Facing the Hard Truth of the Future We Made

HSBC's chief economist Stephen D. King over at NYT lays out very well what we have been discussing here on a regular basis over the years; the Western Welfare State is an illusion, and by pretending that you can keep the dream going longer by mortgaging in the name in the unborn - you only make the eventual reckoning worse;

AS bad as things in Washington are ... they are going to get much worse, for the United States and other advanced economies, in the years ahead.
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the numbers no longer add up. Even before the Great Recession, rich countries were seeing their tax revenues weaken, social expenditures rise, government debts accumulate and creditors fret thanks to lower economic growth rates.

We are reaching end times for Western affluence. Between 2000 and 2007, ahead of the Great Recession, the United States economy grew at a meager average of about 2.4 percent a year — a full percentage point below the 3.4 percent average of the 1980s and 1990s. From 2007 to 2012, annual growth amounted to just 0.8 percent. In Europe, as is well known, the situation is even worse. Both sides of the North Atlantic have already succumbed to a Japan-style “lost decade.”
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Adam Smith discerned this back in 1776 in his “Wealth of Nations”: “It is in the progressive state, while the society is advancing to the further acquisition, rather than when it has acquired its full complement of riches, that the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable. It is hard in the stationary, and miserable in the declining state.”

The decades before the French Revolution saw an extraordinary increase in living standards (alongside a huge increase in government debt). But in the late 1780s, bad weather led to failed harvests and much higher food prices. Rising expectations could no longer be met. We all know what happened next.

When the money runs out, a rising state, which Smith described as “cheerful,” gives way to a declining, “melancholy” one: promises can no longer be met, mistrust spreads and markets malfunction. Today, that’s particularly true for societies where income inequality is high and where the current generation has, in effect, borrowed from future ones.
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Not knowing who, ultimately, will lose as a consequence of our past excesses helps explain America’s current strife. This is not an argument for immediate and painful austerity, which isn’t working in Europe. It is, instead, a plea for economic honesty, to recognize that promises made during good times can no longer be easily kept.

That means a higher retirement age, more immigration to increase the working-age population, less borrowing from abroad, less reliance on monetary policy that creates unsustainable financial bubbles, a new social compact that doesn’t cannibalize the young to feed the boomers, a tougher stance toward banks, a further opening of world trade and, over the medium term, a commitment to sustained deficit reduction.

In his “Future of an Illusion,” Sigmund Freud argued that the faithful clung to God’s existence in the absence of evidence because the alternative — an empty void — was so much worse. Modern beliefs about economic prospects are not so different. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear. But as the current fiscal crisis demonstrates, facing the pain will not be easy. And the waking up from our collective illusions has barely begun.

Read the whole thing, especially how he outlines the "5-Factors."

The first second order effect of this decoupling for the military - something whose preface is already starting - will be that perfect storm we call the "Terrible 20s." So much will have to be recapitalized at the same point that all the economic chips are going to be called - then end result will be a quickening in the decline of the real military capabilities of the USA not seen since the 1920s. We will be OK and will still have significantly more capabilities than anyone else - if we plan to adjust accordingly. On a percentage basis, we are heading towards 2-2.5% GDP on the military in the next few years and should be ready to be close to 1.5% to 2% by the end of the 2020s. That is what we should be planning for.

In 2012 we spent 4.4%; UK 2.5%. Don't close your eyes, lean in and focus more clearly.

A Compromise to Save USS Olympia

After years of sad, passive-aggressive disrespect to our Navy history - before mother nature takes her vengeance - there is a chance to save the old girl. This would require Philly to get motivated though.

There is one last-gasp effort underway by Philadelphia-area people to save the Olympia for future generations. They have developed a promising plan for the restoration and re-berthing of Olympia that would allow the ship to remain here.

The solution is to permanently dry-dock Olympia in Dry Dock No. 1 at the Philadelphia Navy Yard.

This approach would save millions of dollars in structural repairs, which would not be required since the ship would not be afloat. Furthermore, the funding required for periodic dry-docking (recommended every 15 to 20 years for museum ships) would be unnecessary. Permanent dry-docking also would ensure no further deterioration of the now razor-thin "wind and water" area of the hull plating.

Dry Dock No. 1 at the Navy Yard sits idle and is too small to be viable commercially. It is the perfect size for Olympia. The dry dock is itself a historic structure. It is a graving dock designed by and constructed under the supervision of Adm. Robert E. Peary, a famous explorer of the North Pole. It was commissioned in 1891, a year before the launching of Olympia.

The Olympia would be displayed in the dry dock at street level, with a shallow pool of water surrounding her to make her appear to be afloat. In addition to touring the decks and interior of the ship, visitors would be able to go down into the dry dock to see the underwater portion of the hull, as well as the interior of the dry dock itself. At night the ship would be bathed in light, a spectacular sight for airline passengers as they land at Philadelphia International Airport.

She really belongs at the Washington Navy Yard - but we don't live in my world.

I wish the people of Philly good funding and faster decisions.

A great retirement plan ....

I think having ensured shore power, good batteries, and/or backup bilge pumps wasn't part of it.

...a 72-foot tug that sank at its pier on Lake Union Monday morning.

The Coast Guard got word from the vessel's caretaker at 7:30 a.m. that the "Iver" had sunk and that there was a fuel sheen in the water.
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The Iver is no longer used as a commercial tug and has been converted for private use.

Live aboard? Better call ServePro.

Shipmates to the Ivy League?

Ummm ... errrr ... let's see. This usually starts about 3-months in to deployment.

If school started in mid-AUG then ... Shipmate is a bit early.

Students and officials at Yale University are trying to put a stop to a person or group that has been soiling people's laundry by putting human excrement in clothes dryers.

The assailant or assailants are being called the "poopetrator" and are being blamed for at least four incidents in the past month in the laundry room at Saybrook College.

I wonder if he/she has hit the shower stalls yet?

Your Enemy

So this is our #1 enemy?  Just bask in it for a bit.

Where to start? Battle Birkenstocks? Sigh. The Long War will be a challenge as it is a religions war (just a reminder, only one side has to consider it to be a religious war for it to be so) - but from a military POV, it isn't that hard of a nut to crack when you make the decision to crack it. Good intel, solid targeting, and useful ROE. Doable.

Not as straightforward as the below, but doable.



Don't get me wrong - I'm not dismissing them at all. They are very good at killing, raping, torturing, and terrorizing unarmed women and children ... but let's keep perspective; we used to train for nuclear war on a global scale. We need to remember that previous generations faced worse by worse.

Within living memory, we also had few qualms about accepting civilian casualties as part of war. We need to accept that today as well.

The predawn raid Saturday came unstuck when the US troops were faced with heavier-than-expected return fire, and pulled out to avoid civilian casualties, two security sources said. No Americans were injured.

Civilian deaths? Well ... take a number. 

Don't accept terrorists in your tribal area, and then it isn't a problem. Have them as neighbors, well, sorry - we have a job to do.

Chat'n with the CHINFO, on Midrats

From long-term issues like sequester, the strategic review, the QDR, to bolt-from-the-blue incidents like the murders at the Navy yard - how does the Navy communicate to the public and the press in an information starved culture?

When the race to being wrong first seems to be a standard, how do we maintain the standard of being a useful source of information, but in a timely manner? In some areas like the budget that wander in to the political arena - how do we stay inside the lines but still inform?

What is the right mix of method and substance to explain to an often perplexed world our Navy and those things that impact it?

Returning to Midrats, but this time for the full hour this Sunday from 5-6pm Eastern will be our guest, Rear Admiral John Kirby, USN, the Chief of Information.

Join us live if you can with the usual suspects in the chat room and offer up your questions for our guest, but if you miss the show you can always listen to the archive at blogtalkradio.

Listen to internet radio with Midrats on Blog Talk Radio

Fullbore Friday

How can a nondescript insurance guy from Maryland be the subject of a Fbf?

Did he serve in the military and do incredible things? No. Actually, he never served a day in his life.

Did he do something brave? Well, in a fashion - yes.

What he really did is use the power of the pen to do something that so many so-called leaders and recruiters never do - he inspired.

It has been years since I read Tom Clancy - but that is just because my taste in reading has changed and my reading time is too short. I have read quite a bit of his work, starting with an early 1984 edition of The Hunt for Red October . I don't know about you, but for 4/C MIDN Salamander, his book sparked an interest in my future profession like few other things.

Yes, it was fiction, but it made me want to know more. It made me go to the library - it made me wait for his next book too.

Earlier this week when I heard of his passing, it was interesting to see how many people I have come to know in this little corner of the maritime national security arena seemed to come from a very similar place that I did when it came to Clancy. I found that not just interesting, but in a strange way - comforting.

He also spawned a whole new area of fiction and morphed other established genres of adventure fiction.

One of the better gifts he gave the national security arena is in the non-fiction area of thought at the tactical, operational, and strategic levels. A lot of very smart folks who wanted to learn and engage in the marketplace of ideas in this area who just happened to never have worn the uniform could say to themselves, "Hey - if Clancy can learn all this stuff, so can I." Those minds have been a great addition to the conversation, providing a perspective those who are wearing or used to wear the uniform cannot have.

That is what is so fullbore about Tom Clancy. By inspiring people to learn more, read more, think more, engage more in the national security arena - he unquestionably made us a stronger and more vibrant nation. 

Last night I had to think a bit about where his books were in my library. Middle stack, bottom shelf behind the door - right next to William F. Buckley Jr. and Robert Harris. 

No, that order doesn't make sense - but that is where they were unpacked in 2009 when the once 4/C MIDN Salamander got ready to be CDR Salamander, USN (Ret.) 

Maybe I need to pull out that 1984 imprint and read it again. Maybe.

Anyway - 66 is a bit short and you've been in the shadows for a long time, but thanks and well done Mr. Clancy.