Politics/Intel
Iran Becomes More Complicated
Word comes this morning that Iran claims to have successfully launched its first orbiting satellite, Omid ("Hope") on its Safir ("Ambassador") launcher. The Safir was most recently tested last August and is believed to be a derivative of the Shahab-3 a booster, a descendant of the Korean Nodong-1 missile. While Western intelligence agencies have confirmed the launch, they have said little more about the Omid payload. Iranian President Ahmadinejad said after the launch that the satellite had made contact with Iranian ground control but that its other communication systems had not yet been activated. So some doubt remains over the status of Omid but that is hardly the salient point. That Iran claims to have delivered a satellite into orbit is the big news. [Update: From Armscontrolwonk.com "NASA has posted the first orbital elements of the satellite and its third stage rocket body and, running the orbits backwards, they are totally consistent with a launch from the “Kavoshgar” launch site at 18:38 on 2 February 2009 (GMT)."]As has long been the case with Iran, a potential destabilizing military development is again couched in terms of peaceful scientific and technological advancement. Certainly a space launch capability is an impressive technological achievement and allows Iran to have its own communications infrastructure without dependence on western companies (and their governments). The successful enrichment and processing of natural uranium into fuel for a nuclear reactor(s) is another advance which frees Iran from the normal sourcing of low-enriched reactor fuels. However, both technologies can be used militarily, alone or in combination. There lies the problem for the US and other governments. Is the development of an indigenous space program a legitimate right of any country? Or, because of dual-use, will new technological developments initially seen in the US and Europe be deemed unacceptable for second and third world countries such as Iran, thus fully stepping on the slippery slope where just about anything can find a significant military use alone or in combination? To what lengths should the US (and others) go to stop the development and use of such technologies? Is turning Iran into rubble OK while we accept programs from nuclear capable states such as Brazil and Japan? Were there some form of legitimate peace between Iran and Israel would we no longer fear what Iran intends or could do with these technologies?
There is no immediate national threat from Safir as a ballistic missile launcher for an Iranian nuclear bomb - there are still many hurdles (not least of which is the making of a bomb small enough to be carried by Safir) such as guidance and re-entry which Iran must cross. But for too long the West has stuck its collective head in the sand, repeatedly saying no, no, no to the use of technologies they themselves take for granted. A better approach would be to develop a real and substantial diplomatic framework now to deal with these issues in the general sense so that we do not do this song and dance every time an unfriendly country develops a dual-use technology. To think that nuclear weapons and ballistic missiles will be the most complex developments the West must confront is folly - these are fifty plus year old instruments of power. Science and technology do not stand still and what is a coveted national military secret one day will be readily obtainable to others in the future. There is no lock on knowledge and once obtained, there is no going back.
How Hard Up Is Norm Coleman?
The never ending saga of the 2008 Minnesota US Senate election spun in a new direction this week. On Monday, election officials for all intents certified comedian Al Franken the winner of the election after a complete recount swung the vote total to his favor. The recount went fairly smoothly as these things go, with only two events raising any question at all. The first was of a precinct which chose to go with the election night rather than the recount totals as the recount was short 133 votes (resulting in a net gain of 46 votes for Franken.) The basis for this decision was that the recount total was 134 votes lower than the sign in register. The second involved 32 ballots supposedly found in the car trunk of an election worker. In fact, the ballots were not in a car trunk, were legitimate and had not been counted. Franken got 16, Coleman 7 and the balance to 3rd parties.The morning after the vote, when it appeared he had 'won' by just over 200 votes, Coleman spoke to reporters:
"Yesterday the voters spoke. We prevailed," Coleman said Wednesday at a news conference. He noted Franken could opt to waive the recount.
"It's up to him whether such a step is worth the tax dollars it will take to conduct," Coleman said, telling reporters he would "step back" if he were in Franken's position. Secretary of State Mark Ritchie said the recount would cost 3 cents per ballot, or almost $90,000. Source: kstp.com
A day later, his own blog had this statement, even though Coleman was then aware many absentee ballots had not yet been counted in a race which was well inside the legal limit for an automatic recount:
"The Senator is thrilled and humbled to be given the opportunity to serve the people of Minnesota for another six years. Today is a time for us to come together as a state and a nation. There is much work to be done, and the Senator is ready to roll-up his sleeves and bring people together to get it done."
Yet Norm Coleman filed suit yesterday to challenge the result of the recount, claiming double counting of some ballots and a failure to open some absentee ballots. So much for Coleman's friendly advice for Franken to do the right thing! In fact, the Minnesota Supreme Court already tossed the duplicate ballot claim once, largely because Coleman was unable to offer any clear evidence of double counting. As to the remaining absentee ballots, all counties, per Supreme Court order, identified wrongly rejected absentee ballots and in the subsequent process to determine which would be opened, both camps had lawyers present. Coleman however now claims that there are still substantial wrongly rejected ballots. Again, no firm evidence of this was presented to the canvassing boards prior to the completion of the recount. And given the way those ballots broke, even if he is correct, Coleman is unlikely to net many, if any, votes.
So how desperate is the Coleman campaign? So desperate that they are dialing for dollars into blue states to help pay the anticipated very large legal bill a court challenge will incur. Yes, early this morning, we were on the receiving end of such a call. To say we were shocked is an understatement. Not only that Coleman is apparently unable to raise enough money in Minnesota and nearby states but that his people would reach so far away into territory least likely to support him. The Republican brand that Coleman shares was discredited nationally but suffered even worse losses in the mid-Atlantic and Northeast. Before they could get too far into their sales pitch, we suggested Mr. Coleman follow his own advice to Franken and drop out now and not drag the Republican party any further through the mud. Give it up, you lost. If Gore could move on, so can you.
Automakers: Let Them Fail
This past week has seen an acceleration in the claims of impending doom by the big three US auto makers and the consequent need for the federal government to provide them with significant liquidity to remain afloat. Our take on this: now is not the time.Unlike the various financial companies which the government has provided liquidity through its TARP and other programs, the failure of the auto makers will not have an immediate, calamitous effect on the broader economy. Wide spread failure in the financial industry could have resulted (and in some cases nearly did) in the knock on failure of many companies who depend on the financial markets and those companies for day to day liquidity for continuing operations. The same applies to the consumer seeking auto and home loans and short term financing for purchases via bank credit cards. Were the big three to fail, the primary pain would be inflicted on workers and shareholders of those firms and potential lost business by their parts suppliers (and perhaps the supplier of raw materials to them). Certainly, this would be very unpleasant for those involved. But would it be short term or long term pain?
Unlike failed financial institutions, which as a general rule disappear and leave little behind, more traditional 'hard' product companies can and do emerge from Chapter 11 bankruptcy. The airline industry, undoubtedly still troubled, has seen many failures the past three decades. While true that some airlines disappeared, many were able to restructure their operations sufficiently that they could exit bankruptcy a new and leaner company with the chance for longer term survival. The auto industry suffers many of the same problems which inflicted the airline industry and should be allowed to follow a similar path.
Detroit has two main hurdles to overcome: legacy labor costs and product choice. Labor costs are by far the largest single drain of liquidity for the car makers. Recently negotiated contracts have resulted in a tiered system whereby new employees are paid far less in hourly wages and far less when the full benefits package is considered - current workers can expect to see a total pay package of order $30/hour while older workers are pushing $80/hour. Were all employees under the same structure Detroit would not be on Capitol hill hat in hand. Detroit is also saddled with huge health care costs for retired workers who are now benefiting from the auto makers past largesse (this should be a wake up call to the Congress on the need to reform Medicare/Medicaid before its too late).
All the blame, however, can't be placed on workers pay packages. The US auto industry has consistently lost market share - even during the SUV boom years - to foreign producers. This is a function of poor management, one unable to correctly gauge what kind of vehicles the public really wants. There are some signs now they have seen the light and are making cars more inline with the Japanese and Korean imports. But the damage has been done and it will be up to the domestic producers to show their products are superior (more features, better quality, more efficient), better value (lower cost of ownership for similar features/quality) or both.
So where does bankruptcy fit in all this? First, it is not 100% certain all three will go into Chapter 11. Private capital may still be raised and costs further cut to allow operations to continue until spring 2009. At that point the consumer will hold the key to Detroit's future. If sales remain at depressed levels, chapter 11 will follow quickly. As we noted earlier, when an industry is suffering some firms will be liquidated while others will restructure. Chrysler will be the one to disappear - it has the smallest market share and the only unique product they have is the traditional 'Jeep'. Rights to that model (and perhaps a handful of others) could be sold in the liquidation to another automaker. Ford and GM, however, still have significant market share and were the cost structure altered, should be able to remain viable entities under new management. Chapter 11 will allow Ford and GM to change the terms of labor agreements and obligations, close redundant plants and otherwise restructure their operations (i.e. get better managers) to emerge as leaner companies able to make a consistent profit while developing and producing future cars which consumers desire.
We began by saying 'now is not the time.' Were federal taxpayer aid offered now, prior to any Chapter 11 filings, the government would be throwing good money into a hole. Money alone does not solve the fundamental problems of the auto industry. It is true that the current recessionary environment has hurt and hastened their demise (some would argue they should have been better prepared for it), but a capital infusion will only delay the day of ultimate reckoning. It is far better, in our eyes, to allow this process to run its course. Once they have officially filed for Chapter 11 protection, then the government can step in to provide interim financing while restructuring is underway in exchange for some percentage of the 'new' companies. We do not however, favor terms such as those placed on AIG which amounted to a defacto nationalization. Any loans should carry an appropriate interest rate and term with the expectation they be paid in full. The equity stake should be small, say 15%, and offer the company the right to buy back the government stake based on a prearranged price or metric. This will give the taxpayer some upside return but keep the government out of the nationalization business and encourage private capital investment in the survivors.
By following this course the disruption to the economy will be minimized while allowing for the best possible future outcome. The majority of plants will still operate and suppliers will be paid while Ford and GM work through restructuring. Chrysler will fail, but being the smallest producer will limit the damages to the near term as the removal of excess capacity will improve the long term prospects for the larger two. This course will be politically difficult for president-elect Obama and the new Congress but coming at the start of the term gives greater flexibility. And outside of the auto industry, most Americans have said they do not want to see a large scale bail out of the car makers. By letting them fail first and then assisting the restructuring process, Obama can limit the damage from labor voters while increasing his standing with the majority of the electorate. Reagan faced a similar thorny early decision with PATCO (air traffic controllers) but ultimately took the action which resulted in the best long term outcome. Hopefully Obama will do the same.
North Korea Watch: Dear Leader Dead?
A cryptic message this morning out of North Korea. Press reports stating that DPRK diplomats have been instructed to cancel travel and meeting plans and wait for an important announcement. Given all the rumors about Kim Jong-il's health the past six months, could this be the announcement that he is no more? Probably wishful thinking but can't imagine what else would lead to that kind of message. Stay tuned.From Russia With Love - Another Bush Debacle
The world, in particular the US, seems shocked! that the Russians have invaded South Ossetia and Abkhazia this past weekend. Perhaps asleep at the wheel is a more apt description. The Russians have managed to play Georgia and its president Mikhail Saakashvili pefrectly. They set him up by stirring up sporadic altercations within South Ossetia - baiting a politician already eager to deliver on his campaign promise to 'reunite' Georgia - to seize upon those attacks as justification to pursue a military action to retake first the S. Ossetian capital Tskhinvali and later the rest of the break-away territory. But this played right into Russian PM Putin's hands - he could now use the sizable Georgian offensive as justification to take both South Ossetia and Abkhazia in the name of 'protecting' the population, many of whom had recently been conveniently given Russian citizenship. Thus the attacks by Georgia were said to be attacks on Russia itself. Georgia now finds itself thrown out of both regions and under attack from the north and the Black Sea in the west. The only questions that remain in our mind are a) will Russia increase their assault and attempt to permanently cripple the Georgian military and remove Saakashvili from power, b) will Russia incorporate S. Ossetia and Abkhazia as republics thus ending Georgian dreams of reclaiming those areas forever, c) will Russia seek to take all of Georgia "back" and thus have control over additional resources in the Caspian and Black Sea at the same time increasing the buffer zone around Russia proper?"I've expressed my grave concern about the disproportionate response of Russia and that we strongly condemn the bombing outside of South Ossetia," Bush said in an interview with NBC Sports. And that appears the best that the US and the 'West' can do. If Saakashvili thought US bluster was going to prevent the Russians from responding he was beyond stupid. Did he expect that the US or NATO would come rushing to his aid with tanks, planes and troops? Europe made it very clear this past year they wanted no part of a Georgia in NATO until the questions of S. Ossetia and Abkhazia were settled. Europe was not going to be dragged into a regional, ethnic conflict on Russia's doorstep. The same Russia they count on for a large share of energy supplies.
Meanwhile, the right wing is abuzz in outrage at the fighting, some going as far as to demand a US military response. Comments made over the weekend are always subject to possible drug or alcohol influence but we suspect these individuals really want that outcome, one that was avoided for over 40 years of cold war between the US and USSR. Perhaps it was this which egged them on?
"The vice president expressed the United States' solidarity with the Georgian people and their democratically elected government in the face of this threat to Georgia's sovereignty and territorial integrity," Cheney's office said in a statement.
It said Cheney, in a phone call on Sunday, told Saakashvili that "Russian aggression must not go unanswered, and that its continuation would have serious consequences for its relations with the United States, as well as the broader international community." Source: AP
Has Cheney promised the Georgians a few B-2 bombing runs? Cruise missile attacks? A division of armour?
John McCain meanwhile is determined to look tough, damnit! So tough that he has called on the G-8 to boot the Russians out and become the G-7 again. While the G-8 may think of itself as some tony exclusive club, in reality they accomplish very little at their annual meetings and with huge capital inflows from selling energy and hard commodities to the world, it seems it is the G-8 that needs Russia, not the other way around. In addition, McCain has called on NATO to convene to "demand" a ceasefire and prepare to send "peacekeepers" to the region. These are the same Europeans who can't even manage their NATO responsibilities in Afghanistan and McCain wants to put them on the Russian border in a hot fight? The rest of McCain's thoughts on the situation are similar to what the other presumptive nominee has said - condemn the violence, stop the shooting, maintain Georgian territorial integrity, send in the diplomats, hurry!
But what is left unsaid is why the situation even got this far. For that, blame must be laid squarely on the Bush administration. They have had nearly eight years to agressively seek a diplomatic resolution to the situation in Ossetia and Abkhazia and done little, if anything to this end (Nagorno-Karabakh and Trans-Dniester too.) Instead, the US has continued to antagonize Russia by pushing the NATO envelope ever closer to the Russian border while also employing rhetoric in non-member countries such as Georgia and Ukraine. Sec. State Condi Rice was purported to be the Russian expert of the administration but by all measures relations between the US and Russia have declined since 2001 with Russia becoming more autocratic, wealthy and economically powerful. All that remains is for Putin to accelerate the modernization of Russian forces. Recent high level staff changes indicate the move to a modern, professional army will shift into high gear while efforts are already underway to modernize Russian strategic (nuclear) forces. Russia may no longer wish to be able to roll its tanks across Europe but they certainly will be able to defend their own territory and nearby neighborhood.
This whole event can be viewed as the mirror image of the Kosovo/Serbia confrontation in the 1990s. Then it was NATO (well, the US) coming to the 'defense' of the break away territory which claimed nasty, unprovoked attacks by genocidal Serbs. The Serbs on the other hand wanted to retain what had been theirs for a very long time. The US intervention destroyed much of the Serbian military and put Kosovo on the fast track to becoming an independent state with de-facto military backing from the West. Now the shoe is on the other foot. South Ossetia and Abkhazia are soon to be 'independent' states with Russian backing and if they so chose, to be incorporated as republics within Russia. During the Kosovo conflict Russia was very weak economically and militarily was involved with Chechnya in its own backyard. Once the shooting started in Kosovo, there was little that Russia could do to prevent the US from taking charge. Now the US must endure the humiliation of watching one if its 'partners' in Iraq be torn to pieces by the Russians. Will the US go to war with Russia over the break-away regions or even to defend Georgia's territorial integerity? Not a chance. Will Europe impose sanctions against Russia? Not while they depend on Russian natural gas to heat their homes in the winter. For those who have asked what the limitations of US hard power are, turn on your TV and take a look at Gori.
In fact, we can even see parallels between Iraq's invasion of Kuwait in 1990 and the current crisis. Many speculate that Saakashvili misread US intentions or the degree of support he might receive from the US and NATO. Saddam apparently made the same mistake, misinterpreting the US failure to diplomatically discourage him from action over a border dispute with Kuwait as a wink-wink green light to invade. Interesting that in both cases a Bush was at the helm.
As we write this, Gori is for all intents gone and the key transportation hub at Samtredia is also now a target. A loss there would be devastating to Georgia both militarily and economically. Gerogia would no longer have access to the Black Sea, land routes to Turkey and no control over the Baku-Tbilisi-Supsa (BTS) pipeline from which transit fees provide a good piece of Georgia's income. Russia will destroy the Georgian military, some of its economic assets (mostly in the energy sector) and will remove Saakashvili from power. The speed and precision with which this is occuring does lead one to believe Russia has gamed this for quite some time. That Georgia, a US ally, is so hopelessly unprepared to counter the attack is surprising. It remains to be seen if the CIA/NSA failed to sound the alarm and warn the administration in the days and weeks prior to open hostilities or if the White House, Cheney in particular, chose to again ignore sound advice.
Expect South Ossetia and Abkhazia to hold referendums in the near future to 'join' their brethren as Russian republics. We wonder if NATO will then be ok with admitting Georgia now that the question of the disputed territories is resolved? Probably as likely as the Germans, French and Belgium taking the lead in fighting the Taliban in Afghanistan. These are not good days to live next door to Russia. Victor Yushchenko and the Ukrainians will undoubtedly be a lot nicer to Putin the next time they speak.
Obama Boxscore on Oil: Swing and a Miss; Broken Bat Single
This will be one of a very few posts on the two principle candidates for president in 2008. Keep in mind we find both have serious flaws, so much so that neither is likely to receive our endorsement or support.
Over the past week or so, Senator Obama has attempted to put forth a number of suggestions concerning the high price of oil/gasoline which we expect he would attempt to enact were he to win the presidency. Two of his ideas stand out: releasing 70 million barrels of light sweet crude oil from the strategic petroleum reserve (SPR) and $1,000 per family 'emergency rebate checks' financed by a windfall profits tax on oil companies.
We start with the bad: robbing Peter to pay Paul with a windfall profits tax. This idea is not just a strike, its a whiff. First off - what constitutes an oil company? Are we only speaking of the so called 'integrated' petroleum companies like ExxonMobil or Chevron? What about smaller E&P's like Devon? Or Range Resources which obtains most of its revenue through the sale of natural gas - another product whose price has risen dramatically. Should we also include companies which provide oil field services or transport crude? Logic says they too are benefiting from higher prices of crude and natural gas.
Second, what defines a windfall? What exactly is a fair profit and who gets to decide what that figure is? The table below shows various profitability ratios for a number of firms: Microsoft, Oracle (database software), Linear Technologies (semiconductors), Google, Chevron, British Petroleum and Range Resources (natural gas e&p):
| MSFT | ORCL | LLTC | GOOG | CVX | BP | RRC | |
| Operating Margin | 39.5 | 35.7 | 48.4 | 30.0 | 12.7 | 10.9 | 15.8 |
| Net Profit Margin | 29.3 | 24.6 | 33.0 | 24.6 | 8.6 | 7.4 | 5.4 |
| Return on Assets | 22.0 | 12.2 | 25.3 | 14.5 | 12.3 | 9.3 | 2.6 |
| Return on Equity | 52.5 | 27.6 | 16.4 | 21.2 | 25.4 | 26.5 | 3.6 |
Looking at this table it is quite clear: integrated and other energy companies do not show any significant excess of return when compared to firms in other industries. The media does a good job of winding people up with statements like 'Oil company makes $10 billion profit in last quarter, a new record!' but of course that only tells part of the story. The capital employed to produce that $10 billion is substantially greater than that of other firms. It is somewhat akin to comparing your childhood lemonade stand to Minutemaid - the scale of the operation is entirely different.
So when Obama proposes such a plan he is doing nothing more than stealing from the shareholders of ExxonMobil, Chevron, etc to give to those he feels are more deserving of the money. That is decidedly not the American way and far afield from capitalism. It also igores the near certain increase in prices charged downstream to recoup the tax - ultimately the consumer will pay as prices reach a new equilibrium.
On the other hand, Obama's proposal to release 70 million barrels of light sweet crude from the SPR does have some merit but does not go far enough. In targeting the supply of light sweet crude oil Obama does hit on the very real issue of demand. US and European refineries are primarily designed to crack light sweet crude oil as it is a) easier and b) has given higher profits. The problem today is that most of the excess oil supply is heavy sour crude, such as what Iran has been producing. And one of the larger 'swing' producers of light sweet also happens to be the least stable - Nigeria. For two years now there have been rebel and bandit attacks on Nigerian pipelines and production facilities. The resultant decrease (and irregularity) of production has been a sizable contributor to the pressure on the price of light sweet crude oil such as is indicated by the West Texas futures contract.
The most serious flaw in this proposal, however, is that 70 million barrels will not go very far - the state of Texas alone produces 1 million bbl/day and the US consumes over 20 million bbl/day. While it is impossible to predict the exact effect the extra supply will have on price, the more important consideration is that it will be very short lived. With no likely political or military settlement to the situation in Nigeria and no significant additional light supply to come on line in the near term, this plan amounts to nothing more than taking two aspirin in the hopes of curing chronic pain. It just won't work.
Also absent is a look to the future. At the same time that Obama is releasing light sweet crude from the SPR (and replacing it with heavy sour), he should be dramatically reducing the regulatory burden to build new refineries which only crack heavy crude. We have previously proposed the use of abandoned or decommissioned military bases or other federal land for the construction of new refineries. This is an urgent need and another example of where Bush completely failed to lead. Even if there were adequate supplies of light sweet crude, the underlying economic growth will soon require all refiners to operate at 100% capacity 100% of the time. That is a recipe for chaos and economic catastrophe.
In conclusion, the Obama plans are nothing more than political posturing (dangerously in the case of the windfall tax) which at best will provide a very short reduction in prices but do nothing to cure the underlying problems. Grade: D-
Waiting for Minot
It seems that Minot Air Force Base and the housing crisis have something in common - a series of many missteps with no sign of recovery. Tonight the wire services are reporting another incident involving the ballistic missile crews stationed at Minot. While this latest faux pas did not put any weapons directly at risk unlike when they 'accidentally' loaded a B-52 with some AGM-129 nuclear tipped cruise missiles last year, it does point to how much the culture from the SAC days has been lost.The reports say three of four crew members were sleeping July 12 while (apparently) still on duty after swapping out missile control codes. These 'codes' are part of a device which is then brought into the underground missile control facility and in the event of war, is used to activate and launch the 150 Minuteman III missiles siloed throughout North Dakota. As described by Air Force Times
The device, kept in a locked case, installs the codes that allow the missile launch control center to command the ICBMs in the missile silos. One piece of hardware is installed and the old one is removed, somewhat akin to changing hard drives in a computer.The old control codes were brought into a room above ground and stored in a lock box (where was Al Gore?) while the crew waited to be relieved of the codes and end their shift. Interesting enough, Air Force rules permit any two crew members to be sleeping. Whether that rule applies during peacetime or only during heightened alert when crews might be forced into extended duty is uncertain.
What is certain is that at no time were the codes compromised as they were a) in the lock box, b) inside the missile facility and c) behind a guarded security perimeter. Beyond the anticipated disciplinary action and blemish on their records, the sleepy heads will also suffer interrogation by the NSA. Ouch. Left unsaid in all the reports is who found them all asleep? Was it the fourth of the team (rat!), the new crew or some remote link with video and audio?
Secretary of Defense Gates recently canned the top two Air Force officials after a review of the earlier incidents (B-52 and the nose-cone fuse assemblies mistakenly sent to Taiwan) found Air Force leadership consistently failed to demonstrate the required concern over the security of the US nuclear deterrent. “This incident represents a significant failure to ensure the security of sensitive military components, more troubling, it depicts a pattern of poor performance,” said Gates at a Pentagon news conference in reference to the Taiwan mishap. Clearly, the leadership and cultural problems flow all the way down the ladder and even the firing of two bigwigs was insufficient to keep a missile crew from slipping up and sleeping on the job. Even prior to these incidents at Minot there were problems. In November 2000, one of the launch control facilities at Minot became the only such facility in US history to suffer a major fire - the above ground building was completely destroyed.
Ivan must be snickering. Can you imagine this happening during the cold war? The disdain this crew would receive from their equals would be almost as bad as the official reprimand but today this type of incident would probably be laughed off by other crews behind closed doors or over beers. Left unsaid in most reports: The 91st Space Wing (AFSPC) is responsible for one of the three operational strategic missile bases in the United States. While technically off 'alert' status by order of President Bush (43), this is more a matter of semantics - these missiles are ready to fly on a moments notice. That is, so long as everyone is awake.
UPDATE 08/03/2008: Unable to get out of their own way, Minot made the news again on Friday night after a truck transporting the 38 ton booster for a Minuteman III missile to a launch facility overturned about 70 miles from the air base. The Air Force reported there is no hazard and locals seemed unfazed by a booster in a ditch off the road. The same spokesman noted this has happened "3 or 4 times before in the past 25 to 30 years." Sec. Def. Gates must be banging his head against the wall.
War Powers?
Perhaps we can forgive James Baker III and Warren Christopher. After all, both served as secretary of state and both are getting on in years (78 and 83 respectively). But how is it that they can conjure up something as insulting to the American people and all those who have served in uniform or in government?WASHINGTON - The next time the president goes to war, Congress should be consulted and vote on whether it agrees, according to a bipartisan study group chaired by former secretaries of state James Baker III and Warren Christopher. In a report released Tuesday, the panel says the current law governing the nation's war powers has failed to promote cooperation between the executive and legislative branches. It says the 1973 resolution should be repealed and replaced with new legislation that would require the president to inform Congress of any plans to engage in "significant armed conflict," or non-covert operations lasting longer than a week. In turn, Congress would act within 30 days, either approving or disapproving the action. [...]Encourage the two branches to act in a way true to the spirit of the Constitution? When exacly did the Constitution cease becoming the law that binds both the executive and legislative branches? Where in the Constitution does it say 'you may ignore this paper if it is expedient to do so or makes you feel better?' We hate to think of the money which has been wasted by this commission when all that was required was a mandatory remedial course on the United States Constitution for our legislators and executive branch employees. Specifically:
"What we aim to do with this statute is to create a process that will encourage the two branches to cooperate and consult in a way that is both practical and true to the spirit of the Constitution," Baker said in a statement. Source: AP
Article I
Section 1. All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.
Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To define and punish piracies and felonies committed on the high seas, and offenses against the law of nations;
To declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;
To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;
To provide and maintain a navy;
To make rules for the government and regulation of the land and naval forces;To provide for calling forth the militia to execute the laws of the union, suppress insurrections and repel invasions;
To provide for organizing, arming, and disciplining, the militia, and for governing such part of them as may be employed in the service of the United States, reserving to the states respectively, the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress;
Senator Kyl On Our Nuclear Deterrent
Have you ever wondered if a politician read a statement their office put out? Or considered having someone else check it for believability first? We had that moment yesterday morning while reading the letters section of the Financial Times. There, across three columns, was a letter from Arizona Senator Kyl titled 'Next US president should modernise nuclear arsenal'. We will forgive him for the choice of headline as that is the job of the FT editor. The content, however, was all his and all very, very unconvincing. We did pen a response (not yet published) and portions of this post are from that letter. Brevity prevented us from doing in a letter what we can do here - address each of Kyl's points as he attempts to convince us the US nuclear deterrent is in dangerous decline.His first point is that
First, more than 31 countries have security guarantees with the US, many of which place those countries under the so-called US nuclear umbrella. ... We must be aware of the cascade of proliferation that will likely result if the world loses confidence in the US deterrent. Countries such as Japan, S. Korea, Germany and Turkey rely on the US deterrent so that they don't have to develop their own. Saudi Arabia has expressed interest in obtaining civilian nuclear power: the only logical explanation for this move is that the Saudis are concerned that Iran will acquire nuclear weapons. [emphasis ours]
Ah, where to start! Is there any evidence the world has lost confidence in the physical capacity of our nuclear deterrent? We have never heard anyone question the ability of the US to deliver a working nuclear weapon anywhere in the world at a moments notice. Perhaps instead Senator Kyl refers to the impression some may have (i.e. Japan) that the US no longer is willing to use our nuclear weapons except if similar weapons are used directly against the US and not a third party, ally or not. But that is decline in political will. Do you know where he is going with the Saudi statement? Is Kyl implying that the Saudis will somehow turn an advanced commercial light water reactor into a bomb making machine? This would be next to impossible when considering the design and fuel of these reactors, IAEA safeguards, no existing large scale working enrichment cascades nor a heavy water reactor to convert natural uranium into plutonium (as is speculated Iran's intention is for their IR-40 facility at Arak). Or maybe the Saudi royal family will hide behind the containment tower in the event of an attack by Iran? As to why the Saudis might want to use nuclear power? Over the long term they can sell domestic oil or natural gas on the open market for more than the cost of running a nuclear facility? The nuclear facility is cleaner than burning oil? Natural gas pipelines are far easier to sabotage? They need large amounts of power for desalinization plants? -more-
Count All The Votes... If They Are For Me
Did she really say this? So much for memories of 2000 but then again, Al Gore hasn't yet endorsed Hillary either.Pledged delegates are a "misnomer. The whole point is for delegates, however they are chosen, to really ask themselves who would be the best president and who would be our best nominee against Senator McCain," Clinton said. "And I think that process goes all the way to the convention."While it is indeed true that the delegates are not bound by the party to vote for a specific candidate, the voting population expects that the delegates shall faithfully represent the voting interests expressed in the Democratic primaries/caucuses. If not, why bother with any primaries or caucuses - just let the delegates chosen by party bigwigs vote as they clearly know better than the people, or so Hillary would have us believe.
Wasn't it only Tuesday that Hillary was clubbing Obama like a baby seal claiming he was denying Florida and Michigan residents their votes at the Democrat convention by opposing by opposing re-vote efforts?
Ron Paul's Big Day
By now you have probably read or heard about the November 5th 'money bomb' which Presidential candidate Ron Paul's grassroots supporters arranged. Paul cleared $4.2 million in hard cash over 24 hours, an online record and likely also a one day primary record if factors such as 'bundling' are excluded (raised prior and delivered all on a single day). That his supporters are able to raise this kind of cash for a man preaching a non-mainstream vision of America - at least not today's mainstream - is simply amazing. The campaign estimates 37,000 people gave putting the average at $113.50 each. Memo to other Republican campaigns: Paul's donors are not even close to being maxed out. Do not for a moment think that if Paul is needing money in early January that his appeal will go unheeded. This guy can pull in $3 to $5 million on a whim.The event is not without its amusing side too. Beyond the Guy Fawkes/ V for Vendetta tie-in, the explanations of the so called 'Republican base' provide the most laughs. The single best was from a Hannity forum where it was stated that the 'donations were all coming from the Hillary campaign'. Really? All 36,500 of them? (these same people believe there are only 500 Paul supporters sitting in their pj's at the keyboard all day). They just seem unable to comprehend that a large number of their party have become so disgusted they are willing to financially support a (less) longshot whom represents their ideals and not some nebulous 'most able to beat/most presidential' attribute.
If Paul is able to get over 10% in the national polls he definitely, as he put it to Jay Leno, 'just might win'.
Tancredo Is In But Out
Give Congressman Tom Tancredo some credit - he has made the difficult choice between running for President and keeping his congressional seat. We suppose the prospect of another two years of working in the Nancy Pelosi forum was just too much - Tancredo chose to continue his world leader aspirations. Unlike Congressman Ron Paul of Texas, Colorado does not allow elected officials to run for two offices at the same time so a decision was coming at some point. A few weeks ago we speculated Tancredo would opt to keep his seat in Congress but it appears he will attempt to leverage his greater name recognition into a run for one of Colorado's Senate seats in 2010. His opponent would be Ken Salazar, a decidedly pro-immigration figure.While we disagreed with some of Tancredo's foreign policy statements (it probably wasn't necessary to broach the idea of bombing Mecca in retaliation for a WMD attack on the US, at least not at this time), Tancredo like Paul was not afraid to speak his mind and say how the Republican party had lost its way. He many times spoke to the fact that without serious entitlement reforms we were heading down the road to economic disaster. He also showed disdain for those who would "rewrite" the constitution to suit their policy du jour while never actually amending the document. We wish the Congressman good luck in the future.
Q3 Fundraising: Ron Beats Rudy
Well all the financials have been filed for Q3 and there are a few interesting observations to be made on the Republican side. First, from a purely financial standpoint, why are Huckabee, Brownback, Tancredo and Hunter still in this? Combined they only have $988,000 cash on hand with the majority consisting of Huckabee's $651,000. Those look more like numbers fit for a congressional campaign, not a presidential run. We admit that the Huckster has gotten a lot of nice press of late and he is a likeable guy but even in his case we wonder if he can make it to January as most of his $1mm raised in Q3 probably came immediately after the Iowa straw poll in August. And when compared to what the back of the pack Dems have raised (Biden $1.8mm and Dodd $1.6mm) there is really no case to be made for Brownback, Hunter and Tancredo remaining in the race and only a marginal one for Huckabee. While it is true money should not be the only determination of the success of a campaign, at this stage all of these men should be showing higher figures and certainly a significant upward trend from Q2 as more people have begun to focus on the primary. They aren't.An interesting item (complements of the NY Times providing a very nice fundraising graphic) is that Ron Paul has out raised Rudy Giuliani in one donor category: contributions under $200. For the year to date, Rudy has raised $3.8mm in small donations while Ron has raised $4.1mm. If small donors are a measure of the breath of support for a candidate, Ron Paul certainly seems to be holding his own. Given that Rudy had a significant early fund raising edge both time wise (Paul began his exploratory campaign relatively late) and in name recognition, this is quite the accomplishment. What will be interesting to see in Q4 is how much more those small donors are willing to give - can Paul push them into the $200-$2,300 bracket? Given the Q3 trends and early indications for Q4, it looks quite possible that Ron Paul will enter January with cash on hand approaching that of the 'leaders', somewhere either side of $10mm.
Finally, Mitt Romney. How can he claim to be a fiscal conservative when he is apparently so poor a manager of his own campaigns finances? Romney has been spending well beyond his means - $21.3mm last quarter - and only remains 'solvent' because of his own loans to the effort. This sounds quite a lot like business as usual in Washington: spend the money you are unable to raise through taxes on all the 'goodies' and get a loan to cover the deficit from someone else, like China. Brilliant! And we might add that to anyone who played Missile Command as a kid, the NY Times graphic showing donor geographic distribution makes it look like the state of Utah has suffered a first strike. This is one very, very expensive ego trip for Mittens.
The Politics of Intervention
With seeming no ability to end the war in Iraq and no desire to address the many issues of domestic import, the US Congress has instead decided to stick its nose into Turkish and Armenian affairs. Leader Pelosi has promised to bring to a floor vote a measure just passed out of the foreign affairs committee:H. Res. 106, Calling upon the President to ensure that the foreign policy of the United States reflects appropriate understanding and sensitivity concerning issues related to human rights, ethnic cleansing, and genocide documented in the United States record relating to the Armenian Genocide, and for other purposes.Without getting into the was it/wasn't it and who's to blames, the fact is this event took place in 1915 - nearly 100 years ago and has been the principle cause of Armenian Americans ever since. And yet the good speaker and her Democratic colleagues seem to believe it is of critical importance for the US to comment on decades old events involving Turkey (the Ottoman Empire) and Armenia.
And what does this interference in the affairs of other countries (well, descendents of prior empires) do for the US? Does it improve our economy by promoting trade with other countries? No. Does it improve the security of the US? Most certainly not. After the measure cleared the committee, Turkey recalled their ambassador and this weekend the most senior general of the Turkish military said:
General Buyukanit called the passage of the resolution by the committee “sad and sorrowful,” in light of the strong links the two NATO allies have shared. Further, if it were to be passed by the full House of Representatives, “Our military relations with the U.S. would never be as they were in the past,” he said. “We could not explain this to our public,” he said. “The U.S., in that respect, has shot itself in the foot.” Source: NY TimesAnd the reaction from the House leader? Pelosi dismissed possible reprisals affecting Turkey's cooperation with the US military, as "hypothetical" that would not derail the resolution.
So "hypothetical" that the most senior member of the Turkish military says to effect - pass it and if you thought things were bad between us now, just wait. Turkey has been dancing a fine line on the issue of military intervention in northern Iraq to neutralize retreating members of the PKK (peoples worker party of Kurdistan) who they believe use this area as a staging ground for terrorist attacks within Turkey. While many Kurds would, as is usually the case, call these freedom fighters trying to liberate 'Kurdistan' from Turkey and not terrorists, the fact remains this has been an on-going problem in southern Turkey for many years with significant loss of life. Meanwhile the US, locked in at best a stalemate in Iraq, wants nothing to upset the relative calm in the Kurdish controlled north. The State Department has been strong arming Turkey for over a year not to launch military operations within Iraq. Well folks, that looks to be out the window now too, thanks to the efforts of Ms. Pelosi and her fellow Dems:
ANKARA (AP)--The Turkish government has decided to send a motion to parliament seeking approval for a military operation against Kurdish rebels in northern Iraq, a government spokesman said Monday. The government will immediately send a motion to the parliament, government spokesman Cemil Cicek said. He said he hoped parliament would vote on the motion this week. Source: AP wireNothing like poking a stick in the eye of your estranged friend to convince them not to aggravate your own plans. This whole fiasco proves once and for all that the Democratic party is equally as bad as the current Republican party when it comes to foreign policy. Neither party seems capable of putting America's best interest ahead of their own petty party politics. Somebody, please save us from these idiots.
Next Candidates To Depart?
With third quarter fundraising data starting to hit the wires, we have to ask - who will drop out next? Sadly for most, on the Democrat side it doesn't look like any will pull out before the primaries. Kucinich and Gravel are both in it to try to change the debate to topics more dear to the left and even with little money on hand, they will continue their missions. Joe Biden, who has raised order of $2 million, will hang on for two reasons - an incredibly large ego and the hopes he might be put on the ticket as VP. Much the same applies to Dodd who has slightly more money in the bank but equally poor Q3 money raised.Bill Richardson has been raising money at a reasonable rate, at least for past elections, yet still trails badly in national polls but less so in Iowa. He has enough money to stay in and is best positioned should the front runners slip up. Unlikely, but it really doesn't hurt him to stay in and he may increase his chances to be the VP candidate through increased name recognition. Edwards, though still raising money, has shown no traction at all. Considering he already had name recognition from 2004 and three years to plan for this race, we think his chances are slim. He won't drop out though and even were he to entertain the thought it is unlikely his wife would allow him. Perhaps they should read the AP poll showing Al Gore has more support (still) than Edwards?
However, on the Republican side we expect the field to thin shortly with the departure of Brownback and Tancredo. Brownback has not released Q3 figures, but judging by attendance at his events and his disappointing finish in the Iowa straw poll there is no realistic expectation for a surprise. Tancredo at some point must decide -more-
Romney Problems?
The Washington Post today had a short piece on Q3 fundraising efforts and this caught our eye:Republican candidates were equally coy about their third-quarter totals. Aides to former Massachusetts governor Mitt Romney said last night he raised about $10 million in the third quarter and contributed $6 million to $7 million of his own money. None of the other Republicans released totals yesterday. Source: Washington PostIf we take the positive interpretation - that Romney raised $10 of outside funds and added $6 of his own, this will be bad news as it implies his burn rate remains extremely high and that his ability to raise new cash has declined by 50% from Q1. His own funds will now be about 25% of the total. Hmmm... can't wait to see the cash on hand figure. For a man that once said it would be very bad if he had to float his campaign, have we entered that danger zone?
[this has been edited to reflect additional reporting indicating Romney did get $10 mio of outside money]
Another Waste of Money
If you put these coordinates ( +32° 40' 35.65", -117° 9' 29.96") into Google maps (or similar) and get the satellite view you can see the latest waste of tax payer money. The NY Times and others report that the Navy will be spending $600,000 to 'fix' a 'problem' that has existed since the 1960s but apparently was never an issue until the wide spread availability of hi-res satellite maps. Perhaps they'll be painting the rooftop black and the ground red so it won't be so overlooked in the future. Time to get over it and move on people.On another note... more evidence that Congress wants their ratings to sink even further. They've just attached a 'hate crimes' rider onto a defense appropriations bill. Aren't we past the age where we treat the same crime differently depending on the victim? Isn't murder still murder? Assault, assault? This was, bad pun intended, bush league.
What's In A Name?
After researching a few rules and regs on the Federal Election Commission web site we were a bit numb and needed a break from the tedium of paragraph this subsection that. On the front of the FEC page is a search function and we thought lets play with this... wonder how many people named 'Clinton' gave to Hillary Clinton or 'Romney's' giving to Mitt Romney... hmm...We tossed in a bunch of names.. it really didn't take very long at all. Except as noted, the totals reflect individuals, not contributions; the exceptions just had too many entries to bother condensing down to individuals (the output lists each donation so some people have multiple low dollar entries):
Clinton: 1 out of 7 total
Edwards: 20 of 220 *
Obama: 1 of 1
Dodd: 2 of 13
Richardson: 14 of 212 *
Biden: 2 of 2
Giuliani: 6 of 6
Romney: 32 of 32
Paul: 5 of 232 *
McCain: 9 of 18
Huckabee: 2 of 3
Brownback: 2 of 3
* denominator is total line item contributions
The Democrats Are Idiots
What else can it be when their 'leadership' sees fit to call a vote in the Senate on a bill to defund the war in Iraq.The legislation, sponsored by Senate Majority Leader Harry Reid and Sen. Russ Feingold, was indicative of the Democratic leadership's new hardline strategy.Here is a small clue to you Senator Reid: you don't need to vote on a "defunding bill". You simply do not bring any funding bill to the floor at all. This is exactly what should have been done with the last supplemental. Take the request from the White House, add a sufficient amount to cover an orderly withdrawal of the troops and give it to Bush to sign. Then hold a press conference stating 'that's all folks!'. At that point you have funded his request and given him enough to bring the troops out with their equipment. If the administration ignores the wishes of Congress by trying to continue past that point, the funds will have to come from the general DOD budget and the burden is on the White House for acting irresponsibly and against the wishes of the people as expressed by their elected representatives - which means no more funding bills.
Unable to attract enough Republican support on milder proposals, Reid has sought votes on strong anti-war measures intended to force a withdrawal of troops. The outcome was not a surprise. In May, the Senate rejected a similar proposal by Reid and Feingold by a 29-67 vote, with most Democrats saying they did not support using money to force an end to the war because that approach could hurt the troops. Source: AP
Bush: Insulting
Two things we took away from the Bush address last night on Iraq. First, he is unable to come clean and admit the only reason he is drawing down troops as described is because the Army can't maintain that level past March. That was bad enough. But what we found quite offensive and frankly insulting was the following quote:In Anbar, the enemy remains active and deadly. Earlier today, one of the brave tribal sheikhs who helped lead the revolt against al Qaeda was murdered.Mr. President, reserve the word brave to preface the names of our troops. This man whom you chose to dignify was until very recently part of the Sunni insurrection with the overarching aim to kill American soldiers. The enemy of my enemy who is now my friend is not brave. Sorry.
No point in commenting on the rest of it - that ground has been covered before too many times, most recently here.
