Category: FAIL

From the Department of About F%$#ing Time

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It looks like members of Congress are getting sick and tired of skyrocketing operational costs and fiscal obfuscation by the Department of Defense, and will be pushing back against any increase in acquisition.

Unfortunately, the excessive costs of the program has been baked into the program, with the DoD signing off a model that is clearly intended to maximize rent seeking by Lockheed-Martin: (Paid subscription required)

In response to new delays to the F-35 fighter program, senior House Democrats are threatening to limit aircraft production and end the practice of adding funding for aircraft the Pentagon never requested.

The laundry list of program problems includes cost overruns, a large engine backlog at the depots, funding cuts to an already temperamental predictive maintenance system and delays to essential upgrades.

“If this program continues to fail to significantly control and reduce actual projected sustainment costs, we may need to invest in other affordable programs and backfill an operational shortfall of potentially over 800 tactical fighters,” Rep. Donald Norcross (D-N.J.), House Armed Services Committee (HASC) tactical air and land forces subcommittee chairman, said during a hearing on the F-35 program.

………

Now that Democrats control the Senate, Garamendi and Norcross may turn the tide and prevent lawmakers from increasing the F-35 quantity in future budget requests. During the fiscal 2021 budget cycle, the HASC failed to convince the other defense committees not to add extra F-35s.

………

F-35 Program Executive Officer Lt. Gen. Eric Fick, agrees with Abba’s assessment. Delays in delivering required support equipment and technical data, along with the increased work scope for F135 power module repairs, are driving the depot shortfalls, he said.

The Government Accountability Office (GAO) acknowledges that the Pentagon is taking steps to increase depot repair capacity for the F135 power module, but the GAO says the number of capable aircraft will remain an issue in the near term.

………

Along with those delays, the cost of the engine is growing. The increase, likely 3% for the 15th production lot, is the result of Turkey being removed from the program after Turkish President Recep Tayyip Erdogan opted to purchase the Russian-manufactured S-400 anti-aircraft weapon system.

………

Meanwhile, the F-35’s logistics system is experiencing yet another round of upheaval. The Pentagon was in the process of transitioning its Autonomic Logistics Information System (ALIS) to a new cloud-based network, the Operational Data Integrated Network (ODIN), by 2022. But the Pentagon has directed a “strategic pause” for the move to ODIN because of a 42% funding cut in fiscal 2021.

………

Other delays plaguing the program include the slowdown of Technology Refresh 3 (TR-3) and Block 4 development. Lockheed Martin waived $60 million in fees because of the delays to TR-3, the hardware providing the F-35 additive processing power, memory and open-systems architecture. The company says the delays were caused by supplier challenges related to the spread of the novel coronavirus.

Lockheed knows that they have the DoD, and particularly the USAF by the short hairs, and the “Mistake-Jet” continues to eat the operational capabilities of the USAF. 

The tail, now controlled by the contractors, is devouring the teeth.

Nevada Governor Backs Off Really Bad Cyberpunk Idea

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If you’ve read any Cyberpunk, you are probably familiar with the idea of corporate controlled arcologies, which people are packed in like sardines and subject to the whims of psychopathic corporate drones.

Well the (hopefully soon to be former) governor of Nevada, Steve Sisolak, looked at this, and decided that allowing corporations to incorporate their own municipalities was just the balm that the state economy needed.

It was not well received, so the he’s downgraded to a study, which hopefully means that this idea is well and truly dead:

Nevada Governor Steve Sisolak is retreating from his plan to introduce legislation that would have allowed tech companies to form local governments within the state. Per The Nevada Independent, the governor now instead plans to create a bipartisan committee made up of state Senate and Assembly members to study the idea. At the end of 2021, the group will present recommendations to Sisolak, with one possible outcome being that they suggest he abandon the proposal.

“Innovation Zones is a bold proposal for our State that deserves additional attention and discussion — and not under the pressure of less than 40 remaining days in the current legislative session,” Governor Sisolak said in a statement. “I know that legislators, stakeholders and Nevadans still have questions, and I want those questions to be discussed and answered. I want people to be enthusiastic about this opportunity, not skeptical about a fast-tracked bill.”

Governor Sisolak first floated the idea during one of his State of the State addresses earlier in the year. He positioned Innovation Zones as a way for Nevada to attract tech businesses without the need for measures like corporate tax breaks. Draft legislation obtained by the Las Vegas Review-Journal laid out a system where companies in verticals like cryptocurrency, artificial intelligence and renewables would have had the option to form local governments with the same powers and responsibilities as counties. That means those companies would have had to do things like collect taxes and operate school systems.

Just when you thought that this idea could not get any worse, we find that the big push for this initiative came from a Blockchain firm.

Kill it with fire.

The Just in Time Economy

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Now the global chip shortage has moved from automobiles to consumer electronics.

The capitalist system cannot create robustness in markets, because the creation of safety margins are expensive, and inherently unprofitable.

Our hyper-efficient global economy has a glass jaw:

The deepening global chip crunch is spreading to makers of smartphones, televisions and home appliances, according to suppliers in Asia, as companies boost stockpiles of in-demand semiconductors.

Chip supplies have tightened due to booming demand for electronics during the Covid-19 pandemic and outages at large production facilities.

But the shortage has been worsened by hoarding by sanctions-hit Chinese groups, which has made it harder for some companies to secure components for everyday electronics such as washing machines and toasters.

………

LG, a big appliance maker, said the chip shortage had not yet disrupted its production but admitted it was a risk. “We are closely monitoring the situation as no manufacturer can be free of the problem if it gets prolonged,” the company said.

A small TV maker in Seoul said: “It is getting more difficult to secure key components unless you pay higher prices. We have to hike TV prices, reflecting the rising material costs.”

Production of low-margin processors that carry out simple tasks such as weighing clothes in a washing machine or crisping bread in a smart toaster has been affected.

“Microcontroller units are in tight supply, which could be impacting general appliances,” said Randy Abrams, head of Asian semiconductor research at Credit Suisse.

………

Foundries in South Korea said they were unable to satisfy surging orders even while operating at full capacity.

This is why we need governments, and government regulation.

Running a society completely on selfishness is insane.

Headline of the Day

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The Operating Costs of the F-35 Are High Because They Are Designed to Be

—Hush-Kit

Money quote from the interview:

The operating costs are high because they are designed to be so. From the very beginning of the program, the F-35 was set up to operate as a “total system performance responsibility” enterprise which meant that the services were intentionally surrendering a great deal of control over the maintenance and operations of the weapon they were buying to the contractors. This incentivised the contractors to design the aircraft in such a way that only their personnel could perform many of the maintenance actions on the aircraft. It is nearly always more expensive to use contractor personnel to perform work for the government, which certainly drives up the cost-per-flight-hour. It also means that the government has only one source bidding for these contracts, so there is little incentive to lower costs.

This, “Total system performance responsibility,” was not an accident.

The Pentagon procurement is deeply corrupt, with senior military officers choosing the most expensive, and hence most profitable ways to address their stated needs, because at the end of their career, after they retire, they secure comfortable sinecures at defense contractors and the like.

Our defense procurement system is corrupt, dysfunctional, and unaffordable.

Failure is VERY Profitable

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Following her 9 point drubbing by Susan Collins, Democrat Sara Gideon still has $11,000,000.00 left in her campaign accounts.

By way of context, the population of Maine is 1.35 million.

Collins raised about $30 million, and Gideon raised about $75 million.  (And the loser spent only about 85% of that, because there is only so much media in Maine)

This is addition to at least $70,000,000.00 in “independent” PAC spending.

This from a campaign that was literally sending out frantic funding requests emails the day before the election.

The reason that they spent so much money was that for every media buy, the consultants associates with the Democratic Party establishment (There is no Democratic Party establishment) got a percentage.

The same thing happened in Kentucky, where Mitch McConnell destroyed the hapless Amy McGrath by almost 20 points.

In both cases, the Democratic Party establishment (There is no Democratic Party establishment) chose to run a largely content free campaign and a largely content free candidate, and the only winners on the Den side were the consultants.

The same could be said from North Carolina, where 3rd party expenditures, and hence commissions, dwarfed spending be l by both campaigns.

All of these races were seen as winnable, and all of these races were not even close, despite the best efforts of the Democratic Party establishment (There is no Democratic Party establishment).

By comparison, Democrats won both (still hugely expensive) races in Georgia, largely on the get out the vote efforts of Stacy Abrams, which were a TINY fraction of total spending.  (I still don’t trust her though, because of her choices in literature)

For to many in the Democratic Party establishment (There is no Democratic Party establishment), the strategies never change, because they make money from these failed strategies.  Lots and lots of money, something like 20% on media buys, and 10% on fundraising.

My advice is the same as always tell the DCCC, DSCC, and the DNC to pound sand, never respond to online or phone solicitations for funds, and chose your candidates yourself.

Act Blue is good, but going through a candidate’s web site is better, and you can get links to their web sites through Act Blue.

Until the plague of consultants, who I liken to a plague of locusts, are ejected from the Democratic Party establishment (There is no Democratic Party establishment), it’s all you can do.

H/t Atrios

—
Posted via mobile. 

New Nevada Democratic Party Leadership Raises Money Looted by Old Guard

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You may recall that after reformers took over the Nevada Democratic Party, the entire staff quit, transferred much of their cash to the DSCC, took most of the remainder as severance, and quit. (The consultants quit too)

I called it an, “Own Goal,” because it ended up removing ears and eyes and potential saboteurs affiliated with the old guard from the organization.  (This is a lesson that can be learned from Jeremy Corbyn and the active monkey-wrenching committed by professional staff in Labour)

Now it appears that, the Nevada Democratic Party has raised a crap-load more money than was looted by the old guard:

Just over a month after the staff of Nevada’s Democratic Party quit rather than work alongside an incoming slate of candidates backed by the local chapter of Democratic Socialists of America, taking $450,000 and severance with them, the party’s new leadership has raised that money back with some to spare.

The Nevada Democrats have raised $530,000 from more than 16,500 contributions since the March 6 elections, when a progressive slate of five candidates — one incumbent and four newcomers — took over the party, beating the preferred picks of the local machine. The figure includes $100,000 raised on their own within a few weeks of the election and a boost in contributions with help from national progressive allies like Sen. Bernie Sanders, I-Vt., Rep. Alexandria Ocasio-Cortez, D-N.Y., and Rep. Cori Bush, D-Mo., who sent fundraising emails over the last several weeks on the party’s behalf.

………

When Judith Whitmer, founder and chair emeritus of Left Caucus, won the March 6 election for state party chair, her predecessors did not only almost empty the state party’s accounts, but they also funneled the money to the Democratic Senatorial Campaign Committee and notified Whitmer that all their consultants had terminated their contracts. The DSCC will use the money to support the 2022 reelection campaign of Sen. Catherine Cortez Masto, D-Nev. In the runup to March 6, Cortez Masto asked Whitmer to drop out of the race and approached her opponent, Clark County Commissioner Tick Segerblom, a Sanders ally who is more established in the state party, to run.

Don’t rehire the consultants.  Instead, focus your efforts about increasing registration and turnout for likely Democratic voters.

The consultants are parasites, the old guard is useless.

Yeah, This is Going to End Well

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You know, when I read the headline, “Wall Street Finds New Way To Finance Unprofitable Tech Firms, I have a feeling of impending doom.

I know that there are cartoons to explain the process, so it does not invoke Saroff’s Rule, “If a financial transaction is complex enough to require that a news organization use a cartoon to explain it, its purpose is to deceive,” but this sounds like it’s another crack-up waiting to happen.

They are called Asset Backed Secularizations, and every sentence seems of the article implies greater and greater leverage and greater uncertainty:

No earnings? No problem. Investors are funneling money to unprofitable software companies through a new type of debt deal.

Nonbank lenders like Golub Capital, AllianceBernstein Holdings LP and Owl Rock Capital Partners LP have issued asset-backed bonds to help finance about $2 billion of loans to such companies since November, according to data from Kroll Bond Rating Agency Inc. and S&P Global Market Intelligence. Many of the loans are to fast-growing, but still unprofitable, software enterprises.

………

The loans backing the complex bonds—known as asset-backed securitizations, or ABSs—can be small, like the $25 million Golub provided to software delivery specialist CloudBees Inc. Other deals run in the hundreds of millions of dollars, like the $300 million Owl Rock lent to back the leveraged buyout of software security company Checkmarx by private-equity firm Hellman & Friedman LLC. Golub has been making the loans since 2013 and has had no defaults, even during the pandemic-induced economic downturn last year, according to a credit-rating report.

………

Still, some fund managers say the new deals pile debt on debt, disregarding the risk of default in the relatively immature companies.

Demand for ABS backed by conventional corporate loans called collateralized loan obligations, or CLOs, surged late last year as markets recovered from the pandemic selloff. But, the new transactions are so unorthodox that large credit-rating firms Moody’s Investors Service and Standard & Poor’s Global Ratings don’t rate most of them, the people involved said.

Instead, the bulk of the deals have gotten ratings from Kroll Bond Rating Agency, one of three smaller firms competing with Moody’s and S&P for credit-ratings business.

………

A single investment bank, MUFG Securities Americas Inc., has arranged all of the deals for the lenders, selling them primarily to U.S. investors specializing in ABS, the people said. A spokeswoman for MUFG, a subsidiary of Japan’s largest bank, Mitsubishi UFJ Financial Group Inc. declined to comment.

………

The average credit quality of the loans is the equivalent of debt with a single-B or triple-C rating, two of the lowest rungs on the credit-rating ladder, according to research by Kroll. If the borrowers default, it is unclear how much lenders will recover. “It is a relatively new asset class with limited recovery data,” Kroll said in a report.

 Let’s see:

  • Obscure financial product.
  • Single ratings agency participating.
  • Single bank arranging the deals. 
  • Junk bonds (anything less than BB+ is a junk bond)

Bingo!

This is going to blow up.

Damn

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The union drive at Amazon in Bessemer, Alabama failed. It failed spectacularly: 

Earlier today the National Labor Relations Board announced the results of the vote on whether workers at the Amazon warehouse in Bessemer, Ala., would join a union. The vote was 738 in favor to 1,798 against. It’s bad news, but it doesn’t mean workers in future Amazon campaigns won’t or can’t win. They can. The results were not surprising, however, for reasons that have more to do with the approach used in the campaign itself than any other factor.

The stories of horrific working conditions at Amazon are well-known. Long before the campaign at Bessemer, anyone paying even scant attention would be aware that workers toil at such a grueling pace that they resort to urinating in bottles so as not to get disciplined for taking too much time to use the facilities, which the company calls “time off task.” Christian Smalls was fired a year ago for speaking publicly about people not getting personal protective equipment in his Amazon facility, in bright-blue state New York. Jennifer Bates, the Amazon employee from the Bessemer warehouse, delivered testimony to Congress that would make your stomach turn. Workers at Amazon desperately need to unionize, in Alabama, Germany—and any other place where the high-tech, futuristic employer with medieval attitudes about employees sets up a job site of any kind. With conditions so bad, what explains the defeat in Bessemer?

Three factors weigh heavily in any unionization election: the outrageously vicious behavior of employers—some of it illegal, most fully legal—including harassing and intimidating workers, and telling bold lies (which, outside of countries with openly repressive governments, is unique to the United States); the strategies and tactics used in the campaign by the organizers; and the broader social-political context in which the union election is being held.

First, it needs to be stated that the legal and regulatory environment regarding unionization in the US has been hostile the labor unions since the passing of Taft-Hartley, but the organizers knew that.

I will add that Mike Elk at Payday Report has a very good analysis of what the organizers did wrong:

Today, the union drive at Amazon in Alabama, which drew unprecedented political and media attention, was defeated by a 2-to-1 margin.

………

In our interviews with workers, we discovered most workers held similar views to Beringer. It wasn’t that they hated unions, who were heavily against them, but that they didn’t know much about unions and didn’t feel they could trust them.

In winning union elections, the election feels like more of a formality since the organizing committee has already been acting as a union, winning campaigns in the workplace to change things and standing up for co-workers facing unfair disciplining.

Then, when the union election comes, workers feel like they already know the union and are a part of it. In massive facilities with thousands of workers like Amazon, the process of building a strong organizing committee and building trust in the organizing committee through concerted action can sometimes take years.

RWDSU [Retail, Wholesale and Department Store Union] had only started its campaign last June when outrage over unsafe working conditions during COVID was raw. While they had an outpouring of initial momentum and interest, they never developed a strong organizing committee that took the time to build trust through shop-floor action and organizing against the boss.

Instead, they rushed a union election or did what is known in union organizing as “hot shopping,” where union organizers hope to take advantage of an outburst of anger in a facility over things such as poor COVID working conditions to force and win and a quick union election.

A “hot shopping” campaign is were the unionization effort is driven by an immediate issue, think shootings of clerks at a store and management refusing to add security cameras, rather than a long term organizing effort.

This was a case of long standing issues and the philosophy of management, and the effort needed to deeper and broader

However, their initial union enthusiasm support collapsed under the weight of a sophisticated anti-union campaign by Amazon that combined threats of job loss with promises of improvement if workers rejected the union. Many workers in interviews that voted against the union, admitted that they knew little about unions. This allowed the company through anti-union meetings to create fear over the change that unions could bring, warning workers that their wages may actually decrease under a contract or worse that their facility may close.

………

Without a strong organizing committee already engaging the boss in shop-floor action, workers had no ability to see the potential upside of the union because they never got to see the union in action on the shop floor before being asked to vote on joining it.

(emphasis mine)

There are a number of people, including Mike Elk, suggesting that there are the seeds of victory in this loss, but I don’t see that.

If it were, many Walmarts around the nation would already be unionized.

The only people heartened by this development are Jeff Bezos and his Evil Minions™.

Your Charter School Update

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We lead with the story of how Clark and Jeanette Parker of Beverly Hills used charter schools as a piggy bank, following a long history of dodgy accounting in the “charity” sector, moving to a new location whenever their self-dealing and underperformance became known by the local educational regulators.

………

The Parkers have cast themselves as selfless philanthropists, telling the California Board of Education that they have “devoted all of our lives to the education of other people’s children, committed many millions of our own dollars directly to that particular purpose, with no gain directly to us.”

But the couple have, in fact, made millions from their charter schools. Financial records show the Parkers’ schools have paid more than $800,000 annually to rent buildings the couple own. The charters have contracted out services to the Parkers’ nonprofits and companies and paid Clark Parker generous consulting fees, all with taxpayer money, a Times investigation found.

Presented with The Times’ findings, the Parkers did not respond to multiple requests for comment.

How the Parkers have stayed in business, surviving years of allegations of financial and academic wrongdoing, illustrates glaring flaws in the way California oversees its growing number of charter schools.

Many of the people responsible for regulating the couple’s schools, including school board members and state elected officials, had accepted thousands of dollars from the Parkers in campaign contributions.

Like other charter operators who have run into trouble, the Parkers were able to appeal to the state Board of Education when they faced the threat of being shut down; the panel is known for overturning local regulators’ decisions. A Times analysis of the state board’s decisions has found that, over the last five years, it has sided with charters over local school districts or county offices of education in about 70% of appeals.

California law also enables troubled charter operators to escape sanction or scrutiny by moving to school districts more willing to accept them. The Parkers have used this to their advantage, keeping one step ahead of the regulators.

“They’re like cats,” said Kawamoto, who began working at one of the couple’s charter schools in 2006. “They have so many lives.”

Charter schools are technically public schools operated by private entities.  Make the subject to the freedom of information acts that normal schools do.

That Which Can Be Destroyed By the Truth, Should Be

        —P.C. Hodgell

On the “Good News” side, we have a public education advocate turned public education advocacy lawyer Robert Skeels, who has been beating the Charter School establishment like a drum in court:

On Tuesday, March 23, 2021, I got my second big win in court against a charter school corporation. It was also a major victory over their California Charter Schools Association (“CCSA”) trade association, which tried to use the case to carve out immunity to the California Public Records Act (“CPRA”). I represented @DotKohlhaas in the action.

………

My first win against a corporate charter school was a year ago as third chair in a suit to overturn a wrongful expulsion of a student of color. The Partnerships to Uplift Communities (“PUC”) charter chain (of convicted felon Ref Rodriguez fame) had violated the student’s due process rights. Violated isn’t a strong enough word for what they did. PUC unilaterally changed the charges at the appeals hearing and then branded the child as a terrorist in his permanent record. Under the tutelage of the brilliant partners at the law firm I was a part-timer at the time (I am currently transitioning to full time there), plus sage advice from @DrPrestonGreen, we built a strong case.

It was my argument that the charter corporation never proved specific intent — a crucial element to Ed. Code § 48900.7, as well as PUC’s glaring lack of notice afforded to the student, that saw the court overturn the wrongful expulsion and give the student their life back.

This latest case was a charter trying to hide all its dirty secrets by not complying with the CPRA. The scandal-ridden The Accelerated Schools (“TAS”) charter chain’s leaders absconded when the community started pushing back and started asking questions about union busting.

………

I suppose I can’t blame them. The charter industry — long used to unaccountably spending tax dollars in total secrecy — fought tooth and nail the imposition of the CPRAand Brown Act added by Ed. Code § 47604.1(b)(2)(A). When the statute took effect January 2020, charter school corporations were already looking for ways to skirt the law. At the firm where I’m a junior associate, we use the CPRAfor pre-discovery work against charter corporations. Michael Kohlhaas dot org, on the other hand, has used the CPRAto expose some of the ugliest, scandalous conduct by an industry already infamous for scandal. Uncovering the vile Nick Melvoin’s sharing of Los Angeles Unified School District’s (“LAUSD”) confidential legal strategieswith their then party-opponent in a lawsuit(the CCSA) was a blockbuster revelation enabled by the CPRA.

When one looks at the corruption, self dealing, and opacity of the Charter School industry, it’s almost as if the entire process was designed to serve the dual goals of resegregating public education and allowing private operators to loot the public coffers. 

Oh wait, it was.

This:

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Matt Stoller Makes a very good point, “Keep McKinsey Away from Biden’s Infrastructure Push.”

They are corrupt, and will make a dogs breakfast of everything that they touch: 

If there’s one striking feature of the Biden administration so far, it’s the rejection of Barack Obama’s policy framework by his own party. It is now the consensus that Obama’s lack of ambition led to Trump’s election. For instance, party leader Senator Chuck Schumer recently called the Obama stimulus a “mistake” and “a small measly proposal” on CNN, as a way of selling Biden’s much larger proposals.

Biden’s goal, and that of the Democratic Party that controls both houses, is to break from recent politics, and be “more like Franklin Delano Roosevelt (FDR) and the Congress of 1933, and less like Barack Obama and the Congress of 2009.” Biden wants to spend a lot, to go big, instead of the go small vision of Obama.

………

It’s a bold vision. One important question is whether it’s actually possible to spend that amount of money on so many things without immense amounts of corruption or waste. The difference between FDR and Obama, after all, was not just spending amounts. Obama didn’t spend enough, but he did spend a lot. FDR, however, actually built things, whereas Obama’s stimulus money for, say, California’s high-speed rail, evaporated into a cloud of consultants. (A particularly mean joke was that FDR won WWII in less time than it took Obama to build Obamacare web sites that didn’t work.) 

This might be the best business meme of 2019 so far. pic.twitter.com/hTXul3Muy3

— ArtkoCapital (@ArtkoCapital) March 5, 2019

The McKinsey Way

There is an important difference between Joe Biden and Barack Obama, Biden went to the University of Delaware and then Syracuse for law, and Obama went to Columbia University and then Harvard Law School, both of which are Ivy League institutions.

Obama spent his formative years at colleges where McKinsey was actively recruiting, and his fellow students, and likely many of his friends, were eager at the chance to get their start there.

As such, Obama placed a lot of trust in those consultants, because they were his people, a part of the “Clan of the Ivys,” and we got less than stellar results when the consultants were called in on California rail, or Obamacare.

This is what normally happens when you bring in McKinsey:

Skipped an aside about mismanaging Puerto Rico.

………

So what has McKinsey been doing, if it hasn’t been running Puerto Rico? The answer is, McKinsey has been looking out for McKinsey. It has ensured that Puerto Rico will spend the mind-bogglingly large sum of $1.5 billion on professional services, meaning lawyers, bankers, and consultants (including McKinsey), which is five times what Detroit paid in services for its bankruptcy. I don’t know how much the firm will make, but according to the GSA schedule, just one recent college graduate working at McKinsey costs around $3 million a year. Beyond the straight fee extraction, the conflicts of interest are comical; McKinsey’s internal hedge fund actually owns Puerto Rican bonds.

Far from an anomaly, such a situation for McKinsey is common. McKinsey helped ruin the U.S. spying apparatus with a bloated, failed contract. They helped run Trump’s U.S. Immigration and Customs Enforcement; ICE even hired McKinsey to write its own contract. McKinsey structured France’s terrible coronavirus response, and that of New York state. McKinsey is so brazen that it was caught by the GSA Inspector General for cheating the government out of $65 million. It didn’t seem to matter. In 2019, McKinsey worked for more than 15 federal agencies and departments, and 25 states.

Unfortunately, the government has continued down this path for many decades, removing government capabilities, and even capability for government oversight, and turning it over the private sector. 

That was my experience working for over 2 years on a project run under a “Lead Systems Integrator” model that was so dysfunctional that future LSI contracts were banned by Congress.

………

Roosevelt’s first major infrastructure battle was over Muscle Shoals in Alabama, the great hydroelectric resource. The Morgan interests and the electric utility magnates wanted that resource privatized for their use. Roosevelt said no, and had the government directly build the Tennessee Valley Authority, a publicly owned and operated electric utility for much of Appalachia. TVA was part of a package of reforms to constrain and control Wall Street, to end what FDR called the ‘informal economic government of the United States.’

Over the rest of the New Deal, FDR transformed the physical plant of the country, and spent a lot of money on infrastructure. But Roosevelt first made sure Wall Street had little say over how public money or public resources were spent. Public institutions got bigger and more competent, and the financiers and monopolists lost power. One key result is that the government could do big things. During World War II, military procurement officers had immense capacity and power, imposing tight control over contractors, and ensuring that there were at least a dozen competitors for each major weapon system. They could peer into the books of contractors, and even claw back excessive profits.

America used this governing capacity for decades, constructing the national highway system, winning the space race, deploying the polio vaccine, landing on the moon and building the internet, and running the project Sematech in the 1980s to address foreign threats to semiconductors.

In the 1990s, however, Bill Clinton’s “Reinventing Government” initiative killed the public capacity Roosevelt had constructed. Clinton encouraged the big prime defense contractors to merge, shrinking them from over 100 to just 5 firms. Clinton’s procurement initiative, led by Steve Kelman, invented a whole new vocabulary for ways to let contractors steal. The details get complex, but the gist was a ‘light touch’ approach to negotiating by the government. Procurement officers stopped making hard-nosed demands for better prices, and were stripped of the ability to look at the books of the contractors to make sure there weren’t excess profits.

It actually started under Reagan, and then SecDef Dick Cheney massively expanded this at the Pentagon under GHW Bush, but Clinton took the idea, and ran with it in a way that no administration has before or since. (I will leave the determination of their motives as an exercise to my reader(s)).

We need to return core competencies to government, or will continue to be unable to efficiently do the business of government.

Remember When I Said that Contextual Ads Were More Effective?

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I pointed to the case of a Dutch broadcaster who got better results, and more revenue, when they stopped using ad tech that tracked and identified (stalked) people, and switched to ads based on the contents of the web page that they were viewing. 

Well, with Google shifting its own ad tech, some other companies are discovering that what they were sold by Google and Facebook was complete pants: 

Bacardi last October ran a test to tell whether its campaign promoting Bombay Sapphire in the U.K. could boost sales and brand favor—and in the process help answer a broader question about the long-term fate of its digital marketing as the way consumers are targeted for ads faces a shift.

The campaign took 10,000 anonymized identities of people who had visited the gin brand’s distillery or website, and sent them offers like promotional emails or Instagram ads promising drink recipes and early access to new products.

The result was a click-through rate, which indicates how often ad exposures lead to clicks, around 9% higher than previous campaigns that relied on common but now endangered targeting methods, such as using data from third-party sources. The new campaign also saw a 14% increase in cost efficiency as measured by a cost-per-click metric.

Bacardi says those and other encouraging signs give it confidence in its ability to build its brand and sell products even once it no longer has access to individual ad tracking and targeting technology that Google plans to move against next year.

My guess is that Bacardi’s marking department is calling Google and Facebook and the other “Stalker Advertisers”  pig felching* c%$# sucking con men who should be put up against the wall, because they realized that they have been scammed.

You want to sell booze?  Buy ads on booze web sites.

It’s that simple, and it’s cheaper, and far less opaque.

*If you do not know that that word means, Don’t Google It. Trust me.

Tweet of the Day

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The only thing I would add to this is how defensive officials I talk to get when I say plainly that America lost the Afghanistan war. It’s instinctive, tribal and revealing, a glitch in the matrix of American Exceptionalism. https://t.co/vmHcgeab2M

— Spencer Ackerman (@attackerman) April 2, 2021

Mixed emotions on this one, but just on the semantics.  I don’t think that we LOST the war in Afghanistan, I think that the Afghans BEAT us.

The phrasing of “Lost” implies that the agency was all on the part of the us, but the American public lacked the will to continue.  (It’s called the Green Lantern theory of geopolitics.)

This terminology allowed our military to learn nothing but how to lie to the American public in response to the Vietnam debacle.

In Afghanistan, much like in Vietnam, we were beaten, and once again, we will learn nothing from this.

Diplomatic Nostalgia

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To be honest, I have not heard the term, “Running Dog,” as used by elements of the Chinese foreign policy apparatus ever. I’ve merely heard about this, because its use pretty much ended when Nixon went to China, and I wasn’t even 10 years old then.

So I find it rather amusing that a Chinese diplomat has just used the sobriquet to describe Justin Trudeau.

I thought that the term had died when Mao Zedong did:

A Chinese diplomat has dismissed Canada’s prime minister Justin Trudeau as a “boy” in a social media attack marking a new low in the fractured relationship between the two countries.

China and Canada have clashed repeatedly in recent months, and last week the two countries imposed sanctions on each other in a growing row over Beijing’s treatment of its Uighur minority.

But on Sunday, Trudeau was singled out for insult by China’s consul general to Rio de Janeiro, Li Yang in a tweet blaming him for the diplomatic crisis.

“Boy, your greatest achievement is to have ruined the friendly relations between China and Canada, and have turned Canada into a running dog of the U.S,” he tweeted.

The demeaning term “running dog” , a relic of Maoist China, is often used to describe nations that are subservient to countries like the United States.

Honestly, I am stunned at the PR ineptitude of the elements of the Chinese state on this one.

Maybe they should hire some professionals who could do a better job, because even the Marketing Department of the Sirius Cybernetics Corporation would be an improvement.

The Front Fell Off

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The Front Fell Off?

It now appears that the Ever Given, the massive container ship which had completely blocked the Suez Canal, has been freed and traffic has resumed through the waterway.

There is still a major backlog of ships in both directions, but after a week, we should expect a return to normal shipping conditions.

The bigger issue is how this event has demonstrated the fragility of international shipping.

What’s more, it has increasingly been juxtaposed with economic fragility driven by the increasingly oligopolistic nature of shipping, which means that if one shipper fails, the entire system can seize up.

The classic Clarke and Dawe sketch, “The Front Fell Off,” (shown) is a perfect metaphor for this:

In this newsletter, I do a lot of explaining about complicated problems caused by big dumb corporate institutions. I don’t have to do that this time, because the story of the mess in the Suez is so simple. “After years of bitcoin and reddit short selling and credit default swaps and a million other things I don’t understand,” one random person put in a tweet that went viral, “it’s so refreshing to hear that global commerce is in peril because a big boat got stuck in a canal.”

That’s basically the story right there, it’s a big boat and it got stuck in a canal. The ship blocking the Suez, called the Ever Given, weights 220,000 tons, and is as long as the Empire State Building is high. Despite the hilarious nature of the problem, the disruption to world trade is large and serious, costing tens of billions of dollars. And if the ship can’t be dislodged soon, some consumers will once again experience shortages of basic staples like toilet paper.

That said, the reason this disruption to global commerce seems so dumb is because it is. It starts with the ship size itself. Over the last few decades, ships have gotten really really big, four times the size of what they were 25 years ago, what the FT calls “too big to sail.’ The argument behind making such massive boats was efficiency, since you can carry more at a lower cost. The downside of such mega-ships should have been obvious. Ships like this, which are in effect floating islands, are really hard to steer in tight spaces like ports and canals, and if they get stuck, they are difficult to unstick. In other words, the super smart wizard financiers who run global trade made ships that don’t fit in the canals they need to fit into.

The rise of mega-ships is paralleled by the consolidation of the shipping industry itself. In 2000, the ten biggest shipping companies had a 12% market share, by 2019 that share had increased to 82%. This understates the consolidation, because there are alliances among these shippers. The stuck ship is being run by the Taiwanese shipping conglomerate Evergreen, which bought Italian shipping firm Italia Marittima in 1998 and London-based Hatsu in 2002, and is itself part of the OCEAN alliance, which has more than a third of global shipping.

Making ships massive, and combining such massive ships into massive shipping monopolies, is a bad way to run global commerce. We’ve already seen significant problems from big shipping lines helping to transmit financial shocks into trade shocks, such as when Korean shipper Hanjin went under and stranded $14 billion of cargo on the ocean while in bankruptcy. It’s also much harder for small producers and retailers to get shipping space, because large shippers want to deal with large clients. And fewer ports can handle these mega-ships, so such ships induce geographical inequality. Increasingly, we’re not moving ships between cities, we’re moving cities to where the small number of giant shipping lines find it efficient to ship.

Dumb big ships owned by monopolies are the result of dumb big ideas, the physical manifestation of what Thomas Friedman was pushing in the 1990s and 2000s with books such as The Lexus and the Olive Tree and The World is Flat, the idea that “taking fat out of the system at every joint” was leading towards a more prosperous, peaceful and competitive world. Friedman’s was a finance-friendly perspective, a belief that making us all interdependent with a very thin margin of error would force global cooperation.

………

What is new isn’t the vulnerability of the Suez Canal as a chokepoint, it’s that we’ve intentionally created lots of other artificial chokepoints. And since our production systems have little fat, these systems are tightly coupled, meaning a shortage in one area cascades throughout the global economy, costing us time, money, and lives.

It’s a dumb way to organize a global supply chain system, just as it was dumb to build ships that are too big to fit into canals. And that’s why the “big boat stuck in canal” is such a great illustration of the problem, it shows our policymakers and corporate leaders couldn’t even think through what would happen if Really Big Thing Got Stuck In Important Canal.

………

The answer to addressing the problem of thinned out supply chains is to recognize that hyper-efficient globalization inherently carries the downside of unpredictable shortages, geopolitical tension, and supply disruptions. And then redesign our global trading order to make it less efficient and more resilient. There are three basic changes we’ll need.

Matt Stoller calls for a rigorous enforcement of anti-monopoly measures, a reimpositition of border friction like tariffs, and a restructuring of business so that they are less indebted and less vulnerable.

Unfortunately, this will not happen, because this system was created to benefit financial institutions and to drive wages down through labor arbitrage, so his reforms are actually a repudiation of the entire system.

I support his ideas, but I don’t think that they are politically realistic at this time.

 

バカにつける薬はない*

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In response to raucus partying and a refusal to engage in proper social distancing, Miami Beach has announced a curfew.

Who could have possibly known that a bunch of drunk college students on spring break would take of their masks and swap bodily fluids?

The answer to this question is, “Anyone with 2 brain cells to rub together.” 

One day after the spring break oasis of South Beach descended into chaos, with the police struggling to control overwhelming crowds and making scores of arrests, officials in Miami Beach decided on Sunday to extend an emergency curfew for up to three weeks.

The officials there went so far as to approve closing the famed Ocean Drive to all vehicular and pedestrian traffic from 8 p.m. to 6 a.m. — the hours of the curfew — for four nights a week through April 12. Residents, hotel guests and employees of local businesses are exempt from the closure.

The strip, frequented by celebrities and tourists alike, was the scene of a much-criticized skirmish on Saturday night between at-times unruly spring breakers who ignored social distancing and masking guidelines, and police officers who used pepper balls to disperse a large crowd just hours after the curfew had been introduced.

The restrictions were a stunning concession to the city’s inability to control unwieldy crowds of revelers that the city and the state of Florida aggressively courted amid the continuing coronavirus pandemic.

Florida, man.

*Pronounced in Japanese, “baka ni tsukeru kusuri wanai”, which means, “There is no medicine for stupidity.” Apologies for any inaccuracies in the text, I do not know Japanese.

This is Completely Insane

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Boris Johnson and his merry band of blood-thirsty prats have decided that nuclear weapons are an appropriate response to agents of foreign governments hacking systems in the UK.*

This is completely bat-sh%$ insane.

Britain is prepared to launch nuclear weapons if the country was faced with an exceptionally destructive attack using cyber or other “emerging technologies”, according to the integrated defence review.

The stark statement marks a change from existing UK policy, which had been that Trident missiles could only be launched against another nuclear power, or potentially in response to extreme chemical or biological threats.

The new policy says Britain would “reserve the right” to use nuclear weapons in the face of “weapons of mass destruction”, which includes “emerging technologies that could have a comparable impact” to chemical or biological weapons.

It sets the UK in a different direction to the US, where the newly elected president, Joe Biden, had floated the idea during his election campaign of making the “sole purpose” of nuclear weapons to deter or if necessary to retaliate against a nuclear attack.

No further detail was spelled out in the document, published on Tuesday, but analysts said the shift in language was significant. Tom Plant, a director at the Royal United Services Institute thinktank, said: “This is clearly an indication that the UK government perceives the potential for some combination of novel technologies, in years to come, to rival existing WMD.”

Just imagine what happens if someone starts downloading pr0n using Boris’ Netflix account.

Shall we play a game?

Love to.  How about Global Thermonuclear war?†

And then there is this.

Discussion about Britain’s new nuclear policy unveiled by Boris Johnson, reversing 30 years of modest disarmament since the end of the cold war, dominated the publication of a 100-page integrated review of defence and foreign policy.

It confirmed leaks from Monday night that the UK would allow the cap on its nuclear weapon stockpile to rise to 260 from a target of 180 “by the mid-2020s” – and that the UK would abandon a second pledge to hold a lower number of operational warheads, previously set at 120.

This is a violation of the Nuclear Non Proliferation Treaty (NNTP) which the UK is a party to.

Defence sources said the decision to lift the warhead cap by over 40% was motivated by a desire to be more assertive about nuclear weapons. “If we have them, let’s not apologise for it, let’s own it,” an insider added.

So this is just all dick swinging.  Lovely.

So now, Boris is the world’s problem.

*As Anna Russell would say, “I’m not making this up, you know.”
†Yes, I know. I am referring to two completely different movies. Get over it.

Yes, Lying about Self Driving Cars Is a Bad Thing, Elon

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The NTSB has called out Elon Musk and Tesla for serial lying about their self driving capabilityes, saying that this puts the driving public at risk.

This is not a surprise. 

Tesla’s culture comes from the height of the Dot Com bubble, with a, “We’ll fix it in Beta,” mentality, which is negligent at best, and potentially criminal when dealing with 4000 pound high speed death machines like automobiles:

The National Transportation Safety Board has filed comments blasting the National Highway Traffic Safety Administration for its permissive regulation of driver-assistance systems. The letter was dated February 1 but was only spotted by CNBC’s Lora Kolodny on Friday. The letter repeatedly calls out Tesla’s Autopilot for its lax safety practices and calls on NHTSA to establish minimum standards for the industry.

The dispute between federal agencies is the result of Congress dividing responsibility for transportation safety among multiple agencies. NHTSA is the main regulator for highway safety: every car and light truck must comply with rules established by NHTSA. NTSB is a separate agency that just does safety investigations. When there’s a high-profile highway crash, NTSB investigators travel to the scene to figure out what happened and how to prevent it from happening again. NTSB also does plane crashes and train wrecks, allowing it to apply lessons from one mode of transportation to others.

………

Under then-President Donald Trump, NHTSA largely let automakers do what they liked when it came to advanced driver-assistance systems (ADAS) and prototype driverless vehicles. NHTSA has generally waited until safety problems cropped up with ADAS systems and dealt with them after the fact. NTSB argues NHTSA should be more proactive, and it put Tesla and Autopilot at the center of its argument.

………

The NTSB also calls for NHTSA to require driver-monitoring systems to ensure drivers are paying attention to the road while driver-assistance systems are active.

“Because driver attention is an integral component of lower-level automation systems, a driver-monitoring system must be able to assess whether and to what degree the driver is performing the role of automation supervisor,” NTSB argued. “No minimum performance standards exist for the appropriate timing of alerts, the type of alert, or the use of redundant monitoring sensors to ensure driver engagement.”

………

Finally, NTSB argues that NHTSA should require automakers to limit use of driver-assistance systems to the types of roads they’re designed for. For example, some ADAS systems are designed to only work on limited-access freeways. Yet few cars actually enforce such limitations. Many systems can be activated on roads the systems weren’t designed for.

………

The NTSB mentions Tesla 16 times in the report—far more than any other automaker. This is partly because Tesla vehicles have figured so prominently in the NTSB’s work. NTSB says it has investigated six crashes involving driver-assistance or self-driving systems between May 2016 and March 2019. Four of those were fatal. One of these four was the 2018 death of Elaine Herzberg after she was hit by an Uber self-driving prototype. The other three were Tesla owners who relied too much on Autopilot, and it cost them their lives.

………

In its report on the crash, NTSB noted that, at the time of the crash, Autopilot software was only designed for use on controlled-access freeways—not rural highways where cars and trucks can enter the highway directly from driveways and side streets. NTSB pointed out that its report on the Brown crash “recommended that NHTSA develop a method to verify” that companies selling driver-assistance systems like Autopilot have safeguards to prevent customers from using the systems on roads they aren’t designed for. Such a system might have prevented Brown from activating Autopilot on the day of his death.

………

“The NTSB remains concerned about NHTSA’s continued failure to recognize the importance of ensuring that acceptable safeguards are in place so the vehicles do not operate outside of their operational design domains and beyond the capabilities of their system designs,” the agency wrote. “Because NHTSA has put in place no requirements, manufacturers can operate and test vehicles virtually anywhere, even if the location exceeds the AV control system’s limitations.”

NTSB then called out Tesla again, specifically criticizing the decision to release its “full self-driving beta” software to a few-dozen customers.

“Tesla recently released a beta version of its Level 2 Autopilot system, described as having full self-driving capability,” NTSB wrote. “By releasing the system, Tesla is testing on public roads a highly automated AV technology but with limited oversight and reporting requirements.”

This is negligent behavior, both on the part of Tesla and on the part of the NHTSA, and it has already gotten people killed.

I Picked the Right Time to Switch to Verizon®

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As I noted yesterday, my family and I changed my provider from Sprint® to Verizon®.

To be sure, the problem was not with Sprint® per se, it was because Verizon® gave us a better deal, particularly since we were already FIOS®, the land line fiber service, customers, particularly with regard to getting new phones for Sharon, Natalie, and Charlie.  (We’ll be saving about $50 a month including various discounts, and replacing Sharon’s* and the kid’s decrepit cell phones for free.)

That being said, I have had some misgivings about the T-Mobile®‘s takeover of Sprint® a few years back, and the increasing move to T-Mobile®-ize Sprint was concerning.

What I did not expect T-Mobile® to do though was to attempt to aggressively spy on its customers to collect ad dollars, but is what they did, as the folks at The Register noted, ” Privacy Purists Prickle at T-Mobile Us Plan to Proffer People’s Personal Web, App Pursuits to Ad Promoters.” (Seriously, El Reg’s headline writers should get a Pulitzer) 

T-Mobile is requiring users to opt out in order for them not to share data like, phone location, apps installed on the phones,  web browsing habits.

T-Mobile® is claiming that the data is “Anonymized”, but each phone user will have a unique identifier, and by aggregating as few as 5 data points, the likelihood of specifically identifying a user becomes well more than 90%. (The term is “Profiling” or “Stalking”)

What’s more, as the folks at Ars Technica note the opt-out process is (unsurprisingly) not working reliably, “We’ve heard from customers who say they’ve had problems opting out so you may have to try multiple links or make multiple attempts,” because ATAB (All Telcos Are Bastards).

It’s a rather depressing turn of events for a wireless company that markedly improved consumer treatment in the US market a few years ago.

*Love of my life, light of the cosmos, she who must be obeyed, my wife.