to warning of this or that Soviet operation.

In both cases, the US faced a clearly identified problem, that could be reduced to specific tactical and technical issues, and a great deal of time and effort was spent to track those tactical and technical issues.

With the arrival of nuclear weapons the issue became even more focused, with Soviet nuclear weapons becoming the keystone of the IC collection, analysis and warning problem. Everything else took a second seat to this one element.

And so, the US was surprised by nearly every single strategic development over the past 60 years. The US designed, developed, built and reinforced an intelligence community that tracked in excruciating detail a clearly defined problem; anything that fit within the intellectual construct was symmetric; anything outside was asymmetric. Anything that did not fit into that clearly defined problem was, to some extent, ignored. The focus had to remain on the one central problem. But strategic surprise is, almost by definition, asymmetry.

The list of failures is long and unpleasant. An abbreviated list includes:

Soviet development of atomic weapons

Korea 1950

Hungary 1956

Czechoslovakia 1968

Soviet Invasion of Afghanistan 1979

Fall of the Shah 1979

Iran-Iraq War 1980

Collapse of Warsaw Pact 1989

Iraq Invasion of Kuwait 1990

Collapse of Soviet Union 1991

Arab-Israeli Conflict – nearly every incident

Terrorist Incidents for three decades

In literally every single one of these incidents, and in scores of other failures that have fallen into the shadows of history, there was more than enough information available to provide some sort of ‘heads-up’ to our leadership. In virtually every case there were one or two analysts (often more) who had made the case for the warning; they had sorted through the intelligence, understood the associated environment and made the correct assumptions, and then had constructed a logical argument that showed their conclusion was valid. It must also be noted that in most of these cases there were case officers and their agents who had repeatedly risked their lives to acquire critical pieces of intelligence for the analysts to dissect and then integrate with other intelligence.

But in each case the senior leadership, the President and his closest advisors, were ‘surprised,’ presented with a situation as it happened rather then made aware before it happened so that they might preempt the event, in many cases presented with situations for which there was not even a planned response.

The Contradiction

Anyone who has ever had any dealing with the Intelligence Community will tell you the same few things: they have never met so many bright, hard working people. Second, the technology that the IC uses to collect information and otherwise assist these people in doing their jobs is simply remarkable. Third, the level of dedication and patriotism among the members of the IC is unmatched by anything they have seen anywhere. Tens of thousands of people, often laboring in true anonymity, have committed their lives to defending this country. It is no exaggeration to say that a walk through the halls of the CIA or NSA or any of the other agencies, or better still, working with these people in the field, reveals a professionalism and patriotism that is truly remarkable and humbling. And this is as true today as it has been for six decades.

Then why does it fail? Why does the IC fail to alert leadership? Tens of thousands of very bright, diligent and committed people and yet they continue to fail? How can this be?

Four Problems

The answer lies at the intersection of four tightly interconnected issues: organization, leadership, authorities, and investments.

Organization

First, the IC is organized and structured to do one thing: provide ‘alertment’ to the leadership by tracking a clearly defined problem. As noted earlier, the construction of the IC took place in the long shadow of the attack on Pearl Harbor and the many investigations that followed. The focus was, and is, to provide a flow of information ‘up’ the organization to the key decision-makers: the President, the Secretaries of State and Defense, the Joint Chiefs. The organization is not designed to share information; it is designed to push it ‘up,’ once it passes certain thresholds.

What does it push ‘up?’ Information that it is clear that the decision-makers want. Once again, if the decision-makers, and the support mechanisms around them, haven’t identified something, whatever it is, then the information, no matter what it is, won’t get moved ‘up.’

But both Congress and the President (actually, at least the last five Presidents) have called for better sharing of intelligence. Why hasn’t intelligence sharing improved? To be fare, in some specific, narrowly defined areas, there has been some improvement. But, for the most part, the IC grinds on as it always has.

The reason for this is fairly simple: the organizations remain, at their most basic levels, unchanged; this despite decades of Presidential and Congressional efforts. At senior levels new offices have been created, new lines of authorities established, and new requirements stated. But at the production level the situation, despite all these ‘fixes,’ has only gotten ‘set in stone.’

The situation might be compared to a sports team: a football team is organized specifically to play football. The team members are all excellent athletes, but without a complete reorganization (as well as changes in training plans and support systems), they would fail miserably as a baseball team. By analogy, the IC was organized as a football team but is being asked to not only continue playing football, but also to play baseball and hockey as well.

The IC was built as a vertically aligned set of organizations that would track a clearly defined problem. But, in a very real sense the US Intelligence Community (IC), which, with apologies to Voltaire, is neither intelligent nor a community, nor was it intended to be either; in the sense that a ‘community’ is a set of interdependent organisms or organizations. And emerging threats demand an intelligence community with a higher degree of interdependence then our current construct allows.

In any case, the IC is – rightly – being asked to identify new, emerging problems while it is expected to continue to track the clearly defined problem. The same organization cannot do both, and it has proven this repeatedly over the last 60 years.

To fix the organizational conundrum requires separating the community into two major pieces: one that is a predominantly vertically aligned community, focused on defined problems with clear, deductive processes to address defined problems; and a second, horizontally aligned community, with a much more rapidly iterative, inductive process to address the problem of identifying emerging problems.

The two IC ‘Halves’ would overlap at two points: the management of the collection process and the management of the information collected. Both must be placed in the same hands; the DNI – the Director of National Intelligence – must be given sole and absolute control over both collection and that which is collected. No one, not DOD, not NSA, not CIA, not State, etc., would own any information. Once information on any foreign activity or event, or person or thing is collected, the DNI owns it and he alone (or the DNI’s boss – the President) set the rules for use.

To reiterate, the US needs both capabilities; but one organization cannot do both well. This will not be easy or quick, but it must be done if we expect the IC to provide real strategic warning.

Leadership

The leadership of the IC has failed the people they lead, the people they work for and the nation they serve. This isn’t because these are evil or incompetent people. But it is because the organizations that make up the IC routinely select senior leaders who will function well within the bureaucratic environment of Washington: they are the people who are expert at crafting procurement programs, defending budgets and protecting organizational turf. Rarely are they either gifted leaders or gifted intelligence professionals. In the few cases where there have been gifted intelligence officers in leadership positions they have failed to perform as competent leaders who can manage to force through real change. The gifted leaders and the superior intelligence professionals normally do not promote well within the IC, and the IC suffers as a result.

The IC needs leadership that is willing to change organizations, even when that means one organization ‘gains’ and another ‘loses.’ IC leadership has traditionally resisted real change, choosing to ‘rearrange the deck chairs’ rather than change course, fighting each other to protect ‘budget share,’ then developing complex programs that ensure each is protected (a ‘you scratch my back, I’ll scratch yours’ solution), but failing in the end to address new concerns, help the actual ‘workers’ within the community or improve the intelligence product.

In the Iraq Study Group Report (issued in the summer of 2008) it was noted that the “embassy of 1,000 [people] has 33 Arabic speakers, just six of whom are at the level of fluency” (pg 60). That 5 years after moving into Iraq we still had less then 1% of the embassy staff fluent in Arabic is a disgrace. And it represents a clear failure of leadership. Later, the report notes that: “We were told that there are fewer than 10 analysts on the job at the Defense Intelligence Agency who have more than two years’ experience in analyzing the insurgency. Capable analysts are rotated to new assignments, and on-the-job training begins anew.” (Pg 62)

It is not new. At the time of the seizing of the US embassy in Tehran in 1979 the author recalls being told that the DOD had only 2 fluent Farsi speakers in uniform. While that number may have improved a bit, it is enlightening to note that the US Navy (8 years after the US pushed the Taliban out of Afghanistan) started a program in 2009 to develop more Afghani and Pakistani expertise. Sadly, they began it by moving a large number of senior officers into the program, officers who will work at large, flag level operations centers, and who will be departing the service within several years – rather than bringing in junior personnel who can be committed to developing real expertise for the future, while working in the tactical centers and forward bases where the real understanding can be generated.

Authorities

Instituting the changes needed – the massive reorganization – splitting some offices, joining others – will be impossible if we expect it to happen within the current construct. The IC cannot fix itself. The system is too large and the level of bureaucratic inertia too great. A new Director needs to be appointed, with a new team, and a new plan. And Congress needs to give him the authorities to execute the plan. The new Director needs to brief Congress, but then Congress needs to bless the plan and get out of the way.

The new director needs to be given the authority to fix the collection architecture, expand personnel hiring, and change a wide range of personnel policies that have no place in the world of intelligence, and realign tasks and internal authorities. The new director will need true authority over the budget, and true ‘hire and fire’ authority. And the new director should be given a clean slate: all current admirals, generals and SES in any intelligence or intelligence related position should tender their resignation, and the new Director be allowed to ‘cull the herd.’

True excellence in analysis is the result of years of focused effort. Yet the bureaucratic and personnel policies of the government as a whole work against developing this excellence. Does it develop anyway? To some extent, yes it does. But it does so despite the IC, not because of it. And here again the leadership has failed to make the case for excellence over bureaucratic ‘correctness.’ Personnel training policies and standards, as well as assignment practices, need to be revamped to allow the creation of a large number of truly expert, all source analysts.

In addition to this very necessary and massive reorganization, the IC needs bureaucratic streamlining. The current structure – while well intentioned – has resulted in a complex layering of bureaucracy. The large and top-heavy superstructure that now exists, with a host of directors and deputy directors, each with their own staffs and staff processes, has done nothing to either improve the product or streamline the process. This bureaucracy needs to be reduced. There are any number of ways to do this, but it needs to be done.

Investment

Finally, we need to invest in our IC, and it is ‘our IC,’ the entire nation’s intelligence community. As with the DOD, the IC has found its tasking increasing over the past seven years. Unlike the DOD, the IC’s tasking has been increasing regularly for much of the last 20 years. And this increased tasking has taken place even as the national investment in intelligence – as a percentage of GDP – has decreased.

As the nation reduced the size of military force, the argument that was used by one and all was that it was the quality of our intelligence that would allow us to safely reduce the size of the DOD. Intelligence was the ‘ace in the hole.’ Yet, since we began the massive DOD reductions in 1986, and with the exception of recent increases in the Army, the Marine Corps and the various Special Forces units, that drawdown continues to this day, we have also seen a dramatic decrease in the effective level of funding for the IC. While the numbers are difficult to find, it is reasonable to estimate that 40 years ago the nation was spending considerably more than 1% of GDP on intelligence; today that number is less then ½ of 1%. When we recognize that relative pay has increased (which is a good thing), we can see that a larger percentage of that budget goes to pay for a smaller number of over-tasked people, and an aging intelligence infrastructure is facing obsolescence.

The nation can, if it chooses, continue to reduce the size of the DOD, but to reduce both the size of the military and the organization that is supposed to provide even more of a warning then ever before, while we reduce our ability to defend or respond militarily seems to be the height of folly.

Conclusion

The nation needs an IC that can both reliably track and provide warning on major threats – the nuclear forces around the world, and an IC that can provide strategic warning, that is, notify the President and other senior decision-makers with adequate time for them to act preemptively and thereby defend the United States, its people and its interests. To do the latter is to develop a capability to identify and provide notification of emerging problems. But this is a fundamentally different problem then tracking an identified problem, for one is deductive and requires fine-grained analysis, the second is inductive and require developing understanding.

But the IC as it is organized can only provide warning on defined problems. No amount of’ rewiring’ at the top, or orders to improve sharing will change this. It is time we face the hard task of building the IC the nation needs and deserves.

Return of the Fabians

"[They wanted] a business-like understanding of national needs which would take hold of the future like a governess, slap it into clean clothes, wash its face, blow its nose, make it sit up at the table and eat a proper meal.”

Does that sound vaguely familiar?

Does that begin to describe the sense you get when you hear some of the descriptions coming out of this or that figure in Washington as they talk about the need for more government involvement in healthcare, banking, energy, education, etc?

Does this sound similar to the meaning of some of the adds paid for by this or that group of actors or perhaps a political action committee, that ‘we can’t wait anymore, we need to fix ‘it’ now?’

Those words were used by the historian Barbara Tuchman to explain the Fabians, a society founded in 1884 in England. They were an interesting bunch. Tuchman described them as ‘essentially authoritarians, impatient with democratic process,’ they were ‘coldly bent on improving society’ (from their own perspective.) They wanted ‘Socialism without Marx or revolution, something like Macbeth with the murder.’ They favored ‘anything which strengthened the State and brought in revenue for more sewers, soup kitchens and unemployment insurance.’

And right now we have Senators and senior bureaucrats in Washington making statements to the effect that the House of Representatives should just accept the Senate’s healthcare bill, not debate it or change it or contest it. “Impatient with democratic process.”

Just to remind the folks in Washington who sometimes forget what’s what. The Constitution, the document you have sworn to protect, was designed to stimulate debate, to establish a slow and deliberative process in regards to the creation or changing of laws. This systems, what we learned as ‘checks and balances’ in our social studies courses when we were in school, is fully intended to make passing a law a slow process, one that is easily stopped.

Why is that? Because the Founding Fathers, having studied history a good deal more thoroughly than many – most – in Washington today, were aware that laws, once passed, are VERY difficult to ‘undo.’ And laws passed quickly are usually poorly thought out. Having not been thoroughly debated, they normally lack clarity and intellectual integrity.

The best example of this is in the length of a bill – any bill. Long bills (proposed laws) usually become that way because different offices construct different elements of the bill. The bill is then simply stacked together. Mark Twain famously observed that ‘I have to send you a long letter as I don’t have the time to write a short one.’ The same is true of bills.

Long bills create great complexity because as the length increases in any document it becomes more difficult to ensure consistency and integrity and the result is contradictions (apparent and real), mistakes, omissions and loopholes. This is only exacerbated by the process we see in Congress in which multiple offices draft different sections of the bill, often with only a cursory review of each other’s work. Further complicating the issue, amendments are then added to the bill, often without the drafter having actually read the whole bill. The result is the plethora of long, tortuously complicated laws that we have on the books, laws that need constant amendment to cover the various mistakes that are discovered every year.

But none of that matters to those in power in Washington today. Rather, as their ads insist, the need is to act ‘now.’ Let’s not think this through, let’s not debate it – as the Founding Fathers intended and as the Constitution insists, let’s not have a rational discussion on the pro’s and con’s of each issue. Instead, sane discussion is replaced with invective, finger pointing, and demagoguery. Those who call for debate have been accused of being no better then the slave traders of 200 years ago, and anyone who opposes this or that bill is clearly a tyrant in disguise.

The fact is that the procedures called for by the Founding Fathers, and resident in the Constitution, were designed to prevent tyranny, by insisting on a slow and deliberative process, so that the truth might be revealed by informed debate.

But that is not what the Fabians wanted and that is not what the politicians in Washington want now. Rather, like the Fabians, they want “progress” as they have defined it, and are impatient with the democratic process – the one identified in the Constitution - the same one they swore to protect. They have decided they have found ‘the truth’ and anyone and anything that stands in their way – to include the Constitutional process – must be pushed aside.

The Fabians have returned, and the Constitution be damned.

Bring Me a Rock: How Not to Fix HealthCare

The healthcare issue seems to have settled into a dance between sophistry and fear mongering. On the one hand are vague comments about healthcare being ‘broken’ and that ‘we have to act because …’ followed by loosely knit opinion; on the other hand is a constant screed that ‘if we don’t do something now…’ followed by predictions that start to sound like some Hollywood end of the world thriller.

Meanwhile, no one answers any hard questions with anything approaching real data. It would be comic if it weren’t so important. We have actors, posing as hyper-concerned citizens, telling us that we need to ‘fix it now,’ though precisely what they mean by ‘it’ is never made clear (Do they really mean they want every single piece of the healthcare industry addressed in one truly enormous piece of legislation? Teeth cleaning to brain surgery, all in one?) Nor does anyone care to define what is actually broken (if you are going to fix something, ostensibly it is broken).

But what is broken? A recent article in ‘Investor’s Business Daily’ provided the following statistics:

Percentage of men and women who survived a cancer five years after diagnosis:

U.S.              65%

England        46%

Canada         42%

Percentage of patients diagnosed with diabetes who received treatment within six months:

U.S.              93%

England        15%

Canada         43%

Percentage of seniors needing hip replacement who received it within six months:

U.S.             90%

England       15%

Canada        43%

Percentage referred to a medical specialist who saw them within one month:

U.S.             77%

England       40%

Canada        43%

Number of MRI scanners (a prime diagnostic tool) per million people:

U.S.             71

England       14

Canada        18

Percentage of seniors (65+), with low income, who say they are in "excellent health":

U.S.             12%

England         2%

Canada          6%

Was there some careful selection of the data shown? I suppose, though that last set of data are telling. Nevertheless, it speaks to facts, not hand-ringing.

One of the worst things leader or manager can do is provide guidance which is so vague or obscure as to actually make the situation worse. We have all known or worked for someone who only tells us something is wrong, but never really tells us what he is thinking or how to address the problem. We are told to ‘bring me a rock,’ and then told ‘no, not that rock. Bring me another.’ The ‘managers’ and ‘leaders’ who behave in this manner are poor managers and leaders. And usually, we find they had little knowledge of what they were trying to manage.

Congress, and a whole slew of special interest groups, are determined to ‘fix’ healthcare, though they can’t really be precise about what is broken except to say that 15% of Americans don’t have health insurance, and to constantly bang the drum that healthcare is expensive. Yet nothing in any of these proposed bills will actually reduce the amount of money we as a nation spend on healthcare, nor will it create more healthcare, nor has anyone in any of the harangues (I have seen no real debates) shown any element that will actually improve the quality of specific types of care. Is that because they can’t find something that is broken or they simply don’t know how to fix it? Or is it simply irrelevant?

Consider this: in the 1940s, 1950s, 1960s and 1970s in the US military every soldier, sailor, airmen and Marine received a yearly physical. But, as the services shrank in size in the 1970s and the number of dependents increased, there were fewer uniformed doctors and nurses to provide healthcare. The answer was that the military went to physicals every three years for everyone not on special status (such as pilots). This was done for one reason: the Department of Defense could not afford to hire more doctors and nurses. So they rationed healthcare.

Yet there isn’t a doctor or nurse in this country who will tell you that you should not have a physical every year.

Recently, the US Preventive Services Task Force, a panel whose members are appointed by the Department of Health and Human Services (those who would control our healthcare) recommended that women start regular breast cancer screening at age 50 vice 40. It is worth noting that this was based on new analysis of existing data, not any new discovery, and the final decision, according to the vice chair of the panel, was ‘qualitative’ ‘and not based on some magic number.’ Why let facts interfere? (The link to an article in the Wall Street Journal is provided below.)

The American Cancer Society disagrees. But, they are dealing with patients, not money. So, ask yourself this one question: How will government oversight increase cancer survival rates?  See if anyone has any facts.

http://online.wsj.com/article/SB126031689043682715.html?mod=googlenews_wsj

Let's Create Jobs........

Sounds like a good idea: create jobs.

Like most things, though, there is a catch. Let’s say you have a Billion dollars in your pocket – every year. And, being a kind and generous sort, you decide to create some jobs. How many jobs can you create? Well, let’s assume that you start a company and you are going to pay everyone a $50,000 salary. So, you could employ 20,000. Well, actually, no. Because you need to pay Social Security and Medicare, every $50,000 salary will actually mean about $57,000 per person. Plus state taxes of perhaps 1 or 2%. So, let’s call it $58,000 per $57,000 job (though the employee only sees $50,000). So, you can create 17450 jobs.

So, why can’t the government create some jobs with all that tax money they collect and solve the unemployment problem?

The Federal government collects almost $3 trillion in taxes and such every year. That translates into 51 million ‘$50,000’ per year jobs. Problem solved, right? Well, not exactly. Because it seems that the numbers don’t quite work that way.

First, the government (any government) isn’t quite this efficient. Because of systemic inefficiencies, as well as the obvious cost of the bureaucracy that is handling the money, the ‘rule of thumb’ figure for the cost of a basic job in the federal government (that is, if you say this will require 100 people, the number you multiply 100 by to reach the annual labor cost) is $65,000 (or more, depends on which department).

So, the translation is simple: every time the government collects $58,000 in taxes, it deprives the free market economy of the money needed to fund a real job. To create a job, the government then needs to spend a bit more than $65,000. $3,000,000,000,000 in tax revenue translates into the equivalent of 51 million jobs. But $3,000,000,000,000 in government spending translates into 46 million jobs. Net loss is 5 million jobs.

Now, it isn’t quite this simple or clean, as the relation between the taxing and the spending is delayed and tortuous. But the general relationship is this: government spends more money creating a job then does the private sector and government spending. Once government moves past a certain point in providing security, infrastructure and governance – which occurs consumes less then 10% of the entire Gross Domestic Product - it stops adding to the solution, and starts adding to the problem.

Moreover, when government creates a job, there is no reason to believe they got it right; government often overpays, and the job may be of no value. It is no coincidence that real estate costs in the Washington DC area are some of the highest in the country. While the federal government does not pay very well at the very top end (that comes after folks leave government), it pays ‘middle management’ very well, as witnessed by the number of SES and GS-15s in the Washington area.

The Under-Funded War

There are some real myths surrounding the wars the US is now fighting.

First: Cost

Washington and the media insist that the war, that is the wars in Afghanistan, the Republic of the Philippines, Iraq, and the Horn of Africa, cost too much. So, some simple numbers: Since 2001 the United States has spent a bit more than one trillion dollars on the war. During the same period the total US Gross National Product is in excess of 100 trillion dollars. In short, we are spending less than 1% of our national wealth per year for something that both President Bush and President Obama state is vital to our national security.

If it is so vital, and I think it is, why is spending less than 1% of our wealth so extreme? A few nights ago the President suggested that the cost in Afghanistan could reach 300 billion dollars per year. Such a number still represents a tiny sum if it is indeed vital to our national security.

This is not too say that there hasn’t been a real cost in people, 5000 dead and 30000 wounded. which is a horrible price.  But, here too the numbers are illuminating. I recently saw a figure that estimated that roughly one million US citizens have participated in this war over the last 8 years. That is compared to a national population of 303 million. To put that in perspective, the US population in 1970 was 203 million, and the number of US citizens who took part in Viet Nam was a bit less than 7 million; 1/3 of a percent versus 3.5 percent.  Almost twelve times the level of involvement.

Second: Duration

We are told that we cannot have open-ended commitments (even though it is vital to our national security). Why not? In fact, if something is vital to our national security doesn’t that demand an open commitment? The logic of this argument escapes me.

The fact is that anything that is vital to our security requires commitment for however long it takes. Presidents in the past have made this case and the American people, who routinely have more sense then their elected servants in Washington or the “experts” in the media, have agreed. That is why there are still US forces in Korea (59 years), Japan (65 years), Germany (65 years), Italy (65 years), the Sinai (30 years). We kept forces in the Philippines from 1944 to 1993 (49 years). The American citizenry understands security and sustained commitment. It’s why we have kept a fleet of ships forward deployed to the western Pacific for more than 100 years (yes, 100 years).

The only people who don’t “get this” live within 30 or 40 miles of Washington DC and in a few select ivory towers around the country. The idea that we will commit to something that is stated to be vital to our national security - but only for 18 months - is lunacy.

Third: Nation Building

We are told nation building is impossible. Well, anyone who says that has never been to Seoul, Korea. We helped the Koreans rebuild their nation, the Germans, the French, the Italians and the Greeks, the Philippines, Japan, etc. Nation building is hard because it DOES require commitment. There are a host of “experts” (in more ivory towers) who will tell you that the cases cited above were ‘different’ and that the current candidates for nation building lack this or that trait and therefore can’t be successful candidates for nation-building.

I would suggest that the nations listed above are about as diverse a group of cultures as you would want. Yet we – they and the US working together – did engage in nation building. The only difference was the leadership in the 1940s and 1950s didn’t listen to any “experts” who insisted, because of their own lack of intellect and imagination and spine, that it couldn’t be done.

Nothing important is achieved quickly or at low cost in real sweat. The American people get that. It is fairly clear that the experts in Washington and the ivory towers don’t.