Tuesday 7 October 2014
Photo, above: The January 2010 failure of a generator aboard HMAS Farncomb was just the latest in a long history of problems faced by its fleet of 6 Collins Class diesel-electric submarines – which have sometimes been reduced to just 1 operational vessel. That readiness issue presents an immediate financial headache for Australia’s government, and adds a longer-term challenge to the centerpiece of Australia’s future naval force.
With just 6 submarines in its fleet, Australia’s current deployment set-up leaves little room for error. Even a normal setup of 2 in maintenance, 2 for training but available if needed, and 2 on operations makes for a thin line, given Australia’s long coastline and sea lanes. Almost 15 years after the first Collins Class boat was delivered, they are still short of this goal. When crewing problems are added to the mechanical issues, the failings of its current fleet are creating sharp questions about the Australia’s 2009 White Paper plan to build 12 new diesel-electric fast attack submarines, as the future centerpiece of the 2030 Australian Navy. See Hour 2, Blocks C & D, Gregory Copley, StrategicStudies director & author, UnCivilization, Defense & Foreign Affairs.
JOHN BATCHELOR SHOW
Co-host: Larry Kudlow, CNBC senior advisor; & Cumulus Media radio
Hour One
Tuesday 7 October 2014 / Hour 1, Block A: John H. Cochrane, AQR Capital Management, Distinguished Service Professor of Finance, University of Chicago Booth School of Business; in re: Bill O'Reilly interviewed Leon Panetta tonight; Panetta diplomatically conveyed that the president simply doesn’t "get it" in national and international security.
Suppose there's a sack of money in the room, and a wd comes in to blow it around. Some get $100, some get $10. Is everyone better off? Not? . . . Confiscatory wealth & expanding the power of the state? . . . Fix a rotten educational system . . . Keynesians; "rich people save too much"; Why and How We Care About Inequality by John H. Cochrane via Grumpy Economist
Tuesday 7 October 2014 / Hour 1, Block B: : John H. Cochrane, University of Chicago Booth School of Business; in re: We see income inequality: kids go to terrible schools, thus are not ready for college, can’t get decent jobs. Bad schools cause inequality. Taking money from rich people and leaving the schools bad solves nothing. Meanwhile, increasing tax rates doesn’t generate much: the rich hire tax lawyers and wind up paying about the same. Ergo, it’s taxing the rich in order to get rid of rich people. Real inequality: NYT refers to those who've "got more money"; WSJ: "earned more money." Social mobility has suffered in the US but not around the world (c.f., China). The US govt is a lot of the problem in this. Poor people in the US face daunting problems – even if we got rid of all the hedgies in the world the extant problem would continue.
Chicken and Egg Inequality The FT's Martin Wolf weighs in on "Why inequality is such a drag on economies" This is the question that was bugging me last week. Why is inequality a problem in and of itself, rather than representing a symptom of problems that should be fixed for their own sake? Since last week's review of these ideas was rather scathing, I hoped Wolf would offer some new, and better tested ideas. Alas, and interestingly, no.
Tuesday 7 October 2014 / Hour 1, Block C: John Villasenor, Hoover & Forbes and Brookings, in re: Five Things the Texas Ebola Case Can Teach Us about Critical Infrastructure Security. Mr Duncan showed up at Dallas hospital, from Liberia with ebola symptoms, was turned away till he was disastrously sick. The hospital blamed it on "software." Five points on complex systems: Blaming problems on software sidesteps responsibility – we’re all just victims of that? Nurse with clipboard fills out form; hands it to doctor. No: now it’s all digitized; mismatched assumptions. Ewe thing the travel system was entered in the form, but hospital "has identified a flaw" – oops, change: "We'd like to clarify; there was no flaw in the electronic system." Air traffic control, finance, health care – everything depends on this sort of [structure]. The 2010 flash crash – a few minutes when the stock mkt lost a huge percentage of value then gained it back very swiftly. To this day there's no good example of how that happened. Also 2011 Baja California power outage – how? Cascading consequences that are quite sobering and we still don’t know how these have worked. In fact we’ve had mini-flash-crashes since 2010 – no human involved in them. Did he physician ask the patient in Dallas? [Didn’t he have a West African accent and so spark a question in the doctor's mind?] No single human can credibly claim to understand the dynamics of interactions across the country, incl in financial world. We’re this left with a large-scale experiment; need to model the systems with better assumptions OR can we redesign the information flows so there's a human involved? Sometimes – at least, better fail-safe methods. As flu season comes on, people need to write it down on paper and talk.
Tuesday 7 October 2014 / Hour 1, Block D: Lanhee J. Chen, Stanford, in re: Obama's Blow to Endangered Democrats Senate's Future Likely Hinges on These Three Races The Senate most plausibly turns on the survival of Alaska's Begich, Colorado's Udall, and the outcome of the open contest in Iowa between Braley and Ernst. "Bruce Bailey: the worst Democratic candidate in this campaign season." Minimum wage, fair pay and clean energy – three policies of Pres Obama that depress the demand for labor. Need instead Keystone XL, tax reform and free trade to help; this president does not have a pro-growth agenda. . . . President is searching for relevance. Looks as though ultimately he'll hurt Dem incumbents. Clinton barnstorming in Arkansas, saying, "Don’t vote of Obama; vote for the candidate."
Hour Two
Tuesday 7 October 2014 / Hour 2, Block A: Matt Kaminski, WSJ, in re: Angela Merkel's Putin Problem Hoping a shaky cease-fire holds in Ukraine In East Germany, Putin came away scared by the fall of the Berlin wall, while Merket in East Germany learned to love freedom Merkel speaks fluent Russian while Putin speak fluent German Putin is pro tem doing better. Germany has the better economy but a weak military; she cannot stand Putin personally – sees right through him Her coalition partners are fairly pro-Russian and won’t confront it. Germany is pretty much on its own facing Russia.
Tuesday 7 October 2014 / Hour 2, Block B: Paul Gregory, Hoover, in re: Maidan in light of Hong Kong. Interesting comparisons and insights into why dictatorships are scared to death by Maidan. There are also some insights about the incompatibility of economic freedom and dictatorship.
Tuesday 7 October 2014 / Hour 2, Block C: Gregory Copley, StrategicStudies director & author, UnCivilization, Defense & Foreign Affairs, in re: To Win Is to Change, and in Many Ways
Almost all decisive strategic victories — winning the peace, not just the battle — derive from the adoption of game-changing capabilities, as well as strategic depth. Competing through linear development of old approaches is expensive and dangerous, especially when budgets are tight.
Analysis. By Gregory R. Copley, Editor, GIS/Defense & Foreign Affairs. Chill winds are sweeping through the Pentagon as US military leaders contemplate the point at which they have now arrived: They cannot deliver decisive military force against the People’s Republic of China (PRC) short of total war, the commitment of inter-continental ballistic missiles. Even there, victory, even Pyrrhic victory, is debatable.
The US and the PRC are not at war, and do not contemplate the near-term eventuality of such a situation, but each regards the other as the capability against which it must prepare. They also compete, regardless, for strategic leadership. In some respects, the nation-state with the greatest prestige can win a de facto victory; it was through such a psycho-political denouement that the Cold War was won by the West, and by the US.
Tuesday 7 October 2014 / Hour 2, Block D: Gregory Copley, StrategicStudies director & author, UnCivilization, Defense & Foreign Affairs, in re: Australia Moves Toward a Definition of Its Strategic Future. Analysis from GIS/Defense & Foreign Affairs Canberra Station. For Australia, the Government’s next moves are not just about a major defense procurement, but about how well it places Australia into the 21st Century.
The Government of Prime Minister Tony Abbott is moving toward two critical strategic junctions: the choice of a new submarine fleet, and deciding whether Australia can return to being an advanced industrial state. It is possible that Australia, with the 12th largest economy in the world but the 51st largest population, could decide within months on which submarine design it will adopt to replace its Collins-class submarines. But the decision is now inextricably linked to the issue of employment and productivity levels within the Australian workforce, and whether Australia can ever resume its momentum as the industrial innovator and producer it once was. The test will be on whether it can build the new submarines in Australia
Hour Three
Tuesday 7 October 2014 / Hour 3, Block A: James Taranto, Wall Street Journal, in re: Early Goating Who lost next month’s election?
Tuesday 7 October 2014 / Hour 3, Block B: Joshua Green, Bloomberg Businessweek, in re: THE NEW POLITICS OF THE OLD How the rise of Reagan seniors helps Republicans this fall By Joshua Green WITH LESS than six weeks to go until the midterm elections, control of the Senate is up for grabs. But whatever the outcome, Republicans will end up with significant gains in both houses of Congress. That’s because the GOP has a demographic advantage in midterm elections that mirrors the one Democrats enjoy from the rising wave of young, female, and Hispanic voters who reliably turn out in presidential elections. The Republicans’ advantage: old people.
Tuesday 7 October 2014 / Hour 3, Block C: Mona Charen, NRO, in re: Hispanic Voters and the American Dream Can the GOP win over a constituency they have by turns resented, ignored, courted, and insulted?
Tuesday 7 October 2014 / Hour 3, Block D: Coral Davenport, NYT, in re: There is a growing push for a global carbon price - but fierce political opposition remains in the U.S.
Hour Four
Tuesday 7 October 2014 / Hour 4, Block A: Tunku Varadarajan, Hoover, in re: It is not my intention to be churlish about the trip, a review of which I offer here, much in the manner of a theatre critic. Modi scarcely put a foot wrong. America had not seen an Indian Prime Minister like him. America, in fact, had not seen a visiting head of government like him—from anywhere in the world—since Fidel Castro, a vastly different species of man, blustered his way through Manhattan in 1960. [more]
Tuesday 7 October 2014 / Hour 4, Block B: Peter Coy, Bloomberg Businessweek, in re: JANET YELLEN: NO MORE MS. NICE FED CHAIR It's time for a reappraisal. Janet Yellen isn't a true Dove--that is, someone who consistently prioritizes fighting unemployment over keeping a lid on inflation. The perception that she is may be the biggest misunderstanding today in all of finance and economics. Investors who bet that rates will remain super-low may be in for a nasty surprise. Yellen has favored easy money until now because the economy has been exceptionally weak, but she has vowed that when circumstances change, so will she.
Tuesday 7 October 2014 / Hour 4, Block C: Michael Ledeen, FDD, in re: . . . Boroujerdi has been treated atrociously in Evin, and his family and supporters have been warning for many months that his health was failing. Now they are telling us that he has been transferred to a cell that is typically used for prisoners about to be executed.
I can well imagine the frustration of the hollow men atop the Iranian regime. They’ve had Boroujerdi arrested and tortured, they keep hoping that he’ll finally die. But he won’t — his will to live is extraordinary. And unlike Jahanbegloo, he’s remained defiant, and has even smuggled letters and, I am told, the manuscript of a devastating critique of the Islamic Republic, to the outside world.
I don’t think the Rouhani/Khamenei regime, which has killed substantially more Iranians than Ahmadinejad in his prime, is going to execute Boroujerdi, any more than I think they will take any formal action against the arrested Green leaders, Mir Hossein Mousavi and Ali Karroubi. I think the tyrants fear these men, who have inspired millions of Iranians to reject the regime and plan for its removal.
The “Western world’s” failure to openly support Boroujerdi is a deep black stain of dishonor and cowardice. If diplomats could call for Johanbegloo’s release–and Johanbegloo is a man of trivial significance in the internal turmoil that characterizes Iran today–they have umpteen million better reasons to denounce the maltreatment of Boroujerdi and demand his release.
But the West wants a deal with Iran and won’t do anything to annoy Rouhani and Khamenei. Nor will the misnamed journalists who waste miles of ink analyzing the negotiating tactics of a regime that wants us in precisely the same condition as Ayatollah Boroujerdi.
As Goldfinger said to James Bond when asked, “do you expect me to talk?”
“No, Mr. Bond, I expect you to die.”
That’s what Rouhani and Khamenei are all about, and Boroujerdi’s case removes any doubt about their nature and their intent.
If I were a high official in the American government I would insist that we defend Boroujerdi, and if Obama, Biden, Rice, Kerry, et al., won’t do it, I’d quit in disgust.
Tuesday 7 October 2014 / Hour 4, Block D: Matt Richtel, NYT, in re: Smoking The tobacco industry’s giants are putting health warnings on e-cigarettes that outstrip both those on traditional cigarettes and those on e-cigarettes made by smaller competitors, leaving public health officials skeptical about the companies’ intent.
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