I have spent considerable time lately advocating the principle that we need to aid our way out of some of our problems abroad, rather than attempting to bomb them all away.
But aid carries its own lessons to learn.
Here’s a big one:
Lots of Americans don’t understand the world we are trying to change; and much of the world we want to change cannot visualize our goals.
I’ll offer a simple example-sewers.
How many of you have a hose running from your house to a barrel for a septic system? Or can imagine a thriving business in barrel-emptying?
Or that the largest maternity hospital in your nation’s capital city would have basically the same problem?
This is not an issue limited to just one war-torn country. The two cities I’m referencing are Kabul and Esna, Egypt, for those of you not already visiting the links.
Imagine the simple difficulties of expectation-ours and theirs-as we hypothetically enter a small Afghan village to install a new sewer system.
If they have never seen a sewer system, they probably won’t…
…have flush toilets. That’s a bit of an adjustment for the village right there, eh?
…understand why it takes forever to rip up streets for construction (a problem that surfaced in our Esna, Egypt example). (Actually, that isn’t much different than freeway construction in Boston.)
…appreciate the foreign customs of the NGOs/contractors/soldiers involved any more than we appreciate going 6 or 8 or 12 months without a beer.
…admire our Buy American attitude, either when we build the system or maintain it later.
…want us to convert them to Jesus (or Western Democracy, or Compliant Capitalism) any more than Jerry Falwell wants to become a worshipper of Allah.
…want to change their entire life, existence and culture just because we ask them to.
…visualize the benefits to them until the project is over.
Here’s another example: If our Afghan village farms poppies for opium production (and we can safely assume lots do-more or less 4000 tons worth a year) we might try to encourage the locals to stop cultivating the crop. Surprisingly, this might be a bad idea, as it can reinforce the wealth of the local warlord while driving the population you’re trying to help even further into poverty.
Maybe instead of sending in the DEA to end poppy production, we should send micro-lenders. But I digress.
In any event, the point is: if we don’t understand conditions on the ground we don’t know what we’re doing.
Which leads us to the second lesson for today:
Experts might not be worth the money.
Any consultant, even a fake consultant, ain’t cheap. Especially when paid in US dollars. And who wants to lose a good gig?
But spending 30 to 50% of an aid contract in Washington, DC on consulting is just insanely foolish.
Expertise is like food. You can buy “fast food” level expertise for lots of money and little effort; or for less money and more effort you can acquire “fine dining” level expertise by sending your own people to learn from real experts-the very folks you want to help.
This is where the advantage of long-term involvement pays off-it buys institutional memory, which saves money for real good for real people.
Finally, the toughest lesson for today:
When you give money as a gift to a new friend; then tell your new friend to spend all the money on you, it doesn’t look like a gift anymore.
Sorry, everyone, but Buy American upsets as many people in Kabul as it pleases in Peoria. And why wouldn’t it?
Some crew of guys (maybe even women!) comes into your town with a lot of cash you need badly, then they leave you some system they never really explained or left you equipped to maintain-then they want you to buy parts only from them…at high prices…taking the cash that would have helped your economy back home to the good old USA.
What kind of friend is that?
That’s a lot for today, so let’s sum up.
If we really want to create positive outcomes from our non-military efforts, let’s start treating our friends in “nation life” just like we treat our friends in “real life”.
Unless, of course, your “real life” belongs on “The Jerry Springer Show”.
Wednesday, January 31, 2007
On Public Diplomacy, Or, Karen Hughes, Are You Listening?
Karen Hughes, we are told, has pulled an Elvis and “left the building”, so to speak.
Noting the vacuum at the top of the public diplomacy pyramid, I thought I’d take this opportunity to encourage some out-of-the box thinking regarding the manner in which we “do” the public diplomacy business.
Today’s conversation comes with a disclaimer:
This is satire.
I’m kidding.
Really.
Well, mostly, I’m kidding
To begin, then: I’m completely jumping over a discussion regarding the propriety of “public diplomacy”, because it seems pointless.
Why?
Because public diplomacy happens, whether you want it to or not.
The real question is: do you want managed or unmanaged public diplomacy?
To assist the discussion, I agree completely that actions speak louder than words, and public relations alone will never compensate for a nation’s bad behavior.
Before we discuss the methods, let’s consider some possible benchmarks for success.
I suggest that if your public diplomacy is going well, the following should happen:
People in other countries should have a better opinion of your country.
Citizens of the world should be more interested in your economy’s output.
Your country should be more attractive to the most desirable potential immigrants available.
Your country should be less of a target for your enemies.
For that matter, if you’re doing well, over time, you should have fewer enemies.
So to get the ball rolling, here’s my proposal:
The American Lottery
How would it work? Something like this…
…Anybody in the world, except American citizens, would be invited to visit the “American Lottery” website. If you’re a lucky random visitor, you get something American.
Maybe a Big Mac coupon.
Maybe a $50 bill.
Maybe a Cadillac.
For one lucky winner, how about a Boeing Business Jet?
Advantages? Here’s a few:
You get a huge bang for the buck. (Maverick missile goes for about $1.5 million. So do 30 Corvettes, more or less. Which would you rather see falling from the sky into your town?)
Winners will like us better.
Our economic output will be far more interesting to the world
We’ll probably have a lot fewer enemies.
Maybe it’ll keep an auto assembly line open a bit longer.
This could be accomplished with no-bid contracts, or by directing the investment with the help of the best lobbyists and well placed contributions. (Bonus!)
Here’s the best part: once somebody wins an Escalade, they have less interest in blowing up the Escalade factory. Might need spare parts one day.
So that’s my modest proposal.
Karen Hughes, are you listening?
Noting the vacuum at the top of the public diplomacy pyramid, I thought I’d take this opportunity to encourage some out-of-the box thinking regarding the manner in which we “do” the public diplomacy business.
Today’s conversation comes with a disclaimer:
This is satire.
I’m kidding.
Really.
Well, mostly, I’m kidding
To begin, then: I’m completely jumping over a discussion regarding the propriety of “public diplomacy”, because it seems pointless.
Why?
Because public diplomacy happens, whether you want it to or not.
The real question is: do you want managed or unmanaged public diplomacy?
To assist the discussion, I agree completely that actions speak louder than words, and public relations alone will never compensate for a nation’s bad behavior.
Before we discuss the methods, let’s consider some possible benchmarks for success.
I suggest that if your public diplomacy is going well, the following should happen:
People in other countries should have a better opinion of your country.
Citizens of the world should be more interested in your economy’s output.
Your country should be more attractive to the most desirable potential immigrants available.
Your country should be less of a target for your enemies.
For that matter, if you’re doing well, over time, you should have fewer enemies.
So to get the ball rolling, here’s my proposal:
The American Lottery
How would it work? Something like this…
…Anybody in the world, except American citizens, would be invited to visit the “American Lottery” website. If you’re a lucky random visitor, you get something American.
Maybe a Big Mac coupon.
Maybe a $50 bill.
Maybe a Cadillac.
For one lucky winner, how about a Boeing Business Jet?
Advantages? Here’s a few:
You get a huge bang for the buck. (Maverick missile goes for about $1.5 million. So do 30 Corvettes, more or less. Which would you rather see falling from the sky into your town?)
Winners will like us better.
Our economic output will be far more interesting to the world
We’ll probably have a lot fewer enemies.
Maybe it’ll keep an auto assembly line open a bit longer.
This could be accomplished with no-bid contracts, or by directing the investment with the help of the best lobbyists and well placed contributions. (Bonus!)
Here’s the best part: once somebody wins an Escalade, they have less interest in blowing up the Escalade factory. Might need spare parts one day.
So that’s my modest proposal.
Karen Hughes, are you listening?
Monday, January 29, 2007
On A New Mission, Or, How About a Peace Ship?
I start today’s discussion with the proposition that non-military responses to events around the world offer great bang-for-the-buck opportunities to cement friendships with citizens across the globe.
This is especially true in a disaster scenario. You might recall the story of the New York City paramedics providing assistance in Pakistan, and how much it impacted the locals getting the help.
In my mind, that means responding to disasters around the world is an effective way to enhance our National Security. Even more so when the country you are helping might not be your closest friend; and you want to affect public opinion/increase connectivity in spite of the local Government.
Which brings me to today’s suggestion:
If this stuff works, why not create the tools to do it better?
Specifically, I suggest we build a couple of Peace Ships.
Look at the lessons learned from the Tsunami disaster in East Asia and Katrina.
The complete absence of infrastructure-security, medical, communications, electrical, air traffic control, all of it-meant it was challenging just to get recovery started. Bases had to be created so that repairs could get underway.
We could put those capabilities into a floating response platform using resources already developed and working. Here’s what I mean:
The USS Iwo Jima is one of a class of “light” aircraft carriers used to support amphibious assaults. It has, in fact, been used as a command center following Katrina. Its Combat Information Center is not dissimilar to a Network Operations Center for a telecom company married to an Air Traffic Control facility; and it operates a small airport upstairs, a small medical center downstairs.
So imagine a ship carrying a similar CIC operation, with an expanded medical center, 500-1000 Marines for quick-response security, enough earthmoving gear and Construction Battalion team personnel to clear a runway, and a stash of generators and other electrical/cell phone/satellite gear for emergency restoration of services.
Otters, Ospreys (if considered safe…), helicopters, and quickly assembled microwave towers/satellite uplink vans can allow the ship to reach out more than 500 miles. Mobile hospital kits can offer the same capability in the medical area.
To create a more robust potential response, pre-positioned equipment could be placed outside the US (perhaps the Marine Expeditionary Units will let us borrow some depot space?).
Check out the USS Kitty Hawk for an example of the type of platform that could be used.
There is a huge amount of budget involved, which is good and bad. It will be more difficult to obtain and keep Congressional support, but the Navy will love it (who doesn’t like a mandate for a new mission to fund?).
This can even be sold as a form of “portable” foreign aid that doesn’t statutorily lock to any particular country or program initiative.
Iran has suffered major earthquakes recently, including an event in 1990 that killed 35,000.
We are considering spending billions upon billions to kill thousands more Iranians, and I’ll bet at the end of the process we will not have a peaceful relationship with Iran.
On the other hand, for a lot less money we could create a public diplomacy tool which, had we sent it to Iran two or three times, could have created a much different relationship than we face today. (You might notice that Ache is not considering attacking us…)
And it would have come in real handy in New Orleans, or Florida, or wherever the next American disaster occurs. Bonus!
For full disclosure, the response time issue seems to be the fly in the ointment, but with two ships and smart basing a one week response is possible for much of the world.
So: smart way to spend money, or is the Peace Ship a waste of time?
I’ve reported, you decide.
This is especially true in a disaster scenario. You might recall the story of the New York City paramedics providing assistance in Pakistan, and how much it impacted the locals getting the help.
In my mind, that means responding to disasters around the world is an effective way to enhance our National Security. Even more so when the country you are helping might not be your closest friend; and you want to affect public opinion/increase connectivity in spite of the local Government.
Which brings me to today’s suggestion:
If this stuff works, why not create the tools to do it better?
Specifically, I suggest we build a couple of Peace Ships.
Look at the lessons learned from the Tsunami disaster in East Asia and Katrina.
The complete absence of infrastructure-security, medical, communications, electrical, air traffic control, all of it-meant it was challenging just to get recovery started. Bases had to be created so that repairs could get underway.
We could put those capabilities into a floating response platform using resources already developed and working. Here’s what I mean:
The USS Iwo Jima is one of a class of “light” aircraft carriers used to support amphibious assaults. It has, in fact, been used as a command center following Katrina. Its Combat Information Center is not dissimilar to a Network Operations Center for a telecom company married to an Air Traffic Control facility; and it operates a small airport upstairs, a small medical center downstairs.
So imagine a ship carrying a similar CIC operation, with an expanded medical center, 500-1000 Marines for quick-response security, enough earthmoving gear and Construction Battalion team personnel to clear a runway, and a stash of generators and other electrical/cell phone/satellite gear for emergency restoration of services.
Otters, Ospreys (if considered safe…), helicopters, and quickly assembled microwave towers/satellite uplink vans can allow the ship to reach out more than 500 miles. Mobile hospital kits can offer the same capability in the medical area.
To create a more robust potential response, pre-positioned equipment could be placed outside the US (perhaps the Marine Expeditionary Units will let us borrow some depot space?).
Check out the USS Kitty Hawk for an example of the type of platform that could be used.
There is a huge amount of budget involved, which is good and bad. It will be more difficult to obtain and keep Congressional support, but the Navy will love it (who doesn’t like a mandate for a new mission to fund?).
This can even be sold as a form of “portable” foreign aid that doesn’t statutorily lock to any particular country or program initiative.
Iran has suffered major earthquakes recently, including an event in 1990 that killed 35,000.
We are considering spending billions upon billions to kill thousands more Iranians, and I’ll bet at the end of the process we will not have a peaceful relationship with Iran.
On the other hand, for a lot less money we could create a public diplomacy tool which, had we sent it to Iran two or three times, could have created a much different relationship than we face today. (You might notice that Ache is not considering attacking us…)
And it would have come in real handy in New Orleans, or Florida, or wherever the next American disaster occurs. Bonus!
For full disclosure, the response time issue seems to be the fly in the ointment, but with two ships and smart basing a one week response is possible for much of the world.
So: smart way to spend money, or is the Peace Ship a waste of time?
I’ve reported, you decide.
Thursday, January 25, 2007
On Puppies, Or, Hillary’s Math
I am constantly reminding everyone who will listen that the centrist leaning; non-Party affiliated voters who occupy the “gap” decide Presidential elections.
All evidence suggests this will again be true in 2008. To take it further, in many constituencies, gap voters will determine Congressional races as well.
Here’s why:
From a risk/reward perspective, changing the minds of the “hard” voters on either side of the electorate through persuasion is often not worth the challenge.
To illustrate the inherent difficulties in moving voters from either fringe, I humbly offer the “Puppy Theory of Political Persuasion”:
1) There is a percentage of the population who will not object if the President were to eat a live puppy on national television, as long as some explanation for the behavior can be provided (“The puppy was a threat to National Security!”).
2) Alternatively, there is a percentage of the population who would not give Mr. Bush credit if he personally ended the Iraq War and cured AIDS, both on the same day (“He’s still in the pocket of Big Oil!”).
Is Clinton also affected by this calculus?
Can we quantify the population at either fringe who find her objectionable beyond all persuasion, or will support her no matter what?
To put it another way, can we put a number to Hillary’s Puppy Factor?
While I don’t feel capable of providing such answers at this time, I do have ideas that could stimulate the analysis.
First, I think the measurement of “non-objectors” (point 1 above) is easier for Mr. Bush than it will be for Clinton. This is because Mr. Bush has seen the enormous drop in his approval ratings over the past 5 years, which have apparently stabilized since about the fall of 2005.
The principal issue driving these numbers, I think we all agree, is Iraq.
Since the news from Iraq has continued to become worse, but the approval rating is basically stable, I submit that we are fairly close to identifying Mr. Bush’s non-objector Puppy Factor as being somewhere around 35%.
Second, there is an additional Puppy Factor, the “non-creditors” (point 2 above), which I submit is more difficult to measure than the non-objectors, unless the candidate being measured can post an upward trend similar to Mr. Bush’s downward measurement.
Should Clinton, or Obama, or others find themselves moving dramatically upward, that measurement, for that candidate, may reveal itself.
Finally, why does all this matter?
If elections are won in the gap, then the larger the gap population, the more likely a centrist candidate can effectively harvest votes from that group. Conversely, a candidate facing a smaller gap will have to harvest from a smaller universe of available votes, a tougher proposition.
Of course, another option in either case is to attempt to attract prior non-voters.
Historically this tends to yield less efficient results than harvesting known voters, which means knowing the Puppy Factor, for these candidates, can provide an indication of how much additional effort they will need to win an election.
This means if the Puppy Factors for candidates are known, each can adjust their efforts in gap outreach for better results. It will also be easier for analysts to evaluate each candidate’s potential electoral success in 2008 and beyond.
The Puppy Factor ©.
America’s newest political metric.
Look for it in an election coming to you soon.
All evidence suggests this will again be true in 2008. To take it further, in many constituencies, gap voters will determine Congressional races as well.
Here’s why:
From a risk/reward perspective, changing the minds of the “hard” voters on either side of the electorate through persuasion is often not worth the challenge.
To illustrate the inherent difficulties in moving voters from either fringe, I humbly offer the “Puppy Theory of Political Persuasion”:
1) There is a percentage of the population who will not object if the President were to eat a live puppy on national television, as long as some explanation for the behavior can be provided (“The puppy was a threat to National Security!”).
2) Alternatively, there is a percentage of the population who would not give Mr. Bush credit if he personally ended the Iraq War and cured AIDS, both on the same day (“He’s still in the pocket of Big Oil!”).
Is Clinton also affected by this calculus?
Can we quantify the population at either fringe who find her objectionable beyond all persuasion, or will support her no matter what?
To put it another way, can we put a number to Hillary’s Puppy Factor?
While I don’t feel capable of providing such answers at this time, I do have ideas that could stimulate the analysis.
First, I think the measurement of “non-objectors” (point 1 above) is easier for Mr. Bush than it will be for Clinton. This is because Mr. Bush has seen the enormous drop in his approval ratings over the past 5 years, which have apparently stabilized since about the fall of 2005.
The principal issue driving these numbers, I think we all agree, is Iraq.
Since the news from Iraq has continued to become worse, but the approval rating is basically stable, I submit that we are fairly close to identifying Mr. Bush’s non-objector Puppy Factor as being somewhere around 35%.
Second, there is an additional Puppy Factor, the “non-creditors” (point 2 above), which I submit is more difficult to measure than the non-objectors, unless the candidate being measured can post an upward trend similar to Mr. Bush’s downward measurement.
Should Clinton, or Obama, or others find themselves moving dramatically upward, that measurement, for that candidate, may reveal itself.
Finally, why does all this matter?
If elections are won in the gap, then the larger the gap population, the more likely a centrist candidate can effectively harvest votes from that group. Conversely, a candidate facing a smaller gap will have to harvest from a smaller universe of available votes, a tougher proposition.
Of course, another option in either case is to attempt to attract prior non-voters.
Historically this tends to yield less efficient results than harvesting known voters, which means knowing the Puppy Factor, for these candidates, can provide an indication of how much additional effort they will need to win an election.
This means if the Puppy Factors for candidates are known, each can adjust their efforts in gap outreach for better results. It will also be easier for analysts to evaluate each candidate’s potential electoral success in 2008 and beyond.
The Puppy Factor ©.
America’s newest political metric.
Look for it in an election coming to you soon.
On Not Losing, Or, Pull Out Now-To Afghanistan
In a previous discussion I created a hypothetical set 3 months in the future, and asked the community how we might respond.
Today I’d like to do something similar, but with a predetermined outcome.
But before I do, let’s talk about that outcome.
There are a bunch of reasons to remain engaged in the Mideast neighborhood, and a bunch of reasons not to be in Iraq.
For those still evaluating the issues, consider the following:
Precipitous withdrawal will create a power vacuum, and there will be a fight-unless the Sunni decide to accept what appears to be a future of poverty and no political power.
Of course, al-Sadr will also have to accept being at the bottom of the economic pile while bearing no animosity to the wealthy Shi’a keeping him there, and all Shi’a will have to accept that 35 years of mistreatment from the Sunni deserve no retaliation.
What about the Kurds?
Iran?
Saudi Arabia?
Do you own that much Tylenol?
If we race home, our image as a reliable partner will once again be tarnished, although, ironically, our perception as an “honest broker” might actually improve, if we were not seen as providing backing for one faction or another.
In the meantime, spring draws ever nearer, which means trouble ahead in Afghanistan. Fighters coming down from the Northeast mountain provinces and Pakistan will create more trouble for the multinational force in country.
What might happen in a withdrawal scenario? Most likely is the pullback of US forces to bases in Iraq, and a basically defensive posture. At the same time, some (half?) of US forces will likely withdraw back home, particularly National Guard units.
Of course, this won’t last long (the best fortress is a prison theory, and who wants to sit around taking inbound mortars?), suggesting that this solution will also lead us right back where we are now, US troops trying to put out fires as they break out, especially in Baghdad.
So how can we create the appearance of impartiality and strength, stay militarily engaged, and deal with the coming Afghani spring offensive?
I suggest, instead of withdrawing to defensive positions in Iraq, we withdraw to offensive positions in Afghanistan, while maintaining a backup force to discourage outside intervention.
Pitfalls?
You bet.
All this will only work if we can...
...Convince the surrounding nations that stability in Iraq serves everybody’s best interests, and…
…Convince the population of Iraq that stability in Iraq serves everybody’s best interests.
Neither one an easy proposition.
Diplomatic efforts must begin immediately and must be perceived as militarily neutral, as opposed to militarily offensive.
There should be four objectives: to convince Iran not to involve themselves internally (bribery is an option here), to assure the Kurds that we will allow them to defend their interests as needed, to find a way to create economic opportunity amongst the al-Sadr supporters, and to reassure Sunni Islam that Iraqi Sunnis will not be marginalized, if we can help it.
Possible positive outcomes?
Here’s a few:
Diplomacy creates an interest in Iran in a more expansive economic relationship, which helps us maintain parity with China in securing access to traditional energy resources over the next few decades.
Why would Iran be interested? Because they have a younger generation, too, and a future of war and sanctions will not give them much to do, creating internal instability the Iranian Government would probably rather avoid.
A similar analysis could be made regarding Syria.
The Royal Saudi Government has much to gain from stability, and even more to gain from the perception that the US is not an enemy of the Sunni.
Our allies in Afghanistan get assistance they could really use, at the most active time of the combat year, if recent history repeats itself.
All of this reinforces the perception that the US does have the patience to stay around for the long haul.
It also leaves the factions in Iraq having to decide how to reconcile without us taking sides in daily combat-unless all sides choose all-out warfare, which we may not be able to contain under any conditions, including the status quo.
So that’s my conversation about what to do.
Now here’s my question-how do we do it?
Specifically, where can we start moving troops, and to whom should we reach out to first diplomatically?
Today I’d like to do something similar, but with a predetermined outcome.
But before I do, let’s talk about that outcome.
There are a bunch of reasons to remain engaged in the Mideast neighborhood, and a bunch of reasons not to be in Iraq.
For those still evaluating the issues, consider the following:
Precipitous withdrawal will create a power vacuum, and there will be a fight-unless the Sunni decide to accept what appears to be a future of poverty and no political power.
Of course, al-Sadr will also have to accept being at the bottom of the economic pile while bearing no animosity to the wealthy Shi’a keeping him there, and all Shi’a will have to accept that 35 years of mistreatment from the Sunni deserve no retaliation.
What about the Kurds?
Iran?
Saudi Arabia?
Do you own that much Tylenol?
If we race home, our image as a reliable partner will once again be tarnished, although, ironically, our perception as an “honest broker” might actually improve, if we were not seen as providing backing for one faction or another.
In the meantime, spring draws ever nearer, which means trouble ahead in Afghanistan. Fighters coming down from the Northeast mountain provinces and Pakistan will create more trouble for the multinational force in country.
What might happen in a withdrawal scenario? Most likely is the pullback of US forces to bases in Iraq, and a basically defensive posture. At the same time, some (half?) of US forces will likely withdraw back home, particularly National Guard units.
Of course, this won’t last long (the best fortress is a prison theory, and who wants to sit around taking inbound mortars?), suggesting that this solution will also lead us right back where we are now, US troops trying to put out fires as they break out, especially in Baghdad.
So how can we create the appearance of impartiality and strength, stay militarily engaged, and deal with the coming Afghani spring offensive?
I suggest, instead of withdrawing to defensive positions in Iraq, we withdraw to offensive positions in Afghanistan, while maintaining a backup force to discourage outside intervention.
Pitfalls?
You bet.
All this will only work if we can...
...Convince the surrounding nations that stability in Iraq serves everybody’s best interests, and…
…Convince the population of Iraq that stability in Iraq serves everybody’s best interests.
Neither one an easy proposition.
Diplomatic efforts must begin immediately and must be perceived as militarily neutral, as opposed to militarily offensive.
There should be four objectives: to convince Iran not to involve themselves internally (bribery is an option here), to assure the Kurds that we will allow them to defend their interests as needed, to find a way to create economic opportunity amongst the al-Sadr supporters, and to reassure Sunni Islam that Iraqi Sunnis will not be marginalized, if we can help it.
Possible positive outcomes?
Here’s a few:
Diplomacy creates an interest in Iran in a more expansive economic relationship, which helps us maintain parity with China in securing access to traditional energy resources over the next few decades.
Why would Iran be interested? Because they have a younger generation, too, and a future of war and sanctions will not give them much to do, creating internal instability the Iranian Government would probably rather avoid.
A similar analysis could be made regarding Syria.
The Royal Saudi Government has much to gain from stability, and even more to gain from the perception that the US is not an enemy of the Sunni.
Our allies in Afghanistan get assistance they could really use, at the most active time of the combat year, if recent history repeats itself.
All of this reinforces the perception that the US does have the patience to stay around for the long haul.
It also leaves the factions in Iraq having to decide how to reconcile without us taking sides in daily combat-unless all sides choose all-out warfare, which we may not be able to contain under any conditions, including the status quo.
So that’s my conversation about what to do.
Now here’s my question-how do we do it?
Specifically, where can we start moving troops, and to whom should we reach out to first diplomatically?
Tuesday, January 23, 2007
On A New Auto Industry, Or, The Road Ahead
When discussing the current state of the auto industry in the US it is evident that future trends do not point to likely profits soon for the “Big 3” (or Big 2, or 3 again, if Daimler were to dump Chrysler) US automakers.
The labor cost problem is often referenced as an enormous issue that hobbles the industry going forward.
Design issues also take a toll, but that was the focus of a previous discussion, not today’s.
Instead, let’s look to how we might restructure the industry to create a new business model.
Before we begin, I want to point out that I am writing this from the point of view of a mythical auto company executive.
What I will propose will be potentially disastrous for the affected companies, their employees and retirees-but then again, it might just be their best shot.
I’m going to open this conversation with a completely out-of-the-box question:
If there’s a huge labor cost problem building cars, why don’t unprofitable automobile companies just quit building cars?
Bear in mind, I’m not suggesting they get out of the business; just consider a different model for the industry.
For a moment, think about the computer industry.
Computer components are, for the most part, “agnostic”, meaning your RAM can be used in a Dell, or HP/Compaq, or the generic box assembled at the local computer store.
This means, for the most part, retail computer sellers are really “integrators” who put their effort into designing final packages, rather than components. (There are exceptions; distinctive Dell cases being an obvious example)
There are advantages to this system. As an example, Intel can put more effort into chip development than any of the above mentioned companies would wish upon themselves. A second example: software.
Alert observers will note that this process is already under way.
Johnson Controls is an example of a company that makes “automotive modules” (they are a huge supplier of automotive interiors).
If we were to take the concept farther, the eventual outcome could be companies that design and market automobiles, other companies that assemble those cars and still other companies that design and build automotive components.
As far as I can see, the biggest obstacle (other than the timing of changes in legal control) is the question of who is going to eat the healthcare and pension costs of the legacy Ford, GM, and Chrysler companies.
So here’s a proposal:
Give the factories to the current workers, in exchange for indemnity from future medical/pension costs for those workers.
Those assembly companies would presumably be more able to convince their employee-owners that stock appreciation comes from a controlled cost structure than is possible for the legacy companies today.
These assembly plants would then compete for assembly work-from any legacy company, as each evolved to this structure.
Multiyear contracts could provide cost stability.
This only gets us part way there, however.
Retirees. Here’s where we get really far out.
If the legacy companies couldn’t make it in the car business because of excessive labor costs, could the legacy companies make it in the health care industry?
In other words, why not get in the clinic/pharmacy trade?
Something along the lines of a Kaiser Permanente operation, but centered on the legacy companies’ retirees’ geographic distribution and distribution of retained employees (although, if it somehow became profitable, it could be spread).
There are ERISA issues aplenty, which means negotiations backed by a bit of serious hardball would be required.
The legacy companies might need to approach the retirees and the Pension Benefit Guarantee Board (and eventually Congress and a currently unknown future Administration-start donating now!), with something like this:
Good cop: This opportunity will preserve quality heath care for hundreds of thousands of deserving workers…and registered voters.
Bad cop: If we go bankrupt, sell the assets for liquidation, pay back our debtors, and go away, the Federal Government will be on the hook for a substantial portion of the bankrupt pension plan…or face hundreds of thousands of registered voters, and still more angry stockholders…also registered voters.
(A variation of this approach can also be used to address UAW concerns, if the union is not amenable to the employee-ownership offer mentioned earlier.)
Interestingly, this does not require the legacy companies to offer these services with as much concern for reimbursement levels and other revenue issues as other providers.
This is because the only target the legacy companies need to hit is the current cost they lay out for those expenses, plus the expenses for the retained employees’ heath care costs-costs that should be lowered by at least the amount of profit the former providers and administrator took from the system.
If the legacy companies could de-unionize the health care providers they purchase, costs could be further reduced.
Regarding pensions: if there is a reasonable possibility that the PBGC could find a way to supplement the existing pension system without a takeover, a potential deal exists.
We’re coming to the end, and here’s where it gets really interesting…
…Remember my observation about the computer industry, how parts are interchangeable? Your Dell (or Apple, or generic) computer can accommodate hard drives, graphics cards, and every other internal part from numerous sources with pretty good interoperability.
Imagine if your Mustang could be ordered with a Delphi drivetrain, Bosch brakes, and interior components specified by you?
Imagine if you could also order your Dodge minivan with the same family of components? (Imagine if every car in your driveway had the same dashboard, motor, and electronics package!)
Voluntary standardization of mountings and connections (and adapters, and etc.) across the industry could make this possible.
It’s not as crazy as you might think. It’s already the standard in heavy trucks and commercial aircraft (“GE or Rolls-Royce engine for that Boeing 777, sir?” ”Cummins or Allison for that new Peterbilt?”).
There are a ton of pitfalls here, no doubt, but imagine the outcome if the US auto industry was the only place in the world you could be free to put the mechanics you want under the frame and body and interior you want.
If it could be made to work the Japanese will be coming to study us.
The labor cost problem is often referenced as an enormous issue that hobbles the industry going forward.
Design issues also take a toll, but that was the focus of a previous discussion, not today’s.
Instead, let’s look to how we might restructure the industry to create a new business model.
Before we begin, I want to point out that I am writing this from the point of view of a mythical auto company executive.
What I will propose will be potentially disastrous for the affected companies, their employees and retirees-but then again, it might just be their best shot.
I’m going to open this conversation with a completely out-of-the-box question:
If there’s a huge labor cost problem building cars, why don’t unprofitable automobile companies just quit building cars?
Bear in mind, I’m not suggesting they get out of the business; just consider a different model for the industry.
For a moment, think about the computer industry.
Computer components are, for the most part, “agnostic”, meaning your RAM can be used in a Dell, or HP/Compaq, or the generic box assembled at the local computer store.
This means, for the most part, retail computer sellers are really “integrators” who put their effort into designing final packages, rather than components. (There are exceptions; distinctive Dell cases being an obvious example)
There are advantages to this system. As an example, Intel can put more effort into chip development than any of the above mentioned companies would wish upon themselves. A second example: software.
Alert observers will note that this process is already under way.
Johnson Controls is an example of a company that makes “automotive modules” (they are a huge supplier of automotive interiors).
If we were to take the concept farther, the eventual outcome could be companies that design and market automobiles, other companies that assemble those cars and still other companies that design and build automotive components.
As far as I can see, the biggest obstacle (other than the timing of changes in legal control) is the question of who is going to eat the healthcare and pension costs of the legacy Ford, GM, and Chrysler companies.
So here’s a proposal:
Give the factories to the current workers, in exchange for indemnity from future medical/pension costs for those workers.
Those assembly companies would presumably be more able to convince their employee-owners that stock appreciation comes from a controlled cost structure than is possible for the legacy companies today.
These assembly plants would then compete for assembly work-from any legacy company, as each evolved to this structure.
Multiyear contracts could provide cost stability.
This only gets us part way there, however.
Retirees. Here’s where we get really far out.
If the legacy companies couldn’t make it in the car business because of excessive labor costs, could the legacy companies make it in the health care industry?
In other words, why not get in the clinic/pharmacy trade?
Something along the lines of a Kaiser Permanente operation, but centered on the legacy companies’ retirees’ geographic distribution and distribution of retained employees (although, if it somehow became profitable, it could be spread).
There are ERISA issues aplenty, which means negotiations backed by a bit of serious hardball would be required.
The legacy companies might need to approach the retirees and the Pension Benefit Guarantee Board (and eventually Congress and a currently unknown future Administration-start donating now!), with something like this:
Good cop: This opportunity will preserve quality heath care for hundreds of thousands of deserving workers…and registered voters.
Bad cop: If we go bankrupt, sell the assets for liquidation, pay back our debtors, and go away, the Federal Government will be on the hook for a substantial portion of the bankrupt pension plan…or face hundreds of thousands of registered voters, and still more angry stockholders…also registered voters.
(A variation of this approach can also be used to address UAW concerns, if the union is not amenable to the employee-ownership offer mentioned earlier.)
Interestingly, this does not require the legacy companies to offer these services with as much concern for reimbursement levels and other revenue issues as other providers.
This is because the only target the legacy companies need to hit is the current cost they lay out for those expenses, plus the expenses for the retained employees’ heath care costs-costs that should be lowered by at least the amount of profit the former providers and administrator took from the system.
If the legacy companies could de-unionize the health care providers they purchase, costs could be further reduced.
Regarding pensions: if there is a reasonable possibility that the PBGC could find a way to supplement the existing pension system without a takeover, a potential deal exists.
We’re coming to the end, and here’s where it gets really interesting…
…Remember my observation about the computer industry, how parts are interchangeable? Your Dell (or Apple, or generic) computer can accommodate hard drives, graphics cards, and every other internal part from numerous sources with pretty good interoperability.
Imagine if your Mustang could be ordered with a Delphi drivetrain, Bosch brakes, and interior components specified by you?
Imagine if you could also order your Dodge minivan with the same family of components? (Imagine if every car in your driveway had the same dashboard, motor, and electronics package!)
Voluntary standardization of mountings and connections (and adapters, and etc.) across the industry could make this possible.
It’s not as crazy as you might think. It’s already the standard in heavy trucks and commercial aircraft (“GE or Rolls-Royce engine for that Boeing 777, sir?” ”Cummins or Allison for that new Peterbilt?”).
There are a ton of pitfalls here, no doubt, but imagine the outcome if the US auto industry was the only place in the world you could be free to put the mechanics you want under the frame and body and interior you want.
If it could be made to work the Japanese will be coming to study us.
On Tire Inflators And DVD Players, Or, Should Utilities Be Buried?
So it’s been one of those winters, and if you’re reading this…
…you have Power.
There is a winter ritual involving snow shovels, kerosene, checking the “battery closet”, finding that missing glove, and all the other tasks that make losing current more bearable in our part of the world.
It appears many of you share this ritual, judging from what can be seen out there.
As our neighborhood frequently loses power, this is an ongoing process requiring frequent updates.
There’s a fair amount of effort involved, but also considerable familiarity with the “mitigation process”, if you will.
For example, it’s easy to cook meatloaf and cornbread in a Weber grill-fun, too.
Here’s a free bonus for you today: an unexpected tip for those of you out there in the dark for another night, dying for entertainment, looking for an alternative to hooking the TV to a $600 generator.
We shop Costco and Sam’s Club (equal opportunity shoppers), and recently purchased a $20 “cordless tire inflator”. It’s basically a battery attached to a pump, with a hose, in an industrial-looking (ish) yellow housing.
Inputs: 120V and 12V for battery charging. Output for a 12V connection is provided. Been carrying it around in the car, just in case.
It only took about 3 hours of darkness before my personal light came on (“12V output!”), and the idea of using it to power the portable DVD player came to fruition about 7 seconds later.
The “inflator”, when fully charged, runs our player for a good “The Dirty Dozen”, “Kelly’s Heroes”, and “Patton” trifecta, with power left over. (I did not have the initiative to complete the “The Longest Day” quinella, should you wonder.)
Recognizing the potential for car recharging (they have that 12V input…), I raced back to Sam’s and bought 2 more. A $50 variant, with jumper cables instead of an air pump, is also available, but I just wanted the batteries.
So each day I’d load the batteries in the car’s 3 outlets, and each night, depending on how much I drove, I’d have from 30 to 50% of full charge time duration before voltage decreased below minimum for the player.
But that’s not to say losing power is all fun.
Having lost power for a week this year I can easily appreciate the situation across the Midwest and Northeast (visit the “Tulsa World” site, www.tulsaworld.com for example), and the difficulties farmers in other areas are facing as well.
Which brings me to power lines.
As usual, I like to consider the out-of-the-box question, so here’s one:
Should we be, to a much greater extent, burying the utility distribution system?
I quickly searched for some kind of omnibus estimate of the cost of America losing current in the winter, and there appears to be a lack of good data.
Such an estimate would, however, need to include much more than the obvious cost of restoring power distribution-there’s the supplemental costs of lost opportunity/productivity, not to mention the huge increase in D cell sales.
Did I mention liability, industrial generator rentals and home generator purchases, air pollution from wood burning…well, you get the idea.
Why D cells more than all the rest, by the way?
To answer this sort of question with wisdom, we need to at least get a handle on the cost of replacement, and the difference in burial or poles in new construction and long-term maintenance (tree-trimming…), but because of how difficult the costs of losing power are to quantify, the cost/benefit analysis will be challenging, indeed.
Nonetheless, I’m proposing we examine the wisdom of making such a change, perhaps starting with changing code for new construction, much as we have with sprinklers.
It should be noted that the electric customers most suffering, and least likely to benefit (or benefit last) from a proposal such as this are the rural customers in the world of 1 house per mile of wire.
Am I too out-of-the-box here, or might it be worth the money?
…you have Power.
There is a winter ritual involving snow shovels, kerosene, checking the “battery closet”, finding that missing glove, and all the other tasks that make losing current more bearable in our part of the world.
It appears many of you share this ritual, judging from what can be seen out there.
As our neighborhood frequently loses power, this is an ongoing process requiring frequent updates.
There’s a fair amount of effort involved, but also considerable familiarity with the “mitigation process”, if you will.
For example, it’s easy to cook meatloaf and cornbread in a Weber grill-fun, too.
Here’s a free bonus for you today: an unexpected tip for those of you out there in the dark for another night, dying for entertainment, looking for an alternative to hooking the TV to a $600 generator.
We shop Costco and Sam’s Club (equal opportunity shoppers), and recently purchased a $20 “cordless tire inflator”. It’s basically a battery attached to a pump, with a hose, in an industrial-looking (ish) yellow housing.
Inputs: 120V and 12V for battery charging. Output for a 12V connection is provided. Been carrying it around in the car, just in case.
It only took about 3 hours of darkness before my personal light came on (“12V output!”), and the idea of using it to power the portable DVD player came to fruition about 7 seconds later.
The “inflator”, when fully charged, runs our player for a good “The Dirty Dozen”, “Kelly’s Heroes”, and “Patton” trifecta, with power left over. (I did not have the initiative to complete the “The Longest Day” quinella, should you wonder.)
Recognizing the potential for car recharging (they have that 12V input…), I raced back to Sam’s and bought 2 more. A $50 variant, with jumper cables instead of an air pump, is also available, but I just wanted the batteries.
So each day I’d load the batteries in the car’s 3 outlets, and each night, depending on how much I drove, I’d have from 30 to 50% of full charge time duration before voltage decreased below minimum for the player.
But that’s not to say losing power is all fun.
Having lost power for a week this year I can easily appreciate the situation across the Midwest and Northeast (visit the “Tulsa World” site, www.tulsaworld.com for example), and the difficulties farmers in other areas are facing as well.
Which brings me to power lines.
As usual, I like to consider the out-of-the-box question, so here’s one:
Should we be, to a much greater extent, burying the utility distribution system?
I quickly searched for some kind of omnibus estimate of the cost of America losing current in the winter, and there appears to be a lack of good data.
Such an estimate would, however, need to include much more than the obvious cost of restoring power distribution-there’s the supplemental costs of lost opportunity/productivity, not to mention the huge increase in D cell sales.
Did I mention liability, industrial generator rentals and home generator purchases, air pollution from wood burning…well, you get the idea.
Why D cells more than all the rest, by the way?
To answer this sort of question with wisdom, we need to at least get a handle on the cost of replacement, and the difference in burial or poles in new construction and long-term maintenance (tree-trimming…), but because of how difficult the costs of losing power are to quantify, the cost/benefit analysis will be challenging, indeed.
Nonetheless, I’m proposing we examine the wisdom of making such a change, perhaps starting with changing code for new construction, much as we have with sprinklers.
It should be noted that the electric customers most suffering, and least likely to benefit (or benefit last) from a proposal such as this are the rural customers in the world of 1 house per mile of wire.
Am I too out-of-the-box here, or might it be worth the money?
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