Morning Fog

Economic Restructuring

The need for restructuring a company, an industry, or even an entire economy often exists before people wake up to it.  It's easier, and cheaper, to muddle along and make incremental changes to try to deal with any problems that come up.  And that approach can be successful for a period of time, sometimes quite a long period.  Ultimately, however, if the company/industry/government leaders haven't had the foresight or courage to restructure in good times, a crisis will come along to force the issue.

That seems to be what's happened in a couple of cases before us now.  In the financial sector, risk-taking got out of hand and finally collapsed last year, to the point where I don't believe anyone doubts we need thoroughgoing change in many aspects of our banking and loan sectors. 

In the automotive industry, U.S. companies got stuck in a time warp, innovating piecemeal and grudgingly, while European or Japanese makers brought new more efficient features to market years, even decades, ahead of Detroit.  In this sector too, the economic crisis has finally provided the impetus to restructure.  Current efforts may bring that about, but will it be too late?

One of the reasons politicians rushed to "save" Chrysler and GM was ostensibly because it's important to preserve the American manufacturing base.  I've tended to share that thinking.  From my micro-perspective, if times are tough I might redo my deck myself, or put it off, rather than hiring it done; but if my refrigerator conks out, I can't put off replacing it, or just build my own. So it has always seemed to me that our economy should be better off, especially in times of a downturn, if we were domestically producing a physical "product" rather than just "services." 

Ah, but maybe not.  For years, economists haven't been particularly alarmed about the increasing share of U.S. GDP coming out of services.  Virginia Postrel's column "Macroegonomics" in the April 2009 issue of The Atlantic provides a clue that perhaps I shouldn't be either.  Postrel's main focus is on economic stability and the limits of economic policy, but in one paragraph she notes economic studies showing that durable goods are the most volatile segment of the economy, and services the most stable. 

This seems counterintuitive to me, and I'm still not certain I buy it 100%, but here's the macro picture that Postrel paints:  A small consumer cutback can mean a large cut in a manufacturer's sales.  She posits a company with a fleet of 100 trucks, a couple of which need replacing; if the company decides to replace just one rather than two, it's a small percent of its fleet, but the decision is a 50% cut in the order the manufacturer gets.  In fact, economists believe that the heavy proportion of services in our economy has actually cushioned the effects of the recession -- it could have been worse! 

Which brings us finally to the restructuring of our economy as a whole. If this theory is correct, we may want to reconsider whether "saving" auto manufacture in the U.S. is the correct thing to do.  Perhaps our focus should be on shifting even more toward services.  The crisis hasn't forced us to think in these broader terms yet, though some signs of it exist in Obama's efforts to create "green" jobs.  Nevertheless an article by James Fallows in the same issue of The Atlantic points out that China is using the current economic crisis to restructure its own economy toward higher-end production.  We know the Chinese are making cars; could their thrust in that direction pre-doom the efforts we're making now to fix our automotive industry?  The history in other areas of manufacturing isn't encouraging.

Incidentally, The Atlantic is an excellent magazine; I've been a subscriber for probably 40 years or more.  You can subscribe too, via the link in the right-hand margin.  

Who Opposes Speed Cameras?

The use of cameras to enforce speed limits and penalize running red lights is 30-year-old technology in Europe (which in itself speaks volumes about how the U.S. has fallen behind in technology).   But, it has only more recently come to the U.S., where for the past several years, it seems to have raised strong opposition from some quarters. 

Now it is Maryland's turn; the state has approved the use of cameras in some situations but a group deceptively calling itself Marylanders for Responsible Enforcement is trying to put the issue on a referendum, where they hope it can be stopped. 

I have some difficulty imagining who would oppose these cameras.  Leaving aside red-light-running, which is a particularly dangerous practice, let's look just at speeding.  Of course, we all know that we exceed speed limits regularly; but we also assume that if we're pulled over we'll get a ticket, and in our hearts we know - if we're not drunken fools or teenagers - that excessive speed kills, just as the billboards say. So who opposes better enforcement?  

The proposed law is not especially draconian.  It would allow cameras only in school zones and work zones, and drivers would be ticketed only if they were clocked at 12 mph or more above the limit.  That's 37 mph in an active school zone!  Is that unreasonable?

The MfRE website offers a list of reasons to oppose, but many are unconvincing or based on incomplete information.  For the most part, they boil down to vague concerns about "privacy," and the charge that the state isn't really interested in safety, but income.

The privacy argument is particularly ridiculous.  Should anyone expect privacy while driving up and down public streets?  If so, perhaps "privacy" also extends to other law-breaking.  Will we soon see a hit-and-run driver who was filmed by a nearby ATM security camera arguing that his privacy was violated, and getting off scot-free?  People who oppose cameras often say the alternative is to have more police on the streets to control speed.  Having cops on every corner observing you evidently does not violate your privacy the way an inanimate camera does.

Perhaps the MfRE has a point when they complain that 90% of ticket proceeds will go to the contractor who runs the camers - that seems excessive.  But really, I can't buy the income-versus-safety objection.  Fines for law-breaking are standard practice; if governments use the proceeds to help fund government services, and keep taxes lower for those who aren't lawbreakers, we should all be applauding that. 

All of which leads me to the inescapable conclusion that people opposing this are just drivers who are in the habit of speeding regularly without paying any penalty for it.   

Survey: Know Any Curious Slogans?

A few days ago on television I heard the story of Hardin, a small town in Montana with a big, brand-new prison that for various reasons hasn't been put into use.  Hardin's officials (unlike Montana's two U.S. Senators and many other Congresspeople) were actively campaigning to have the detainees from Guantánamo transferred to their high-security jail, figuring it would bring at least a few jobs to the town.  Now, that's the good old American spirit of enterprise!

This report also reminded me of my father's home town, Leavenworth, Kansas, which boasts three major prisons within the city or its environs: one federal, one state, and one military (at Ft. Leavenworth), plus several smaller ones such as a Federal Marshals Detention Center.  Although a century and a half ago Leavenworth was considered a good bet to become the region's "big city," upstart Kansas City, a little farther downstream, eventually outstripped it.  As far as I know, the prison facilities are the town's main economic activity nowadays. 

The town's official motto now is "The First City of Kansas" (meaning the oldest).  But a few years ago I happened to pass through there and picked up this visitor's guide with the slogan "How About Doin' Some Time in Leavenworth?"  Well, when life gives you lemons, you make lemonade, but still, this seemed to be a less-than-perfect catchphrase to attract visitors.  

I began to think about the possibilities for other counterintuitive mottos.  My own "town" (actually a county)  - Arlington, Virginia - is mainly famous outside our immediate area for Arlington National Cemetery, though we also have the Pentagon, Reagan National Airport, and lots of history.  Now, a national cemetery is more prestigious than your run-of-the-mill one, but still, you have to admit, having a cemetery as your town's main identity is a bit of a downer.  I tried to think of a motto...hmm... how about "Arlington - Not As Dead As You Think!"?  Maybe I'll try that one out on the county board...

I'd love to hear comments from any readers, if you've got an idea for a lemonade-type slogan for a town or maybe a company (will GM need a new slogan?).  Use your imagination for a town that doesn't have a motto, or let 'Morning Fog' know about a real one you've encountered. 

Supreme Court Kabuki - Role Of A Lifetime

Tired of Supreme Court commentary?  I understand.  Bear with me for one more and I'll shut up for a while.

Another curious part of the stylized dance everybody does around a Supreme Court nomination is the confirmation hearing.  Supposedly,  Senators delve into a nominee's past decisions, qualifications, and judicial philosophy but in recent decades the utility of these proceedings seems to have been subverted by politics and the media.  The nominee goes into a confirmation hearing knowing what to say and not say, like a thespian with a carefully prepared script.   Even if the Senate panel succeed in getting beyond the script, however, the hearings won't necessarily provide a good insight into what the nominee will do on the Court.    

After confirmation, it's amazing how often a Justice confounds expectations - either those of the President who nominated him, or those the Senate Judiciary Committee formed from his testimony.  Take, for example, Chief Justice John Roberts.  A lengthy piece by The New Yorker's legal columnist Jeffrey Toobin argues that Roberts has moved far from the assurances he gave the Senate during his confirmation and is now the Supreme Court's "stealth hard-liner."  If so, that's a plus for Bush, but let's give it more time and see what Roberts's record looks like 10 years from now.  Justice Souter did not prove to be the rock of conservatism he was predicted to be.  Likewise, Sotomayor's record even now is not uniformly "liberal" so it is anyone's guess how her opinions will develop over time. 

Justices sit for a lifetime.  Evolution is key.  A newly minted Justice, confronted with new, more awesome responsibility, will usually "grow into the job," just as we expect a state governor who becomes President to abandon childish things and work for the good of the country rather than advance the interests of his state.  Evolution begins at that point, proceeds through exposure to the arguments of the other Justices and the cases before the court, and continues its effect as the Justice (surprise!) gets older.  

The kabuki of the confirmation hearing is not the life-or-death matter partisans make it out to be.  Rightists, leftists of the world, relax!  You may be surprised. 

Cheney's Elephant Whistle

In an article last week, New Yorker legal affairs writer Jeffrey Toobin quotes Chief Justice John Roberts, who was questioning an attorney about the deterrent effect of a part of the Voting Rights Act, as making this comment:

“That’s like the old elephant whistle. You know, ‘I have this whistle to keep away the elephants.’ You know, well, that’s silly. ‘Well, there are no elephants, so it must work.’ ”

I can't resist applying this little tale about deterrence, handily supplied by the Chief Justice, to different subject matter, namely, Vice President Cheney's recent unprovable mantra that the Bush administration's anti-terrorism program, including dubious interrogation methods and the Guantánamo detentions, kept the country safe for the past eight years.  Evidently Cheney's elephant whistle worked.

Supreme Court Kabuki - Life Experience Counts

I don't intend to get deep into the specifics of Obama's nomination of Sonia Sotomayor for the Supreme Court, her professional standing, or the confirmation process that now begins.  The real issues there are complex and involve an assessment of her judicial qualifications and legal background that is beyond my ken (though broadly I'd say her background in the judicial system suggests she's fully qualified; if not, two past Presidents have screwed up badly). 

On the other hand, a large part of the Court nomination and confirmation process these days is pure political theater - as stylized as kabuki - in which each player (President, nominee, President's party, opposition party) takes a predictable role and says prescribed, predictable things.  I do think it's useful to try to separate the issues that really matter from some of the drivel that forms a part of the kabuki script. 

One such non-issue is the opinion, commonly heard these days, that a Justice must not apply his or her "life experience" to judicial decisions.  That, we are told, constitutes "legislating from the bench" or "judicial activism."  But this line of argument is nonsensical.  Legislating from the bench is exactly what our system asks our courts, particularly our Supreme Court, to do.  Legislators write laws, but since the early days of the Republic, we have left to the Court, through judicial review, the final say on whether a law is "Constitutional," or whether in specific cases some party's constitutional rights have been infringed.  That's the Court's role in check-and-balance. 

Granted, the Court shouldn't originate legislation on an issue, but once the Congress has done so - often in a poorly worded or unclear way - the job of any judge, from Chief Justice Roberts to Judge Judy, is to figure out how to apply it in cases of dispute.   Interpretation is needed to determine what the law means; to determine whether the facts of the case fall within the definition of the law; and to reach a conclusion about how law and facts mesh and overlap. 

We do expect Justices to try to be objective in this process, and to exercise restraint in their personal views (Roberts likened it to being an "umpire"); and certainly Sotomayor may be challenged on that score.  But if we're honest with ourselves, I don't think any of us would claim this interpreting function can be done in some ethereal vacuum where Justices' personal experiences won't inform their thinking.  It's not humanly possible.  (Even if it were, we don't need vacuum-heads on the Court.)  To argue otherwise is to suggest that if two, or even nine, different justices look at the same case, they would never disagree.  How often has that occurred?  In short, the whole business about "legislating from the bench" (a purposely deceptive term coined by certain political groups) is baseless and bogus; those who invoke it are uncomfortable only when the "legislation" is something they don't agree with.

Yesterday, when the Sotomayor nomination was announced, a few critics were already extending the concept of the "pure" law to suggest that diversity or representativeness on the Court weren't important.  But if those people can be honest with themselves for a moment about what we pay our judges for (interpretation), the scales should fall from their eyes and they will see that diversity is critical to the effective, fair working of our court system, particularly in the court of last resort.

Supreme Court Diversity: Getting Beyond The Basics

This morning before Pres. Obama's official nomination of Sonia Sotomayor to the Supreme Court, I was reading an excellent article, "More Than One Way To Diversify the Supreme Court."  It pointed out that the current available supply of U.S. Supreme Court Justices is an extremely homogeneous group on nearly any yardstick you might care to use. 

Diversity is especially important on the Supreme Court, where we have a panel of several justices, because judges from a variety of backgrounds will in all likelihood come up with a more representative and well-formed collective opinion on the questions before them.

Most attention in diversity discussions is focused on gender and ethnicity, yet as the article points out, the members of the court are still of a bland sameness in a variety of other areas, which may be equally important -- areas such as their judicial background, (they all came from appellate courts), life experience (none has ever been a legislator or elected official), legal education (except for Souter, all East Coast Ivy League), regional background (only two are not East-Coasters), and religion (five Catholic).  No one has yet mentioned sexual orientation as still another possible vector. 

It occurred to me that, had Pres. Obama wanted to spring a surprise, he might have looked to someone who met some of these other criteria.  For example, his early talk about looking for "empathy" might have meant that he would choose a state governor or other elected official.  That was not to be.  His predictable nomination of Sonia Sotomayor today does address those two most visible factors of diversity - gender and ethnicity -- though without any positive impact on any of the others.  To get beyond the basics of diversity, we'll need to wait until the next nomination.

California Dreamin'

Last week California voters resoundingly defeated five of six propositions on the ballot aimed at reducing the state's budget deficits.  Once again, the effects of the historic  Proposition 13 are being felt.   In 1978, when this taxpayer revolt was voted into law by the voters, the main effect was expected to be to decelerate the rise in property taxes.  But as last week's voting proves, the longer-lasting effect was Prop 13's requirement that any state tax rate increases would have to be approved by a two-thirds majority of the state assembly.  This has made it difficult, if not impossible, for state officials to budget effectively for inevitable increases in the costs of providing services.  Proposition 13 is just another manifestation of a problem I've raised before:  People want a lot from their government, but they don't want to pay for it.  

While Governor Schwarzenegger is now focused on budget cuts to keep the state fiscally afloat, some California legislators apparently still hoped to stave off having to deal with their own budget problems, and suggested that the federal government should do so instead, by guaranteeing California debt.  How could supposedly serious state politicians, not to mention both the state's Senators, even consider making this proposal?  Maybe they supposed that a heavily Democratic state, even one with a nominally Republican governor, could depend on the sympathies of a Democratic administration dependent on California votes.  Was this what they meant when they said California is too big to fail?  Maybe they were just smoking something, or addled by the Sacramento heat.

Anyway, that flyer has now appropriately been slapped down.  It was surprising that anyone in Washington gave it even a moment's consideration, though the tenor of the reports suggested that some did take it seriously.  Discussion about why it could not, or should not, be done centered on the idea that the Federal government couldn't offer such help to one state without expecting others to put their bids in too. 

That's true, but it's far from the main point. This just isn't a national problem. The voters of California produced the crisis, and it's up to them and their representatives to solve it.  If the electorate turned down the budget propositions, they must be prepared to weather cutbacks in services.  Economic retrenchment in California won't help the country's economic recovery, but the real story may be that while the Golden State continues to dither over fixing its finances, growth opportunities could go elsewhere, and other states could pick up the slack.   

The National Guard: The Model Is Broken And It Needs Fixing

Just a few days after I mentioned the unfair deal a lot of our National Guard men and women got during the past several years, it's nice to see the Washington Post Magazine devoting a cover story to the topic. 

The problem is that the National Guard was not created for extended deployment except in times of very serious national emergency or an all-out war (the last such was WWII).  Most Guardsmen for generations have been people who wanted to serve, but not as a career; they were trained (often in various specialties), probably attended a few weeks training in the summer, but never expected to have their career paths in their civilian jobs completely derailed by long-term call-ups of two years, three years, or more.  This bargain held pretty well through the Vietnam era; only a handful of Guard units were ever called for service in the combat zone, and as I mentioned, the sons of the political elite could sign up for the Guard with a high degree of confidence they'd never get called.

No longer.  As the above-linked article says, after the terrorist attacks of September 2001,

 "Never before had tens of thousands of Guard members been plucked from civilian life, sent overseas to combat and then thrust back into society."

Conscription was abandoned after Vietnam, and when the Bush administration realized they would need far more troops to conduct wars in Afghanistan and Iraq than they had originally told Congress and the public, they started calling up Reserve and Guard units to help fill the need.   And, exhibiting the sense of duty that we celebrate on Memorial Day tomorrow, the Guard went off to war in large numbers, at times making up as much as 40% of US forces in some areas.

The article describes the tribulations of one returning National Guardsman, Craig Lewis, trying to fit back into society and, above all, to reclaim his job after several years of deployment.  According to law, employers are supposed to "save" a Guardsman's job for up to five years; in practice, few actually do. It's easy to see why; in trying to be fair to the returning National Guard, the government puts employers, especially smaller ones, in an untenable position.  Of course the current state of the economy doesn't help, but even in more normal times, how can the employer run his business effectively if one (or frequently more) employees are missing for years?  

Back in the sleepy 1950s, with a deployment of a few months, this may have been a workable process for employers and Guardsmen alike.  Now, with the length of deployments figured in years rather than months, it's not.  Adding to the problems:  after these lengthy deployments, many returning soldiers may have changed their minds about what they want to do.  Lewis, for example, was a special ed teacher before; now, he's not certain he wants to teach at all but if he does, he's looking at switching to teaching phys ed.  

It's probably impossible to go back to the old model of short deployments.  We no longer have conscription (I favor reinstating it but good luck with that!); Guardsmen do volunteer for service; and the training they're given is often costly, so we can't afford to waste it by not using their skills when they're needed.  But it should be possible to work out a far fairer tour-of-duty policy and a better system of reintegration that meets the needs of both employers and the individual National Guard soldier.

Postscript: The author of the Washington Post article, Christian Davenport, is publishing a book June 1 on this subject, entitled "As You Were: To War and Back With the Black Hawk Battalion of the Virginia National Guard."  I don't generally favor books by journalists, but I'll probably get this one; it may be worth reading if you want to know more. 

Interrogation: Let Yelping Dogs Lie

The debate about harsh interrogation goes on.  And on.  There is no end in sight, yet the continuation of the two threads of the controversy defies logic.  Neither has real-world consequences at this time; both are about politics and nothing more. 

First, as regards what Pelosi knew and when, it matters little.  The recollections of Congresspersons who received briefings vary along curiously partisan lines as to whether the CIA did or didn't say waterboarding and other techniques were being used.  All parties to this - Congressional Democrats, Congressional Republicans, and the CIA - have obvious reasons to lie, and maybe all are doing so to some extent.  Even if that weren't the case, the best-intentioned, most honest Congressional briefee may not correctly remember the details of a briefing they received several years ago, or may have stepped out of the room at the wrong time.  Besides, this is now history.  If Pelosi was fully briefed and decided at the time it was best to support the Administration leading a country in war, but has now reconsidered, isn't that her right?  What if the briefers mentioned these techniques but (as I think likely) didn't describe them graphically, nor provide video demonstrations of them?  In short, I don't think any amount of discussion or investigation will produce incontestable resolution of the who/when question.  

The same is true of the relentless, angry expostulations of former VP Cheney that we are somehow less safe as a nation under the new no-torture rules.  The premise that waterboarding made us secure can't ever be proved.  If CIA memos like Cheney has described do exist, they would be automatically suspect because bureaucracies tend to self-justify.  (Look at it this way: If a CIA internal memo states that on the 25th of December, 2004, a planned terrorist attack on a U.S. city was thwarted thanks to information developed from "harshly interrogating" a prisoner, there will surely be one written over at the Department of Homeland Security claiming that same attack was thwarted by the improved security meansures instituted by DHS).  Besides, the debate about such interrogation isn't new; why wouldn't the Bush administration have released such info, minus a few details, back in August 2008, to justify its methods?  Finally, let's keep in mind that existing detainees had surely already been fully interrogated by January 20, 2009.  No new ones are in the pipeline, or likely to be, so the argument has no real-world effect at this time.  Thus it's difficult to see how Cheney's continuing efforts to tear the scab off this wound can benefit anyone besides him, President Bush, and their "legacy," about which Cheney seems preternaturally obsessive.

Obama, for his part, has indicated he's not much interested in looking backward to try to punish anyone for their role in these controversial interrogations.  It could be done; some argue it should, even must, be done for moral and ethical reasons; but the practical effect would be to embroil the country in a further downward spiral of mistrust and extremist bickering.  Cheney seems to relish that prospect, but then fomenting divisiveness is nothing new for him.