South Korea Passes on Dead Parrot

Decides Not to Buy F-15 'Silent Eagle'

H/T F-16.net
In the competition to procure a new South Korean fighter to replace their rapidly obsolescing F-4s and F-5s, push came to shove, and military requirements trumped costs.

It is a "No Decision"

South Korea did the only thing they could do under their acquisition laws when the only competitor to make the price point didn't make the performance cutoff: they went back to the drawing board:

South Korea decided not to select Boeing's F-15SE as the country's next fighter jet Tuesday amid concern the sole-remaining candidate for the 8.3 trillion won (US$7.2 billion) project is not suitable as it lacks stealth features....

...Locked in competition with Lockheed Martin's F-35 and EADS' Eurofighter, Boeing was close to winning the deal with a cheaper offer than its rivals. But its fourth-generation aircraft finished in second place behind the F-35 stealth jet in comprehensive assessments, leaving questions over its combat capabilities...

... "A majority of the committee members agreed to reject (F-15 SE) and restart the project, taking into consideration the recent security situation including North Korea's third nuclear test and latest aerospace technology development,"...

... "They agreed that South Korean Air Force needs fifth-generation combat jets to keep pace with the latest trend and to deter provocations by North Korea." ... 

...Their rejection on the verge of the final selection illustrates pressure felt by the military and the government to buy 60 jets from the F-15 family with improved features as experts and former Air Force chiefs have expressed concern over the jet's stealth capabilities. As the F-15 SE failed to get approval at the last minute, the DAPA will restart the procurement program, which is expected to further delay the replacement of South Korean Air Force's aging fleet of F-4s and F-5s. ...  

... Boeing tried to highlight its conformal weapons bay as one of the key radar-evading features, but it failed to quell questions over its capability against F-35, which is originally designed as a stealth jet.

The Borg Never Quit

With Boeing, the 'Parrot' is never REALLY dead, "it's just pining for the fjords". Boeing's big problem with the Silent Eagle now is other possible shoppers will be asking themselves :What does South Korea know about the F-35 and F-15SE that we don't?

Admin Note: To cut down on possible flaming by 'F-15 Fanboys' and 'F-35 Haters', if you want to assert the F-15 deal was scuttled for reasons other than those the South Koreans have stated in the comments, fine --bring evidence to back it up at the same time.
If not...'Snip'. (you can go libel people someplace else).  

Colin Clark: "Cost Estimates" and the F-35

Great article by Colin Clark at AOL Defense. Clark captures what weapon system 'cost estimates' really "mean" better than I've read anywhere else in the press.

If you can't visualize 55 years of Operations, don't pretend to be offended by the costs.

The 'F-35 H8ers' are no doubt dissing the F-35 and the article (and probably my comment on the thread come to think about it) as I type, but go, as they say, read it all here.

,,,and I can't post this graphic too often:

How the Anti-Defense 'Reformers' Practice 'Slash and Whine'

P.S. I'm almost done with Part 2 of the "F-35 G-Spec change" posts. Research is done. Crunching numbers now and will write it up soon.


Update 4 May: If I seem a trifle rough on some of the commenters at the AOL link, so be it. I cannot abide regurgitators of myths, poseurs, or what the Soviets used to refer to as the "govnoed".

GO VOTE!



Election 'After Battle' Report: 

It 'Aint Over'-The job just got a whole lot tougher.

 

With the exception of the usual brain dead zones (including Moscow on the Brazos), and the usual NAACP illegalities in Houston, Texas pretty much did what it could against the Rise of the "Loser Nationtm" . Too bad about much of the rest of the country. Expect more polarization at the state level as the sentient beings who can cut their strings with the 'Blue' states move to where Makers outnumber the Takers. Welcome! -- just leave any silly ideas at the state line. Concealed Carry permit applications are first door on the right.

 



Image Courtesey of the Chicago Boyz

Introducing Suzie Dershowitz Part 4

‘Provoking Accountability’…Of the ‘Unaccountable’ 

Or,

Defusing CATO’s “Precisely Guided Analytical Bomb”

Back to Part 3

POGO's Banner Carrier, Suzie Dershowitz. (Source: POGO)
Hopefully, this is the LAST time we'll be seeing her, but don't bet on it.

(To make each segment better as a ‘standalone’, I'm getting a little repetitive at the start of each post. If you’ve been following the segments all along, you may proceed to the subheading “CATO/POGO: Fuller Multiplier is an Outlier!” without missing the heart of the post.

Major Ploy Du Jour #2 (Continued):

“This Proves/Refutes Our POV/Their POV” (In this case both). Only.... it doesn't. Hint: You could lay all the economists in the world end to end and you still wouldn't be able to reach a conclusion.
 
As we noted in Part 3:  

“…for this exercise we will focus on problematic areas of the CATO analysis (because it is not a study, but is merely an analysis that is critical of the Fuller study) where Ms. Dershowitz unwisely attempts to use in support of her assertion that ‘left, right, and center’ agree with POGO: that there will not be the kind of damage that the industry-sponsored study warns us will happen.”
 As we also noted in Part 3, there are two aspects of the CATO analysis upon which POGO relied as evidence ‘supporting their position’. These perceived points of ‘support’, unfortunately for POGO do NOT provide the support they claim. 

We exposed POGO/CATO’s Fatal Flaw #1 in Part 3 by illustrating CATOs critique of the Fuller study’s methodology amounted to no more than a pique over academic taste. The CATO complaint over the Fuller Study not going further than it was designed to do, and not doing anything other than that needed to achieve its intended explicit objective was rather sad. Claiming the Fuller study should have been burdened with additional layers of abstraction to answer a question different from the question asked, with the claim rationalized by the unsupported assertion that it would have been more meaningful, all without adequately describing the specific controls (ground rules and assumptions), modeling, or processes involved, seems to be rather self-serving caviling.

In closing Part 3 and in preparation for this segment, I asserted:          
I believe the CATO players fully understand the notion of ‘usefulness’, and that it wasn’t enough to claim their study was more useful, when at best it is perhaps useful in a different way, and at the worst less than helpful through introduction of excessive ambiguity. What MAY explain why CATO went to great lengths to employ (and POGO parroted) the complaint that the Fuller study ‘didn’t go far enough’ is that they sought to use it as a smokescreen to cover their more ‘tangible’ complaint that Fuller overstates the net economic ‘multiplier’ of defense acquisition spending. Strip away the ‘Fuller didn’t take into consideration X,Y,and Z’ obfuscation and CATO’s weak attempt to ‘sell’ the idea that Fuller’s multiplier was outside some ‘economics mainstream’ not only looks even weaker, but intentionally contrived (more on that later).   
By using CATO's own references, I will show how CATO not only does not show the Fuller multiplier lies outside some contrived norm, but they actually lend support to idea that the Fuller multiplier is possibly more appropriate than either the Economic Aesthetes at CATO or the Progressive Proles at POGO would have us believe.
 
Thus, on this adventure, we will cover Fatally-Flawed POGO/CATO Point #2.

2. Dershowitz/POGO relies on CATO claims (and claimed ‘evidence’) that the Fuller study overstates the net economic ‘multiplier’ of defense acquisition spending.

 CATO/POGO claim: Fuller Multiplier for Defense Spending is an Outlier!

CATO asserts, and POGO’s Dershowitz promotes the notion that the Fuller study used an inflated ‘multiplier’ for arriving at the economic impact values for reduced defense spending. 

CATO Analysis:

 The Fuller analysis summarized above suggests a GDP multiplier effect of 1.92 for 2013 as a result of a $45 billion reduction in defense procurement. The modern scholarly literature on the GDP effect of government spending growth casts significant doubt on any multiplier effect of that magnitude, even under the assumption that the concept of a multiplier effect is consistent with sound economic analysis. 

POGO’s Dershowitz claim: Fuller Is (Gasp) “Overblowing”!

POGO’s Dershowitz applies a blatantly biased spin on the CATO claims: Thus, it appears that Fuller is overblowing the impact of defense spending on GDP by almost twice as much as other estimates. The table in Zycher's analysis (reproduced below) provides a visual representation demonstrating just how out of sync Fuller's study is…

Ms. Dershowitz was kind enough to replicate the CATO table involved:

Author	Estimate	Notes
Fuller	1.92	defense procurement
Cogan et al.	0.65	large stimulus
Mountford and Uhlig	0.65	spending "shock"
Barro and Redlick	0.6-0.9	increases in defense spending
Ramey (2011)	0.6-0.8	defense spending after WW2
Hall	0.7-1.0	all government purchases
Parlow	0	defense spending
Ramey (2012)	0.5	all government spending

Let’s look at these comparative references just a little closer, to see “how out of sync Fuller's study is” shall we?

The Cogan, Et Al. Paper

The first reference we’ll look at is Cogan, Et Al. The title, “New Keynesian versus Old Keynesian Government Spending Multipliers”, gives us a fairly good indicator the paper itself presents.
From the abstract of the paper, we see that the thrust of the analysis is not only just about “New vs. Old” Keynesian modeling, but also about how those models apply to estimating the effects of one of the recent, large, so-called “Economic Stimulus” packages (You know – the ‘stimulus’ packages…that weren’t):

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large and with private sector employment impacts likely to be even smaller.

If that isn’t bad enough, the ONLY place the .65 ‘multiplier’ figure of merit proffered by CATO and repeated by POGO has nothing to do with defense spending:

 In any case, by assuming that the impact on consumption of the extra 1 percent discretionary increase in the deficit is .3 percent of GDP and using the above mentioned multiplier of .63 the impact will be to increase GDP by an additional .19 percent. If we add this to the .46 percent GDP increase from purchases, the total impact will be to increase GDP by.65 percent in the fourth quarter of 2010 compared to what it would otherwise be (P.17).

In fact, the words ‘defense’, military, or even ‘durable goods’ appear nowhere in the paper. It is a Keynesian modeling love-fest that lumps all government spending in one bucket from what I can tell. Interestingly, the focus is on the impact of adding new generic government spending with all sorts of multiplying effects versus estimating the negative impact (shock and long term) of suddenly withdrawing funds which would impact innumerable and ongoing economic activities. This point is even acknowledged in the text of the CATO paper (p.6):

”Cogan et al. estimate an effect of only about 0.65 in the quarter with the highest impact of a large government “stimulus” policy, which obviously differs from a change in defense spending alone”. 

How typical of POGO to NOT mention that little quirk behind the entry in the nice shiny ‘table’ they hold up as an example. 

BTW: If you like the back and forth of Keynesian economic model arguments (I don’t) you can always pull this thread and see where it takes you.

 
The Mountford and Uhlig Paper 

In  the Mountford and Uhlig reference CATO is again forthcoming in the text about what the .65 multiplier means (p.6):

“Mountford and Uhlig, employing a different type of economic model, arrive at a very similar finding of 0.65 in the first quarter of a spending shock financed with debt.”

 More specifically, the Mountford and Uhlig source document reveals the .65 figure in a table, and in the note below that table we find:

 “This table shows the present value multipliers for a deficit financed tax cut policy scenario and for a deficit spending fiscal policy scenario.” 

The entire thrust of the Mountford and Uhlig study is to characterize the effects of deficit spending overall – NOT what is the economic impact of defense spending. At least the Mountford and Uhlig study indicates that ‘Defense’ spending was accounted for in the overall lump of government spending (p.26), but we have no way of knowing whether or not the multiplier of defense spending alone is above or below the ‘.65 average’ modeled for ALL spending.

The Barro and Redlick Paper

At least this academic exercise in economics attempts to deal with the defense outlays, but by its own internal observations acknowledges several problematic aspects that call into question any direct comparison with the Fuller study. The two largest IMHO:
 
1. The authors state from their review it is their opinion that “It seems unlikely that there is enough information in the variations in defense outlays after 1954 to get an accurate reading on the defense-spending multiplier” (pg 4). Unless the CATO authors assert that there is no material differences between the economy of today and the US economy prior to the Korean War, which would be wrong, (see my post on the 50th anniversary of Eisenhower’s now-mythic Military-Industrial Complex speech ) this would seem to automatically preclude relying on this study to evaluate the Fuller report, even if it agreed with the Fuller defense multiplier.

2. The author’s abstract contains the assertion: “For U.S. annual data that include WWII, the estimated multiplier for defense spending is 0.6-0.7 at the median unemployment rate. There is some evidence that this multiplier rises with the extent of economic slack and reaches 1.0 when the unemployment rate is around 12%.” Since the paper’s median unemployment rate is 5.57% (pg.18), and we are in fact experiencing much higher unemployment rates at the moment (as high as 14.9% if you counted unemployment like we did back in the years this study analyzed)  , the question becomes would the authors’ assertions that the defense multiplier would cap at ‘1’ hold in today’s economy?

Answer: We don’t know from the data presented.

The Ramey(2008)and Ramey(2011)Papers

All we (the Public) have to go on concerning Ramey’s 2008 paper is the abstract which claims:

The implied government spending multipliers range from 0.6 to 1.1. 

…and the CATO Analysis observation within the text which claims Ramey(2008) “finds a defense multiplier effect of 0.6 to 0.8 for the period after World War II”.
That last bit is interesting. I wonder how that statement is reconciled with Barro and Redlick’s observation above—the point that being able to determine the multiplier after 1954 was ‘unlikely’?

By now, the reader should have gotten the idea that with models and the right ground rules, these studies will find whatever the authors want them to find. 

The CATO analysis claims Ramey(2011) “finds a GDP multiplier from all government spending of about 0.5”. Well, we’ve already covered the point that ‘all government’ spending does not equal ‘defense spending’, so what is CATO’s point other than attempting to ‘pile on’?
 
In reviewing the papers we’ve covered to this point, I’ve even found reference to dominating influences of state and local government spending in the ‘all government’ spending equation after the middle of the last century (No, I’m not going to reread them all again to find it for a link). That aspect muddies the waters even more.

The Parlow (Ahem) Paper

When I first read this paper my first thought was: WTFO? But the author apparently isn’t a functional illiterate, but instead a German studying for his Econ PhD in the US. Apparently no one proofreads his work. Once you get past the poor grammar, you find little more than a ‘this is how I used the models and made them work using fake expenditures and wars’ discussion.
The author claims that his analysis, using quarterly data vs. annual data, is a ‘better’ approach than the norm. Apparently the author is unfamiliar with how long it takes to invoke a change in defense acquisition or see the impacts thereof.
The author, as noted in the CATO/POGO table, claims ZERO economic effect from defense spending. There is no account provided for how the author actually handled the “all other things held constant” economic variables. But if I knew more about this paper, I would probably encourage the reader to also take a look: for it reeks of classic GIGO. As it stands, I wouldn’t recommend it to anyone, and it makes me wonder if CATO was THAT desperate to come up with a longer table for their pagination and printing purposes rather than content.
With the claim of ZERO impact from defense spending (the only one in the list), what makes this Parlow paper NOT the outlier compared to all others in CATO’s eyes?

Finally, The Hall Paper

This is another one that the web provides only the abstract on this side of firewalls [bold emphasis mine]:

During World War II and the Korean War, real GDP grew by about half the amount of the increase in government purchases. With allowance for other factors holding back GDP growth during those wars, the multiplier linking government purchases to GDP may be in the range of 0.7 to 1.0, a range generally supported by research based on vector autoregressions that control for other determinants, but higher values are not ruled out. New Keynesian macro models have multipliers in that range as well. On the other hand, neoclassical models have a much lower multiplier, because they predict that consumption falls when purchases rise. The key features of a model that delivers a higher multiplier are (1) the decline in the markup ratio of price over cost that occurs in those models when output rises, and (2) the elastic response of employment to an increase in demand. These features alone deliver a fairly high multiplier and they are complementary to another feature associated with Keynes, the linkage of consumption to current income. Multipliers are higher—perhaps around 1 .7—when the nominal interest rate is at its lower bound of zero, as it was during 2009. 

In fairness, the CATO analysis mentions Hall’s reference to the multiplier moving to the higher end of the range as interest rates approach zero included (pgs 6-7). POGO’s Dershowitz conveniently omits that fact in her little hit-piece. If one would care to review the current rate at which the Government can borrow, one would find it much closer to zero than I think any other time I’ve seen in my adulthood (.25%--a quarter of one percent at this time). Which brings us to observe, that even without necking down the dollars in Hall’s paper to just Defense spending, the Hall paper’s findings are not very far apart from the Fuller report’s multiplier.

By CATO’s own reference to Hall, they prove that while Fuller may be on one side of a range of modeled results, the Fuller Report is NOT an ‘outlier’ by any means.

Summary

The assortment of studies that the CATO authors rounded up and how they applied them reeks every bit of the sort of advocacy research that they attempt to claim is a fault of the Fuller report. For about the last decade and a half (or so), when I read this sort of advocacy masquerading as analysis I mentally file it under a category named for the first half of the title of a favorite paper: A Precisely Guided Analytical Bomb.
 

Introducing Suzie Dershowitz Part 3

Still ‘Provoking Accountability’….Of the ‘Unaccountable’

POGO's Suzie Dershowittz, Source: POGO

Back to Part 2

Major Ploy Du Jour #2: “This Proves/Refutes Our POV/Their POV” (In this case both). Only.... it doesn't. Hint: You could lay all the economists in the world end to end and you still wouldn't be able to reach a conclusion.

Ms. Dershowitz’s cogitative effluence attempts to use the CATO ‘study’ as evidence (may I say ‘proof’?) that one particular defense industry economic impact study, which we shall refer to as the “Fuller study”, and one that points to destructive effects from an imminent and abrupt downturn in defense acquisition spending, is not to be trusted and is also out of the ‘mainstream’ of economic thought. Now, I have many problems with using the CATO ‘study’ in this manner (as I would for any study used in the same way). BUT… for this exercise we will focus on problematic areas of the CATO analysis (because as much as POGO might like to think it is a study-- it is not a study, but is merely an analysis that is critical of the Fuller study) where Ms. Dershowitz unwisely attempts to use in support of her assertion that ‘left, right, and center’ agree with POGO: that there will not be the kind of damage that the industry-sponsored study warns us will happen.

The key points that POGO is relying on and promoting in the Dershowitz piece are twofold:

1. Dershowitz/POGO relies on the CATO claims that the Fuller study overstates the adverse impact of lost defense acquisition programs because it does not take into account the impact of applying freed resources in the economy elsewhere.
2. Dershowitz/POGO relies on CATO claims (and claimed ‘evidence’) that the Fuller study overstates the net economic ‘multiplier’ of defense acquisition spending.

Fatally-Flawed POGO/CATO Point #1

The CATO claim of Fuller overstating the adverse impact of defense cuts by not taking into account the redirection of resources for other purposes is relayed to us by POGO/Dershowitz as follows:

What's more, Zycher explains that redirecting resources (such as labor and capital) to more productive uses can yield long-term benefits for the economy as a whole:
The process of allowing market forces to redirect resource use increases aggregate output and wealth, thus making virtually all individuals better off over time on net. The movement of resources from less to more profitable sectors increases the aggregate productivity of the economy.

The first problem with this complaint is how it is framed. What Dershowitz fails to mention is that the CATO author’s problem with the Fuller study is a ‘problem’ he has with all such studies. In the notes of the CATO analysis we find (pg 15): 

I criticize the Fuller analysis here not because it is necessarily more flawed than most such analyses, but instead because it is quite typical of that body of literature, and is the most recent that I have found. 

What exactly is the CATO author referring to? The CATO author’s complaint is that the Fuller study ONLY deals with the jobs and economic activity lost in the defense sector and NOT what the impact is when resources get reallocated as a result. The implication from the POGO piece is that this is a deficiency. In fact, it is a design OBJECTIVE.

Fuller’s methodology was designed to estimate the direct adverse economic impact of a rapid contraction in defense acquisition activity on the defense industry, and this was clearly expressed on Page 4 in Fuller’s report “The U.S. Economic Impact of Approved and Projected DOD Spending Reductions on Equipment in 2013: Summary of Research Findings”. –No more, no less.

Academic Slap Fight

That the author of the CATO paper found sufficient ‘fault’ with Fuller’s limiting the scope of his study to prompt CATO to in effect, pick a prissy academic ‘slap fight’ over Fuller conducting the study such that it is more relevant to current events and the population at large, rather than making it more relevant to ivory tower academics, is more indicative of contrivance on CATO’s part to promote their agenda than any by Fuller and the Aerospace Industries Association who sponsored the Fuller study. I believe I can state this without fear of cogent disagreement or recrimination because it can be shown that there are clearly sufficient reasons to NOT include speculation on downstream effects as advocated by the author of the CATO paper. Before we get to those reasons, it will be helpful to spend a paragraph or two on what really drives 1) any economic impact study, 2) what data is analyzed and 3) how it is interpreted when conducting and reporting the study.

Models Drive Studies and Ground Rules and Assumptions Shape the Models.

It must be remembered that economic impact studies are to varying extents “model-driven”. On some of my projects, I work with an Operations Research colleague (big ‘Shout Out’ to Doctor Dave) who is fond of opening any conference or meeting where we will be presenting study findings developed using model driven data on a cautionary note. Doctor Dave will begin by paraphrasing a quote attributed to statistician George Box. “Remember, ALL models are ‘wrong’, but some are useful.”.

For best illustrative purpose on our topic, I think one of Box’s more complete expressions of the point is even better:"Remember that all models are wrong; the practical question is how wrong do they have to be to not be useful." Given this ground truth, by extension we can safely observe:

Remember: All model-driven studies are wrong; the practical question is -- how wrong do the models have to be for the study to not be useful?

A study that would resemble what the CATO analysis advocates cannot be compared to the Fuller study. The CATO analysis advocates introducing additional assumptions and caveats and carries the analysis further than just determining the negative impact on the defense industry. Some examples:

…This shift of resources, including labor, across economic sectors is an example of what economists call “structural unemployment.” It is the result of changes in the underlying economic conditions of demand and supply that yield shifts in the relative price signals inducing resources to flow toward and away from various sectors. In other words, as demand and supply conditions change, the “structure” of the economy changes as well: some industries grow while others decline, either absolutely or in a relative sense. Structural unemployment is a fundamental feature of any dynamic economy driven by constant changes in individual preferences, individual choices, technological shifts, and a myriad other factors. Any owner of an input, including workers suffering from unemployment caused by a change in market conditions, is worse off, at least temporarily. But the process of allowing market forces to redirect resource use increases aggregate output and wealth, thus making virtually all individuals better off over time on net. The movement of resources from less to more profitable sectors increases the aggregate productivity of the economy...

…A change in the aggregate demand for defense services is more difficult to measure (or to perceive) than is the case for goods and services traded in the private sector—value in the public sector is a good deal murkier—and public decision makers may have weaker incentives to respond to such changes in demand conditions...

All true and interesting in an academic sense, but how much faith may one place in an academic exercise to confidently make major policy decisions? How well would such information benefit a decision maker with our current economic environment and problem? Both the Fuller and a CATOesque study would ‘inform’, but is a CATOesque study as ‘useful’ as the Fuller study, since a CATOesque study involves the modeling (how well done, i.e. realistic?) of a “dynamic economy driven by constant changes in individual preferences, individual choices, technological shifts, and a myriad other factors”? Would a CATOesque study effectively capture the inner workings and outcomes of a “process of allowing market forces to redirect resource use increases aggregate output and wealth” over the 10 year period affected by the looming sequestration debacle? How well would a CATOesque study quantify a relative value lost or gained, if “value in the public sector is a good deal murkier”? How long will it take for “virtually all individuals” to be “better off over time”, how bad will it be for them in the interim, and WHO exactly isn’t part of the ‘virtually all” in the picking of winners and losers?
Sidebar: I notice that the CATO analysis studiously refers to Defense Service costs and values instead of the Defense Acquisition costs that the Fuller study examines. What are the differences between the two definitions, if any? I suspect the CATO analysis is referring to services as well as acquisition of material defense products.

Coming Up: Part 4

I believe CATO understands the weakness of the argument that the Fuller study ‘doesn’t go far enough’ (and POGO doesn’t care: with POGO it is all about whether or not a vehicle can be used to peddle their noise). I believe CATO fully understands the notion of ‘usefulness’ and that it wasn’t enough to claim the sort of study they advocate would be more useful. At best it would be perhaps useful in a different way, and more likely it would be less than helpful through introduction of uncertainty via likely errors of assumption and deduction. This MAY be why CATO went to some lengths to employ (and POGO parroted) the additional complaint that the Fuller study somehow overstates the net economic ‘multiplier’ of defense acquisition spending in arriving at the results Fuller did find, and IMHO it used rather questionable methodology and tautology in attempting to ‘sell’ the idea that Fuller was out of the economics mainstream in employing the multiplier that he did.
By using CATO's own references, I will show how the Fuller multiplier is probably more appropriate than the Economic Aesthetes at CATO or the Progressive Proles at POGO would like us to believe. I will provide those arguments supporting my assertions on this point in the final part, Part 4, of “Introducing Suzie Dershowitz”.


Part 4

Introducing Suzie Dershowitz Part 2

Today we will be ‘Provoking Accountability’….Of the ‘Unaccountable’



Smiling Suzie Dershowitz, with an incredibly hybris-ridden slogan. Source: POGO
(and why does this reminded me of a Jonah Goldberg book?)

POGO Major Ploy Du Jour #1: False Non-Political/Partisanship claims. Hint: Libertarian is NOT Conservative.

A Continuation From Part 1

Ms. Dershowitz opened her 'piece' (see part 1) by offering a title and a couple of paragraphs intimating POGO's position on reducing defense spending has broad support:

A recent study by Benjamin Zycher from the libertarian think tank the CATO Institute reaffirms what we've been saying all along: Cutting Pentagon spending will not cause the economic nightmare or job loss catastrophe the defense industry wants us to fear.

In addition to CATO, other right-leaning analysts, advocates, and politicians have also been vocally challenging the narrative that defense spending must not be decreased. Grover Norquist, president of Americans for Tax Reform, recently pledged to fight any efforts to divert tax reform revenues toward an increase in Pentagon spending or avoiding across-the-board budget cuts, known as sequestration. Rep. Roscoe Bartlett (R-Md.), a senior Republican on the House Armed Services Committee, has called for a national dialogue on sequestration, recognizing that "the average American out there, by big percentages, wants to cut defense by twice the sequester amount."

Got that? The 'spectrum' of support includes:

1. ‘Big L’ Libertarian CATO which thinks of terms of Republic OR Empire, and that if you're not all at home, well then you must be an Empire. 
2. A Cult of Personality ‘small government’ activist of the extreme self-serving more than tax-cut ilk, AKA Grover Norquist, and
3. ONE Republican Congressional dinosaur who just happens to be in a fight to keep his seat: the sole Republican House Seat in a district that has been redrawn to his disadvantage since the last election.

Who in that group would today be likely to place a priority on defense spending compared to their other interests?

Answer: None of them.

 

 About ‘Big L’ CATO and Defense  

‘Big L’ CATO has a Pollyanna view of world affairs that lives under the delusion that the US can afford to downsize the military because THEY don’t see the ‘threat’ which, combined with a somewhat more ‘passive isolationist’ vision of the United States’ role in world affairs versus the current (and faded under Obama) role as the benevolent and last remaining Superpower. This is perfectly acceptable, if CATO would then make statements that were qualified with the caveat “In CATO’s opinion, view, vision, we believe X”. But they don’t qualify. They flatly assert we need to reduce our defense spending and our involvement in the world’s affairs, that there is no ‘threat’ that warrants defense spending levels, etc (see this video which could have been the germ for the POGO regurgitation) . In doing so they look right past the point that if the United States does not ensure its interests are taken care of around the globe, someone else will take care of them for us in the manner of their choosing. The focus on visible ‘threats’ conveniently prevents them having to recognize: 

• The positive economic effects of close defense relationships with our allies, 
• The deterrent effects to those who would seek to cause us indirect as well as direct harm, economic or otherwise, 
• The advantages of having ‘friends’ and forces in place for any emergency (most likely unforeseen) no matter where on the globe that emergency might appear. 

 

As I’ve always said: I would be a Libertarian, if they had a frickin’ clue when it comes to defense, but then if they did, they would be good Conservatives. Here’s a tip for CATO.

If POGO and PDA are on your side—you are on the wrong side.

As it is, your defense ‘work’ just gives aid and comfort to the enemy. Sad.

BTW: Notice between the CATO ‘study’ and the CATO video, there is a conflation of the topics of ‘defense reductions’ in general and ‘defense sequestration’ specifically? This serves to abstract the issue and make it more ‘feely’ than ‘factual’. We’ll work on that later.
 

Part 3
Part 4

Introducing POGO's Suzie Dershowitz

Know Your Reformers: Training Wheels Edition

The left-wing 'reform' group (they claim to be non-partisan, but their funding stream, especially as it relates to defense topics, tell a different story) Project on Government Oversight, aka POGO, has a budding young 'Public Policy Expert' named Suzie Dershowitz. Ms Dershowitz seems to have been given the opportunity to editorialize on defense spending in the relatively safe harbor of the Huffington Post with an 'article' titled: Right, Left and Middle Agree: Reshaping the Pentagon Budget Won't Hurt the Economy. Now, the Beta and Omega PuffHo's that haunt the joint should be considered 'training wheels' for young Suzie: You can float 'defense' turds all day long in that fever swamp with nary a complaint.
The reason I'm pointing Dershowitz's piece is twofold. First, I'm going to use it as another example to illustrate the sort of ploys POGO et al are far too comfortable in thinking they can pass off as 'thoughtful' on the unsuspecting public. Second, I'm using this as a sort of test to see if a typical POGO pattern emerges: POGO drops the turd, and the 'usual suspect' pseudo-news sites picks it up and passes it around (Eewww --the Imagery!).

The Major Ploys Du Jour

I'll just list them tonight, and expand on them later (Hey,it's late and I'm tired!) but I'm sure the reader can explain them once they're pointed out as well as I can.
1. False Non-Political/Partisanship claims. Hint: Libertarian is NOT Conservative.
2. This Proves/Refutes Our POV/Their POV (In this case both). Only.... it doesn't. Hint: You could lay all the economists in the world end to end and you still wouldn't be able to reach a conclusion.

The Pattern

Let's see who (if anyone) picks the POGO piece up and promotes it. (I'm running a risk here of tipping my hand, but I'm counting on the major site's tendency to focus on cranking out the pre-written memes instead of producing original journalism.

Part 2
Part 3
Part 4

F-35 PAUC and APUC

Sheesh. I shouldn't surf the web after midnight (or at least not comment)

What I MEANT to type last night while commenting on a very good F-35 "Costs" article:

Kudos.
You honestly expand on a difficulty where many have seen opportunity to sow confusion.
PAUC among other things includes RDT&E and all costs associated with production of the item such as hardware/software, systems engineering (SE), engineering changes and warranties plus the costs of procuring technical data, training, support equipment, and initial spares. But there is one aspect of PAUC that can make it VERY inappropriate for telling people what something WILL cost them: PAUC includes ‘sunk’ cost.
Most notably, in the F-35’s case, it includes the percentage of the RDT&E, Production, Engineering, and Technical Data costs that have already been incurred. Since the primary production line and RDT&E capabilities for the F-35 are already stood up, and all the suppliers' engineering and production capabilities are running in place waiting for the higher production demand, this has to represent a huge chunk of PAUC [though APUC is still correct and part of PAUC I meant to type the latter] that is already sunk cost.
Try explaining to the man in the street that the PAUC went up because of conscious decisions to defer higher rates of production and stretch development to ‘reduce risks’ and NOT because the Contractor is jacking up the price. People’s eyes will glaze over if you try and explain everything that goes into the PAUC or APUC: Many of the costs tacked on to the PAUC would make no sense to the average citizen because we don’t buy things like a government does. Example: The Man in the Street doesn’t add the cost of a new garage to the cost of his new 4x4 because it is too big to put in the garage he already has. He pays the money and then observes he has bought a new 4&4 AND a new garage.
While PAUC is considered ‘true' costs of the plane by ‘some’, it isn’t. It is just an aggregation of a lot of direct costs that are then booked against each plane by dividing by the number of units. Obviously it includes the costs of infrastructure, new technology, and new knowledge. Much of it will invariably be used to advantage elsewhere – it just gets BOOKED against the program of record.
On the other hand URF is something people will understand because it’s the dollar cost number to buy ‘just one’. Just like the store down the street.
If you must, use both numbers. But only PAUC requires extensive explanation to prevent misrepresentation. And once you have significant sunk costs, to be completely honest with the public, you should also provide the PAUC for producing NO more units, including cancellation costs. If the requirement demands a new program after a cancellation, add the estimated PAUC for that program as well. Let the public see the true cost tradeoffs involved.

POGO Wrongly Cries “Foul!”... While Sniping in a Ghillie Suit

Guerrilla Reformers Falsely Accuse Defense Industry of Guerrilla Tactics 

UPDATED AND BUMPED 9 July 2012 (UPDATE BELOW: Look for the RED) 

Last week, POGO’s Ben Freeman posted another fact-free and ideologically-driven screed, this time at the ‘Puffington Host’ (You know where I mean. I try not to ever link to that swamp) titled “The Guerrilla Warfare of Pentagon Contractors”. To give you the flavor of the misdirection he peddles within, here’s a clip that gives a pretty good summation [emphasis mine]:

Last week Politico reported that defense contractor's new plan is to "threaten to send out layoff notices -- hundreds of thousands of them, right before Election Day." This threat is intended to frighten incumbents into rolling back the impending Budget Control Act sequestration, which would reduce Pentagon spending by roughly ten percent per year for the next ten years.

Despite the doomsday rhetoric and contractor funded "studies" reporting grossly overinflated job losses they claim would result if the Pentagon's more than half a trillion dollar budget is cut, there is absolutely no reason these companies would need to have massive layoffs. This is nothing more than a political stunt.

One would think POGO should know a stunt when they see one, but they either fell short this time or are willfully prevaricating. Perhaps it is because they aren’t too familiar with parts of acquisition law concerning Government contracting and labor rules? I do suppose there’s no exposure to the workings of the current monopsony in POGO’s exclusive digs in the Ivory Tower end of Castle 'Non-Profit'?

Contrast POGO’s flippant dismissal with this excerpt from a recent Defense News article:

Panetta’s meetings come a week after the heads of Lockheed Martin, Northrop Grumman and Pratt & Whitney met with top Office of Management and Budget officials seeking greater clarity on the government’s plan for implementing nearly $500 billion in mandatory defense cuts over the next decade that are scheduled to start Jan. 2.

OMB told the executives it does not plan to issue sequestration implementation guidance until after the November elections, sources said. The meeting was requested by Aerospace Industries Association President Marion Blakey.

Although defense industry leaders have long said that planning for sequestration will be difficult given it is unclear what the specific impact of automatic cuts will be, they have become increasingly vocal that job losses would be unavoidable starting in January.

And they’ve stressed that federal guidelines require them to notify their workers of potential mass layoffs at least 60 days in advance — that would be on the eve on the election.

Source: AEI

Having been one of the many people in the industry long enough to have found themselves on the receiving end of one of those federal ‘60 day notices’ when just one Government program was cancelled or cut back, and having witnessed many others, POGO’s dismissive attitude speaks volumes as to their indifference and/or ignorance. Multiple programs being suddenly cut/cancelled/impacted for reasons other than cause can only cause chaos in the industry. Carrying out such pointless cuts every year over a period of years? Sounds like POGO/Leftard heaven and National Defense Hell. Ask anyone who’s been around Defense Aerospace ‘more than a minute’. They’ll tell you: POGO is full of Sh*t.
Freeman’s POGO puff piece is irritating, but it is more important to keep in mind what this whole sequestration gambit is really about: Democrats playing political games with National Defense.

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 Quick Sidebar: Hey! I see from their website that not only has Winslow Wheeler moved his shingle under the POGO rubric, he seems to have brought not only the Strauss Military Reform Project but also the Center for Defense Information with him (link)! I suppose this tells us something about how Reformers are dealing with a diminishing donor base. As I noted earlier: I love it when targets bunch up. On the downside, it seems “the radical trust fund baby cum 'photographer’[ HASN’T] got tired of paying his salary”.

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Well Lookee’ Here!  POGO’s got Their Own ‘Snake Eaters’ On Point  

So While POGO’s Freeman is claiming the Defense Industry is employing ‘Guerilla Tactics”, I’ve noticed a marked uptick in the foreign blog and online alternative newspapers containing references to POGO’s pet ‘expert’ commentators. POGO ‘special operators/fellow travelers’ seem to be most active in F-35 Partner nations where economic conditions are tightest and in countries that represent existing or emerging markets for F-35 Foreign Military Sales (FMS). What a surprise (Not!). The most recent one to catch my eye was an English-version of a Korean ‘alternative’ paper article by one delightfully named ‘Stuart Smallwood’ who also mirrored most of his piece at his own blog.
Smallwood’s entire post reads like a POGO press release, and it is quite obvious from his phrasing and the conclusions surrounding his commentary that Mr. Smallwood (a ‘grad student’ in "Asian Studies" out of Canada now mucking around in other people’s cultures, Eh?) that he hasn’t a freakin’ clue as to what he is writing about. In the comments thread of his ‘blog’ last night I posted a challenge:

Heh. If I demonstrate that your post is erroneous on at least one or more key points, will you promise to never again publicly opine on defense topics about which you are ill-informed and not equipped [to discuss*]? And if so, will you also give POGO back the spoon with which they have been feeding you this stuff?

*I have an oversensitive touchpad on my laptop (that I keep turning off and Microsoft keeps turning on whenever they push updates) that causes me no end of typo and edit problems. I didn’t catch two words had dropped until after I posted my comment.


When I went back today to see if my kind offer was accepted I find not only was it rejected, but it seems to have been deleted (shocker). Not much of a Snake Eater after all, eh?
In the last comment on the short Smallwood thread, a thread which had quickly devolved into fantastic familial allegations about ‘bullying allies’, you will see as of this posting a comment (from his Mom?/Sister?) proclaiming: “bullying is everywhere!”. Perhaps Ms. Smallwood, perhaps. But it appears to be not nearly so widespread as intellectual cowardice. It’s to be expected under the circumstances I suppose. I have found that among the professions, the thick thinness of the skin is inversely proportional to the intellectual rigor required of its practitioners. [/snark ]

**************************** 

Update/Correction: Seems Smallwood's Got Game (Good on Him)

My comment has 'reappeared' in the thread:

I take back half the things I've said already. If he chooses wisely...Well. we'll see about the rest later.
Which point will I select for debunking?  I'm leaning towards "the myth of stealth". Stay tuned.

(Special thanks to my reader who e-mailed me the "head's up" on this development)

************** END OF UPDATE**************  

On a More Serious Note

Catching POGO in their machinations could be simply left as a case of blaming others for what they are guilty of: akin to when a grifter gets caught in the 'act'. But in the war of words, POGOs moves are a cross between Rules For Radicals and at least one of the best military theorists.

“If your enemy is secure at all points, be prepared for him. If he is in superior strength, evade him. If your opponent is temperamental, seek to irritate him. Pretend to be weak, that he may grow arrogant. If he is taking his ease, give him no rest. If his forces are united, separate them. If sovereign and subject are in accord, put division between them. Attack him where he is unprepared, appear where you are not expected.” 

—Sun Tzu

Their biggest disadvantage is that they scurry like vermin when the light hits them. 

P.S. Anyone else about had it with Blogger's formatting quirks?

“There are certainly those who would call this an ambush patent”

UK MoD Attempting to Coop American Ingenuity That Brought GPS to The World? 
And the rest of the world might get to pay MORE for GPS equipment and use of the system because of it.

I'd call this worse than 'ambush patent' activity.  I call it bureaucratic rent-seeking parasitism at it's Euro-finest. I would also call it a form of 'Lawfare'.

GPS III Upgrade: To Include Paying the UK for the privilege of using our own systems?

One solution: charge any b*stards who charge us the equivalent for whatever part of the GPS system that up until this point has been 'free'. Make it retroactive. 

Democrats playing games with National Defense: Rowan Scarborough Crochets (or something)

Great. Rowan Scarborough at the Washington Times (of all papers) channels the Democrat’s cognitive dissonance without a twinge of irony. Does he even realize it?

Congress does not appear close to reaching a deal that would head off $1.2 trillion in automatic spending cuts, $600 billion of which would strike the Pentagon over the next 10 years, bringing total reductions to more than $1 trillion.  

For now, that prospect is the proverbial elephant in the room

 Hey Rowan, you Doofus! That’s a fake elephant you’re pointing at! The Democrats are holding the leash to the real one.  

Not the Real Elephant In the Room. Source

The BIG ELEPHANT in the room: Democrats are playing sick games (away from scrutiny) with the National Defense to achieve their tawdry and socialistic political ends.

Since Rowan fails to Grok the very piece he wrote, let’s translate it for him.

• Military ordered by the POTUS (D) via the SecDef (D) to not plan for sequestration to prevent ANY possibility, however faint, of a feasible plan to come forward. Not only that, the order prevents any chance of an ILLUSION of a feasible plan to come forward. Why?

• The SecDef(D) has “warned of a “hollow” force if the automatic cuts occur”, and has said there is no alternative long-range budget” . The Services also see “dire consequences of sequestration, which would require deeper troop cuts and missions left undone.” So everyone is agreed that sequestration is a ‘bad’ thing. Or is it if you are a (D)?

• The House of Representatives (Controlled by the Rs), the only entity that can actually authorize USG (and therefore DoD) spending is offering a budget that would ‘avoid’ sequestration.

• The SecDef (D) asserts “that he cannot accept the current Republican 2013 budget that avoids sequestration”. If, as he has asserted, sequestration will result in a “hollow force” if it occurs, then why CAN'T he “accept” the current 2013 House (controlled by R but still ‘House’) budget?

“I’m grateful to the House for recognizing the importance of stopping sequestration,” he said. “But by taking these funds from the poor, middle-class Americans, homeowners and other vulnerable parts of our American constituencies, the guaranteed results will be confrontation, gridlock and a greater likelihood of sequester....

The key is to work together. Each side can stake out its political position. I understand that. But the fact is that nothimg will happen without compromise from both sides"

We finally get to the real story:

Hoping Nobody Notices As Long as the Press Covers For Him? Source: Michael Ramirez/IBD

The difference between a SecDef and a SecDef(D).

The SecDef(D) is willing to obey his Master and knowingly GUT the National Defense under the pretense of caring about the “poor, middle-class Americans, homeowners and other vulnerable parts of our American constituencies” while (and since 2009) the rest of the entire Obama Democratic machine has been working at gutting the economic engine that supports us all.

I ALMOST can’t tell which is more disturbing.

On the one hand we have The ‘Homicidal Democrat Uber Alles Clown Posse’ itself. On the other we have the fact that what made it all possible was the Republican Suckers getting PWND on the 2011 budget.

Ehhh,who am I kidding. Being Evil is worse than Stupid, even if by a nose. I call it for the Clown Posse. (But I still REALLY want to get rid of the Suckers).

Attention potential commenters: I added the Useful Idiot tag for anyone who might want to chime in and defend the sequestration lunacy or the train wreck created by Obama and his ilk.

Vote Republican! It's like doubling your car mileage!

That should be a 2012 campaign slogan for the GOP. (Update Below)

I went down  to the Gulf coast and back yesterday for a memorial Mass and burial of my Aunt who was also my Godmother. That meant a lot of time on the road to think of many things related to the trip and life in general.

It also took two refills of the gas tank. On the second tank, it hit me that this trip would have been less than half the cost (~$50 instead of over $100) if President Obama's energy policies had never existed or if they are reversed. I don't care what his motives are, but the end result was the same.

From a consumer $ point of view, it's the same today as if my car was only getting 11-12 mpg in 2007.

From ThePeoplesCube

My line of thought was undoubtedly fed by conversations with relatives after the burial ceremony, three of whom have jobs with the oil and gas industry and another looking to get into the business.

P.S. In case someone is so inclined: Spare us the 'Peak Oil' BS.
Even so-called 'Ecologists' unreasonably fear the long term availability of oil.  Other energy sources will make sense when oil REALLY (vs. artificially) gets scarce. What scares 'Ecos' (smarter ones anyway) even more is the possibility that Western assumptions underlying oil production may not be correct.  Yet another science that is unsettled.

Update 5 May 12 for a commenter.

An Investor's Business Daily article briefly summing up the most cogent points here.

A nice graphic illustrating much of same from the Senate GOP:

If there is an unsupported assertion in these sources, prove it.

No 'Fox News' involved. I just ordered Jonah Goldberg's new book The Tyranny of Cliches . While  attempting to disparage information on the presumption that it comes from a certain source is Circumstantial Ad Hominem , the continued use of the logical fallacy should be considered rising to the 'Cliche' level. --I wonder if the 'Fox News' cliche made it into Goldberg's book?

Footnote:  I'm not against careful use of cliches. Truth told too often can become cliche as well as falsehoods. They serve as a convenient shorthand in discussions as long as those discussions do not involve an argument. But one discovers over time that while a 'true' cliche can be adequately supported by additional explanation and detail, a falsehood hiding in a cliche will be destroyed by same.  

Nature Fakers (Enviros)

They've been around longer than most people realize.
I was just telling someone this week why, as a lifelong Conservationist, I hate Nature-Faking  'Environmentalism'. In the future, I'll just refer them to the link.

Occupy Fort Worth A Total Bust So Far

Or: 'Dude! If you are bald or gray ditch the ponytail - you're creeping out the children!
First - I'm not going to dive into the cognitive dissonance required for people to blame 'Wall Street' over the housing bubble bust  or the crap economy the last couple of years,  yet do not Grok the link between the Crony Capitalists and the Socialist-Left Democratic Party--Whom they SHOULD be blaming for most of our problems (with a relatively minor role played by the Quislings of the irritatingly clueless Republican Establishment).  I'm going to write a blurb here about the people involved in this 'Occupy' farce. A farce which I believe that when all is said and done, will be shown to have been blown all out of proportion, and someday someone will admit as having had the express purpose of furthering the Leftist subversion of America.

About 'Occupy Fort Worth'

So few people have showed up for this 'epic fail', the local newspaper was able to put a story up with pictures identifying by name what looked like a significant number of people (who weren't minors) who showed up. Article with photos here.

The cross-section was cliche. They had freshly-minted college grad 'filmmakers', angst-ridden musicians, full-bore vegans, retired 'teachers', and my favorite: Geriatric Hippies. I believe I've made it quite clear what I'm most looking forward to on the Hippie Question.

Geriatric Hippie 'Jack Smith' (If that is his real name)

(Crop of Star-Telegram/Rodger Mallison Photo. Find Original Here)

Outside enclaves of idiocy in Dallas, Houston, and most of Austin, Texas has an acute shortage of the type of people who have either the time or inclination to gather and bi*** about how unfair life is. This is true mainly because MOST people understand life IS unfair. From what I can tell of this so called 'movement' to date, it is largely populated by people who made life choices that didn't turn out as well as they thought they should have. Tough. There are some involved who ARE victims of fate, I'm sure - and creating a narrative to explain away misfortune is a human tendency and therefore understandable. Just don't expect the rest of us to buy into whatever story you built around your misfortune to cope with it. I'm more interested in being supportive of friends who are in dire straits and are working through the situation without giving up. My sympathy extends as far as your willingness to help yourself. Can't find a job where you live and there are jobs elsewhere? MOVE. Don't have the skills needed? Get them. I know people that are doing both and they're not wasting time at the park looking for handouts.